######## SECTION 6. RECOMMENDATIONS

The CME SIM Project Team researched and analyzed the present Department
of Energy (DOE) research and development (R&D) management processes,
developed alternatives to improve the processes, selected the best
alternative, and made supporting and implementing recommendations based
upon the corporate perspective and knowledge gained as a result of
participation in the CME SIM study. A representative from the Office of
Architecture, Standards, and Planning within the Office of the Chief
Information Officer (CIO) participated in this study to ensure that the
approach taken adheres to the principles for information management
contained in the DOE Corporate Systems Information Architecture.

**6.1 Recommended Solution**

Alternative 3, Corporate R&D Portfolio Management Environment, with
estimated implementation and operating costs of over \$17 million for
the 5-year project life and annualized productivity gains of
approximately \$39 million is recommended. The Corporate R&D Portfolio
Management Environment is the technology infrastructure, information
integration methodologies, and process enhancements that will enable
cradle-to-grave tracking of research projects, information sharing
across programs, and snapshots of the Department's R&D. Using commercial
off-the-shelf (COTS) products and advanced information-sharing methods,
this alternative will enable the consolidation and integration of
critical data regarding the proposal/plan, project funds distribution,
cost, and performance for the purposes of R&D portfolio management
across the entire DOE complex. In this environment, proposals/plans will
be electronic and submitted once when needed. Projects will be assigned
unique identifiers upon receipt of the proposal/plan. The requirement to
submit "proposal type" information in response to the Unified Field
Budget Call (UNICALL) will be eliminated and replaced with requests for
information truly needed to support the development of budget requests.

Funding instruction documents will be automated, contain the unique
identifier associated with the proposal/plan, and interfaced with the
Chief Financial Officer (CFO) Business Management Information
System-Financial Management (BMIS-FM) and automated funds transfer.
Reporting to the Department will be streamlined through the use of data
dictionaries that enable the R&D facilities to submit data elements that
can be tailored to meet program office needs upon receipt. This approach
will allow stakeholders to continue using their project management
tracking systems through interfaces with the Corporate R&D Portfolio
Management Environment system and enable managers and their staff to
"pull" information for better planning and decision-making, as well as
"push" information required for reporting.

This alternative was considered the best approach to modernize and
streamline DOE R&D project management processes. It will enable DOE to:

-   Comply with Inter-Agency Electronic Grants Committee (IAEGC)
    requirement to accept proposals electronically

-   Align with R&D governing laws, such as the Government Performance
    and Results Act, Government Paperwork Elimination Act, and Federal
    Financial Assistance Management Improvement Act

-   Report more complete and accurate R&D information to Congress,
    Office of Management and Budget (OMB), Office of Science and
    Technology Policy (OSTP), and others with significantly greater
    speed, efficiency and consistency

-   Plan a corporate R&D portfolio management infrastructure with known
    requirements

-   Foster R&D collaborations across programs and in the field

-   Improve the capability for strategic R&D investments

-   Participate in interagency efforts that foster information sharing

-   Meet program manager needs

-   Distribute fund more expediently to the performing sites

-   Maximize the time and funds principal investigators are able to
    allocate to research by reducing inefficient and/or ineffective
    administrative processes.

The capabilities and benefits associated with implementing the Corporate
R&D Portfolio Management Environment are clearly superior to those of
the Enhanced Base Case in the areas listed above and noted in sections
6.7.1 and 6.7.2. The Corporate R&D Portfolio Management Environment is
comprised of three modules that must be designed and developed in
parallel with perfect definition of all interfaces to other systems in
order to provide seamless integration. Other issues and key
considerations related to the recommended solution follow in this
section.

2.  **Implementation Cost and Schedule**

Implementation and operating costs over the 5-year project life is
estimated at \$17.25 million. This includes \$13.10 million of
non-recurring costs and \$4.15 million of recurring costs. Detailed
information on the costs for Corporate R&D Portfolio Management
Environment can be found in Exhibits F-4, F-6 and F-8 in Appendix F.
Table 6-1 summarizes the implementation and operating costs by year over
the 5-year project life.

+--------------------+---------------+---------------+---------------+
| **Fiscal Year**    | **Recurring** | **            | **Total       |
|                    |               | Non-recurring | 5-Year Cost** |
|                    | **Cost**      | Cost**        |               |
+--------------------+---------------+---------------+---------------+
| FY 01              | 0.27          | 5.47          | 5.74          |
+--------------------+---------------+---------------+---------------+
| FY 02              | 0.50          | 5.61          | 6.11          |
+--------------------+---------------+---------------+---------------+
| FY 03              | 0.78          | 2.02          | 2.80          |
+--------------------+---------------+---------------+---------------+
| FY 04              | 1.30          | \-            | 1.30          |
+--------------------+---------------+---------------+---------------+
| FY 05              | 1.30          | \-            | 1.30          |
+--------------------+---------------+---------------+---------------+
| **Total 5-Year     | **\$4.15**    | **\$13.10**   | **\$17.25**   |
| Cost**             |               |               |               |
+--------------------+---------------+---------------+---------------+

***Table 6-1***

***Estimated Costs by Year for the Recommended Alternative (\$
millions)***

The project start date is October 2000. It is imperative that this date
and all other proposed dates tied to the phased implementation schedule
are met to ensure DOE is in compliance with government mandates and that
the technical solution is aligned with other major corporate system
development activities currently in progress -- specifically, the
BMIS-FM initiative. A phased approach with three specific milestones is
being recommended to ensure system modules are implemented well in
advance of mandatory compliance dates and to accommodate the development
schedule of BMIS-FM.

-   Milestone I, Proposal Submission Modules. This activity will be
    initiated in October 2000 and be completed by February 18, 2002.
    These modules will meet Congressional mandates to accept grants
    electronically by FY 2003. The schedule provides adequate time to
    implement the DOE-wide Project Identification Number (PIN) service
    and deploy Public Key Infrastructure (PKI) technology to address
    security requirements.

-   Milestone II, Project Tracking and Program Management Modules. This
    staged implementation will provide early implementation of some
    tools to support program management that will achieve early benefits
    from the system yet permit adequate time to fully interface systems
    and develop templates and tools to assist in a fully-supported and
    secure web-based environment. Final delivery of these modules is
    scheduled for October 21, 2002.

-   Milestone III, Project Execution Modules. This part of the
    implementation has been planned to lag behind the BMIS-FM
    implementation activities, since that system will be the primary
    data source for this module. These modules are planned for
    completion on July 3, 2003.

See Figure G-4 in Appendix G for the detailed implementation timeline.

3.  **Funding Considerations**

Three major considerations with regard to funding of the development and
implementation of the recommended system exist.

[Timing]{.underline} -- This concern is centered on the possible
disconnect between planned actions and the availability of appropriated
funds. This business case proposes an ambitious schedule, and the timing
of the costs associated with it is based on that schedule. Failure to
have the funds available when needed will stretch the schedule and
increase the costs. The critical time frame is towards the end of FY
2000. The action plan, outreach, and formation of the implementation
team should begin during the last quarter of FY 2000. The CME SIM
Project Team recognized that the project implementation must begin in FY
2001 to be successful.

[Certainty of Funding]{.underline} -- It is imperative that an
implementation plan be developed and sufficient funding be guaranteed to
complete the full implementation of all modules of the Corporate R&D
Portfolio Management Environment system.

[Method to Fund]{.underline} -- There was general agreement that this
project is an attractive candidate for Corporate Management Information
Program (CMIP) funds in FY 2002 and beyond. The general consensus was
that effective partnerships of the CFO, CIO, Lead Program Secretarial
Offices (PSO), and field R&D stakeholders is critical for the initial
phases of the project beginning during the 4^th^ quarter of FY 2000 and
continuing through FY 2001. In addition to support during the early
phases, it is important to have appropriate personnel participate as
part of the implementation team.

4.  **Implementation Impacts**

[Process Changes]{.underline}. Process changes always impact multiple
areas of the Department when implemented and the proposed
standardization of terms and formats used in reporting R&D project
information will be no exception. The difficulty in getting
organizations to give up their current procedures and adopt new,
coordinated methods cannot be overstated. Agreement on the content and
structure of the data dictionaries will also require a collaborative
effort across DOE program offices. Acceptance and use of the new
procedures, including standardized terms and reporting formats is
critical for project success, and will depend on early, active, and
continuous involvement by those entities with a vested interest in the
R&D management process of DOE.

[New Systems and Technologies]{.underline}. The new technologies being
implemented in this solution are mature and functioning well in DOE and
other agencies. Therefore, the technical risk associated with this
alternative is low. However, development and implementation of the
proposed system will necessarily result in a number of cultural and
organizational changes within the Department. Detailed elaboration of
the nature of the changes, their impact, and most importantly their
implication for the financial, project, and program management at DOE
will depend on: 1) the final requirements for the new system; and 2) the
functional capabilities of the system when implemented.

[Other Corporate Initiatives]{.underline}. Integration with other
corporate systems to eliminate the duplicate data entry now performed is
a major benefit of this solution. Slippage in the scheduled
implementations of these systems may impact some of the deliverables for
this solution. For example if the schedule for BMIS-FM were to slip,
then interim interfaces to other DOE and contractor systems, such as the
Funds Distribution System and site accounting systems, could be
required.

[Cybersecurity]{.underline}. Security requirements for all DOE systems
are currently being defined and implemented across the complex. These
requirements must be fully considered in any new corporate system
development.

[Early Benefits]{.underline}. Providing benefits to stakeholders early
in the project is a measure of its success. This will require full
collaboration of all R&D professionals and a corporate focus while
participating in process improvement and system implementation
activities.

**6.5 Risk Management**

The risks associated with the recommended approach are generally higher
than those for the other alternatives, as would be expected. Major
changes to the management processes of any bureaucracy is risky, but for
an R&D entity as large as the DOE, major changes will bring a myriad of
risks, both anticipated and unforeseen. The risks associated with this
alternative are described in Section 4.3.5.

The CME SIM Project Team defined the following management strategies to
potentially mitigate the top risk factors.

1)  ***Risk*:** Required collaboration among DOE programs will be
    critical for success.\
    \
    ***Management Strategy to Mitigate Risk:***

    -   Commitment from PSOs

    -   Program offices to assign key subject experts to participate in
        the requirements study and on the implementation team

    -   Outreach plan to engage key stakeholders, communicate
        anticipated changes and benefits, and provide a forum for
        continued information exchange. The outreach plan will target
        executive management within the DOE, the operations offices, and
        R&D facilities, as well as other key managers of research,
        information technologies, budget, and accounting.

    -   Steering Committee to oversee the implementation. The Steering
        Committee will be comprised of members from the CME SIM Project
        Team as well as subject experts from key stakeholder
        organizations that may not have been represented on the Team.

2)  ***Risk:*** Implementing major changes in the R&D Portfolio
    Management processes during an Administration change will be
    challenging.\
    \
    ***Management Strategy to Mitigate Risk:***

    -   Action plan to carry the effort across Administrations. The
        action plan will focus on career Federal employees at all levels
        to ensure momentum is maintained on the project and support is
        carried forward as the Administration changes.

    -   Form implementation team and move on the action plan and
        outreach plans during fourth quarter FY 2000.

3)  ***Risk:*** Project schedule slippage due to inadequate funding
    could increase costs significantly and cause the project to loose
    momentum, or fail. The recommended technical solution, in effect,
    replaces or creates multiple elements of an integrated system.
    Failure to achieve the objectives of any element jeopardizes the
    whole.\
    \
    ***Management Strategy to Mitigate Risk:***

    -   Assure full and sufficient funding and staffing to implement the
        system prior to start

    -   Begin implementation activities in FY 2001, as scheduled.

4)  ***Risk:*** Dependence on other major implementation efforts, in
    particular the BMIS-FM project, could have adverse affects.\
    \
    ***Management Strategy to Mitigate Risk:***

    -   Stage roll-out of execution, tracking, and reporting modules,
        following the BMIS-FM implementation schedule by approximately
        one year

    -   Use emerging standards to develop interfaces to research
        institution systems as an interim solution, similar to how the
        proposal submission module currently works in the Collaborative
        Management Environment system

    -   Participation of a BMIS-FM implementation team member from the
        CFO organization on the Steering Committee that oversees the
        implementation of the Corporate R&D Portfolio Management
        Environment

    -   Form a joint working group with implementation team members from
        BMIS-FM and the Corporate R&D Portfolio Management Environment.

5)  ***Risk:*** Timing of implementation of capabilities to program
    managers could affect the ability to maintain momentum and support.

> **\
> *Management Strategy to Mitigate Risk:***

-   A staged implementation of the software modules and implementation
    of policy changes at the earliest possible date

-   Program management participation on the Steering Committee and data
    dictionary core group, and involvement during requirements
    definition.

6)  ***Risk:*** Lack of consensus on a data dictionary will affect the
    ability to use information integration technologies for a Corporate
    R&D Portfolio Management Environment.

> **\
> *Management Strategy to Mitigate Risk:***

-   Form a core group to define a data dictionary comprised of key
    subject experts with regard to the process activities evaluated as
    part of this study from all major DOE programs that fund R&D,
    elements responsible for maintaining officials sources of data
    related to R&D, and stakeholder sites

-   Participation of some of the CME SIM Project Team members in this
    core group to maintain continuity.

7)  ***Risk:*** Standard software development risks could potentially
    impact implementation.

> **\
> *Management Strategy to Mitigate Risk:***

-   Use a core implementation team, staff, and a project leader with
    participation of systems experts from the program offices

-   Use best software practices, emerging standards, and COTS products,
    where available and mature.

6.  **Performance Measures**

An initial set of performance measures proposed for the Corporate R&D
Portfolio Management Environment are presented in Figure 6-2.

+---------------------+------------------------------------------------+
| **Goal**            | **Measurement**                                |
+---------------------+------------------------------------------------+
| 1\) Streamline      | -   Reduced annual cost to prepare UNICALL     |
| processes used to   |     response at M&O contractors (proposal/plan |
| manage R&D across   |     submission process)                        |
| DOE.                |                                                |
|                     | -   Increased number of programs able to       |
|                     |     accept and review proposals electronically |
|                     |     (proposal/plan submission process)         |
|                     |                                                |
|                     | -   Reduced time between funding decision and  |
|                     |     funds availability to researchers (project |
|                     |     execution process)                         |
|                     |                                                |
|                     | -   Reduced the number of times financial,     |
|                     |     work authorization, and guidance           |
|                     |     information require manual reconciliation  |
|                     |     (project execution process)                |
|                     |                                                |
|                     | -   Reduced number of FTE-hours required to    |
|                     |     update research portfolio (project         |
|                     |     tracking and reporting process)            |
|                     |                                                |
|                     | -   Reduced time taken by program offices to   |
|                     |     respond to queries (program management     |
|                     |     process)                                   |
+---------------------+------------------------------------------------+
| 2\) Improve         | -   Increased number of program offices        |
| information         |     accessing crosscut or portfolio data on    |
| availability and    |     other program office projects              |
| utility with        |                                                |
| respect to DOE R&D  | -   Increased number of public queries on      |
| projects.           |     repository                                 |
|                     |                                                |
|                     | -   Reduced number of times that responses to  |
|                     |     questions require additional data from     |
|                     |     research facilities                        |
+---------------------+------------------------------------------------+
| 3\) Implement       | -   Implemented Corporate R&D Portfolio        |
| required            |     Management Environment system components   |
| information         |     in accordance with the approved schedule.  |
| systems.            |                                                |
+---------------------+------------------------------------------------+

***Table 6-2***

***Proposed Performance Measures***

If the Corporate R&D Portfolio Management Environment alternative is
approved by DOE, the next step will be to identify specific functional
requirements for the information system in order to support the business
process performance measures. At that time, performance measures may be
further refined or revised. Additional activities related to the
implementation of the Corporate R&D Portfolio Management Environment are
described in Section 7.

7.  **Decision-Making Activities**

The team followed formal decision-making activities to reach the
conclusions and recommendations described in this section. Consensus on
the recommended solution was reached through three decision-making
activities: 1) reviewing the results of the analysis of benefits and
costs; 2) comparing the non-quantifiable benefits associated with each
alternative; and 3) evaluating the capability of each alternative to
satisfy a set of weighted evaluation criteria. In all three areas, the
Corporate R&D Portfolio Management Environment was the best choice.
Following are the key points considered during the decision-making
activities.

***6.7.1 Financial Analysis of Benefits and Costs (ABC)***

As explained in Section 5, the estimated cost of implementation and
operating expenses over the 5-year project life for Corporate R&D
Portfolio Management Environment is over \$17 million, almost twice as
much as the estimate for the Enhanced Base Case. However, the projected
annual benefits for the Corporate R&D Portfolio Management Environment
at full implementation outweigh the Enhanced Base Case alternative by
more than 3 to 1.

Another measure of benefits and costs is the payback year. The payback,
or break-even point, represents the point at which cumulative benefits
equal cumulative costs. Although the Enhanced Base Case payback occurs
first in FY 2002 versus FY 2003 for the Corporate R&D Portfolio
Management Environment, the cumulative net present value of the
Corporate R&D Management Environment will double that of the Enhanced
Base Case and continue to grow at a much faster rate.

***6.7.2 Non-Quantifiable Benefits***

Beyond the financial analyses, there are numerous non-quantifiable
benefits that will accrue to DOE as a result of implementing the
Corporate R&D Portfolio Management Environment with its state-of-the-art
information technology. The most significant non-quantifiable benefits
are summarized in Section 4.4.2 and include:

-   Improved Public Perception of DOE

-   Improved Communication of R&D Information

-   Reduced Loss of Historical Information

-   More Flexible Corporate R&D Portfolio Management Infrastructure

-   Improved Research and Technology Efforts

-   Improved R&D Portfolio Management

-   Improved Quality of Work and Optimal Use of Scarce Resources

-   Increased Customer Satisfaction

***6.7.3 Weighted Decision Criteria***

An evaluation process was used to compare the alternatives on the basis
of their capability to satisfy criteria determined to be important by
the CME SIM Project Team. The criteria provided a quantitative approach
to the evaluation of benefits that are difficult to quantify. The
evaluation criteria ranged in scope from ability to satisfy customer
needs and improved public perception of DOE to enhanced R&D portfolio
management. The non-quantifiable benefits listed above served as the
basis for the evaluation criteria.

The Corporate R&D Portfolio Management Environment outscored the
Enhanced Base Case by a 2 to 1 margin and outscored the Base Case by a 7
to 1 margin. Although the Enhanced Base Case does achieve early benefits
and has little impact on R&D facilities, it does not achieve the vision
of a "corporate" system that the Corporate R&D Portfolio Management
Environment alternative does. The scoring clearly illustrated the
superiority of the Corporate R&D Portfolio Management Environment and
the ability to gain the efficiencies necessary to best manage R&D.

7.  **Summary**

The CME SIM Project Team selected the best alternative and made
recommendations based upon a corporate perspective and knowledge gained
as a result of participating in the CME SIM study. The recommended
solution, the Corporate R&D Portfolio Management Environment, has
estimated implementation and operating costs of over \$17 million for
the 5-year project life and annualized productivity gains of over \$39
million. A staged approach is recommended to implement the three
software modules with the final module, project execution, being
implemented in July 2003. The timing, certainty of funds, and approach
to funding are critical to the project\'s success. The Team believes the
project must begin in FY 2001 through strategic partnerships and that it
is an excellent candidate for CMIP funds for the out-years. Management
strategies are outlined to help mitigate the highest implementation
risks from required program collaboration and commitment, through
administration changes, to standard software implementation risks.

The major results from implementing the alternative will be achieving
the vision of a \"Corporate\" R&D portfolio management environment;
project tracking from cradle-to-grave; and streamlining processes for
productivity gains for all stakeholders. Performance measures for the
goals of streamlining the processes, increasing information availability
and utility, and implementing information systems and technologies
within the context of R&D management are initially defined and will be
further refined as detailed implementation plans are developed.

Consensus of the Team was that the Corporate R&D Portfolio Management
Environment was the best choice. The solution will allow DOE to comply
with Congressional mandates and laws, prepare for upcoming IAEGC
requirements, best meet the Departmental and program manager needs, and
align with best practices. The momentum of the effort and support of
many of the stakeholders, the availability of data integration
technologies and web tools that enable a distributed information
environment, and the scrutiny of the Department to improve management
processes, make this an opportune time to move forward with the
recommended solution.