Benefits Realization: Government of Canada Experience

1
Information TechnologyServices Branch
Government On-Line Initiative

• Benefits Realization Government of Canada
  Experience
• A presentation to the Organization for Economic
  Co-operation and Development
• E-Government Expert Meeting Cost and Benefit
  Analysis
• Paris, France
• 6 February, 2006
• Christine Desloges, Director General, Government
  On-Line, Government of Canada
• Bob Mornan, Executive Director, Chief Information
  Officer Branch, Government of Canada

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Purpose of presentation

• To share current challenges faced by the
  Government of Canada (GC) in realizing benefits
  from IT/IM and e-government projects
• To present an overview of the GCs benefits
  realization methodology and experiences to date
• To position the discussion for the afternoon
  session

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Overview of presentation

• The problem that the GC is trying to solve
• Benefits realization principles
• Benefits realization methodologies Brief
  Definitions
• Enhanced Management Framework
• Outcome Management
• Overview of Enhanced Management Framework
• Overview of Outcome Management methodology
• Project Management and Outcome Management Key
  differences
• Outcome Management The Canadian experience
• Outcome Management The potential to address
  challenges for the GC
• Conclusion
• Next steps

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The problem that the GC is trying to solve
The GC has committed large sums of money to IT
projects based on the promise of a return on that
investment the investment tends to be well
managed, but managing the return needs
improvement. Business cases contain untested
assumptions masquerading as facts.

• The GC requires a benefits realization
  methodology beyond just providing
• deliverables to one that
• Ensures strategic alignment of outcomes with the
  business
• Has broad applicability
• Beyond IT/IM projects
• Horizontal initiatives
• Prioritizes projects and portfolios
• Establishes clear accountability
• Includes ongoing and ex post evaluations
• Soft, non-financial benefits

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Benefits realization principles

• Benefits realization is the pre-planning for, and
  ongoing management of benefits promised to be
  enabled by the successful implementation of an
  IT/IM or e-government project.
• Sound project management can only enable a
  business owner (program) to realize intended
  benefits
• Accountability for the realization of intended
  benefits must rest with the business function,
  not with the IT project

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Enhanced Management Framework and Outcome
Management Definitions

• Enhanced Management Framework (EMF)
• EMF is an integrated management model that
  includes processes and key practices designed to
  ensure that government information technology
  projects fully meet the needs of the business
  functions they are intended to support, deliver
  all expected benefits and are completed on time,
  on budget and on scope.
• Outcome Management
• Outcome Management is a set of methods,
  processes, tools and techniques for planning,
  selecting, managing and realizing results and
  benefits.

What are we building? What is the schedule? What
does it cost?
What problem are we trying to solve? Start with
the end in mind.
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Enhanced Management Framework (EMF)

• In 1996 the Treasury Board Secretariat developed
  the EMF which,
• Is required as part of the submission process
  (solicitation of funds) for IT/IM projects
• Focuses on Project Management concepts (IT/IM
  driven)
• EMF includes
• Cost-benefit analyses (on budget, on time, and on
  scope)
• Gating progress reporting

 For further information on EMF refer to
Management of Large Public IT Projects (Treasury
Board of Canada, Secretariat, 2000) presented to
the OECD in October 26-27, 2000
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Outcome Management

• What is an outcome?
• An outcome (benefit) is the desired result of an
  initiative undertaken to meet a need or solve a
  problem (e.g. to reduce gun related crime by 25
  within 5 years by implementing a national gun
  registry system)
• Outcomes are final results supported by
  intermediate outcomes (benefits milestones)
• Background
• Outcome Management is focused on the outcomes or
  results side of an initiative or program
• Outcome Management methodology is a Canadian
  approach based on internationally recognized
  project and risk management techniques that has
  been refined through public and private sector
  collaborations
• Outcome Management is an evolving discipline
• Details
• Cost benefit analysis is a subset of Outcome
  Management
• Outcome Management is the potential link to
  existing tools or other sources of performance
  indicators

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The Outcome Management process

Outcome Management Process
Stage
0

Launch
Outcome Management
Ensure Readiness
Stage
1

Develop Outcome
Create
Assess Risk
Realization Model
Logic Model
Create
Create
Create
Initiative Register
Outcome Register
Risk Register
Stage
2

Develop Outcome
Create
Realization Plan
Value Case
Create
Outcome Realization Plan
Stage
3

Monitor Delivery
Implement
of Outcomes
Outcome

Risk Monitoring
Stage
4

Realize and
Create
Optimize Outcomes
Outcome Management Office
Harvest
Benefits
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Outcome Management versus Project Management -
EMF Key differences
Project Management - EMF Outcome Management
Focus Manage costs, inputs, schedule, resources, deliverables Manage outcomes, benefits, business results, portfolio
Deliverables Gantt Charts, schedules, work plan, costs, estimates, progress reports, milestones, issues, earned value, PERT charts, etc. Outcomes maps, outcomes registers, value cases, value assessments, value graph, governance reports or structures
Measures of Success On-time, on-budget, delivery of specified change enabler (e.g., system, process), risk management Initiative delivers on promised results, maximized business value of portfolio
Processes Project initiation, project monitoring, project close out, etc. Initiative definition, value definition, portfolio selection, results attainment
Project / Initiative Is accountable to the business sponsor for project deliverables Is accountable to the Program Manager for project execution Facilitates the value case, ensures that the initiatives benefits are achieved
Timeline From project planning to implementation From program planning through implementation to results attainment
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Outcome Management The Canadian experience

• In 2005-06, an examination of 12 GC projects
  using Outcome
• Management approach and traditional cost-benefit
  analysis practices
• 8 projects used Outcome Management methodology
• 4 projects used cost-benefit analysis practices

• 10 Lessons Learned
• Align outcomes with departmental and government
  priorities
• Outcome Management can articulate both the
  business and IT outcomes
• Engage all stakeholders in the process
• Outcome management provides flexibility in
  defining intangible or soft benefits
• Conduct Outcome Management early in the lifecycle
• Integrate Outcome Management with existing
  methods, frameworks and tools
• Successful Outcome Management requires champions,
  education and communication
• Outcome Management needs to overcome systemic
  challenges in government context
• Cost-benefit analysis useful to document cost and
  areas for cost avoidances and conducting options
  analysis
• Outcome Management provides clear definition of
  soft benefits

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Outcome Management The potential to address
challenges for the GC
Challenge Outcome Management
1. Strategic alignment with outcomes (business driven) Focuses on realizing benefits Identifies activities that contribute to the desired outcomes Complements and extends the cost-benefit analysis and results in a more robust and comprehensive understanding of the outcomes expected by the initiative
2. Flexibility Beyond IT/IM projects Horizontal initiatives Prioritizes projects and portfolios Can be used at the project, portfolio, program and initiative levels Supports complex horizontal activities that require multiple stakeholders across jurisdictions Provides information to make adjustments and/or prioritizations at both the portfolio and initiative levels along the way
3. Clear accountability Supports a clear understanding of how outcomes will be realized and recognized, quantification of outcomes, and the assignment of accountability
4. Ongoing and ex post evaluations - soft, non financial benefits Monitors outcomes and their indicators throughout all stages of the Outcome Management process Provides a process for strong identification and qualification of both hard and soft benefits, presenting a broader view of expected value
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Conclusion

• The Government of Canada has faced challenges
  achieving the benefits of IT/IM and e-government
  projects through the traditional project
  management and cost-benefit approaches
• Outcome Management has the potential to overcome
  many of the current challenges

• Outcome Management
• Focuses on realizing benefits not just providing
  the deliverables
• Supports project, portfolio, program and
  initiative levels
• Supports an enterprise approach
• Adjusts and/or prioritizes along the way
• Details and assigns accountabilities
• Facilitates on-going and ex post evaluation of
  hard and soft benefits

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Next steps

• Outcome Management
• The Government of Canada will
• Continue to research and pilot the Outcome
  Management methodology
• Explore how Outcome Management can be integrated
  into existing tools
• Research how to better cultivate a public sector
  culture that supports and practices benefits
  realization evaluations

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• Christine Desloges Bob Mornan
• Director General, Government On-Line Executive
  Director
• Department of Public Works and Government
  Services Treasury Board Secretariat, Canada
• Government of Canada Government of Canada
• 5th Floor, 2745 Iris Street 5th Floor, 2745
  Iris Street
• Ottawa, Ontario Ottawa, Ontario Canada K1A
  0S5 Canada K1A 0S5
• Tel [phone] Tel [phone]
• Fax [phone] Fax [phone]
• Christine.Desloges_at_pwgsc.gc.ca Mornan.Bob_at_tbs-s
  ct.gc.ca

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Examples of Outcomes

• Non-Financial
• Increased service levels
• Decreased time to complete process / transaction
• Increased compliance with regulations
• Increased privacy protection
• Increased customer satisfaction
• Reduced client wait time
• Created environmental benefits
• Increased quality of life / social benefits

• Financial
• Decreased cost of operations
• Decreased energy consumption (costs)
• Increased economic development
• Maintained program registrations
• Decreased bad debt
• Decreased loss risk

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The Outcome Management process in detail
Stage Key Activities
0. Launch Outcome Management Ensure readiness
1. Develop Outcome Management Realization Model Define final outcomes Build Results Chain (Logic Model/Outcomes Map) Assess strategic alignment corporate worth Define risks
2. Develop Outcome Management Realization Plan Detail outcomes and risks to be tracked (Registers) Identify outcome owners (Accountabilities) Establish outcome target metrics and timeframes Define reporting process
3. Monitor delivery of outcomes Enact outcome monitoring and reporting process Implement outcomes and risks tools and methods Prepare outcome realization progress reports Communicate progress regularly
4. Realize and optimize outcomes Reinvest as defined in outcomes realization plan Identify opportunities to increase outcome performance levels Declare and communicate success
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Value Management Maturity
10
High
StrategicAlignment
Financial Worth /Performance Measures
Low
0
0
10
Risk
High
Low