![](media/image1.jpeg){width="1.68125in" height="1.6555555555555554in"}

**IT CPIC Guide**

**Information Technology**

**Capital Planning and Investment Control**

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###### 

###### February 2005 Final

##### OFFICE OF THE CHIEF INFORMATION OFFICER

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|  Vers |       |               |                                    |
| ion C |       |               |                                    |
| ontro |       |               |                                    |
| l Log |       |               |                                    |
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| **D   | **Ve  | **Author**    | **Description**                    |
| ate** | rsion |               |                                    |
|       | \#**  |               |                                    |
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| 12    | 1     | OCIO/PMD      | Original version                   |
| /2002 |       |               |                                    |
+-------+-------+---------------+------------------------------------+
| 12    | 2 -   | OCIO/PMD      | Updated to include: Quarterly      |
| /2004 | Draft |               | Reporting, Operational Analysis,   |
|       |       |               | ITIM Assessment, ITMC & IRB        |
|       |       |               | Charter updates                    |
+-------+-------+---------------+------------------------------------+
| 12/22 | 2.0   | C. Anderson   | Updated to reflect, ITMC, IRB and  |
| /2004 | --    |               | CPWT comments.                     |
|       | Draft |               |                                    |
+-------+-------+---------------+------------------------------------+
| 12/27 | 2.0 - | S.            | Updated to reflect Monthly         |
| /2004 | Draft | Gellenthien   | Scorecards and other Scorecard     |
|       |       |               | input.                             |
+-------+-------+---------------+------------------------------------+
| 12/29 | 2.0   | C. Anderson   | Updated to reflect, PMD and OCIO   |
| /2004 | --    |               | comments.                          |
|       | Draft |               |                                    |
+-------+-------+---------------+------------------------------------+
| 12/30 | 2.0 - | S.            | Updated Quarterly and Monthly      |
| /2004 | Draft | Gellenthien   | Scorecards and supporting          |
|       |       |               | instructions in Appendix M.        |
+-------+-------+---------------+------------------------------------+
| 01/03 | 2.0   | C. Anderson   | Updated to reflect Architecture    |
| /2005 | --    |               | Input                              |
|       | Draft |               |                                    |
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| 01/04 | 2.0   | C. Anderson   | Updated to reflect PM Input        |
| /2005 | --    |               |                                    |
|       | Draft |               |                                    |
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**Updates to this document:** The Department of the Interior recognizes
that the CPIC process and this Guide are going through continuous change
and process improvement. Changes and improvements to the CPIC process
and this Guide come from their interdependence on other processes and
best practices, including Interior's change control management (CCM)
process, project management process (and best practices) and an
integrated life cycle process. As Interior matures, the CPIC process and
the other interdependent processes will become better defined and
aligned.

If you would like to make a suggestion for enhancement, please send an
email or written memo to the OCIO PMD. Please be very specific with your
recommendation and include the section, paragraph and page number in
your note. Subsequent changes will be vetted through the PMD Chief and
the Capital Planning Working Team (CPWT) and final approval will rest
with the DOI IRB.

For further information on IT investment management or DOI's CPIC
process, please contact the Chief of the Portfolio Management Division
(PMD), in the OCIO at either (202) 208-4109 or email OCIO CPIC Working
Team at OS_PIO_CPIC@ios.doi.gov.

#  {#section-1 .TOC-Head}

# Table of Contents {#table-of-contents .TOC-Head}

[Table of Contents v](#table-of-contents)

[Executive Summary 1](#executive-summary)

[Information Technology Capital Planning and Investment Control (CPIC)
Guide
1](#information-technology-capital-planning-and-investment-control-cpic-guide)

[1 Introduction 13](#introduction)

[1.1 Purpose 13](#purpose)

[1.2 Legislative Background and Associated Guidance
13](#legislative-background-and-associated-guidance)

[1.3 Point of Contact 15](#point-of-contact)

[1.4 Scope of CPIC 15](#scope-of-cpic-1)

[1.5 Criteria for Major IT Investments
16](#criteria-for-major-it-investments)

[1.6 Roles and Responsibilities 16](#roles-and-responsibilities)

[1.7 Process Overview 18](#process-overview)

[1.8 Process Coordination 18](#process-coordination)

[1.9 Document Structure 19](#document-structure)

[2 Pre-Select Phase 21](#pre-select-phase)

[2.1 Purpose 21](#purpose-1)

[2.2 Entry Criteria 21](#entry-criteria)

[2.3 Process 21](#process)

[2.4 Exit Criteria 27](#exit-criteria)

[3 Select Phase 29](#select-phase)

[3.1 Purpose 29](#purpose-2)

[3.2 Entry Criteria 29](#entry-criteria-1)

[3.3 Process 29](#process-1)

[3.4 Exit Criteria 33](#exit-criteria-1)

[4 Control Phase 35](#control-phase)

[4.1 Purpose 35](#purpose-3)

[4.2 Entry Criteria 35](#entry-criteria-2)

[4.3 Process 36](#process-2)

[4.4 Exit Criteria 39](#exit-criteria-2)

[5 Evaluate Phase 41](#evaluate-phase)

[5.1 Purpose 41](#purpose-4)

[5.2 Entry Criteria 41](#entry-criteria-3)

[5.3 Process 42](#process-3)

[5.4 Exit Criteria 47](#exit-criteria-3)

[6 Steady State Phase 48](#steady-state-phase)

[6.1 Purpose 48](#purpose-5)

[6.2 Entry Criteria 48](#entry-criteria-4)

[6.3 Process 48](#process-4)

[6.4 Exit Criteria 51](#exit-criteria-4)

[7 Portfolio Management 53](#portfolio-management)

[7.1 Purpose 53](#purpose-6)

[7.2 Entrance Criteria 53](#entrance-criteria)

[7.3 Process 54](#process-5)

[7.4 Demonstration Criteria 55](#demonstration-criteria)

[Appendix A: CPIC Process Checklist
57](#appendix-a-cpic-process-checklist)

[A.1 Pre-Select Phase 57](#a.1-pre-select-phase)

[A.2 Select Phase 57](#a.2-select-phase)

[A.3 Control Phase 58](#a.3-control-phase)

[A.4 Evaluate Phase 58](#a.4-evaluate-phase)

[A.5 Steady State Phase 59](#a.5-steady-state-phase)

[A.6 Process Improvement 59](#a.6-process-improvement)

[Appendix B: Mission Needs Statement
61](#appendix-b-mission-needs-statement)

[B.1 Purpose 61](#b.1-purpose)

[B.2 Mission Need Statement Template
61](#b.2-mission-need-statement-template)

[Appendix C: Operational Analysis 67](#appendix-c-operational-analysis)

[C.1 Purpose 67](#c.1-purpose)

[C.2 Management Objectives 67](#c.2-management-objectives)

[C.3 Roles and Responsibilities 68](#c.3-roles-and-responsibilities)

[C.4 Process 68](#c.4-process)

[Appendix D: Cost-Benefit Analysis
77](#appendix-d-cost-benefit-analysis)

[D.1 Purpose 77](#d.1-purpose)

[D.2 Process 78](#d.2-process)

[Appendix E: Risk Management 91](#appendix-e-risk-management)

[E.1 Purpose 91](#e.1-purpose)

[E.2 Process 91](#e.2-process)

[Appendix F: Performance Measurement
95](#appendix-f-performance-measurement)

[F.1 Purpose 95](#f.1-purpose)

[F.2 Process 97](#f.2-process)

[Appendix G: Project Management 105](#appendix-g-project-management)

[G.1 Purpose 105](#g.1-purpose)

[G.1 Relationship of Project Management to Investment Management
106](#g.1-relationship-of-project-management-to-investment-management)

[G.2 Components 107](#g.2-components)

[Appendix H: Earned Value Analysis
113](#appendix-h-earned-value-analysis)

[H.1 Purpose 113](#h.1-purpose)

[H.2 Process 114](#h.2-process)

[Appendix I: Post-Implementation Reviews
119](#appendix-i-post-implementation-reviews)

[I.1 Purpose 119](#i.1-purpose)

[I.2 Process 120](#i.2-process)

[I. 3 Sample Initiative Evaluation Sheet
121](#i.-3-sample-initiative-evaluation-sheet)

[I.4 Investment Management Report
122](#i.4-investment-management-report)

[I.5 IT Initiative Evaluation Data Sheet
123](#i.5-it-initiative-evaluation-data-sheet)

[Appendix J: IT Investment Rating and Ranking Criteria
125](#appendix-j-it-investment-rating-and-ranking-criteria)

[J.1 Purpose 125](#j.1-purpose)

[J.2 Background 125](#j.2-background)

[J.3 Value Criteria 126](#j.3-value-criteria)

[J.4 IEA Rating Criteria: 127](#j.4-iea-rating-criteria)

[J.5 Risk Factors 133](#j.5-risk-factors)

[Appendix K: Security Infrastructure Guide
135](#appendix-k-security-infrastructure-guide)

[K.1 Overview 135](#k.1-overview)

[Appendix L: eCPIC Requirements by Phase
137](#appendix-l-ecpic-requirements-by-phase)

[L.1 Pre-Select Phase 137](#l.1-pre-select-phase)

[L.2 Select Phase 137](#l.2-select-phase)

[L.3 Control Phase 138](#l.3-control-phase)

[L.4 Evaluate Phase 138](#l.4-evaluate-phase)

[L.5 Steady State Phase 139](#l.5-steady-state-phase)

[Appendix M: Monthly and Quarterly Scorecards, and Corrective Actions
Report (CAR)
141](#appendix-m-monthly-and-quarterly-scorecards-and-corrective-actions-report-car)

[M.1 Introduction 141](#m.1-introduction)

[M.2 Quarterly and Monthly Scorecards
142](#m.2-quarterly-and-monthly-scorecards)

[M.3 Corrective Actions Report 152](#m.3-corrective-actions-report)

[Appendix N: CPIC Process Assessment
157](#appendix-n-cpic-process-assessment)

[N.1 Introduction 157](#n.1-introduction)

[N.2 ITIM Self Assessment Tool 158](#n.2-itim-self-assessment-tool)

[Appendix O: Glossary of Terms and Acronyms
160](#appendix-o-glossary-of-terms-and-acronyms)

[O.1 Glossary of Terms 160](#o.1-glossary-of-terms)

[O.2 Acronyms 164](#o.2-acronyms)

[Appendix P: References 167](#appendix-p-references)

# Executive Summary

## Information Technology Capital Planning and Investment Control (CPIC) Guide

+------------------+---------------------------------------------------+
| ### Th           | Recognizing both the importance of IT investments |
| e Key Components | (or projects) to the organization and its role in |
|                  | supporting the success of these investments, the  |
|                  | Office of the Chief Information Officer (OCIO) is |
|                  | engaged in an ongoing effort to establish,        |
|                  | maintain, and support an IT investment analysis   |
|                  | and decision-making environment. This environment |
|                  | consists of three key components:                 |
+------------------+---------------------------------------------------+

**Executive decision-makers:** Consists primarily of the Secretary, and
the DOI CIO as her delegated authority, assisted by the Investment
Review Board (IRB) and executive working groups appointed by the IRB.
The IRB oversees the process and are stakeholders in the success of
DOI's CPIC.

**Staff or Tools:** DOI uses a variety of tools to manage its IT
investments. Adequate staff resources are allocated to support the
processes and a Capital Planning Working Team (CPWT) to provide
collaboration between the Bureau's, Offices, and the Department to
ensure the CPIC process is kept up to date and relevant.

**Processes:** Capital Planning and Investment Control (CPIC) is DOI's
primary process for: (1) making decisions about which initiatives and
systems DOI should invest in, and (2) creating and analyzing the
associated rationale for these investments.

+------------------+---------------------------------------------------+
| ### This Guide   | The *DOI Information Technology Capital Planning  |
|                  | and Investment Control Guide* identifies the      |
|                  | processes and activities necessary to ensure      |
|                  | DOI's investments in IT are well thought out,     |
|                  | cost-effective, and support the missions and      |
|                  | business goals of the organization. It is based   |
|                  | on guidance from both the Office of Management    |
|                  | and Budget (OMB) and the Government               |
|                  | Accountability Office (GAO).                      |
+------------------+---------------------------------------------------+

At the highest level, the CPIC process is a circular flow of DOI's IT
investments through five sequential phases. As shown in **Figure ES-1**,
these phases are:

**Pre-Select Phase:** Business specialist proposes IT investments.
Executive decision-makers assess each proposed investment's support of
DOI's strategic and mission needs, and then select promising investments
for further analysis.

**Select Phase:** Investment analyses are conducted and the IRB chooses
the IT investments that best support the mission of the organization,
support DOI's approach to enterprise architecture, and exhibit project
management.

**Control Phase:** Through timely oversight, quality control, and
executive review, DOI ensures that IT initiatives are executed or
developed in a disciplined, well-managed, and consistent manner.

**Evaluate Phase:** Actual results of the implemented projects are
compared to expectations to assess investment performance. This is done
to assess the investment's impact on mission performance, identify any
investment changes or modifications that may be needed, and revise the
investment management process based on lessons learned.

**Steady State Phase:** Mature systems are assessed to ascertain their
contin­ued effectiveness in supporting mission requirements, evaluated
for the cost of continued maintenance support, assessed for potential
technology opportunities, and considered for retirement or replacement
options.

Each of these five phases is structured in a similar manner using a set
of com­mon elements. These common elements provide a consistent and
predictable flow and coordination of activities within each phase.

![](media/image3.jpeg){width="5.858333333333333in"
height="3.0701388888888888in"}

**Figure ES-1**. The Five CPIC Phases and the Common Elements within
Each Phase

Beyond the detailed CPIC process and activity description, this Guide
also includes:

A charter for the IRB and the associated operating procedures necessary
to conduct investment reviews. The DOI Investment Review Board (IRB)
charter can be found at the following website;
http://www.doi.gov/ocio/itmc/IRB_charter.pdf

A charter for the Information Technology Management Council (ITMC) and
the associated operating procedures necessary to manage the IT
investment portfolio can be found at the following website:
http://www.doi.gov/ocio/itmc/itmc_charter.pdf

A charter for the CPWT and the associated purpose and goals can be found
on the [U. S. Department of the Interior - OCIO - IT Capital
Planning](http://www.doi.gov/ocio/cp/index.html) web-site.

A template for evaluating the mission need of a new IT investment

Guidance on how to:

> Complete a Cost-Benefit Analysis (CBA)
>
> Conduct risk management for IT capital planning
>
> Develop performance measures for IT investments
>
> Manage IT investments
>
> Conduct earned value analysis
>
> Conduct a Post-Implementation Review (PIR)

The scoring criteria to be used by the executive working groups and IRB
during investment reviews

A glossary of terms and acronyms used throughout this document

A list of references used to create this document.

DOI will implement policy and processes contained in this guide. Each
DOI Bureau will adhere to the same policy and processes, making
modifications as appropriate. Evaluation of compliance to these
processes will be conducted annually in order to ensure the entire DOI
is following the CPIC guidance.

+------------------+---------------------------------------------------+
| ### St           | GPRA requires Federal agencies to develop         |
| rategic and Perf | strategic plans, develop annual performance plans |
| ormance Planning | that are tied to the Department goals and budget  |
|                  | allocation, and report the actual results against |
|                  | performance plans. DOI develops and maintains a   |
|                  | DOI-wide Strategic Plan that addresses DOI's      |
|                  | mission, goals, and objectives, relationship of   |
|                  | the goals and objectives to annual performance    |
|                  | plans, and factors affecting achievement of       |
|                  | business goals or objectives. The IT Capital      |
|                  | Planning and Investment Control process attempts  |
|                  | to link all IT investments to the strategic goals |
|                  | of the Department. The Exhibit 300 business case  |
|                  | for each IT investment must identify its linkage  |
|                  | to the Department's mission, goals, and           |
|                  | objectives, and address how it will enable and    |
|                  | facilitate the achievement of the strategic goals |
|                  | and objectives. Investments that do not support a |
|                  | DOI goal, or cannot be directly tied to a goal,   |
|                  | should be re-evaluated.                           |
+------------------+---------------------------------------------------+

A DOI Annual Performance Plan is combined with the accountability report
and is issued annually as the "Performance and Accountability Report".
It is developed to identify the major perfor­mance goals for the
Department. Each performance goal establishes a current baseline (a
reference position) from which progress is measured consistent with the
DOI strategic plan objectives and tied to the Federal Enterprise
Architecture (FEA) Performance Reference Model (PRM). The plan includes
a goal that measures the extent to which IT investments are maintained
within 5% of their planned cost and schedule. The data to measure this
perfor­mance is derived from the IT Capital Planning and Investment
Control process. In effect, the Annual Performance Plan is the
culmination of the results of the performance of DOI's capital
investments as tied to the Strategic Plan.

+------------------+---------------------------------------------------+
| ### DOI's IT     | #### IT Strategic Plan                            |
| Investment Manag |                                                   |
| ement Philosophy | The Department's IT management philosophy is      |
|                  | based on its IT Strategic Plan, which sets the    |
|                  | following five tenets of strategic IT investment: |
|                  |                                                   |
|                  | 1\. IT investments should be managed as a         |
|                  | portfolio;                                        |
|                  |                                                   |
|                  | 2\. Each IT investment should be justified and    |
|                  | demonstrate benefit to DOI's mission;             |
+------------------+---------------------------------------------------+

3\. The portfolio should strive to balance investments so that strategic
infrastructure and IT investments supporting DOI programs are in
harmony;

4\. The process used to select, control, and evaluate investments should
be integrated with Bureau and Department processes for budget,
financial, and program decisions; and

5\. Bureau and Department managers (project sponsors) are responsible
and accountable for management of respective IT investments.

Interior's IT Strategic plan has two primary components:

-   An E-Gov Strategy that includes a mission and vision with underlying
    goals and objectives for the Department.

-   A Governance Framework that provides a process for management and
    oversight of the Department's IT investment portfolio.

Copies of both of these documents can be found at the following
web-site:

-   <http://www.doi.gov/e-government/>

This *Guide* has been developed in support of these principles.

+------------------+---------------------------------------------------+
| ### Enterprise A | Departments are required to establish an          |
| rchitecture (EA) | integrated Enterprise Architecture (EA), which is |
|                  | tied to the Federal Enterprise Architecture       |
|                  | (FEA.) IT Investment Management, as illustrated   |
|                  | in Figure ES-2, covers the three interrelated     |
|                  | processes, as required by Federal statutory       |
|                  | requirements, regulations, and guidance for both  |
|                  | IT Capital Planning and Investment Control        |
|                  | process and Enterprise Architecture.              |
|                  |                                                   |
|                  | The Interior Enterprise Architecture (IEA)        |
|                  | reference models conform to those of the Federal  |
|                  | Enterprise Architecture (FEA) and are supported   |
|                  | by several architecture teams, both at the        |
|                  | Department level and at the Bureau or Office      |
|                  | level. The DOI Enterprise Architecture Repository |
|                  | ( DEAR) is a systems inventory and the primary    |
|                  | tool used in the development of the modernization |
|                  | blueprints. The Bureau Enterprise Architecture    |
|                  | Repository (BEAR) is the systems inventory for    |
|                  | the individual Bureau level architecture          |
|                  | management of Bureau unique business requirements |
|                  | and is also considered to be a portion of the     |
|                  | \"integrated DOI EA\".                            |
+------------------+---------------------------------------------------+
| #                | As part of the IT CPIC process, the Department    |
| ## CPIC and IT I | has instituted an IT Investment Management        |
| nvestment Manage | improvement effort based on the Government        |
| ment Improvement | Accountability Office's (GAO) guidelines for IT   |
|                  | Investment Management (ITIM) maturity framework.  |
|                  | The recommendations of the "Departmental          |
|                  | Leadership Crucial to Success of Investment       |
|                  | Reforms at Interior" report (GAO-03-1028) will be |
|                  | incorporated in successive iterations of this     |
|                  | CPIC Guide. The objective is to establish a       |
|                  | Department-wide IT portfolio managed by the OCIO, |
|                  | composed of functional or Bureau portfolios,      |
|                  | including equipment, services, applications,      |
|                  | staff, and managers. DOI's portfolio will be      |
|                  | effectively managed to change as new IT           |
|                  | initiatives are added, new technology is          |
|                  | introduced, or new policy is implemented, while   |
|                  | still remaining true to the Department's overall  |
|                  | mission. As a result, project managers, project   |
|                  | sponsors, and system managers will be guided by   |
|                  | one all-encompassing process with well-defined    |
|                  | sub-processes, following GAO's recommendations.   |
+------------------+---------------------------------------------------+

#### DOI's IT CPIC Process Overview

DOI's IT management is based on the fundamental phases of an IT CPIC
process, as described by the Department's OIG, the OMB, the GAO, and
Federal Chief Information Officers' (CIO) Council guidance. This
guidance directs that investment control processes must include three
essential phases; Select, Control, and Evaluate. Each phase is conducted
as part of a continual interdependent management effort aimed at moving
from a fixation on project-by-project focus to a bigger perspective on
investment trends, directions, and outcomes. The CIO Council document,
*Smart Practices in Capital Planning*, states: "Effective capital
planning requires long range planning and a disciplined budget process
as the basis for managing a portfolio of assets to achieve performance
goals and objectives with minimal risks, lowest life cycle costs, and
greatest benefits to the business." Best practices include a
multi-tiered process to assure an optimal IT investment portfolio. Each
tier is empowered to make decisions and approvals through formal
charters. Approval decisions may result in reallocating or requesting
new funding, adding new investments, and postponing, or even canceling,
investments.

The CPIC is a structured, integrated approach to managing IT
investments. The CPIC ensures that IT investments align with the
Department's mission and supports its business needs while minimizing
risks and maximizing returns throughout the investment's life cycle.
CPIC relies on systematic selection, control, and on-going evaluation
processes to ensure that the investment's objectives are met efficiently
and effectively. These continuous processes are depicted in **Figure
ES-2: Information and Process Flow**. The information flows shown in
Figure ES-2 also represent a feedback mechanism to institutionalize
lessons learned. Approved major investments ---Exhibit 300 Capital Asset
Plan and Business Case (Exhibit 300 business case)---become part of a
larger investment portfolio (Exhibit 53) maintained by the Office of
Budget (POB). This portfolio contains an inventory of investments, as
well as sup­porting strategic, technical, and financial information
related to each invest­ment's risk and return profile. This information
will be reported annually to the OMB. When all IT investments are
consolidated into the Department's portfolio, the OCIO can ensure that
all systems support DOI's mission and goals, and work in concert with
each when appropriate, including systems under development, systems
currently in use, and systems scheduled for retirement and or
replacement.

![](media/image2.png){width="4.317361111111111in"
height="3.8020833333333335in"}

**Figure ES-2:** Information and Process Flow

+------------------+---------------------------------------------------+
| ### CPI          | The Clinger Cohen Act, which governs the CPIC     |
| C and Other Mana | process, has three strong focus areas: capital    |
| gement Processes | planning and investment control, enterprise       |
|                  | architecture, and the resources to accomplish     |
|                  | both of these processes. To understand the role   |
|                  | of IT capital planning within the IT management   |
|                  | process, it is important to recognize its linkage |
|                  | with other Department planning and management     |
|                  | processes. Below is a summary of linkages between |
|                  | the DOI IT Capital Planning and Investment        |
|                  | Control process and related management processes  |
|                  | and events, listed in the sequence in which they  |
|                  | normally occur during an annual cycle.            |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### CPIC         | Based on the FEA, DOI has developed an            |
| and EA Alignment | architecture framework as a logical structure for |
|                  | organizing complex information about an           |
|                  | enterprise. This information includes the         |
|                  | enterprise's business processes, participants,    |
|                  | the hardware and software systems that support    |
|                  | those processes and partici­pants, and the rules   |
|                  | and constraints under which the enterprise        |
|                  | operates.                                         |
+------------------+---------------------------------------------------+

An architecture framework helps an enterprise organize and present
aspects of its architecture in a way that is understandable by all
participants in the enterprise and by those outside the enterprise with
which they must interact.

The FEA enables the DOI EA to:

-   Analyze business processes to take advantage of standardization
    based on common functions to customers.

-   Ensure that automated systems optimally support the business
    processes and minimize the data collection burden.

-   Acquire new systems and coordinate technology investments with the
    Federal business systems and architecture.

-   Streamline organizational structure and distribution of
    responsibilities across the enterprise using Federal
    interoperability standards.

-   Facilitate IT Capital Planning and Investment Control and coordinate
    FEA technology investments.

-   Train employees in how the enterprise operates and how they fit into
    the enterprise.

An important role of the Department's CIO and its ITMC is to review the
EA framework and identify redundant information that exists between
investment information and the EA information, and bring that to the IRB
for an investment review. For example, the Federal Enterprise
Architecture Framework (FEAF) requires a list of business goals and
strategies, business plan (objectives and strategies), list of
organizations important to the business, and workflow model (allocation
of responsibilities). The IT CPIC process also requires similar
information. If the existing IT CPIC information is insufficient for use
by the EA, a process for capturing and incorporating the more robust EA
information must be developed.

EA is part of the Exhibit 300 business case criteria for the review and
evaluation of investments through the IT CPIC process.

These following FEA frameworks provide a way of describing, analyzing,
and improving the Federal Government information systems. All
investments must include these criteria linking the investment to the
Business Reference Model (BRM), Technical Reference Model (TRM), Service
Reference Model (SRM), Data Reference Model (DRM), and Performance
Reference Model (PRM):

**Business Reference Model (BRM)** is a function-driven framework that
describes the Lines of Business and Internal Functions performed by the
Federal government independent of the agencies that perform them. All IT
investments (including non-major) are mapped to the BRM to identify
collaboration opportunities.

**Technical Reference Model (TRM)** provides a framework to describe the
standards, specifications, and technologies supporting the delivery,
exchange, and construction of business (or Service) components and e-Gov
solutions. The Federal TRM unifies existing Department TRMs and
electronic Government guidance by providing a foundation to advance the
re-use of technology and component services from a government-wide
perspective.

**Service Component Reference Model (SRM)** provides a common frame­work
and vocabulary for characterizing the IT and business components that
collectively comprise an IT investment. The SRM will help agencies
rapidly assemble IT solutions through the sharing and re-use of business
and IT components. A component is a self-contained process, service, or
IT capability with pre-determined functionality that may be exposed
through\
a business or technology interface.

**Data Reference Model (DRM)** describes, at an aggregate level, the
data and information that supports government program and business line
operations. This model enables agencies to describe the types of
interaction and exchanges that occur between the Federal Government and
citizens.

**Performance Reference Model (PRM)** is a standardized framework to
measure the performance of major IT investments and their contributions
to program performance. This model helps produce enhanced performance
information to improve strategic and daily decision-making; improves the
alignment and better articulates the contribution of inputs to outputs
and outcomes; and identifies performance improvement opportunities that
span traditional organizational structures and boundaries.

+------------------+---------------------------------------------------+
| ### IT Security  | IT security is an explicit part of the IT CPIC    |
|                  | process. All IT investments must demonstrate that |
|                  | costs for appropriate IT security controls are    |
|                  | explicitly incorporated into the life cycle       |
|                  | planning of a all systems in a manner consistent  |
|                  | with FISMA and OMB guidance for IT investments.   |
|                  | Cost effective security of DOI information        |
|                  | systems must be an integral component of business |
|                  | operations.                                       |
|                  |                                                   |
|                  | IT security is part of the Exhibit 300 business   |
|                  | case criteria for the review and evaluation of    |
|                  | investments through the IT Capital Planning and   |
|                  | Investment Control process.                       |
|                  |                                                   |
|                  | Each business case should include costs           |
|                  | associated with all aspects of security program   |
|                  | expenses that would normally occur. For example:  |
|                  | ongoing cyclical Certification and Accreditation  |
|                  | (C&A), risk identification & mitigation           |
|                  | activities, and day-to-day investment level       |
|                  | security operations activities.                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | Annually, agencies are required to submit, in     |
| Budget Formulati | accordance with the requirements of OMB Circular  |
| on and Execution | A-11, IT investments as part of Interior's budget |
|                  | request. All IT investments are to be included in |
|                  | the Federal budget request whether they are       |
|                  | existing investments and systems, incremental     |
|                  | increases for existing investments and systems or |
|                  | new initiatives. During the                       |
+------------------+---------------------------------------------------+

budget process, the reasonableness of the cost estimates is examined and
agencies are held accountable for meeting the cost goals. Alternative
analyses are conducted for each IT investment. The selection of the best
alternative is based on a Cost Benefit Analysis (CBA) that uses a
systematic analysis of expected benefits and costs. Estimates of
risk-adjusted costs and benefits show explicitly the performance, budget
changes, and risks that result from undertaking the investment. DOI's IT
CPIC process is closely aligned to DOI's budget cycle processes. This
includes reviews by the respective controllers of the IT-related funding
requests developed by the Bureaus and Departmental offices during the
formal budget formulation process conducted by the controllers. All
budget requests will be reviewed and prioritized based on projected
budget requests. New investments are justified based on the need to fill
a gap in DOI's ability to meet strategic goals and objectives with the
least life cycle costs of all the various possible solutions, and
provide risk-adjusted cost and schedule goals and measurable performance
benefits.

+------------------+---------------------------------------------------+
| #                | DOI's CPIC covers IT investments originating at   |
| ## Scope of CPIC | the supporting offices of the component Bureaus   |
|                  | to Department-wide systems originating in DOI     |
|                  | level offices. All DOI IT investments are         |
|                  | identified in the DOI IT portfolio (Exhibit 53).  |
|                  | IT governance boards exist from lowest levels to  |
|                  | highest management bodies. All IT investments     |
|                  | (projects) meeting the minimum Bureau screening   |
|                  | criteria must follow their respective CPIC.       |
|                  | Departmental Offices must meet the minimum        |
|                  | national screening criteria and must follow the   |
|                  | Department's IT CPIC Process.                     |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The following decision-making bodies are          |
|  Key Decision Ma | responsible for ensuring that proposed            |
| king Bodies ---  | investments meet the Department's strategic,      |
| General Guidance | business, and technical objectives:               |
|                  |                                                   |
|                  | The DOI CIO, as the Secretary's delegated agent,  |
|                  | makes the final decision based on the IRB's       |
|                  | recommendation.                                   |
|                  |                                                   |
|                  | #### DOI Investment Review Board (IRB)            |
|                  |                                                   |
|                  | The Departmental-level IT governing body is the   |
|                  | IRB. It is responsible for the following          |
|                  | activities;                                       |
+------------------+---------------------------------------------------+

-   Selecting, controlling, and evaluating all Information Technology
    investments included in the DOI portfolio.

-   Defining the decision criteria that will be employed to select among
    IT investments for the DOI IT Investment Portfolio.

-   Making technical decisions regarding the effective use of DOI IT
    investments and resources, including systems development,
    infrastructure, maintenance, and IT consulting.

-   Reccomending, disapproving, or deferring judgment on the entire
    portfolio while also reserving the right to review each IT
    investment under consideration for, or already within, the DOI IT
    Investment Portfolio.

#### Requirements for Bureau Management Review Boards

Bureaus are required to establish and maintain active IT review boards
modeled on the Departmental IRB. These boards are required as part of
the Fiscal Year 2005 President's Budget Pre-Select and Select Phases.
They will also be structured to conduct the Control, Evaluate, and
Steady State moni­toring activities. Specifically, Bureau review boards
will be structured to the following additional activities:

-   Review on-going IT investments to ensure that their status,
    progress, and outlook are satisfactory and consistent with project
    plans.

-   Identify deficiencies in project management and monitor corrective
    actions.

-   Provide recommendations to the ITMC to support their decision to
    continue, reduce, terminate, or defer IT investments.

-   Conduct periodic reviews of investment status, control, performance,
    risk and outlook for approved and funded IT investments.

-   Establish and execute the necessary project controls to manage
    requirements; risk; cost, schedule, and technical baselines; and
    performance outcomes.

# 1 Introduction

## 1.1 Purpose

This document describes the United States Department of the Interior
(DOI) Information Technology (IT) Capital Planning and Investment
Control (CPIC) process. It outlines a framework for DOI to manage its IT
investment port­folio. This investment management process allows DOI to
optimize the benefits of scarce IT resources, address the strategic
needs of DOI, and comply with applicable laws and guidance.

The CPIC is a structured, integrated approach to managing IT
investments. It ensures that all IT investments align with the DOI
mission and support busi­ness needs while minimizing risks and maximizing
returns throughout the invest­ment's lifecycle. The CPIC relies on a
systematic pre-selection, selection, control, and on-going evaluation
process to ensure each investment's objectives support the business and
mission needs of the Department (see **Figure 1-2**).

Through sound management of these investments, the Investment Review
Board (IRB) makes recommendations regarding the IT direction for DOI,
and ensures that bureaus and offices manage IT investments with the
objective of maximizing return to the Department and achieving business
goals.

## 1.2 Legislative Background and Associated Guidance

Seven statutes require Federal agencies to revise their operational and
management practices to achieve greater mission efficiency and
effectiveness. Include these laws:

-   The Chief Financial Officer (CFO) Act of 1990

-   The Government Performance and Results Act of 1993 (GPRA)

-   The Federal Acquisition Streamlining Act of 1994 (FASA)

-   The Paperwork Reduction Act of 1995 (PRA)

-   The Clinger-Cohen Act of 1996 (CCA)

-   The Government Paperwork Elimination Act of 1998 (GPEA)

-   The Federal Information Security Management Act (FISMA)

-   E-Gov Act of 2002

![](media/image2.png){width="4.438194444444444in"
height="3.9034722222222222in"}

**Figure 1-2**. CPIC Information and Process Flow

This CPIC Guide is based upon the IT aspects of these laws, and focuses
specifically on the Clinger Cohen Act (CCA) requirements. The CCA's
objective is that senior managers use a CPIC process to systemically
maximize the benefits of IT investments. The CCA further describes CPIC
as follows:

"The Head of each executive agency shall design and implement in the
executive agency a process for maximizing the value and assessing and
managing the risk of the information technology acquisitions of the
executive agency," and

"The process shall:

> 1\. Provide for the selection of information technology investments to
> be made by the executive agency, the management of such investments,
> and the evaluation of the results of such investments;
>
> 2\. Be integrated with the processes for making budget, financial, and
> program management decisions within the executive agency;
>
> 3\. Include minimum criteria to be applied in considering whether to
> undertake a particular investment in information systems, criteria
> related to the quantitatively expressed projected net risk-adjusted
> return on investment and specific quantitative and qualitative
> criteria for comparing and prioritizing alternative investments;
>
> 4\. Provide for identifying information systems investments that would
> result in shared benefits or costs for other Federal agencies of State
> or local governments;
>
> 5\. Require identification of quantifiable measurements for
> determining the net benefits and risks of a proposal investment; and
>
> 6\. Provide the means for senior management to obtain timely
> informa­tion regarding the progress of an investment, including a
> system of milestones for measuring progress, on an independently
> verifiable basis, in terms of cost, capability of the system to meet
> specified requirements, timeliness, and quality."

Beyond the legislative background, there is extensive guidance from the
Federal Chief Information Officer (CIO) Council, the Office of
Management and Budget (OMB), the Government Accountability Office (GAO),
and others in the area of IT investment management. A list of investment
management reference guides and memoranda is identified in Appendix Q.
The policy and processes described in this Guide are consistent with
this guidance.

## 1.3 Point of Contact

The CPIC process is primarily supported and maintained by the DOI Office
of the Chief Information Officer (OCIO). For further information about
this Guide or the CPIC process, please contact the Chief, Portfolio
Management Division (PMD) in the OCIO at either (202) 208-4109 or OCIO
CPIC Working Team at OS_PIO_CPIC@ios.doi.gov.

## 1.4 Scope of CPIC

All Departmental IT system development, maintenance efforts, and
infrastructure computing resources at all levels of sensitivity, whether
owned and operated by DOI, or operated on behalf of DOI must comply with
this CPIC guidance.

All IT investments must be reviewed and approved by the DOI IRB. It is
expected that each individual DOI Bureau will have a similar CPIC
process, manage its own portfolio, and create associated criteria. At a
minimum, each Bureau is expected to use the CPIC process to manage its
IT investments.

The criteria for an investment to be considered "major" are described in
the following section.

Investments that are not considered "major" are classified as
"non-major" and must have an Exhibit 300-1 business case submitted.

## 1.5 Criteria for Major IT Investments

Major IT systems meet at least one of the following criteria:

-   Any investment that was reported to OMB the previous year as a major
    investment.

-   \$5M annual cost or \> \$35M lifecycle cost

-   Importance to the mission or its significant role in administration
    of programs, finances, property, or other resources

-   Is an integral part of the Department's modernization blueprint (EA)

-   Mandated by legislation or executive order, or identified by the
    Secretary as critical

-   All financial systems with an annual cost greater than \$500,000.

-   High risk as determined by OMB, GAO, Congress and or the CIO.

-   Directly Supports the President's Management Agenda Items of "high
    executive visibility"

-   E-Government, Departmental, cross-cutting (across more than one
    office or Bureau)

-   Links to the first two layers of the FEA. (This is meant to imply
    the first two layers of the BRM: Services to Citizens and Mode of
    Delivery)

-   These investments are considered to be strategic for the Department
    and have a greater documentation burden. Each is individually
    reported to OMB as an Exhibit 300 business case. These investments
    form part of the DOI IRB IT portfolio together with smaller
    investments from DOI Bureaus.

## 1.6 Roles and Responsibilities

The following decision-making bodies and personnel have been
established.

**Investment Review Board (IRB):** The governing and approval bodies
responsible for ensuring that proposed investments meet DOI strategic,
business, and technical objectives and manages the overall IT portfolio.
The IRB reviews, recommends decisions and issues guidance on the
implementation of recommendations contained in Modernization Blueprints
for information technology (IT) lines of business.

**Budget Analyst:** Official responsible for serving as the primary
interface between the investment and the Budget Office.

**Bureau or Office Chief Information Officer**: Responsible for
implementing Departmental policy, reviewing Bureau specific investments,
and making recommendations to the Bureau or office IRB.

**Capital Planning Coordinator:** Official responsible for serving as
the primary interface for capital planning between the investment and
CIO is also a member of the Capital Planning Working Team (CPWT) that
helps to shape and refine DOI's CPIC process.

**Capital Planning Working Team:** The mission of the CPWT is to enable
and assist Bureaus and offices in IT capital planning and investment
management. The mission is cooperative, inclusive of architecture,
budget, security, financial, and other high priority DOI efforts.

**Contracting Officer:** Official responsible for serving as the primary
acquisition support for the investment and interface between the
investment and the Office of Acquisition and Property Management.

**CPIC Sponsor:** Responsible official for providing executive
sponsorship of the investment; should be a senior level executive within
the applicable mission area or office or Bureau.

**DOI Chief Information Officer (CIO):** Responsible for setting
Departmental IT policy, reviewing all IT investments; and, as the chair
of the IRB and Secretary's designated Information Technology (IT)
manager makes final decisions regarding DOI IT investments.

**DOI Office or Bureau Head:** Responsible official for approving CPIC
documentation before submission to OCIO.

**Executive Working Group(s) (EWG):** Responsible for assessing how well
potential major investments meet a predetermined set of capital planning
decision criteria and providing recommendations to the IRB. The IRB
appoints Executive Working Groups as needed. (Examples; Architecture
Review Board (ARB) or e-Gov team)

**Project Manager:** Trained or experienced official responsible for
management and completion of one or more IT investment projects.
(Reference DOI OCIO Directive 2004-019)

**Project Sponsor or Functional Manager:** Business official responsible
for the strategic business processes under development or enhancement
and for ensuring their integrity; also serves as the primary user
interface to the CIO, EWG, and IRB.

**Proponent:** Individual or organization that proposes an IT investment
to meet a mission or business need.

**System Owner:** Responsible for ensuring that the system is evaluated
on an annual basis and receives an appropriate level of funding for the
operations and maintenance of the system.

## 1.7 Process Overview

The CPIC is a structured process in which proposed and ongoing IT
invest­ments are continually monitored throughout their lifecycle.
Successful investments and those that are terminated or delayed are
evaluated both to assess the impact on future proposals and to benefit
from any lessons learned. The CPIC contains five phases (Pre-Select,
Select, Control, Evaluate, and Steady State). As detailed in this
document, each phase contains the following common elements:

**Purpose:** Describes the objective of the phase;

**Entry Criteria:** Describes the phase requirements, and thresholds for
entering the phase;

**Process:** Describes the type of justification, planning, and review
that will occur in the phase; and

**Exit Criteria:** Describes the action necessary for proceeding to the
next phase.

Completing one phase is necessary before beginning a subsequent phase.
Each phase is overseen by the IRB, which ultimately approves or rejects
an invest­ment's advancement to the next phase. This ensures that each
investment receives the appropriate level of managerial review and that
coordination and accountability exist.

DOI Bureaus and staff offices that have new IT investments meeting the
"major" IT investment criteria should prepare an Exhibit 300 business
case according to the guidelines provided in this document. Each Exhibit
300 business case is analyzed by OCIO for quality and conformance to
policies and guidelines and reviewed against the applicable strategic
investment criteria. OCIO analyses and scores the investment initiative.
A recommendation is then prepared and forwarded to the DOI IRB for
approval or disapproval. Approval, if granted, is an approval of concept
for the pre-select phase, indicating that the office or Bureau has done
the preparatory work necessary to fully justify the investment, and has
the mechanisms in place to manage the investment through the CPIC
phases. The investment must still compete for funding through DOI's
budget process. The Exhibit 300 business case is further refined and
submitted for DOI IRB approval at each subsequent phase.

All IT investments must conform to any guidance issued by the IRB in
conjunction with the Modernization Blueprints for key lines of business.

## 1.8 Process Coordination

Approved investments must move through the CPIC processes to obtain
investment funding. They must conform to any guidance issued by the IRB.
The Department is responsible for preparation of budget and or Working
Capital Fund requests for its investment submissions.

## 1.9 Document Structure

This document is divided into six chapters and 15 appendices as
described below:

**Chapter 1: Introduction.** Describes the CPIC purpose, scope,
thresholds, roles, process, and documents the structure.

**Chapter 2: Pre-Select Phase.** Provides a process and mechanism, to
assess an investment's support of the Department's strategic and mission
needs

**Chapter 3: Select Phase.** Provides tools to ensure that IT
investments are chosen that best support the department's mission and
that support DOI's approach to enterprise architecture

**Chapter 4: Control Phase.** Provides guidance to ensure that IT
investment initiatives are conducted in a disciplined, well-managed, and
consistent manner, which promote the delivery of quality products and
result in initiatives that are completed within scope, on time, and
within budget

**Chapter 5: Evaluate Phase.** Provides guidance on comparing actual to
expected results once a project has been fully implemented

**Chapter 6: Steady State Phase.** Provides a means to assess mature
systems to ascertain their continued effectiveness in supporting mission
requirements and to evaluate the cost of continued support or potential
retirement and replacement

**Chapter 7:** **Portfolio Management.** Provides steps in the portfolio
management process for selecting, funding, and managing IT investment
portfolios

#### Appendices:

**A: CPIC Process Checklist.** Provides a checklist of the process steps
investments must complete for each CPIC phase

**B: Mission Needs Statement.** Provides a template for evaluating the
mission need(s) for a new IT investment

**C: Operational Analysis.** Provides a template for evaluating
investments in the Steady State Phase

**D: Cost-Benefit Analysis.** Provides guidance on completing a
Cost-Benefit Analysis (CBA)

**E: Risk Management.** Provides guidance on conducting a risk
identification, qualification, response development, and response
control for IT capital planning

**F: Performance Measurement.** Provides guidance on developing
performance measures for IT investments

**G: Project Management.** Provides guidance on managing IT investments

**H: Earned Value Analysis.** Provides guidance on conducting earned
value analysis

**I: Post-Implementation Reviews.** Provides guidance on conducting a
Post-Implementation Review (PIR)

**J: IT Investment Rating and Ranking Criteria.** Provides the scoring
criteria used by an EWG and the IRB during the annual investment review

**K: Security Infrastructure Guide.** Provides guidance concerning cyber
security information to support the investment

**L: eCPIC Requirements by Phase.** Provides a summary of the data
required in the Information Technology Investment Portfolio System
(eCPIC) for each CPIC phase

**M: Monthly and Quarterly Scorecards and Corrective Actions Report
(CAR).** Lists the critical areas the Control Review Team discusses
during each Quarterly or Monthly Milestone Review

**N: CPIC Process Assessment.** Provides and overview of the CPIC
Process, using the GAO's ITIM framework

**O: Glossary of Terms and Acronyms.** Provides definitions for terms
and acronyms used throughout this document

**P: References.** Provides a list of references used to develop this
document

# Pre-Select Phase

## 2.1 Purpose

The Pre-Select Phase provides a process to assess a proposed
investment's support of the Department's strategic plan and mission. It
is during this phase that the business or mission need is identified and
relationships to the Department strategic planning efforts are
established. The Phase allows project teams to begin the process of
defining business requirements and associated system performance
metrics, performance measures, benefits, and costs, as well as
subsequent completion of an Exhibit 300 business case and initial
project planning efforts in preparation for inclusion in the
Department's IT portfolio.

## 2.2 Entry Criteria

Prior to entering the Pre-Select Phase, investments must have a concept
to address the mission need that is anticipated to include an IT
component.

## 2.3 Process

During the Pre-Select Phase, mission analysis results in the
identification of a mission need necessitating consideration of an IT
alternative. The mission analysis and corresponding development of the
Mission Needs Statement (MNS) (see **Appendix B: Mission Needs
Statement**) are closely linked to the strategic planning process of the
DOI. Following mission analysis, the Project Sponsor, or Functional
Manager first checks to see if the requirement may be addressed in an
investment identified in a Modernization Blueprint. If not, he or she
further develops the proposed solution's concept. A 300-1 business case
with budget estimates and associated CBA are completed. The level of
detail required varies and should be commensurate with the size,
complexity, and cost of the proposed investment.

**Figure 2-1** provides a summary of the Pre-Select Phase process, as
well as the individual(s) and or group(s) responsible for completing
each process step. Each step is detailed in the following the diagram:

![](media/image4.wmf)

> **Figure 2-1** Pre-Select Phase Process Steps

+------------------+---------------------------------------------------+
| ##               | The DOI or Bureau Sponsor identifies a Project    |
| # 2.3.1 Identify | Sponsor for each accepted pro­posal who is the     |
|  Project Sponsor | proponent for the investment. The Project Sponsor |
|                  | will normally be the same person as the           |
|                  | Functional Manager but if the investment is       |
|                  | crosscutting, strategic, or high visibility, the  |
|                  | Project Sponsor may be differ­ent from the         |
|                  | Functional Manager. A crosscutting investment     |
|                  | spans multiple Bureaus. The Project Sponsor       |
|                  | should be a senior individual in the organization |
|                  | with requisite management, technical, and         |
|                  | business skills to lead the investment or         |
|                  | supervise a designated Project Manager.           |
+------------------+---------------------------------------------------+

The Project Sponsor is the business leader responsible to the IRB for
the investment as it continues through the CPIC process. Commercial and
government best practices show that IT investments championed by a
business leader have the best chance for successful deployment. This
commitment by the Project Sponsor to the IRB represents accountability
for the investment.

+------------------+---------------------------------------------------+
| ##               | Mission analysis is a strong, forward-looking,    |
| # 2.3.2 Conduct  | and continuous analytical activity that evaluates |
| Mission Analysis | the capacity of the Department's assets to        |
|                  | satisfy existing and emerging demands for         |
|                  | services. Mission analysis enables the Department |
|                  | to determine and prioritize the most critical     |
|                  | capability shortfalls and best technology         |
|                  | opportunities for improving the DOI's overall     |
|                  | security, capacity, efficiency, and effectiveness |
|                  | in providing services to customers.               |
+------------------+---------------------------------------------------+

Mission analysis is conducted within the framework of the Department's
enterprise architecture and long-range strategic goals. In turn, mission
analysis contributes strongly to the evolution of strategic planning and
DOI IT architecture development. (See **Appendix B: Mission Needs
Statement** for a template on how to conduct mission analysis.)

Consequently, mission analysis yields the identification of critical
needs the Department should address. It estimates the resources the
Department will likely be able to commit to each mission need, in
competition with other needs, within the constraint of a realistic
projection of future department budget authority. More accurate
resources quantification is conducted during the investment analysis if
the investment is selected as part of the Department's portfolio. The
resource estimate is a function of the benefit to the department and the
mission area, the cost of not addressing the need (e.g., poor customer
responsiveness, increased maintenance cost, lost productivity, etc.),
and the likely extent of required changes to the Department's
infrastructure.

If the mission analysis reveals a non-IT solution (e.g., a rulemaking or
policy change, operational procedural change, or transfer of systems
between sites) that can satisfy a capability shortfall and can be
achieved within approved budgets, it can be implemented without
proceeding further in the CPIC process as a non-IT initiative.

A mission analysis should identify the business drivers (e.g.,
Department mission, vision, goals, objectives, and tactical plans.)
Business drivers often involve the need to assist customers in a
particular service area such as recreation on public lands and in
national parks.

Once the key business drivers have been identified, a business
requirements analysis is conducted. The business requirements analysis
identifies how personnel conduct business activities in order to fulfill
mission requirements, meet objectives and perform their tactical plans.

All Mission Needs Statements will emerge from a structured mission
analysis. However, any individual or organization may propose a mission
need based on a perceived capability shortfall or technological
opportunity. Examples of potentially valid needs that could originate
outside DOI lines of business include those related to socioeconomic and
demographic trends, the environ­ment, statutory requirements, or an
industry-developed techno­logical opportunity. These shortfalls and
opportunities should be identified to the appropriate Project Sponsor or
Functional Manager who will determine how mission analysis should be
conducted to validate, quantify, and prioritize the proposed need.

DOI lines of business conduct mission analysis within their areas of
responsi­bility. The mission analysis consists of these principal
activities:

Identify and quantify projected demand for services based on input from
diverse sources; architecture and strategic planners for services needed
in the future; and integrated project teams (IPTs) in the form of
performance and supportability trends of fielded systems. Identify and
quantify projected technological opportunities that will enable the DOI
to perform its mission more efficiently and effectively.

Identify and quantify existing and projected services based on
information from field organizations, the enterprise architecture, and
IT asset inventory that defines what is in place and what is approved
for implementation. Special attention should be paid to IT Modernization
Blueprints, to determine whether investments identified may meet or
might efficiently be extended to meet the newly identified requirement.

Identify, analyze, and quantify capability shortfalls (e.g., the
difference between demand and supply) and technological opportunities to
increase quality of service, efficiency, and effectiveness.

Identify the user and customer base affected.

Prepare a Mission Needs Statement that summarizes the mission analysis
for inclusion with the Exhibit 300 or 300-1 business case.

When mission analysis identifies a capability shortfall or technological
opportunity, the results are summarized in a Mission Needs Statement.
The Mission Needs Statement must clearly describe the capability
shortfall and the impact of not satisfying the shortfall, or the
technological opportunity and the increase in efficiency it will
achieve. The Mission Needs Statement also must assess the criticality
and timeframe of the need, and roughly estimate the resources the
Department should commit to resolving it based on worth, criticality,
and the scope of likely changes to the Department's IT asset base. This
information forms the basis for establishing the priority of this need
in competition with all other Department needs.

+------------------+---------------------------------------------------+
| ### 2.3.3        | Concept development provides the opportunity for  |
|  Develop Concept | further examination of a proposed solution. It    |
|                  | focuses on an analysis of alternatives to meet    |
|                  | the mission need and initial planning for         |
|                  | entering into the Select Phase. Key components    |
|                  | include analysis of alternatives and an           |
|                  | examination and redesign of business practices.   |
+------------------+---------------------------------------------------+

The following activities are conducted during concept development:

Assess Mission Needs Statement.

Identify business objectives based on mission analysis and Mission Needs
Statement.

Discuss the proposed investment in relation to the OMB's three "Pesky
Questions":

1.  Does the investment in major capital asset support core or priority
    mission functions that need to be performed by the Federal
    Government?

2.  Does it have to be undertaken by the requesting department because
    no alternative private sector or government source can more
    efficiently support the function?

3.  Does the investment support work processes that have been simplified
    or otherwise redesigned to reduce costs, improve effectiveness, and
    make maximum use of commercial-off-the-shelf (COTS) technology?

Identify high-level performance measures. (Additional detailed
performance measures will be developed as part of the Select Phase.)

Determine key selection criteria to evaluate concept alternatives that
support high-level performance measures and business objectives.

Ensure solution aligns with Department standards for Security and
Privacy, Enterprise Architecture and e-Government Planning.

Identify alternatives that will be analyzed to support mission need and
business objectives.

Determine whether the investment may incorporate components applicable
to other mission needs and, if so, whether it may be appropriate to
identify it as a key "line of business" for the development of a
Modernization Blueprint. If not, special care should be taken to
determine and justify how the investment is truly unique and entails
components that cannot be shared and reused for other purposes.

Conduct preliminary planning and develop a Concept Management Plan
addressing Select Phase preparation, alternative analysis approach, and
business redesign or reengineering. (Departmental policy requires that
before new systems are fielded the business process owners must simplify
or other­wise redesign their existing processes before they invest in new
IT to support the process.) Plans for redesign or business process
reengin­eering (BPR) should be presented as part of the Exhibit 300 or
300-1 business case.

+-----------------+----------------------------------------------------+
| ### 2.3         | The 300-1 business case provides the necessary     |
| .4 Develop 300- | information to build support and make funding      |
| 1 Business Case | decisions for an investment. While the primary     |
|                 | emphasis of the Pre-Select Phase is on mission and |
|                 | strategic needs analysis, it also requires the     |
|                 | Project Sponsor or Functional Manager to begin     |
|                 | identifying alternative solutions and developing   |
|                 | an order of magnitude estimate of costs and        |
|                 | benefits (both quantitative and qualitative) that  |
|                 | may be realized by a given investment. 300-1       |
|                 | business case development activities include a     |
|                 | preliminary budget estimate and preliminary CBA,   |
|                 | as discussed below.                                |
+-----------------+----------------------------------------------------+

**Prepare preliminary budget estimate.** The preliminary budget estimate
should provide an estimate of costs necessary to support more detailed
planning and concept development prior to investment selection, and
provide an order of magnitude estimate of budget requirements to support
a five-year budget plan and lifecycle costing.

As part of the preliminary budget estimate, a preliminary security
analysis should be performed to determine estimated baseline costs. This
information should be included with the investment's prelim­inary budget
estimate. Detailed information concerning the prepar­ation of a security
analysis can be found in Appendix K: Security Infrastructure Guide.

**Prepare Preliminary CBA.** The preliminary CBA will provide initially
antici­pated costs and benefits of the proposed investment. Costs should
be the same as those identified in the budget estimate and benefits
should be aligned with the investment objectives and high-level
performance measures. The level of detail required varies and should be
commensurate with the size, complexity, and cost of the proposed
investment.

The Project Manager, Project Sponsor or Functional Manager, and Bureau
Sponsor prepare the Exhibit 300-1 business case in preparation for DOI's
investment reviews.

+------------------+---------------------------------------------------+
| #                | The Bureau Head reviews the investment submission |
| ## 2.3.5 Review  | and requests the Project Sponsor or Functional    |
| or Approve Inves | Manager and or Bureau Sponsor to update the 300-1 |
| tment Submission | business case, or make changes as needed. The     |
|                  | Bureau Head then approves the investment          |
|                  | submission and forwards it to the CIO.            |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 2.3.6 Re     | The CIO reviews the 300-1 business case and       |
| view Initiative  | provides any comments and or questions to the     |
| and Recommend Ap | Bureau. The Bureau addresses the issues and sends |
| propriate Action | an updated 300-1 business case to the CIO. The    |
|                  | CIO forwards the updated 300-1 business case with |
|                  | its assessment to the Bureau IRB for review. The  |
|                  | Bureau IRB assesses the investment with an        |
|                  | emphasis on mission alignment, conformance to any |
|                  | applicable IT Modernization Blueprints, and the   |
|                  | proposed concept management plan. This            |
|                  | information is then linked to future portfolio    |
|                  | selection decisions. The Bureau IRB forwards      |
|                  | their investment recommendations to the DOI IRB   |
|                  | for the final decision.                           |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 2.3.7        | The DOI IRB reviews the Bureau's IRB              |
|  Make Final Inve | recommendation and makes the final investment     |
| stment Decisions | decisions. If the DOI IRB approves the Bureau's   |
|                  | IRB recommendation, the investment moves forward  |
|                  | into the Select Phase.                            |
+------------------+---------------------------------------------------+

## 2.4 Exit Criteria

Prior to exiting the Pre-Select Phase, investments must obtain IRB
approval for the mission need and concept.

**Table 2-1** provides a summary of the documents generated during the
Pre-Select Phase process, as well as the whether the document requires
approval or whether the document is required only for the file for
recordkeeping purposes.

  ------------------------ ------------------------ ----------------------
  **Document**             **Required For File**    **Required For
                                                    Approval**

  Mission Needs Statement  **X**                    **X**

  Concept                  **X**                    **X**

  Exhibit 300-1            **X**                    **X**
  ------------------------ ------------------------ ----------------------

**Table 2-1** Summary of documents generated during the Pre-Select
Phase.

# 3 Select Phase

## 3.1 Purpose

In the Select Phase, DOI ensures the IT investments that best support
the mission and DOI's approach to enterprise architecture are chosen and
prepared for success (e.g.,, have a trained or experienced project
manager, risk management, etc.). Investments are also reviewed to ensure
no duplication of E-government initiative or existing DOI system
application. Individual investments are evaluated in terms of technical
alignment with other IT systems and projected performance as measured by
Cost, Schedule, Benefit, and Risk (CSBR). Milestones and review
schedules as part of a work breakdown structure (see Appendix G: Project
Management) are also established for each investment during the Select
Phase.

In this phase, DOI prioritizes each investment and decides which
investments will be included in the portfolio. Exhibit 300-1 or 300
business case submissions are assessed against a uniform set of
evaluation criteria and thresholds, as identified in OMB Circular A-11,
Part 7---Planning, Budgeting, Acquisition, and Management of Capital
Assets. The investment's CSBR are then systematically scored using
objective criteria and the investment is ranked and compared to other
investments. Finally, the DOI IRB selects which investments will be
included in the Department's portfolio.

## 3.2 Entry Criteria

Prior to entering the Select Phase, investments must have obtained IRB
approval for the mission need and concept.

## 3.3 Process

The Select Phase begins with an investment concept (approved during the
Pre-Select Phase) and moves through the development of the Exhibit 300-1
or 300 business cases, acquisition plan, risk management plan,
performance measures, and a project plan. These plans lay a foundation
for success in subsequent phases. The Select Phase culminates in a
decision whether to proceed with the investment.

**Figure 3-1** provides a summary of the Select Phase process, as well
as the individual(s) and or group(s) responsible for completing each
process step. Each step is detailed in the following the diagram:

![](media/image5.wmf)

**Figure 3-1**Select Phase Process Steps

+------------------+---------------------------------------------------+
| #                | The Project Sponsor or Functional Manager, and    |
| ## 3.3.1 Review  | Proponent review the Mission Needs Statement and  |
| the Mission Need | other documentation completed during the          |
| s Statement and  | Pre-Select Phase and makes any necessary changes. |
| Update if Needed | Next, the Project Sponsor or Functional Manager   |
|                  | develops quantifiable performance measures that   |
|                  | focus on outcomes where possible (see **Appendix  |
|                  | F: Performance Measurement**). These performance  |
|                  | measures will form a basis for judging investment |
|                  | success.                                          |
+------------------+---------------------------------------------------+
| ###              | The Project Sponsor creates the Project Charter   |
| 3.3.2 Create the | and sends it to the Bureau Head for review. The   |
|  Project Charter | Bureau Head then reviews it and makes a           |
|                  | recommendation to the Bureau OCIO, who reviews it |
| ###              | and sends it to the Bureau IRB and either         |
|                  | recommend or reject the charter to the DOI IRB.   |
|                  | The DOI IRB makes the final decision.             |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The Bureau Head approves the selection of the IPT |
| 3.3.3 Approve In | members that will assist the Project Sponsor and  |
| tegrated Project | Project Manager in the initiative's development.  |
|  Team Membership | The IPT brings together expertise from functional |
|                  | areas as required by the specifics of the         |
|                  | initiative. A capital planning analyst from the   |
|                  | CIO will work with and provide guidance to the    |
|                  | IPT throughout the process.                       |
+------------------+---------------------------------------------------+

The IPT should consider the need for expertise in these areas:

-   Functional Manager

-   IT Manager

-   Security Specialist

-   Department Budget Analyst

-   Contracting Specialist

-   Additional team members may be added from other functional areas

+------------------+---------------------------------------------------+
| #                | The Project Sponsor identifies a potential        |
| ## 3.3.4 Identif | funding source for the IRB to continue investment |
| y Funding Source | support. The Project Sponsor then gets approval   |
|  and Obtain Depa | from the appropriate management office.           |
| rtment Approvals |                                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 3.3.5 Develo | The Project Sponsor ensures, that for each        |
| p Exhibit 300 Bu | investment, the following studies are completed   |
| siness Case Supp | and the results are submitted to the CIO:         |
| orting Materials |                                                   |
|                  | Business Profile:                                 |
|                  |                                                   |
|                  | Exhibit 300 business case with Performance        |
|                  | Measures (see **Appendix F: Performance           |
|                  | Measurement**) and mission needs statement        |
|                  |                                                   |
|                  | Business Process Reengineering Studies            |
|                  |                                                   |
|                  | Concept of Operations Plan                        |
|                  |                                                   |
|                  | Stakeholder Identification and Requirements       |
|                  |                                                   |
|                  | Functional Requirements                           |
|                  |                                                   |
|                  | Feasibility Study                                 |
+------------------+---------------------------------------------------+

Risk Profile:

Risk Management Plan (see **Appendix E: Risk Management**)

Financial Profile:

Return on Investment (ROI) and CBA (see **Appendix D: Cost-Benefit
Analysis**)

Update lifecycle cost projections

Alternatives Analysis

Funding Source Identification

Technological Profile:

Technical Requirements

> Security Plan (see **Appendix K: Security Infrastructure Guide**)

Enterprise Architecture Plan (see
[http://www.doi.gov/OCIO/architecture]{.underline})

Relationship to Existing Systems (dependencies)

Prototype or Pilot Plans

Project Management and Planning Profile

Project Plan, including a list of team members

Acquisition Plan and strategy

+------------------+---------------------------------------------------+
| ### 3.3.6 P      | The Project Manager prepares the Exhibit 300      |
| repare Exhibit 3 | business case.                                    |
| 00 Business Case |                                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 3            | The Bureau Head reviews the Exhibit 300-1 or 300  |
| .3.7 Review or A | business cases and requests the Project Sponsor   |
| pprove Exhibit 3 | or Functional Manager, and or Bureau Sponsor to   |
| 00 Business Case | update the package or make changes as needed. The |
|                  | Bureau Head then approves the submission and      |
|                  | sends it to the Bureau CIO.                       |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 3.3.8 Re     | The Bureau CIO reviews the investment based on    |
| view Initiative  | the established criteria, and develops findings   |
| and Recommend Ap | and recommendations. The Bureau CIO forwards the  |
| propriate Action | package to the Bureau IRB for review. The Bureau  |
|                  | IRB reviews the investment for compliance with    |
|                  | Departmental strategic, legislative, and          |
|                  | budgetary goals. The Bureau IRB uses standard     |
|                  | criteria to objectively compare investments based |
|                  | on the data presented, and scores projects using  |
|                  | the criteria listed in **Appendix J: IT           |
|                  | Investment Rating and Ranking Criteria**. The     |
|                  | Bureau IRB forwards its findings and              |
|                  | recommendations to the DOI IRB for the final      |
|                  | decision.                                         |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 3.3.9        | The DOI IRB reviews the Bureau's IRB              |
|  Make Final Inve | recommendation and makes the final investment     |
| stment Decisions | decisions. If the IRB approves the Bureau's IRB   |
|                  | recommendation, then the decision is implemented  |
|                  | and a review schedule for the Control Phase is    |
|                  | established in concert with the CIO and Bureau    |
|                  | IRB. The initiative then moves to the Control     |
|                  | Phase.                                            |
+------------------+---------------------------------------------------+

## 3.4 Exit Criteria

Prior to exiting the Select Phase, investments must have executed the
following activities:

-   Established performance goals and quantifiable performance measures.

-   Developed a project plan which details quantifiable objectives
    including an acquisition schedule, project deliverables, and
    projected and actual costs.

-   Identified costs, schedule, benefits, and risks.

-   Established security, Section 508 (IT accessibility), Privacy Act
    assessment, data, and architecture goals and measures.

-   Established an EWG and IRB investment review schedule for the
    Control Phase.

-   Determined whether another key line of business should be identified
    for recommendations to the IRB for the preparation of a
    comprehensive IT Modernization Blueprint.

-   Obtained IRB approval to enter the Control Phase.

**Table 3-2** provides a summary of the documents generated during the
Select Phase process, as well as the whether the document requires
approval or whether the document is required only for the file for
recordkeeping purposes.

  ------------------------------- ------------------- -------------------
  **Document**                    **Required For      **Required For
                                  File**              Approval**

  Mission Needs Statement         **X**               

  Collection Plan                 **X**               

  Business Process Reengineering  **X**               
  Studies                                             

  Concept of Operations Plan      **X**               

  E-Government Plan               **X**               

  Stakeholder Identification and  **X**               
  Requirements                                        

  Functional Requirements         **X**               

  Feasibility Study               **X**               

  Risk Management Plan            **X**               

  Return on Investment (ROI) and  **X**               
  CBA                                                 

  Updated lifecycle cost          **X**               
  projections                                         

  Alternatives Analysis           **X**               

  Technical Requirements          **X**               

  Security Plan                   **X**               

  Enterprise Architecture Plan    **X**               

  Prototype or Pilot Plans        **X**               

  Project Plan                    **X**               **x**

  Acquisition Plan and strategy   **X**               

  Control Phase Investment Review **X**               
  Schedule                                            

  Exhibit 300                     **X**               **X**
  ------------------------------- ------------------- -------------------

**Table 3-2** Summary of documents generated during the Select Phase.

# 4 Control Phase

## 4.1 Purpose

The objective of the Control Phase is to ensure, through timely
oversight, quality control, and executive review, that IT initiatives
are conducted in a disciplined, well-managed, and consistent manner.
Investments should be closely tracked against the various components
identified in the Risk Manage­ment Plan developed in the Select Phase.
This phase also promotes the delivery of quality products and results in
initiatives that are completed within scope, on time, and within budget.
During this process, senior managers regularly monitor the progress or
performance of ongoing IT investments against projected cost, schedule,
performance, and delivered benefits. The DOI IRB has the ultimate
responsibility for project oversight.

Control Phase activities require the continuous monitoring of ongoing IT
initiatives through the development or acquisition lifecycle. Quarterly
or monthly or milestone control reviews (see **Appendix M:** ) are
conducted, as identified in the project plan.

Based on the quarterly or monthly or milestone control reviews, the DOI
IRB will determine if a project is continued, modified, or terminated.
The reviews focus on ensuring that projected benefits are being
realized; cost, schedule and performance goals are being met; risks are
minimized and managed; and the investment continues to meet strategic
needs. Depending on the review's outcome, decisions may be made to
suspend funding or make future funding releases conditional on
corrective actions.

## 4.2 Entry Criteria

Prior to entering the Control Phase, investments must have executed the
following activities:

-   Established performance goals and quantifiable performance measures

-   Developed a project plan which details quantifiable objectives,
    including an acquisition schedule, project deliverables, and
    projected and actual costs

-   Identified costs, schedule, benefits, and risks

-   Established security, Section 508 (IT accessibility), Privacy Act
    assessment, data, and architecture goals and measures

-   Established an EWG and IRB investment review schedule for the
    Control Phase

-   Obtained IRB approval to enter the Control Phase

## 4.3 Process

During the Control Phase, an investment progresses from requirements
definition to implementation. Throughout the Phase, Bureau CIO's provide
the OCIO and the EWG with investment reviews to assist them in
monitoring all investments in the portfolio. They also ensure that all
planned investments do not duplicate any E-Government initiatives or any
existing DOI system applications. Investment reviews provide an
opportunity for Project Managers to raise issues concerning the IT
developmental process, including security, telecommunications,
enterprise architecture alignment, E-Government, GPEA compliance,
Section 508 concerns, etc.

The project manager uses a performance based management system to
evaluate project performance and report variance.

The DOI IRB review project performance, and take corrective action if
the project performance variance exceeds 5 percent from the project's
established baseline.

The DOI IRB reviews are based on factors including the strategic
align­ment, criticality, scope, cost, and risk associated with all
initiatives. The Project Sponsor establishes milestones as part of the
investment baseline against which performance will be measured
throughout the Control Phase. Agencies are expected to uphold these
milestones; OMB will hold agencies responsible for meeting milestones as
originally indicated in the baseline. After establishing the milestones,
the Project Sponsor revises the project plan as required to meet the
approved milestones.

**Figure 4-1** provides a summary of the Control Phase process, as well
as the individual(s) and or group(s) responsible for completing each
process step. Each step is detailed in the following diagram:

![](media/image6.wmf)

**Figure 4-1** Control Phase Process Steps

+------------------+---------------------------------------------------+
| #                | The Project Manager maintains the project         |
| ## 4.3.1 Establi | management and executive plans that were          |
| sh and Maintain  | established in the Select phase;s well as the     |
| Project Costs, S | blished in the Select phaseam (CPWT) that helps   |
| chedule, and Tec | to shape and refine DOI\'A. The E-Gov Strategy    |
| hnical Baselines | was formally adopt as well as the procedures, and |
|                  | practices to support initiative monitoring        |
|                  | activities. The Project Manager directs the IPT   |
|                  | to identify any new or existing internal risks    |
|                  | based upon review of the work breakdown structure |
|                  | (WBS), project plan, risk checklist, and          |
|                  | stakeholder interviews. The Project Manager       |
|                  | monitors financial, technical, operational,       |
|                  | schedule, legal and contractual, and              |
|                  | organizational risks. The Project Manager ensures |
|                  | that all budget documents remain current and      |
|                  | final decisions are vetted through the PMD. The   |
|                  | Project Manager provides periodic updates to the  |
|                  | CIO and or EWG on the investment's status and     |
|                  | security costs, schedule, and technical           |
|                  | baselines. The Project Manager ensures that the   |
|                  | project has been planned realistically.           |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 4.3.2 Ma     | The Project Manager collects actual information   |
| intain Current P | on the resources allocated and expended           |
| roject Cost, Sch | throughout the Control Phase. The Project Sponsor |
| edule, Technical | ensures that the investment still aligns with the |
| , and General St | Department mission, strategic plan, enterprise    |
| atus Information | architecture, and E-Government. The Project       |
|                  | Manager compares the actual information collected |
|                  | to the estimated baselines developed during the   |
|                  | Select Phase and identifies root causes for any   |
|                  | differences. The Project Manager reviews the      |
|                  | security and infrastructure analyses for          |
|                  | accuracy. The Project Manager maintains a record  |
|                  | of changes to the initiative's technical          |
|                  | compo­nents including hardware, software,          |
|                  | security, and communications equip­ment. Technical |
|                  | component changes may trigger a new architecture  |
|                  | review.                                           |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 4.3.3 Asse   | As part of the periodic milestone reviews during  |
| ss Project Progr | the Control Phase, the Project Sponsor determines |
| ess against Perf | whether to continue the project. The Project      |
| ormance Measures | Sponsor deter­mines if the project manager is      |
|                  | managing investment cost and schedule variance,   |
|                  | mitigating risks, and providing projections for   |
|                  | future performance based upon work accomplished   |
|                  | to date. The Project Sponsor determines whether   |
|                  | current cost and schedule projections align with  |
|                  | investment implementation (e.g., based upon an    |
|                  | assumption of baseline actual costs 10 percent    |
|                  | greater than actual, what are the expectations of |
|                  | future performance).                              |
+------------------+---------------------------------------------------+

The Bureau Sponsor and Project Sponsor apply control screening criteria
(see **Appendix J: IT Investment Rating and Ranking Criteria**).

Using the control screening criteria to answer the questions on whether
the project has met expectations will support the decision to continue
with the investment, and identify any deficiencies and corrective
actions needed. Updated investment information is submitted to the OCIO
and the investment undergoes a control review by the DOI IRB. The
results of these reviews are used by the DOI IRB for management of the
IT investment portfolio.

+------------------+---------------------------------------------------+
| ### 4.3          | The Project Manager updates the Exhibit 300       |
| .4 Prepare Quart | business case on the planning and risk            |
| erly or Mileston | information and project performance. This         |
| e Control Review | includes updating the performance based           |
|                  | management system metrics in Part I, Section I.H. |
|                  | in the Exhibit 300 business case.                 |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 4.3.         | The Bureau CIO evaluates the quarterly or         |
| 5 Evaluate Quart | milestone control review documents for project    |
| erly or Mileston | performance. The Bureau CIO and E-Gov team member |
| e Control Review | endorses the investment and forwards the          |
|                  | documentation to the OCIO.                        |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The CIO prepares findings and recommendations,    |
|  4.3.6 Review Co | and forwards the updated package to the Bureau    |
| ntrol Documents  | IRB for review. The Bureau IRB reviews the        |
| and Recommend Ap | investment and determines whether to provide      |
| propriate Action | continued support to the investment and forwards  |
|                  | its recommendations to the DOI IRB for the final  |
|                  | decision (see **Appendix M: Monthly and Quarterly |
|                  | Scorecards, and Corrective Actions Report         |
|                  | (CAR)**).                                         |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 4.3.7 Mak    | The DOI IRB issues a decision, based upon the     |
| e Final Control  | recommendations received from the Bureau IRB. The |
| Review Decisions | decision is sent to the Project Sponsor and       |
|                  | Project Manager.                                  |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| #                | The Project Sponsor acknowledges and implements   |
| ## 4.3.8 Project | any corrective action recommended by the IRB.     |
|  Sponsor and Pro |                                                   |
| ject Manager Imp | Prior to the next scheduled review date, the      |
| lement Decisions | Project Sponsor and Project Manager update the    |
|                  | investment information and initiate another       |
|                  | preliminary assessment. This formal monitoring of |
|                  | investment progress, and the determination of     |
|                  | risks and returns, continues throughout the       |
|                  | Control Phase.                                    |
+------------------+---------------------------------------------------+

## 4.4 Exit Criteria

Prior to exiting the Control Phase, investments must execute the
following activities:

-   Complete investment development, production deployment and or
    implementation.

-   Confirm the PIR schedule

-   Demonstrate to the IRB conformance with any applicable guidance
    issued pursuant to an IT Modernization Blueprint.

-   Obtain DOI IRB approval to enter the Evaluate Phase.

**Table 4-1** provides a summary of the documents generated during the
Control Phase process, as well as the whether the document requires
approval or whether the document is required only for the file for
recordkeeping purposes.

  --------------------------- --------------------- ---------------------
  **Document**                **Required For File** **Required For
                                                    Approval**

  Project Management Plan     **X**                 **x**

  Project Status Reports      **X**                 

  Quarterly or Monthly        **X**                 **X**
  Reports                                           

  PIR Schedule                **X**                 

  Exhibit 300                 **X**                 
  --------------------------- --------------------- ---------------------

**Table 4-1** Summary of documents generated during the Control Phase.

# 5 Evaluate Phase

## 5.1 Purpose

The purpose of the Evaluate Phase is to compare actual to expected
results after an investment is fully implemented. This is done to assess
the invest­ment's impact on mission performance, identify any investment
changes or modifications that may be needed, and revise the investment
management process based on lessons learned. As noted in GAO's Assessing
Risks and Returns: A Guide for Evaluating Federal Agencies' IT
Investment Decision-Making, "the Evaluation Phase 'closes the loop' of
the IT investment manage­ment process by comparing actual against
estimates in order to assess the performance and identify areas where
decision-making can be improved."

The Evaluate Phase focuses on outcomes:

-   Determines whether the IT investment met its performance, cost, and
    schedule objectives.

-   Determines the extent to which the IT capital investment management
    process improved the outcome of the IT investment.

The outcomes are measured by collecting performance data, comparing
actual to projected performance and conducting a Post Implementation
Review (PIR) to determine the system's efficiency and effectiveness in
meeting performance and financial objectives. The PIR includes a
methodical assessment of the investment's costs, performance, benefits,
documentation, mission, and level of stakeholder and customer
satisfaction. The PIR is conducted by the Department, and results are
reported to the CIO, EWG, and IRB to provide a better understanding of
initiative performance and assist the Project Sponsor in directing any
necessary initiative adjustments. Additionally, results from the
Evaluate Phase are fed back to the Pre-Select, Select, and Control
Phases as lessons learned.

## 5.2 Entry Criteria

The Evaluate Phase begins once a system has been implemented and the
system becomes operational or goes into production. Any investment
cancelled prior to going into operation must also be evaluated. Prior to
entering the Evaluate Phase, investments must have executed the
following activities:

-   Complete investment development, production deployment and or
    implementation

-   Confirm the Post Implementation Review (PIR) schedule

-   Obtain DOI IRB approval to enter the Evaluate Phase

## 5.3 Process

In the Evaluate Phase, investments move from implementation or
termination to a PIR and the IRB's approval or disapproval to continue
the investment (with or without modifications). From the time of
implementation, the system is continually monitored for performance,
maintenance activities, costs, resource allocation, defects, problems,
and system changes. System stability is also periodically evaluated.
During the PIR, actual performance measures are compared to performance
projections made during the Select Phase. Then lessons learned for both
the investment and the CPIC process are collected and fed back to prior
CPIC phases.

**Figure 5-1** provides a summary of the Evaluate Phase process, as well
as the individual(s) and or group(s) responsible for completing each
process step. Each step is detailed in the following diagram on the next
page.

+------------------+---------------------------------------------------+
| ### 5.3.1        | The PIR's timing is usually determined during the |
|  Conduct PIR and | Control Phase. The PIR for a newly deployed       |
|  Present Results | initiative generally should take place            |
|                  | approximately six to twelve months after the      |
|                  | system is operational. In the case of a           |
|                  | terminated system, it should take place           |
|                  | immediately because the review will help to       |
|                  | define any "lessons learned" that can be factored |
|                  | into future IT investment decisions and           |
|                  | activities. In either case, before starting the   |
|                  | PIR, the Project Sponsor develops a PIR plan that |
|                  | details the roles, responsibilities, and          |
|                  | investment start and end dates for all PIR tasks. |
+------------------+---------------------------------------------------+

At the heart of the PIR is the IT investment evaluation in which the
Project Sponsor looks at the impact the system has had on customers,
business processes, the mission and program, and the technical
capability. As a result of the PIR, the Project Sponsor provides an IT
Initiative Evaluation Data Sheet to the CIO, as presented in
[Table-1Appendix O.](#_Appendix_O:_Post_Implementation_Rev)

The IT investment evaluation focuses on three areas:

**Impact to stakeholders:** The Project Sponsor typically measures the
impact the system has on stakeholders through user surveys (formal or
informal), interviews, and feedback studies. The evaluation data sheet
highlights results.

**Ability to deliver the IT performance measures (quantitative and
qualitative).** The system's impact to mission and program should be
carefully evaluated to determine whether the system delivered expected
results. This information should be compared to the investment's
original performance goals. This evaluation and comparison should also
include a review of the investment's security and data performance
measures.

**Ability to meet baseline goals**: To determine whether the investment
is meeting its baseline goals the project manager should review the
following areas:

**Cost:** Present actual lifecycle costs to date

**Return:** Present actual lifecycle returns to date

**Funding Sources:** Present actual funds received from planned funding
sources

**Schedule:** Provide original baseline and actual initiative schedule

**Enterprise Architectural Analysis:** Determine whether the initiative
supports the Department's approach to enterprise architecture standards
or what modifications are required to ensure initiative compliance
outside the original architectural baseline

**IT Accessibility Analysis:** Determine whether the initiative
addresses accessibility for persons with disabilities, how the
requirements were managed, and impact on the architecture

**Risk Analysis:** Identify initiative risks and how they were managed
or mitigated, as well as their effects, if any (see **Appendix E: Risk
Management**)

**Systems Security Analysis:** Identify initiative security risks and
how they were managed or mitigated as well as security performance
measures (for more information, see **Appendix K: Security
Infrastructure Guide**).

After the PIR has been completed and reviewed, the Project Sponsor
prepares and makes a formal PIR presentation to the Bureau CIO. The
presentation should summarize the initiative evaluation and provide a
summary of recommendations for presentation to an EWG and the DOI IRB.

![](media/image7.wmf)

**Figure 5-1** Evaluate Phase Process Steps

+------------------+---------------------------------------------------+
| ### 5.3.2 P      | Each investment in the Evaluate Phase will be     |
| repare Exhibit 3 | assessed during the investment review. To prepare |
| 00 business case | for the investment reviews, the Project Sponsor   |
|                  | develops a package of materials that address the  |
|                  | PIR strategic investment criteria. The format for |
|                  | submitting the investment package is the Exhibit  |
|                  | 300 business case.                                |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 5            | The Bureau Sponsor reviews the Exhibit 300        |
| .3.3 Review or A | business case and PIR results, and forwards them  |
| pprove Exhibit 3 | to the Bureau CIO.                                |
| 00 Business Case |                                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 5.3.4 R      | The Bureau CIO reviews the Exhibit 300 business   |
| eview Exhibit 30 | case and PIR results. The Bureau CIO prepares     |
| 0 Business Case  | findings and recommendations, and forwards the    |
| and PIR Results  | updated package to a Bureau IRB for review. The   |
| and Recommend Ap | Bureau IRB reviews the investment and makes a     |
| propriate Action | recommendation that the investment's Project      |
|                  | Sponsor take one of the following actions:        |
|                  |                                                   |
|                  | Continue the investment as planned                |
|                  |                                                   |
|                  | Modify the investment as recommended              |
|                  |                                                   |
|                  | Terminate the investment                          |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 5.3.5        | The DOI IRB reviews the Bureau IRB recommendation |
|  Make Final Inve | and makes the final investment decision.          |
| stment Decisions |                                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 5.3.6 E      | An EWG may also recommend that the CIO revise the |
| valuate IT Capit | CPIC process based on PIR results. The CIO then   |
| al Investment Ma | presents a summary of the PIR activities and      |
| nagement Process | lessons learned to the EWG and DOI IRB.           |
|                  |                                                   |
|                  | Following the completion of this, the CIO and     |
|                  | Bureaus document the strengths and weaknesses of  |
|                  | the CPIC and IT Modernization Blueprint analyses  |
|                  | processes. The information gathered in this       |
|                  | evaluation is used to improve both the CPIC and   |
|                  | IT Modernization Blueprint processes, by          |
|                  | maintaining and improving the factors associated  |
|                  | with improved initiative success rates and        |
|                  | revising or removing the non-value added steps.   |
|                  | These process improvements are discussed as a     |
|                  | regular agenda item for the DOI IRB.              |
+------------------+---------------------------------------------------+

Bureaus can use [Table O-2 in Appendix O: Post Implementation Review
(PIR)](#_Appendix_O:_Post_Implementation_Rev) to record observations and
forward them to the CIO as necessary. Bureaus can add appropriate
comments as deemed necessary. The following are examples of things
Bureaus may consider when addressing each phase:

Initiative Development

Documentation set

General or descriptive information

Financial information

Security or ISTA models

Screen

Viability criteria

Viability considerations

Initiative designation

Score

Mission criteria

Risk

ROI

Pre-Select

Bureau process

CIO or EWG review

IRB endorsement

Select

Bureau process

CIO or EWG review

IRB endorsement

Security review

Control

Milestone review format

CIO or EWG or corrective actions

Security analysis

Evaluate

PIR content

PIR execution

PIR recommendations

Security performance

To capture lessons learned, the Project Sponsor develops a management
report and submits it to the Bureau CIO. All failures and successes are
collected and shared to ensure that future initiatives learn from past
experiences. A high-level assessment of management techniques, including
organizational approaches, budgeting, and acquisition and contracting
strategies, tools and techniques, and testing methodologies, is
essential to establish realistic baselines and to ensure the future
success of other IT initiatives. The investment manage­ment report,
including lessons learned, follows the outline provided in [Appendix O:
Post Implementation Review
(PIR)](#_Appendix_O:_Post_Implementation_Rev).

The DOI CIO schedules formal and informal sessions to review the
manage­ment report and collect additional information about the overall
effective­ness of the process. The DOI and Bureau CIOs work with the
Project Sponsor, Bureau Portfolio Managers, and an EWG to conduct trend
analyses of the process, validate findings, and adjust the process
accordingly. The DOI CIO also sponsors workshops and discussion groups
to improve the CPIC process and ensure lessons learned are applied
throughout the Department. The DOI CIO then works with the Bureau to
develop, recommend, and implement modifications to improve the process.

## 5.4 Exit Criteria

Prior to exiting the Evaluate Phase, investments must have completed the
following activities:

-   Conducted a PIR -- which may include one or all of these documents:

    -   Initiative Evaluation Sheet

    -   Investment Management Report

    -   IT Process Evaluation Data Sheet

```{=html}
<!-- -->
```
-   Established an Operations and Maintenance (O&M) and operational
    performance review schedule

-   Obtained IRB approval to enter the Steady State Phase

**Table 5-1** provides a summary of the documents generated during the
Evaluate Phase process, as well as the whether the document requires
approval or whether the document is required only for the file for
recordkeeping purposes.

  -------------------------------- ------------------- -------------------
  **Document**                     **Required For      **Required For
                                   File**              Approval**

  PIR Plan                         **X**               

  IT Initiative Evaluation Data    **X**               
  Sheet                                                

  IT Process Evaluation Data Sheet                     

  PIR Presentation                 **X**               

  Exhibit 300                      **X**               

  Investment Management Report     **X**               

  Operations and Maintenance (O&M) **X**               
  and operational performance                          
  review schedule                                      
  -------------------------------- ------------------- -------------------

**Table 5-1** Summary of documents generated during the Evaluate Phase.

# 6 Steady State Phase

## 6.1 Purpose

The Steady State Phase provides the means to assess mature investments,
deter­mine their continued effectiveness in supporting mission
requirements, evaluate the cost of continued maintenance support, assess
technology opportunities, and consider potential retirement or
replacement of the investment.

## 6.2 Entry Criteria

Prior to entering the Steady State Phase, investments must have executed
the following activities:

-   Conducted a PIR

-   Established an (O&M) and operational performance review schedule

-   Obtained IRB approval to enter the Steady State Phase

## 6.3 Process

During the Steady State Phase, analysis is used to determine whether
mature systems are continuing to support mission and business
requirements. Appendix C: Operational Analysis provides a template for
conducting Steady State investment reviews.

**Figure 6-1** provides a summary of the Steady State Phase process, as
well as the individual(s) and or group(s) responsible for completing
each process step. Each step is detailed in the following diagram.

![](media/image8.wmf)

**Figure 6-1** Steady State Process Steps

+------------------+---------------------------------------------------+
| ### 6.3.1        | The Project Sponsor and Bureau Sponsor conduct an |
|  Analyze Mission | analysis to determine if the system is continuing |
|                  | to meet mission requirements and needs and        |
|                  | supports the DOI's evolving strategic direction.  |
|                  | The mission analysis process identified in the    |
|                  | Pre-Select Phase and the Mission Needs Statement  |
|                  | provide a framework to assist in the mission      |
|                  | analysis for the Steady State Phase. This         |
|                  | includes an analysis of performance measures      |
|                  | accomplishment.                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 6.3.2 Asse   | The Project Sponsor evaluates user and customer   |
| ss User or Custo | satisfaction, acceptance, and support for the     |
| mer Satisfaction | existing system. This information should be used  |
|                  | to assess and update the investment's performance |
|                  | measures.                                         |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 6.3.3 A      | The Project Manager and Project Architect         |
| ssess Technology | assesses the technology and determines potential  |
|                  | opportunities to improve performance, reduce      |
| ###              | costs, support the DOI enterprise architecture,   |
|                  | meet security requirements, and to ensure         |
|                  | alignment with DOI's strategic direction. The     |
|                  | Project Architect monitors and maintains the      |
|                  | existing technology and determines technology     |
|                  | refresh schedules, factoring into account not     |
|                  | only existing IT Modernization blueprints but     |
|                  | also the need and potential to identify new key   |
|                  | lines of business based upon new mission needs    |
|                  | and or innovative technology. The Project         |
|                  | Architect informs the Project Sponsor of his or   |
|                  | her findings.                                     |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The Project Sponsor and Bureau Sponsor along with |
| 6.3.4 Review O&M | the Project Manager conduct an O&M review to      |
|                  | assess the cost and extent of continued           |
|                  | maintenance and upgrades. The O&M review should   |
|                  | include a trend analysis of O&M costs and a       |
|                  | quantification of maintenance releases. Costs for |
|                  | government staff workforce employees as well as   |
|                  | any customer costs should be included in all cost |
|                  | estimates and analysis.                           |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The Project Sponsor updates actual costs and      |
| 6.3.5 Prepare Ex | benefits for the investment. The format for       |
| hibit 300 or 300 | submission is the Exhibit 300 or 300-1 business   |
| -1 Business Case | case.                                             |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 6            | The Bureau Sponsor reviews the Exhibit 300 or     |
| .3.6 Review or A | 300-1. The Bureau Sponsor approves the investment |
| pprove Exhibit 3 | submission and forwards it to the Bureau CIO.     |
| 00 Business Case |                                                   |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | The Bureau CIO reviews the Exhibit 300 or 300-1   |
| 6.3.7 Review Exh | business case and prepares findings and           |
| ibit 300 or 300- | re­commendations. The CIO forwards it to the       |
| 1 Business Case  | Bureau IRB for review. The Bureau IRB reviews the |
| and Recommend Ap | investment to determine whether it continues to   |
| propriate Action | support mission or user requirements and the      |
|                  | Department's strategic direction. The Bureau IRB  |
|                  | deter­mines whether the investment should continue |
|                  | in the Steady State Phase, return to a previous   |
|                  | phase due to the extent of system modifications,  |
|                  | be replaced, be incorporated into a key line of   |
|                  | business investment through a Modernization       |
|                  | blueprint, or retired. The Bureau IRB then        |
|                  | forwards its recommendations to the DOI IRB.      |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### 6.3.8        | The DOI IRB approves or disapproves the Bureau    |
|  Make Final Inve | IRB recommendation and directs the Project        |
| stment Decisions | Sponsor how to proceed.                           |
+------------------+---------------------------------------------------+

## 6.4 Exit Criteria

The investment remains in the Steady State Phase until a decision is
made by the DOI IRB to modify, replace, or retire the system. All major
enhancements to Steady State systems are required to complete an MNS and
start at the Pre-Select Phase. A major enhancement can be defined as,
new architecture, or new functionality.

**Table 6-1** provides a summary of the documents generated during the
Steady State Phase process, as well as the whether the document requires
approval or whether the document is required only for the file for
recordkeeping purposes.

  ------------------------ ----------------------- -----------------------
  **Document**             **Required For File**   **Required For
                                                   Approval**

  Exhibit 300 or 300-1     **X**                   **X**

  Operational Analysis     **X**                   
  ------------------------ ----------------------- -----------------------

**Table 6-1** Summary of documents generated during the Steady State
Phase.

# 7 Portfolio Management

## 7.1 Purpose

The purpose of IT Portfolio Management is to ensure that an optimal IT
investment portfolio with manageable risk and returns is selected and
funded. Portfolio Management includes the following steps:

-   Defining portfolio goals and objectives

-   Understanding, accepting and making tradeoffs

-   Identifying, eliminating, and minimizing risks

-   Monitoring portfolio performance

-   Determining whether desired goals and objectives have been obtained

-   Determining how each portfolio fits into the overarching
    architecture for the Department as a whole, including, IT
    Modernization Blueprints for key lines of business.

-   The benefits of IT Portfolio Management are that it:

    -   Encompasses the entire investment management process
        (pre-select, select, control, evaluate and steady state)

    -   Aids investment management decision-making by providing the
        necessary information

    -   Provides the information necessary for monitoring cost and
        performance

    -   Helps determine whether an investment should be continued,
        modified, integrated with others, or terminated

## 7.2 Entrance Criteria

In order to perform the activities associated with selecting, funding
and managing an optimal IT investment portfolio, adequate resources must
be provided for executing the process.

IRB members must exhibit core competencies in portfolio management.

All investments within the portfolio have been analyzed and prioritized
based on each investments, cost, benefit, schedule and risks, throughout
their life-cycle, and that the Department has defined its common
portfolio categories.

## 7.3 Process

The portfolio management process ensures that each IT investment board
collectively analyzes and compares all investments and proposals to
select those that best fit with the strategic business direction, needs,
and priorities of the Department. In addition, DOI will have fiscal and
workforce constraints that have to be weighed against the risks and the
long term return on investments for items that are within the portfolio.
When making portfolio decisions, executive must consider use of IT
resources, along with work force, and contracting options to meet
mission objectives,

To address these practical limits, portfolio management uses categories
to aid in investment comparability and cost, schedule, benefit and risk
(CSBR) oversight. Once all investments within the portfolio are
categorized, investments and proposals can be compared to one another
within and across portfolio categories, and the best overall portfolio
can be selected and funded.

Portfolio Management is an integral component of the CPIC process;
however, IT Portfolio Management cannot be accomplished without first
establishing an IT investment foundation.

Building an IT investment foundation, using GAO's IT Investment
Management maturity model as described in GAO/AIMD-10.1.23, requires
that DOI first establish IT investment management processes to ensure
the following activities:

-   IT investment is selected based on established selection criteria

-   An Investment proposal is business driven

-   IRB establishes and maintains an asset inventory of current IT
    investments

-   IRB oversees these investments

With maturity and experience in establishing an IT investment
foundation, DOI can move forward with developing a complete investment
portfolio. Based on the GAO model cited above, portfolio management
maturity efforts to develop the DOI IT portfolio are based on the
following principles:

-   Ensuring the alignment of the various IRBs

-   Developing portfolio selection rating, and ranking criteria that
    supports DOI mission and strategic goals

-   Conducting continuous analysis of each investment at every phase of
    it's life-cycle

-   Developing IT portfolio performance measures

## 7.4 Demonstration Criteria

To demonstrate that portfolio management is occurring, there must be
physical, documentary and testimonial evidence of portfolio management
activities.

  --------------------------- --------------------- ----------------------
  **Document**                **Required For File** **Required For
                                                    Approval**

  Bureau IRB Meeting Minutes  **X**                 
  for decisions made                                

  DOI IRB Meeting Minutes for **X**                 
  decisions made                                    

  Quarterly Reports           **X**                 **X**

  Operational Analysis        **X**                 **X**

  ITIM Self Assessments       **X**                 

  CPIC Guide                  **X**                 

  IRB Charter                 **X**                 **X**

  ITMC Charter                **X**                 **X**

  ARB Charter                 **X**                 **X**

  E-Gov Charter               **X**                 **X**

  Investment Rating and       **X**                 **X**
  Ranking Summary                                   
  --------------------------- --------------------- ----------------------

# Appendix A: CPIC Process Checklist

## A.1 Pre-Select Phase

+-----------------+----------------------------------------------------+
| ### Wha         | -   The Project Sponsor in coordination with       |
| t are the busin |     Bureau management identifies a need.           |
| ess needs for t |                                                    |
| he investments? | -   The Project Sponsor along with both the        |
|                 |     Functional and Project Managers conduct a      |
|                 |     mission analysis and create a Mission Needs    |
|                 |     Statement.                                     |
|                 |                                                    |
|                 | -   The Project Sponsor along with both the        |
|                 |     Functional and Project Managers develop the    |
|                 |     investment's concept.                          |
|                 |                                                    |
|                 | -   The Project Sponsor along with both the        |
|                 |     Functional and Project Managers prepare the    |
|                 |     preliminary Exhibit 300-1 business case.       |
|                 |                                                    |
|                 | -   The Project Sponsor along with both the        |
|                 |     Functional and Project Managers prepare the    |
|                 |     Exhibit 300-1 business case.                   |
|                 |                                                    |
|                 | -   The Office or Bureau Head reviews and approves |
|                 |     the Exhibit 300-1 business case.               |
|                 |                                                    |
|                 | -   The Bureau CIO confirm that new investments do |
|                 |     not duplicate E-Government initiatives,        |
|                 |                                                    |
|                 | -   The Bureau CIO reviews the initiative and      |
|                 |     recommends an appropriate action to the Office |
|                 |     or Bureau IRB.                                 |
|                 |                                                    |
|                 | -   The Departmental DOI IRB makes the final       |
|                 |     investment decisions.                          |
+-----------------+----------------------------------------------------+

## A.2 Select Phase

+------------------+---------------------------------------------------+
| ### How do       | -   The Project Sponsor along with both the       |
| you know you hav |     Functional and Project Managers review and    |
| e selected the b |     updates the Mission Needs Statement.          |
| est investments? |                                                   |
|                  | -   The Project Sponsor approves IPT membership.  |
|                  |                                                   |
|                  | -   The Office or Bureau Sponsor identifies the   |
|                  |     funding source(s) and obtains Department      |
|                  |     approvals.                                    |
|                  |                                                   |
|                  | -   The Project Sponsor along with both the       |
|                  |     Functional and Project Managers develop       |
|                  |     supporting materials for major investments.   |
|                  |                                                   |
|                  | -   The Bureau CIO confirms that new investments  |
|                  |     do not duplicate E-Government initiatives.    |
|                  |                                                   |
|                  | -   The Project Sponsor along with both the       |
|                  |     Functional and Project Managers prepare the   |
|                  |     investment review submission.                 |
|                  |                                                   |
|                  | -   The Office or Bureau Head reviews and         |
|                  |     approves the investment submission.           |
|                  |                                                   |
|                  | -   The Bureau CIO reviews the initiative and     |
|                  |     recommends an appropriate action to the       |
|                  |     Bureau IRB.                                   |
|                  |                                                   |
|                  | -   The Departmental DOI IRB makes the final      |
|                  |     investment Select decisions.                  |
+------------------+---------------------------------------------------+

## A.3 Control Phase

+------------------+---------------------------------------------------+
| ### What a       | -   The Project Manager maintains initiative and  |
| re you doing to  |     security costs, schedule, and technical       |
| ensure that the  |     baselines.                                    |
| investments will |                                                   |
|  deliver the ben | -   The Project Manager maintains current         |
| efits projected? |     initiative and security costs, schedule, and  |
|                  |     technical and general status information.     |
|                  |                                                   |
|                  | -   The Project Manager, IPT, and Bureau Sponsor  |
|                  |     assess the initiative's progress against      |
|                  |     performance measures.                         |
|                  |                                                   |
|                  | -   The Project Manager prepares the quarterly or |
|                  |     milestone control reviews, annual investment  |
|                  |     review submission package. The Project        |
|                  |     sponsor evaluates quarterly or milestone      |
|                  |     control review documents.                     |
|                  |                                                   |
|                  | -   The Bureau CIO reviews the initiative and     |
|                  |     recommends an appropriate action to the       |
|                  |     Bureau IRB. The Bureau IRB sends              |
|                  |     recommendations to the DOI IRB.               |
|                  |                                                   |
|                  | -   The Departmental DOI IRB makes final          |
|                  |     investment Control decisions.                 |
|                  |                                                   |
|                  | -   The Bureau CIO works with the Project Sponsor |
|                  |     and Project Manager to develop solutions to   |
|                  |     identified issues.                            |
+------------------+---------------------------------------------------+

## A.4 Evaluate Phase

+------------------+---------------------------------------------------+
| ### Based on     | -   The Project Sponsor along with both the       |
|  your evaluation |     Functional and Project Managers conduct a     |
| , did the invest |     PIR, prepare and Exhibit 300 or 300-1 if      |
| ments deliver wh |     necessary and presents results to the Bureau  |
| at you expected? |     CIO, EWG, and Bureau IRB.                     |
|                  |                                                   |
|                  | -   The Office or Bureau Sponsor reviews the      |
|                  |     Exhibit 300 and makes updates if necessary.   |
|                  |                                                   |
|                  | -   The Bureau CIO reviews and approves the PIR   |
|                  |     results and recommends the appropriate        |
|                  |     action.                                       |
|                  |                                                   |
|                  | -   The Bureau IRB makes final investment         |
|                  |     recommendations to the DOI IRB                |
|                  |                                                   |
|                  | -   The DOI IRB makes the final investment        |
|                  |     decisions.                                    |
|                  |                                                   |
|                  | -   The Bureau CIO, CPWT member and Bureau IRB    |
|                  |     evaluate the IT capital investment management |
|                  |     process. The DOI IRB will make the updates to |
|                  |     the CPIC process improvement.                 |
+------------------+---------------------------------------------------+

## A.5 Steady State Phase

+------------------+---------------------------------------------------+
| ###              | -   The Project Sponsor along with both the       |
|  Do the investme |     Functional and Project Managers determine if  |
| nts still cost-e |     the investment is still effective and         |
| ffectively suppo |     supports the mission requirements.            |
| rt requirements? |                                                   |
|                  | -   The Project Sponsor along with both the       |
|                  |     Functional and Project Managers assess user   |
|                  |     and customer satisfaction.                    |
|                  |                                                   |
|                  | -   The Project Architect along with both the     |
|                  |     Functional and Project Managers conduct a     |
|                  |     technology assessment.                        |
|                  |                                                   |
|                  | -   The Project Sponsor along with both the       |
|                  |     Functional and Project Managers and the       |
|                  |     Bureau Sponsor review O&M costs.              |
|                  |                                                   |
|                  | -   The Project Sponsor along with both the       |
|                  |     Functional and Project Managers updates the   |
|                  |     Exhibit 300 or 300-1.                         |
|                  |                                                   |
|                  | -   The Bureau Head reviews and approves the      |
|                  |     updated Exhibit 300 or 300-1.                 |
|                  |                                                   |
|                  | -   The Bureau CIO reviews the initiative and     |
|                  |     recommends an appropriate action to the       |
|                  |     Bureau IRB. The Bureau IRB sends their        |
|                  |     recommendation to the DOI IRB.                |
|                  |                                                   |
|                  | -   The Departmental DOI IRB makes final          |
|                  |     investment decisions.                         |
+------------------+---------------------------------------------------+

## A.6 Process Improvement

+------------------+---------------------------------------------------+
| ### Is the curre | -   The Bureau CPIC Coordinator performs an       |
| nt CPIC process  |     annual self-assessment using the ITIM self    |
| progressing thro |     Assessment Tool found in Appendix N: CPIC     |
| ugh the stages o |     Process Assessment                            |
| f ITIM maturity? |                                                   |
|                  | -   The Bureau CPIC Coordinator provides the      |
|                  |     analysis to the DOI CPIC Coordinator for      |
|                  |     inclusion in the Department's process         |
|                  |     inventory and also forwards on any process    |
|                  |     improvements to the DOI CPIC Coordinator.     |
|                  |                                                   |
|                  | -   The DOI CPIC Coordinator provides             |
|                  |     recommendations and supports the Bureau CPIC  |
|                  |     Coordinator to help the Bureau achieve the    |
|                  |     next stage.                                   |
|                  |                                                   |
|                  | -   The Bureau CIO reviews the changes and        |
|                  |     recommends an appropriate action to the       |
|                  |     Bureau IRB. The Bureau IRB sends their        |
|                  |     recommendation to the DOI IRB.                |
|                  |                                                   |
|                  | -   The Departmental DOI IRB makes final process  |
|                  |     change decisions.                             |
|                  |                                                   |
|                  | In Addition:                                      |
|                  |                                                   |
|                  | -   At any time, the Bureau CPIC Coordinator, or  |
|                  |     Project Manager or Project Sponsor can make a |
|                  |     recommendation for process improvement. These |
|                  |     should be sent to the DOI CPIC Coordinator.   |
|                  |                                                   |
|                  | -   Quarterly, the CPIC coordinator monitors      |
|                  |     quarterly reports and corrective action plans |
|                  |     and provides any necessary guidance and       |
|                  |     direction.                                    |
|                  |                                                   |
|                  | -   Semi --annually, the CPWT meets to conduct    |
|                  |     process review workshops.                     |
+------------------+---------------------------------------------------+

# Appendix B: Mission Needs Statement

## B.1 Purpose

The Mission Needs Statement (MNS) is completed during the Pre-Select
Phase. It is a summary document that describes the operational problem
and presents the major decision factors that an EWG and IRB should
evaluate in considering the need and proposed investment.

The following section provides a template for preparing the Mission Need
Statement. Detailed quantitative and analytical information should be
included as attachments.

## B.2 Mission Need Statement Template

+------------------+---------------------------------------------------+
| ##               | The Mission Need Statement is created during the  |
| # General Instru | Pre-Select Phase (see page                        |
| ctions for Compl | [19](#pre-select-phase)) and must analytically    |
| eting the Missio | justify:                                          |
| n Need Statement |                                                   |
|                  | \(1\) the need for action to resolve a shortfall  |
|                  | in the Department's ability to provide the        |
|                  | services needed by its users or customers, or     |
|                  |                                                   |
|                  | \(2\) the need to explore a technological         |
|                  | opportunity for performing Department missions    |
|                  | more effectively.                                 |
|                  |                                                   |
|                  | The Mission Needs Statement must be derived from  |
|                  | rigorous mission analysis (e.g.,, continuous      |
|                  | analysis of current and forecasted mission        |
|                  | capabilities in relationship to projected demand  |
|                  | for services) and must contain sufficient         |
|                  | quantitative information to establish and justify |
|                  | the need and decision.                            |
+------------------+---------------------------------------------------+

  ----------------------------------- -----------------------------------
  **MISSION NEEDS STATEMENT**         

  **MNS 1. Administrative             
  Information**                       

  Template Name                       eCPIC Field -- Lists template under
                                      which process was created.

  Investment Name                     From Exhibit 300

  Point of Contact                    eCPIC field -- normally the CPIC
                                      Coordinator.

  (MNS) Originator                    Individual, who is entering or
                                      submitting the MNS, could be the
                                      sponsor or project manager. Form
                                      assumes that someone other than the
                                      sponsor will enter the form -- thus
                                      the originator field.

  (MNS) Originator Organization       

  (MNS) Originator Phone              

  Program Activity                    From the Exhibit 300

  (MNS) Investment Category           E-Gov, Cross-Cutting, or Bureau
                                      Specific

  Is there a sponsor or owner for     From the Exhibit 300
  this investment?                    

  If so, identify the sponsor or      
  process owner by name.              

  From the Exhibit 300                

  If so, provide the sponsor or       
  process contact information.        

  From the Exhibit 300                

  (MNS) Has the Sponsor reviewed and  Indicate whether sponsor is aware
  approved the submission of this     of the MNS being submitted.
  Mission Needs Statement?            

  (MNS) Submission Date               Date MNS was originally submitted.

  (MNS) Revision Number               Revision field available to
                                      differentiate from older versions.
                                      Can also use the overall version
                                      field that eCPIC provides.

  (MNS) Revision Date                 Revision Date -- if used.
  ----------------------------------- -----------------------------------

+-----------------------------------+-----------------------------------+
| **MNS 2. Impact on DOI Mission    |                                   |
| Areas**                           |                                   |
+-----------------------------------+-----------------------------------+
| How does this investment support  |                                   |
| your agency\'s mission and        |                                   |
| strategic goals and objectives?   |                                   |
+-----------------------------------+-----------------------------------+
| Field reused from Exhibit 300.    |                                   |
|                                   |                                   |
| >                                 |                                   |
|                                   |                                   |
| Briefly describe the impact of    |                                   |
| the capability shortfall or       |                                   |
| technological opportunity with    |                                   |
| respect to performance metrics,   |                                   |
| goals, or standards in DOI        |                                   |
| mission areas. Performance goals  |                                   |
| are delineated in the DOI and     |                                   |
| Bureau strategic plan, business   |                                   |
| plans, and annual performance     |                                   |
| plan prepared in compliance with  |                                   |
| GPRA (Public Law 103-62). This    |                                   |
| should be linked directly to the  |                                   |
| DOI strategic plan, the Bureau    |                                   |
| strategic plan and the E-Gov      |                                   |
| Strategy.                         |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 3. Needed Capability**      |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Needed Capability           |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > Describe the functional         |                                   |
| > capability needed or            |                                   |
| > technological opportunity.      |                                   |
| > Describe needed capability in   |                                   |
| > terms of functions to be        |                                   |
| > performed or services to be     |                                   |
| > provided. Cite any              |                                   |
| > Congressional, Secretary, or    |                                   |
| > other high-level direction,     |                                   |
| > such as international           |                                   |
| > agreements, to support the      |                                   |
| > needed capability. Cite any     |                                   |
| > statutory or regulatory         |                                   |
| > authority for the need. Provide |                                   |
| > validated growth projections    |                                   |
| > based on operational analysis.  |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > This is not a description of an |                                   |
| > acquisition program (e.g., this |                                   |
| > is not the details of a         |                                   |
| > particular hardware or software |                                   |
| > solution). Do not describe      |                                   |
| > needed capability in terms of a |                                   |
| > system or solution but rather   |                                   |
| > focus on the business or        |                                   |
| > mission aspects.                |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 4. Current and Planned      |                                   |
| Capability**                      |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Current and Planned         |                                   |
| Capability                        |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > Describe quantitatively the     |                                   |
| > capability of systems,          |                                   |
| > facilities, equipment, or other |                                   |
| > assets currently deployed or    |                                   |
| > presently planned and funded to |                                   |
| > meet the mission need. Where    |                                   |
| > applicable, use tables to       |                                   |
| > present the information. If     |                                   |
| > this Mission Need Statement     |                                   |
| > proposes to replace an existing |                                   |
| > investment, provide existing    |                                   |
| > system name and OMB number.     |                                   |
| > References should be made to    |                                   |
| > the existing architecture and   |                                   |
| > asset inventory. Provide back   |                                   |
| > up data in attachments.         |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 5. Capability Shortfall**   |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Capability Shortfall        |                                   |
+-----------------------------------+-----------------------------------+
|                                   |                                   |
|                                   |                                   |
| > Describe the capability         |                                   |
| > shortfall and explain the       |                                   |
| > performance analysis that was   |                                   |
| > used to identify and quantify   |                                   |
| > the extent of the shortfall     |                                   |
| > over time. Define the ability   |                                   |
| > of the current technology to    |                                   |
| > meet the business requirements  |                                   |
| > in support of the mission.      |                                   |
| > Identify changes between        |                                   |
| > current state and future state  |                                   |
| > of technology, and provide      |                                   |
| > recommendations for closing     |                                   |
| > gaps between the two. Define,   |                                   |
| > in detail, the specific         |                                   |
| > limitations of current          |                                   |
| > facilities, equipment, or       |                                   |
| > service to meet projected       |                                   |
| > demand and the needed           |                                   |
| > capability. Explain the         |                                   |
| > criteria used to measure        |                                   |
| > performance. Include            |                                   |
| > appropriate graphs, tables, and |                                   |
| > formulas to define the extent   |                                   |
| > of the shortfall. Identify      |                                   |
| > databases and other data        |                                   |
| > sources upon which the analysis |                                   |
| > is based. Identify models and   |                                   |
| > methodologies used to quantify  |                                   |
| > the shortfall.                  |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > Alternately, describe the       |                                   |
| > technological opportunity in    |                                   |
| > terms of improved DOI           |                                   |
| > productivity, facility          |                                   |
| > availability, operational       |                                   |
| > effectiveness, or improved      |                                   |
| > efficiency. In attachments,     |                                   |
| > explain the analysis used to    |                                   |
| > quantify the magnitude of the   |                                   |
| > opportunity, and identify and   |                                   |
| > describe databases, models, and |                                   |
| > methodologies used to support   |                                   |
| > the analysis.                   |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > Provide specific operational    |                                   |
| > and performance analyses,       |                                   |
| > quantitative projections,       |                                   |
| > maintenance indicators,         |                                   |
| > reports, recommendations, or    |                                   |
| > other supporting data, as       |                                   |
| > attachments.                    |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 6. Impact of Not Approving  |                                   |
| Mission Need**                    |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Impact of Not Approving the |                                   |
| Mission Need                      |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > Describe the impact if this     |                                   |
| > capability shortfall is not     |                                   |
| > resolved relative to the DOI's  |                                   |
| > ability to perform mission      |                                   |
| > responsibilities. Define the    |                                   |
| > expected change in mission      |                                   |
| > performance indicators if the   |                                   |
| > capability shortfall is not     |                                   |
| > resolved.                       |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > Include as attachments          |                                   |
| > appropriate graphs, tables, and |                                   |
| > formulas used to quantify the   |                                   |
| > impact on performance. Identify |                                   |
| > databases, other sources of     |                                   |
| > data, models, and methodologies |                                   |
| > used to support the impact      |                                   |
| > analysis. Explain performance   |                                   |
| > analyses used to quantify the   |                                   |
| > impact of not implementing the  |                                   |
| > opportunity, and identify the   |                                   |
| > external factors (such as       |                                   |
| > validated growth projections)   |                                   |
| > used to support the analysis.   |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 7. Benefits**               |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Benefits                    |                                   |
+-----------------------------------+-----------------------------------+
| How will this investment reduce   |                                   |
| costs or improve efficiencies?    |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > Field reused from the Exhibit   |                                   |
| > 300.                            |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > Summarize the mission analysis  |                                   |
| > determination of benefits.      |                                   |
| > Describe the benefits accrued   |                                   |
| > by the needed capability or     |                                   |
| > technological opportunity.      |                                   |
| > Benefits may accrue from more   |                                   |
| > efficient operations, improved  |                                   |
| > responsiveness to customers,    |                                   |
| > lower operational costs, or     |                                   |
| > other savings.                  |                                   |
| >                                 |                                   |
| >                                 |                                   |
| >                                 |                                   |
| > The summary of accrued benefits |                                   |
| > should describe ground rules    |                                   |
| > and assumptions, benefits,      |                                   |
| > estimating methods, sources,    |                                   |
| > and models. Include as          |                                   |
| > attachments appropriate graphs, |                                   |
| > tables, and formulas used to    |                                   |
| > quantify the benefits.          |                                   |
| >                                 |                                   |
| >                                 |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 8. Timeframe**              |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Timeframe                   |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > Identify when the capability    |                                   |
| > shortfall will seriously affect |                                   |
| > the Department's ability to     |                                   |
| > perform its mission if no       |                                   |
| > action is taken. Establish when |                                   |
| > action must be taken to avoid   |                                   |
| > the adverse impact on services  |                                   |
| > that will result. Explain the   |                                   |
| > performance analysis used to    |                                   |
| > quantify the extent of the      |                                   |
| > impact over time. Discuss the   |                                   |
| > linkage to budget decisions.    |                                   |
| > Explain how long it will take   |                                   |
| > to study, develop, and          |                                   |
| > implement the investment. In    |                                   |
| > general terms, discuss not just |                                   |
| > when it is needed, but when it  |                                   |
| > can get done.                   |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 9. Criticality**            |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Criticality                 |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > State the priority of this      |                                   |
| > mission need relative to other  |                                   |
| > Departmental needs. First,      |                                   |
| > define the priority of this     |                                   |
| > need relative to other needs    |                                   |
| > within the mission area, and    |                                   |
| > then define the priority        |                                   |
| > relative to needs across all    |                                   |
| > mission areas. Characterize     |                                   |
| > whether the mission need        |                                   |
| > identifies internal DOI         |                                   |
| > capability shortfalls or mainly |                                   |
| > shortfalls in servicing the     |                                   |
| > customer community.             |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS 10. Long Range Resource     |                                   |
| Planning Estimate**               |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Long Range Resource         |                                   |
| Planning Estimate                 |                                   |
+-----------------------------------+-----------------------------------+
| >                                 |                                   |
| >                                 |                                   |
| > Provide a rough estimate of the |                                   |
| > resources that will likely be   |                                   |
| > committed to this mission need  |                                   |
| > in competition with all others, |                                   |
| > within the constraint of        |                                   |
| > realistic projections of future |                                   |
| > budget authority.               |                                   |
| >                                 |                                   |
| >                                 |                                   |
|                                   |                                   |
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS Bureau IRB Decision**       |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Bureau IRB Decision         | Bureau IRB Disposition            |
+-----------------------------------+-----------------------------------+
| (MNS) Bureau IRB Comments         |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) Bureau IRB Decision Date    |                                   |
+-----------------------------------+-----------------------------------+
|                                   |                                   |
+-----------------------------------+-----------------------------------+
| **MNS DOI IRB Decision**          |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) DOI IRB Decision            | Departmental IRB Disposition      |
+-----------------------------------+-----------------------------------+
| (MNS) DOI IRB Comments            |                                   |
+-----------------------------------+-----------------------------------+
| (MNS) DOI IRB Decision Date       |                                   |
+-----------------------------------+-----------------------------------+

# Appendix C: Operational Analysis

## C.1 Purpose

This document provides guidance for conducting an Operational Analysis
review for Information Technology (IT) investments. OMB requires that
all Steady State projects must be reviewed at least annually to document
the continued effectiveness in supporting mission requirements and
minimize the cost of asset ownership.( The cost of asset ownership is
defined as the total of all costs incurred by the owners and users to
obtain the benefits of a given project or investment.) The intent, in
part, is to reduce the number of stove-piped legacy systems that are
expensive to maintain. Operational Analysis results are reported to OMB
each year in the Exhibit 300\'s Project (Investment) and Funding Plan
section. A project manager may choose to perform an Operational Analysis
more frequently.

The annual Operational Analysis is a key practice within the Government
Accountability Office\'s (GAO) Information Technology Investment
Manage­ment (ITIM) Stage 2 maturity model.

Using verifiable data, each investment board must regularly review the
performance of IT projects and systems against stated expectations.
Investment boards use of the Steady State project\'s Operational
Analysis support ITIM Stage 2.

## C.2 Management Objectives

Ownership costs such as: operations, maintenance, service contracts, and
disposition, can easily consume as much as 80% of the total life-cycle
costs. Operations are a critical area where improved effectiveness and
productivity can have the greatest net measurable benefit in cost,
performance, and mission accomplishment.

The Operational Analysis formally assesses how well an investment is
meeting program objectives, customer needs, and is performing within
baseline cost, schedule, and performance goals. The results may signal
to management the need to redesign an asset if undetected faults in the
design, construction, or installation are discovered during the course
of operations. Two examples may be: if Operation and Maintenance (O&M)
costs are higher than anticipated; or, if the asset fails to meet
program requirements.

## C.3 Roles and Responsibilities

**Project Sponsor or System Owner:** Coordinates with the Project
Manager to schedule the Operational Analysis and provides guidance to
the Project Manager.

**Project Manager:** Prepares the Operational Analysis.

**OCIO:** Receives and analyzes the Operational Analysis report.

**Investment Review Board:** Reviews the Operational Analysis report and
makes recommendations for disposition of the investment.

## C.4 Process

The Project Sponsor must establish a schedule (annually, semi-annual or
quarterly) to conduct an operational analysis. The Project Sponsor must
establish a strategy to solicit user or customer input. This strategy
can be a survey, focus groups or regular user group meetings. The
Project Sponsor must document the schedule and strategy, and notify all
users or customers of this formal and regular schedule.

Based on projected project or investment costs and benefits (e.g., cost,
schedule and performance), the survey, focus group or regular user group
results will determine whether the Steady State project is meeting its
original or revised objectives. The results are documented in the
Operational Analysis template.

Enhancements outside of the existing project scope are considered a new
investment. To fund an enhancement, the Project Sponsor must enter the
Pre-Select CPIC processes where alternatives to close the gap are
identified, and their costs and benefits estimated.

The general OA methodology is summarized below and the actions
documented in the Operational Analysis Template.

![](media/image9.wmf){width="3.040277777777778in"
height="5.034027777777778in"}

**Step 1: Perform Mission Analysis.** Describe how the investment
supports the Bureau\'s and the Departments Mission, Goals, and
Objectives. Establish the level of functionality and performance
provided by the existing investment.

Describe also how the investment supports the DOI E-Government Strategy
and the E-Government Goals, Objectives and Strategies. These are
documented in the Department\'s E-Government Strategy 2004-2008.

**Step 2: Perform Customer Assessment.** Establish a strategy to
document customer or user requirements. Periodic surveys, focus groups,
or user group meetings are often assessed. Also examine usage trends,
system reports, and change order requests -- these can give insight into
emerging requirements. Summarize and categorize the information into
either performance needs or new functional requirements.

**Step 3: Perform Gap Analysis.** Report Performance and Earned Value
variances based on information provided in the OMB Exhibit 300 or 300-1.
Based on the Customer and User Requirements, Performance and Earned
Value Variance analyses, discuss the root cause of any gap. Identify
what, if any additional functionality or performance is required.

The following table summarizes example topics for consideration:

  ----------------------------------- -----------------------------------
  **Cause of Gap or Problem**         **Required Functionality or
                                      Performance**

  Limited interoperability within     Scalable platform to support EA
  Bureau, Department or Federal       compliant IT infrastructure
  Government                          

  Non-compliance with EA              System consistent with EA

  Poor data sharing and data          Enterprise-based interoperable
  integrity                           systems with shared data standards,
                                      descriptions, and relationships

  Poor reliability                    Modernized workstations and
                                      frequent technology refresh to
                                      maximize system reliability

  Cannot meet growing demand or       Increased capacity to meet
  transaction volume                  processing, service, and mission
                                      demands

  Inadequate information and computer Enterprise-based security
  security                            authentication and or control, and
                                      strengthened IT and information
                                      security

  Poor customer service               Electronic application submission
                                      and processing to improve customer
                                      service

  Technical architecture not scalable Fewer operational disruptions,
                                      reduced O&M costs

  Limited legislative and regulatory  Meets Congressional mandates and
  compliance                          GAO oversight concerns
  ----------------------------------- -----------------------------------

**Step 4: Perform Operational Assessment.** Identify solutions that can
provide the needed functionality or performance. This may include
designing new processes, implementing technologies compliant with the
Department\'s Enterprise Architecture, or collaborating with other
initiatives within the federal government. The system may have been
targeted for replacement by our modernization blueprinting efforts.

Recommend if the existing system should be a) continued with no
additional investment, b) enhanced, or c) terminated d) migrated to a
similar system and retired.

<table style="width:100%;">
<colgroup>
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 13%" />
<col style="width: 2%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 1%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 4%" />
<col style="width: 12%" />
<col style="width: 4%" />
<col style="width: 13%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="14"><strong>OPERATIONAL REVIEW TEMPLATE</strong></td>
</tr>
<tr class="even">
<td colspan="14"><strong>1. Administrative Information</strong></td>
</tr>
<tr class="odd">
<td colspan="6">Investment Title</td>
<td colspan="8"></td>
</tr>
<tr class="even">
<td colspan="6">Office</td>
<td colspan="8"></td>
</tr>
<tr class="odd">
<td colspan="6">Date of Operational Analysis</td>
<td colspan="8"></td>
</tr>
<tr class="even">
<td colspan="6">System Manager</td>
<td colspan="8"></td>
</tr>
<tr class="odd">
<td colspan="6">System Owner</td>
<td colspan="8"></td>
</tr>
<tr class="even">
<td colspan="6">Submission Date</td>
<td colspan="8"></td>
</tr>
<tr class="odd">
<td colspan="6">Revision Number</td>
<td colspan="8"></td>
</tr>
<tr class="even">
<td colspan="6">Revision Date</td>
<td colspan="8"></td>
</tr>
<tr class="odd">
<td colspan="6">System Owner Signature &amp; Date</td>
<td colspan="8"></td>
</tr>
<tr class="even">
<td colspan="14"><p><strong>2. Project Description</strong></p>
<p>Provide a brief summary describing the asset and a description of the
business processes that the investment supports.</p></td>
</tr>
<tr class="odd">
<td colspan="14"></td>
</tr>
<tr class="even">
<td colspan="14"><strong>3. Mission Analysis</strong></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>3. a.</strong> For each Bureau and Departmental
mission or strategic goal that the investment supports, explain how the
investment is continuing to meet Bureau and Department mission or
strategic goals.</td>
</tr>
<tr class="even">
<td colspan="14"></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>3. b.</strong> Describe how the project
supports the Department’s E-Government Strategy.</td>
</tr>
<tr class="even">
<td colspan="14"></td>
</tr>
<tr class="odd">
<td colspan="14"><p><strong>4. User or Customer Assessment</strong></p>
<p>Briefly describe the investment's users and the process (e.g.,
surveys, user group meetings, customer focus groups, etc.) used to
assess user or customer satisfaction. Summarize the results of surveys
or other user or customer inputs, and usage trends. Is the existing
system providing customers the needed functionality and
performance?</p></td>
</tr>
<tr class="even">
<td colspan="14"></td>
</tr>
<tr class="odd">
<td colspan="14"><p><strong>5. Gap Analysis</strong></p>
<p>Identify the need for additional functionality and performance.
Examine gaps in supporting the Bureau and Department’s Mission and
Strategic Goals, Technical Performance as measured by Earned Value, and
results from the User or Customer Survey.</p></td>
</tr>
<tr class="even">
<td colspan="14"><p><strong>a. Performance Variance</strong></p>
<p>For the prior and current fiscal year, provide the OMB Exhibit 300
Performance Goals and Measures (Section 1, Part C) table(s) with prior
year actual results and current year interim results, if known. Complete
Tables 1 and or Table 2 below. If the project collects, manages or
reports to other performance goals and measures, add rows to record
those goals and measures.</p></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>Table 1</strong></td>
</tr>
<tr class="even">
<td><strong>Fiscal Year</strong></td>
<td colspan="2"><strong>Strategic Goal(s) Supported</strong></td>
<td colspan="2"><strong>Existing Baseline</strong></td>
<td colspan="3"><strong>Planned Performance Improvement
Goal</strong></td>
<td colspan="2"><strong>Actual Performance Improvement
Results</strong></td>
<td colspan="2"><strong>Planned Performance Metric</strong></td>
<td colspan="2"><strong>Actual Performance Metric Results</strong></td>
</tr>
<tr class="odd">
<td><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
</tr>
<tr class="even">
<td><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
</tr>
<tr class="odd">
<td colspan="14"><strong>Table 2</strong></td>
</tr>
<tr class="even">
<td colspan="2"><strong>Fiscal Year</strong></td>
<td colspan="2"><strong>Measurement Area</strong></td>
<td colspan="3"><strong>Measurement Category</strong></td>
<td colspan="2"><strong>Measurement Indicator</strong></td>
<td colspan="2"><strong>Baseline</strong></td>
<td colspan="2"><strong>Planned Improvements to the
Baseline</strong></td>
<td><strong>Actual Results</strong></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><strong>2004</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="2"><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="even">
<td colspan="2"><strong>2005</strong></td>
<td colspan="2"></td>
<td colspan="3"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td colspan="2"></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="14"><p><strong>b. User or Customer Analysis</strong></p>
<p>Based on your user or customer inputs, is actual performance
consistent with user or customer expectations, or do the current
performance goals reflect current user or customer functional or
performance requirements? Has the investment exceeded expectations, and
the performance measures need to be re-baselined? Discuss how your
project addresses the following operational indicators:</p>
<blockquote>
<p>1) efficiency</p>
<p>2) effectiveness</p>
<p>3) maintainability</p>
<p>4) productivity</p>
<p>5) security</p>
<p>6) availability</p>
<p>7) reliability</p>
<p>8) energy usage</p>
</blockquote></td>
</tr>
</tbody>
</table>

<table>
<colgroup>
<col style="width: 19%" />
<col style="width: 8%" />
<col style="width: 7%" />
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<col style="width: 10%" />
<col style="width: 6%" />
<col style="width: 5%" />
<col style="width: 10%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"></td>
</tr>
<tr class="even">
<td colspan="11"><blockquote>
<p><strong>c. Earned Value Analysis</strong></p>
</blockquote></td>
</tr>
<tr class="odd">
<td></td>
<td colspan="6"><strong>OMB-Approved Baseline</strong></td>
<td colspan="4"><strong>Actual Outcome</strong></td>
</tr>
<tr class="even">
<td rowspan="2"><strong>Description of Milestone</strong></td>
<td colspan="3"><strong>Schedule</strong></td>
<td colspan="2" rowspan="2"><strong>Planned Cost</strong></td>
<td rowspan="2"><strong>Funding Agency</strong></td>
<td colspan="2"><strong>Schedule</strong></td>
<td rowspan="2"><strong>Percent Complete</strong></td>
<td rowspan="2"><strong>Actual Cost</strong></td>
</tr>
<tr class="odd">
<td><strong>Start Date</strong></td>
<td><strong>End Date</strong></td>
<td><strong>Duration (in days)</strong></td>
<td><strong>Start Date</strong></td>
<td><strong>End Date</strong></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="even">
<td></td>
<td></td>
<td></td>
<td></td>
<td colspan="2"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr class="odd">
<td colspan="7">Completion date: OMB-approved baseline:</td>
<td colspan="4">Estimated completion date:</td>
</tr>
<tr class="even">
<td colspan="7">Total cost: OMB-approved baseline:</td>
<td colspan="4">Estimate at completion:</td>
</tr>
<tr class="odd">
<td colspan="11"><p><strong>Earned Value Variance</strong></p>
<p>Provide the following cumulative earned value data.</p></td>
</tr>
<tr class="even">
<td colspan="5">Cost Variance = (BCWP-ACWP) =</td>
<td colspan="6"></td>
</tr>
<tr class="odd">
<td colspan="5">Cost Variance % = (CV/BCWP) x 100% =</td>
<td colspan="6"></td>
</tr>
<tr class="even">
<td colspan="5">Schedule Variance = (BCWP-BCWS) =</td>
<td colspan="6"></td>
</tr>
<tr class="odd">
<td colspan="5">Schedule Variance % = (SV/BCWS) x 100% =</td>
<td colspan="6"></td>
</tr>
<tr class="even">
<td colspan="11"><p><strong>c.1. Earned Value Variance
Analysis</strong></p>
<p>If cost or schedule variances are a negative 5% or more, explain the
reason for the variance. Discuss the actions that will be taken to
correct the variances, the risk associated with the actions, and how
close the planned actions will bring the investment to the original
baseline.</p></td>
</tr>
<tr class="odd">
<td colspan="11"></td>
</tr>
<tr class="even">
<td colspan="11"><p><strong>c.2. Technical Performance Variance
Analysis</strong></p>
<p>If the performance variances are a negative 5% or more, explain the
reason for the variance. Discuss the actions that will be taken to
correct the variances, the risk associated with the actions, and how
close the planned actions will bring the investment to the original
planned improvement.</p></td>
</tr>
<tr class="odd">
<td colspan="11"></td>
</tr>
</tbody>
</table>

+-----------------------------------------------------------------------+
| **d. Gap Analyses**                                                   |
|                                                                       |
| Based on the Customer and User Requirements, Performance Analysis,    |
| and Earned Value Variance analyses, discuss the root cause of a gap,  |
| and what, if any, additional functionality or performance is          |
| required.                                                             |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| **6. Operational Assessment**                                         |
+-----------------------------------------------------------------------+
| **a. Opportunities**                                                  |
|                                                                       |
| Based on the Gap Analysis, identify opportunities to improve          |
| functionality, performance (effectiveness and or efficiency). These   |
| opportunities may include investing in technology compliant with the  |
| Departmental EA; business process reengineering; and or collaborating |
| with another project. Discuss whether E-Gov initiatives can be        |
| leveraged. Describe how the project could deliver services more       |
| efficiently in a web-based environment.                               |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| **b. Project Manager Recommendations**                                |
|                                                                       |
| Justify if the existing system should continue in operation as is, be |
| enhanced, or terminated. If the system is to be enhanced or           |
| terminated, summarize the actions to be taken this fiscal year.       |
+-----------------------------------------------------------------------+
|                                                                       |
+-----------------------------------------------------------------------+
| Bureau IRB Recommendation:                                            |
+-----------------------------------------------------------------------+
| DOI IRB Decision:                                                     |
+-----------------------------------------------------------------------+

# Appendix D: Cost-Benefit Analysis

## D.1 Purpose

Current laws and regulations require agencies to conduct a CBA prior to
deciding whether to initiate, continue, or modify an IT investment. The
level of detail required varies and should be commensurate with the
size, complexity, and cost of the proposed investment.

The CBA exams the business processes that the investment will change and
presents a quantifiable picture of those changed business processes.
Simply put, if the changes in business operational costs and any new
benefits are greater than the project costs, the investment provides a
positive return on investment (ROI). The benefit to cost ratio is
express as:

**A = Current Costs of Business**

**B = Future Costs of Business**

**C = New Benefits**

**D = Project Costs**

**[A-B+C]{.underline}**

**D**

More information is presented later in this appendix on ROI, but at the
Pre-Select Phase, a simple analysis and estimate of the potential ROI
may suffice for the CBA. If the ratio is greater than 1, the investment
has a positive ROI.

This appendix provides a layout of a CBA for a very large, complex, and
costly IT investment. A scaled down version is appropriate for a
smaller, less costly investment.

The CBA supports decision-making and helps ensure resources are
effectively allocated to support mission requirements. The CBA should
demonstrate that at least three alternatives were considered and the
chosen alternative is the most cost-effective, within the context of
fiscal and practical considerations. Possible alternatives include the
following choices:

-   In-house development

-   Contractor development

-   In-house operation

-   Contractor operation

-   Commercial-off-the-shelf (COTS) system

-   Government-off-the-shelf (GOTS) system

-   Current operational procedures (status quo)

-   New operational procedures

-   Alterative technical approaches

A CBA is performed for each investment alternative to enable the uniform
evaluation and comparison of all alternatives.

The CBA should include comprehensive estimates of the projected benefits
and costs for each alternative. Costs, tangible benefits, and intangible
benefits (benefits which cannot be valued in dollars) should be
included. Intangible benefits should be evaluated and assigned relative
numeric values for comparison purposes. Sunk costs (costs incurred in
the past) and realized benefits (savings or efficiencies already
achieved) should not be considered since past experience is relevant
only in helping estimate future benefits and costs. Investments should
be initiated or continued only if the projected benefits exceed the
projected costs. However, some mandatory systems will not provide net
benefits to the government. A "least cost" analysis is performed to
choose the "best" alternative from a series of solutions. In such cases,
the lowest cost alternative should be selected. If functions are to be
added to a mandatory system, though, the additional functions should
provide benefits to the government.

## D.2 Process

A CBA is completed or updated at the following lifecycle milestones:

-   Proposal initiation (Pre-Select Phase)

-   IRB proposal consideration (Select Phase)

-   IRB initiative review (at least annually during the Control Phase)

-   Initial implement (Control Phase)

-   Post-Implementation Review (Evaluation Phase)

-   Operations and Maintenance review (Steady State Phase)

-   Annually for "major system" CPIC review.

The Project Sponsor ensures the CBA is done. The Project Sponsor can
obtain expertise from the IPT in systems development and operation,
budget, finance, statistics, procurement, architecture, and work
processes, as needed.

The CBA process can be broken down into the following steps:

> 1\. Determine and define objectives for the investment.
>
> 2\. Document current business process
>
> 3\. Estimate future business requirements
>
> 4\. Collect cost data for alternatives
>
> 5\. Choose at least three alternatives

6\. Document CBA assumptions

7\. Estimate costs

8\. Estimate benefits

9\. Discount costs and benefits

10\. Evaluate alternatives

11\. Perform sensitivity analysis

12\. Compare investments.

Each of these steps is detailed in the following sections. The numerical
examples provided are from a variety of sources and do not relate to one
specific investment.

+------------------+---------------------------------------------------+
| ### D.2.1        | The CBA should include a problem definition;      |
| . Determine or D | pertinent background information such as          |
| efine Objectives | staffing, system history, and customer            |
|                  | satisfaction data; and a list of investment       |
|                  | objectives that identify how the system will      |
|                  | improve the work process and support the mission. |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### D.2.2. D     | The current business process should be documented |
| ocument Current  | and address these areas:                          |
| Business Process |                                                   |
|                  | **Existing System---**Current business processes  |
|                  | are performed by manual and or automated systems. |
|                  | Proposed investments should be based on           |
|                  | re-engineered and or improved business processes. |
|                  | A complete understanding of the existing system   |
|                  | and its costs to the government are required to   |
|                  | complete a CBA.                                   |
+------------------+---------------------------------------------------+

**Customer Service**---Each customer's role and services required should
be clearly documented and quantified, if possible (e.g., in an average
month, a customer inputs two megabytes (MB) of data and spends 10 hours
on database maintenance).

**System Capabilities**---Resources required for peak demand should be
listed. For Example: 100 MBs of disk storage space and personnel to
support 50 users.

**System Architecture**---The hardware, software, and physical
facilities that will be required should be documented, including
information necessary for determining system costs, expected future
utility of items, and the item owner (e.g., government or contractor).
**Table F-1**-displays the information desired.

+-----------------+--------------------+------------------------------+
| **Hardware**    | **Software**       | **Physical Facilities**      |
+-----------------+--------------------+------------------------------+
| Manufacturer    | Manufacturer       | Location                     |
|                 |                    |                              |
| Make or Model   | Name               | Size                         |
| Year            |                    |                              |
|                 | Version number     | Capacity                     |
| Cost            |                    |                              |
|                 | Year acquired      | Structure type               |
| Power           |                    |                              |
| requirements    | License term       | Availability                 |
|                 |                    |                              |
| Expected life   | Hardware           | Annual cost                  |
|                 | requirements       |                              |
| Maintenance     |                    |                              |
| requirements    | Cost (annual or    |                              |
|                 | purchase)          |                              |
| Operating       |                    |                              |
| characteristics |                    |                              |
| (e.g., size,    |                    |                              |
| speed,          |                    |                              |
| capacity, etc.) |                    |                              |
|                 |                    |                              |
| Operating       |                    |                              |
| systems         |                    |                              |
| supported       |                    |                              |
+-----------------+--------------------+------------------------------+

**Table F-1** System Architecture Information Requirements

**System Costs**---Current costs provide the CBA baseline. **Figure
F-2-Cost Elements for Systems** addresses the cost elements for most
systems. However, a particular system may not include all elements
identified within a category and may include some activities not shown.

  -----------------------------------------------------------------------
  **Cost Category**    **Cost Elements**
  -------------------- --------------------------------------------------
  Equipment,\          Supercomputers, mainframes, minicomputers,
  Leased or Purchased  microcomputers, disk drives, tape drives,
                       printers, telecommunications, voice and data
                       networks, terminals, modems, data encryption
                       devices, and facsimile equipment.

  Software,\           Operating systems, utility programs, diagnostic
  Leased or Purchased  programs, application programs, and
                       commercial-off-the-shelf (COTS) software.

  Commercial Services  Commercially-provided services, such as
                       teleprocessing, local batch processing, on-line
                       processing, Internet access, electronic mail,
                       voice mail, Centrex, cellular telephone,
                       facsimile, and packet switching.

  Support services\    Commercially-provided services to support
  (Contractor          equipment, software, or services, such as
  Personnel)           maintenance, source data entry, training,
                       planning, studies, facilities management, software
                       development, system analysis and design, computer
                       performance evaluation, and capacity management.

  Supplies             Any consumable item designed specifically for use
                       with equipment, software, services, or support
                       services identified above.

  Personnel            Includes the salary (compensation) and benefits
  (compensation and    for government personnel who perform IT functions.
  benefits)            Functions include but are not limited to program
                       management, policy, IT management, systems
                       development, operations, telecommunications,
                       computer security, contracting, and secretarial
                       support. Personnel who simply use IT assets
                       incidental to the performance of their primary
                       functions are not included.

  Intra-governmental   All IT services within agencies, and between
  services             executive branch agencies, judicial and
                       legislative branches, and State and local
                       governments.
  -----------------------------------------------------------------------

**Table F-2** Cost Elements for Systems

+------------------+---------------------------------------------------+
| ### D.2.3. Estim | Future customer requirements determine the system |
| ate Future Busin | capabilities and architecture, and ultimately     |
| ess Requirements | affect system costs and benefits. These customer  |
|                  | requirements provide the insight needed to        |
|                  | estimate the future costs of business.            |
|                  |                                                   |
|                  | **Future System**---Re-engineered and or improved |
|                  | business processes will be performed by manual or |
|                  | automated systems in the future. A complete       |
|                  | understanding of the requirements allows the      |
|                  | project manager to estimate new business          |
|                  | processes and their costs to the government.      |
|                  | These future costs of business are necessary to   |
|                  | complete a CBA. Each alternative may affect       |
|                  | business processes and associated costs           |
|                  | differently.                                      |
+------------------+---------------------------------------------------+

Items to consider include:

**Lifecycle Time**---Determine the system lifecycle, or when the system
is terminated and replaced by a system with significant changes in
processing, operational capabilities, resource requirements, or system
outputs. Large, complex systems should have a lifecycle of at least five
years, and no more than ten to 12 years.

**Lifecycle Demands**---Identify the most appropriate demand measures
and use the measures to determine previous year demands, calculate the
change in demand from year to year, average the demand change, and use
the average to make predictions; or use expert judgment if deemed the
most appropriate choice. In a complex situation, more sophisticated
tools, such as time-series and regression analysis, may be needed to
forecast the future.

+------------------+---------------------------------------------------+
| ### D.2.4. C     | Data can be collected, from the following         |
| ollect Cost Data | sources, to estimate the costs of each investment |
|                  | alternative:                                      |
|                  |                                                   |
|                  | **Historical Organization Data**---If contracts   |
|                  | were used to provide system support in the past,  |
|                  | they can provide the estimated future cost of     |
|                  | leasing and purchasing hardware and hourly rates  |
|                  | for contractor personnel. Contracts for other     |
|                  | system support services can provide comparable    |
|                  | cost data for the development and operation of a  |
|                  | new system.                                       |
+------------------+---------------------------------------------------+

**Current System Costs**---Current system costs can be used to price
similar alternatives.

**Market Research**---Quotes from multiple sources, such as vendors,
Gartner Group, IDC Government, and government-wide agency contracts
(GWACS), can provide an average, realistic price.

**Publications**---Trade journals usually conduct annual surveys that
provide general cost data for IT personnel. Government cost sources
include the General Services Administration (GSA) pricing schedule and
the OMB Circular A-76, "Performance of Commercial Activities"
supplemental listing of inflation and tax rates.

**Analyst Judgment**---If data is not available to provide an adequate
cost estimate, the CBA team members can use judgment and experience to
estimate costs. To provide a check against the estimates, discuss
estimated costs with other IT professionals.

**Special Studies---**Special studies can be conducted to collect cost
data for large IT investments. For example, the Federal Aviation
Administration (FAA) used three different in-house studies to provide
costs for software conversion, internal operations, and potential
benefits. These data sources became the foundation for a CBA.

+------------------+---------------------------------------------------+
| ### D.2.5. Ch    | A CBA should present at least three viable        |
| oose at Least Th | alternatives; Each viable approach should be      |
| ree Alternatives | included as an alternative. However, the number   |
|                  | of technical approaches may be limited if only    |
|                  | one or two are compatible with the architecture   |
|                  | or if some approaches are not feasible for        |
|                  | reasons other than costs and benefits. Consider   |
|                  | non-IT alternative to mission accomplishment.     |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | Document assumptions and justify them. This is an |
|  D.2.6. Document | opportunity to explain why some alternatives are  |
|  CBA Assumptions | not included. If an alternative is eliminated     |
|                  | because it is not feasible, the assumption should |
|                  | be clearly explained and justified.               |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### D.2.7        | Many factors should be considered during the      |
| . Estimate Costs | process of estimating costs for alternatives.     |
|                  | Full lifecycle costs for each competing           |
|                  | alternative should be included, and the following |
|                  | factors should be addressed:                      |
+------------------+---------------------------------------------------+

**Activities and Resources**---Identify and estimate the costs
associated with the initiation, design, development, operation, and
maintenance of the IT system.

**Cost Categories**---Identify costs in a way that relates to the budget
and accounting processes. The cost categories should follow current DOI
object class codes.

**Personnel Costs**---Personnel costs are based on the guidance in OMB
Circular A-76, "Supplemental Handbook, PART II-Preparing the Cost
Comparison Estimates." Government personnel costs include current salary
by location and grade, fringe benefit factors, indirect or overhead
costs, and General and Administrative costs.

**Depreciation**---The cost of each tangible capital asset should be
spread over the asset's useful life (e.g., the number of years it will
function as designed). OMB prefers that straight-line depreciation be
used for capital assets.

**Annual Costs**---All cost elements should be identified and estimated
for each year of the system lifecycle. This is necessary for planning
and budget considerations **Table D-3**---illustrates the cost estimates
for an investment initiation activity.

  --------------- -------------- -------------- ----------------- ------------ ---------------- ----------------- -----------
  **Activities/   **Problem\     **Work Process **Requirements\   **Security   **Performance\   **Cost-Benefit\   **Total**
  Cost\           Definition**   Evaluation**   Definition**      Plan**       Measures**       Analysis**        
  Categories**                                                                                                    

  Hardware                                                                                                        

  Software                                                                                                        

  Services                                                                                                        

  Support                        10,000         4,000             1,000        6,000            3,000             24,000
  Services                                                                                                        

  Supplies                       100            100               0            100              100               400

  Personnel       5,000          10,000         6,000             500          5,000            8,000             34,500

  Inter‑Agency                                                                                                    
  Services                                                                                                        

  Total           5,000          20,100         10,100            1,500        11,100           11,100            58,900
  --------------- -------------- -------------- ----------------- ------------ ---------------- ----------------- -----------

**Table D-3** Sample Cost Estimates for an Investment Activity

The costs for each year can be added to provide the estimated annual
costs over the investment's life. For example, **Table D-4-Sample System
Lifecycle Cost Estimates** provides the total estimated costs for a
10-year investment. In the first year, in-house staff and contractors
define the problem, evaluate the work process, define processing
requirements, prepare the CBA, develop a request for proposals (RFP),
and issue a contract for the system development. In the second year, a
contractor designs and implements the system. The next eight years
reflect operational and maintenance costs for equipment, software,
in-house personnel, and contractor personnel. Years five and six also
reflect in-house acquisition costs for establishing a new five-year
contract for system maintenance and help desk support.

  ----------- ------------- ----------------- ----------------- --------------- ----------------- -----------
  **Year**    **Startup**   **Acquisition**   **Development**   **Operation**   **Maintenance**   **Total**

  **1**       100,000       100,000                                                               200,000

  **2**                                       800,000                                             800,000

  **3**                                                         200,000         80,000            280,000

  **4**                                                         200,000         60,000            260,000

  **5**                     50,000                              200,000         50,000            300,000

  **6**                     50,000                              200,000         50,000            300,000

  **7**                                                         200,000         40,000            240,000

  **8**                                                         200,000         30,000            230,000

  **9**                                                         200,000         30,000            230,000

  **10**                                                        200,000         30,000            230,000

  **Total**   100,000       200,000           800,000           1,600,000       370,000           3,070,000
  ----------- ------------- ----------------- ----------------- --------------- ----------------- -----------

**Table D-4** Sample System Lifecycle Cost Estimates

+------------------+---------------------------------------------------+
| ### D.2.8. E     | The following six activities are completed to     |
| stimate Benefits | identify and estimate the value of benefits:      |
|                  |                                                   |
|                  | **Define Benefits**---Benefits are the services,  |
|                  | capabilities, and qualities of each alternative,  |
|                  | and can be viewed as the return from an           |
|                  | investment. Benefits are based on the changed     |
|                  | business processes. The following questions will  |
|                  | help define benefits for IT systems and enable    |
|                  | alternative comparisons:                          |
+------------------+---------------------------------------------------+

*Accuracy*---Will the system improve accuracy by reducing data entry
errors?

*Availability*---How long will it take to develop and implement the
system?

*Compatibility*---How compatible is the proposed alternative with
existing procedures?

*Efficiency*---Will one alternative provide faster or more accurate
processing?

*Maintainability*---Will one alternative have lower maintenance costs?

*Modularity*---Will one alternative have more modular software
components?

*Reliability*---Does one alternative provide greater hardware or
software reliability?

*Security*---Does one alternative provide better security to prevent
fraud, waste, or abuse?

*Workforce*---Will the system reduce the number of employees performing
the business process, or allow the same employees to do work more
efficiently?

**Identify Benefits**---Every proposed IT system should have
identifiable benefits for both the organization and its customers.
Organizational benefits could include flexibility, organizational
strategy, risk management, organizational changes, and staffing impacts.
Customer benefits could include improvements to the current IT services
and the addition of new services. Customers should help identify and
determine how to measure and evaluate the benefits.

**Establish Measurement Criteria**---Establishing measurement criteria
for benefits is crucial because the Government Performance and Results
Act (GPRA) and the Clinger-Cohen Act (CCA) emphasize tangible measures
of success (benefits) related to the organization's overall mission and
goals. See **Appendix G-Performance Measurement** for guidance on how to
develop performance measures.

**Classify Benefits**---Benefits that are capable of being appraised at
an actual or approximate value are called tangible benefits. Benefits
that cannot be assigned a dollar value are called intangible benefits.

**Estimate Tangible Benefits**---The dollar value of benefits can be
estimated by determining the fair market value of the benefits. An
important economic principle used in estimating public benefits is the
market value concept. Market value is the price that a private sector
organization would pay to purchase a product or service

**Quantify Intangible Benefits**---Intangible benefits can be quantified
using a subjective, qualitative rating system. As an example, a
qualitative rating system might evaluate potential benefits against the
following:

-   Provides Maximum Benefits (2 points)

-   Provides Some Benefits (1 point)

-   Provides No Benefits (0 points)

-   Provides Some Negative Benefits (-1 point)

-   Provides Maximum Negative Benefits (-2 points)

Once the rating system is selected, each benefit is evaluated for each
alternative. This should be done by a group of three to five individuals
familiar with the current IT system and the alternatives being
evaluated. The numerical values assigned to the ratings then can be
summed and averaged to obtain a score for each benefit. **Table
D-5**---shows the scores for benefits A to D from four reviewers using a
scale of 1 to 5.

  ------------- ------------ ------------ ------------ ------------ -------------
  **Benefit**   **Reviewer   **Reviewer   **Reviewer   **Reviewer   **Reviewer\
                1\           2\           3\           4\           Average
                Score**      Score**      Score**      Score**      Score**

  **A**         5            4            3            5            4.25

  **B**         4            2            3            4            3.25

  **C**         3            2            5            4            3.50

  **D**         4            3            2            2            2.75
  ------------- ------------ ------------ ------------ ------------ -------------

**Table D-5** Sample Reviewer Scores for Intangible Benefits

An option that can be used in a qualitative assessment is to "weight"
each benefit criteria with regard to importance. The more important the
benefit, the higher the weight it carries. The advantage of weighting is
the more impor­tant benefits have a greater influence on the benefit
analysis outcome. The weighting scale can vary between any two
predetermined high and low weights. An example of calculating a weighted
score is provided in **Table F-6** ---and demonstrates using weighting
factors makes Alternative 1 the clear winner.

  -- ------------- ----------- --------------- ------------ --------------- ------------ -------------- ------------ --------------- ------------ --------------- ------------
     **Benefit**               **Alternative 1              **Alternative 2              **Weighting\                **Alternative 1              **Alternative 2 
                               Raw Score**                  Raw Score**                  Factor**                    Weighted                     Weighted        
                                                                                                                     Score**                      Score**         

                   **A**                       4                            2                           10                           40                           20

                   **B**                       3                            2                           9                            27                           18

                   **C**                       4                            3                           8                            32                           24

                   **D**                       2                            3                           6                            12                           18

                   **E**                       3                            4                           5                            15                           20

                   **Total**                   16                           14                          38                           126                          100
  -- ------------- ----------- --------------- ------------ --------------- ------------ -------------- ------------ --------------- ------------ --------------- ------------

**Table D-6** Sample Weighted Benefits Score

+------------------+---------------------------------------------------+
| ### D.           | After costs and benefits for each system          |
| 2.9. Discount Co | lifecycle year have been identified, convert them |
| sts and Benefits | to a common measurement unit by discounting       |
|                  | future dollar values and transforming future      |
|                  | benefits and costs to their "present value."      |
|                  | Present values are calculated by multiplying the  |
|                  | future value times the discount factors published |
|                  | in the OMB Circular A-94.                         |
+------------------+---------------------------------------------------+

**Table D-7**---shows annual costs and benefits for a system lifecycle,
along with the discount factor, the discounted costs and benefits
(present values), and the Net Present Value present value \[NPV\]. The
discounted costs and benefits are computed by multiplying costs and
benefits by the discount factor. The net benefit without discounting is
\$380,000 (\$3,200,000 minus \$2,820,000) while the discounted NPV is
less than \$60,000 because the biggest costs are incurred in the first
two years, while the benefits are not accrued until the third year. When
evaluating costs and benefits, you should be cautious of returns that
accrue late in the investment's lifecycle. Due to discounting, benefits
that accrue in later years do not offset costs as much as earlier-year
benefits. Also, these later-year benefits are less certain. Both the
business and IT environments may experience significant changes before
these later-year benefits are realized.

  ----------- ----------- ----------- ------------ --------------- --------------- ---------------
  **Year**    **Annual    **Annual    **Discount   **Discounted\   **Discounted\   **Discounted\
              Cost\       Benefit     Factor       Cost (DC)\      Benefit (DB)\   Net (NPV)\
              (AC)**      (AB)**      (DF)**       ACxDF**         ABxDF**         DB - DC**

  **1**       150,000                 0.9667       145,005                         (145,005)

  **2**       600,000                 0.9035       542,100                         (542,100)

  **3**       280,000     400,000     0.8444       236,432         337,760         101,328

  **4**       260,000     400,000     0.7891       205,166         315,640         110,474

  **5**       300,000     400,000     0.7375       221,250         295,000         73,750

  **6**       300,000     400,000     0.6893       206,790         275,720         68,930

  **7**       240,000     400,000     0.6442       154,608         257,680         103,072

  **8**       230,000     400,000     0.6020       138,460         240,800         102,340

  **9**       230,000     400,000     0.5626       129,398         225,040         95,642

  **10**      230,000     400,000     0.5258       120,934         210,320         89,386

  **Total**   2,820,000   3,200,000                2,100,143       2,157,960       57,817
  ----------- ----------- ----------- ------------ --------------- --------------- ---------------

**Table D-7** Sample Discounted Lifecycle Costs and Benefits

+------------------+---------------------------------------------------+
| #                | Many benefits cannot easily be quantified in      |
| ## D.2.10. Evalu | dollar terms. As a result, evaluating             |
| ate Alternatives | alternatives cannot always be done using present  |
|                  | values, but valid evaluations can be made using a |
|                  | combination of dollar values and quantified       |
|                  | relative values (values that are numeric, but do  |
|                  | not represent dollar values).                     |
+------------------+---------------------------------------------------+

**Evaluate All Dollar Values**---Once all the costs and benefits for
each competing alternative have been assigned dollar values and
discounted, the NPV of the alternatives should be compared and ranked.
When the alternative with the lowest discounted cost provides the
highest discounted benefit, it is the clear winner, as shown in **Table
D-8**---.

  ----------------- --------------- --------------- --------------- ----------------
  **Alternative**   **Discounted    **Discounted    **Net Present   **Benefit-Cost
                    Cost (DC)**     Benefit (DB)**  Value (NPV)     Ratio (DB/DC)**
                                                    (DB - DC)**     

  **1**             1,800,000       2,200,000       400,000         1.22

  **2**             1,850,000       1,750,000       (-100,000)      0.95

  **3**             2,000,000       2,000,000       0               1.00

  **4**             2,200,000       2,100,000       (-100,000)      0.95
  ----------------- --------------- --------------- --------------- ----------------

**Table D-8** Sample Investment Comparison (Lowest Cost System Provides
Highest Benefit)

**Net Present Value**---There will probably be very few cases where the
alternative with the lowest discounted cost provides the highest
discounted benefit. The next number to consider is the Net Present Value
(Discounted Benefit minus Discounted Cost). If one alternative clearly
has the highest Net Present Value, it is considered the best
alternative; however, it is usually advisable to look at other factors.

**Benefit-Cost Ratio**---When the alternative with the highest Net
Present Value present value is not a clear winner, the benefit-cost
ratio or BCR (discounted benefit divided by discounted cost) may be used
to differentiate between alternatives with very similar or equal Nets.
In **Table D-9**--- Alternative 4 would be the winner because it has a
higher BCR than Alternative 5. Alternatives 4 and 5 are clearly superior
to other alternatives because they have the highest Net Present Value.

**Evaluate With Intangible Benefits**---When all the benefits are
intangible, evaluation will be based on quantifying relative benefits.

+---------+--------------+--------------+--------------+--------------+
| *       | **Discounted | **Discounted | **Net        | **           |
| *Altern | Cost (DC)**  | Benefit      | Present      | Benefit-Cost |
| ative** |              | (DB)**       | Value**      | Ratio        |
|         |              |              |              | (DB/DC)**    |
|         |              |              | **(DB‑DC)**  |              |
+---------+--------------+--------------+--------------+--------------+
| **1**   | 1,500,000    | 1,600,000    | 100,000      | 1.07         |
+---------+--------------+--------------+--------------+--------------+
| **2**   | 1,600,000    | 1,750,000    | 150,000      | 1.09         |
+---------+--------------+--------------+--------------+--------------+
| **3**   | 1,900,000    | 2,000,000    | 100,000      | 1.05         |
+---------+--------------+--------------+--------------+--------------+
| **4**   | 2,000,000    | 2,450,000    | 450,000      | 1.23         |
+---------+--------------+--------------+--------------+--------------+
| **5**   | 3,000,000    | 3,450,000    | 450,000      | 1.15         |
+---------+--------------+--------------+--------------+--------------+

**Table D-9** Sample Investment Comparison (Other Than Lowest Cost
System Provides Highest Benefit)

+------------------+---------------------------------------------------+
| ### D.2.         | Sensitivity analysis tests the sensitivity of     |
| 11. Perform Sens | input parameters and the reliability of the CBA   |
| itivity Analysis | result. Sensitivity analysis should assure        |
|                  | reviewers the CBA provides a sound basis for      |
|                  | decisions. The sensitivity analysis process       |
|                  | requires the following:                           |
+------------------+---------------------------------------------------+

**Identify Input Parameters**---The assumptions documented earlier in
the CBA are used to identify the model inputs to test for sensitivity.
Good inputs to test are those that have significant (large) cost factors
and a wide range of maxi­mum and minimum estimated values. Listed below
are some common parameters:

-   System requirement definition costs

-   System development costs

-   System operation costs

-   Transition costs, especially software conversion

-   System lifecycle

-   Peak system demands.

**Repeat the Cost Analysis**---For each parameter identified, determine
the minimum and maximum values. Then, choose either the minimum or
maximum value as the new parameter value (the number selected should be
the one that most differs from the value used in the original analysis).
Repeat the CBA with the new parameter value and document the results.
Prepare a table like **Table D-10**---to summarize the different
outcomes and enable the results to be quickly evaluated.

  ------------------------- ---------------------- ----------------------
  **Parameter**             **Parameter\           **Best\
                            Value**                Alternative**

  **Development\            1,500,000\             A\
  Cost (\$)**               2,000,000\             A\
                            2,500,000              B

  **Transition Costs (\$)** 100,000\               A\
                            200,000                A

  **System\                 5\                     A\
  Lifecycle (Years)**       10\                    B\
                            15                     C

  **Benefits (\$)**         1,500,000\             A\
                            2,250,000\             A\
                            3,000,000              B
  ------------------------- ---------------------- ----------------------

**Table D-10** Sample Sensitivity Analysis

**Evaluate Results**---Compare the original set of inputs and the
resulting outcomes to the outcomes obtained by varying the input
parameters. In the previous table, the original values are the first
value listed for each parameter. Sensitivity is measured by how much
change in a parameter is required to change the alternative selected in
the original analysis. The sensitivity guidelines include the following:

-   A parameter is not considered sensitive if it requires a decrease of
    50 percent or an increase of 100 percent to cause a change in the
    selected alternative.

-   A parameter is considered sensitive if a change between 10 and 50
    percent causes a change in the selected alternative.

-   A parameter is considered very sensitive if a change of 10 percent
    or less causes a change in the selected alternative.

In the previous example, the analysis would appear to be somewhat
sensitive to the development costs, but not sensitive to the transition
costs and benefits.

+------------------+---------------------------------------------------+
| ### D.2.12. Com  | Even if the CBA shows that benefits will outweigh |
| pare Investments | costs, using Payback Period and Return on         |
|                  | Investment (ROI) analysis help demonstrate an     |
|                  | investment is a better utilization of funds than  |
|                  | other proposed investments.                       |
|                  |                                                   |
|                  | **Table D-11**---illustrates that the money       |
|                  | invested in the system's development,             |
|                  | installation, and operation is not offset by the  |
|                  | benefits until the 10th year. In other words, the |
|                  | payback period for the system is 10 years, which  |
|                  | is generally unacceptable, making it difficult    |
|                  | for this investment to obtain funding.            |
+------------------+---------------------------------------------------+

  ----------- ----------- ----------- ------------- --------------- --------------- ----------- ---------------
  **Year**    **Annual\   **Annual\   **Discount\   **Discounted\   **Discounted\   **\         **Cumulative\
              Cost\       Benefit\    Factor\       Cost (DC)\      Benefit (DB)\   Net Present Net Present
              (AC)**      (AB)**      (DF)**        ACxDF**         ABxDF**         Value\      Value**
                                                                                    DB - DC**   

  **1**       150,000                 0.9667        145,010         0               (145,010)   (145,010)

  **2**       600,000                 0.9035        542,095         0               (542,095)   (687,106)

  **3**       280,000     400,000     0.8444        236,428         337,754         101,326     (585,779)

  **4**       260,000     400,000     0.7891        205,178         315,658         110,480     (475,299)

  **5**       300,000     400,000     0.7375        221,256         295,007         73,751      (401,547)

  **6**       300,000     400,000     0.6893        206,781         275,708         68,927      (332,620)

  **7**       240,000     400,000     0.6442        154,603         257,671         103,068     (229,552)

  **8**       230,000     400,000     0.6020        138,468         240,814         102,346     (127,206)

  **9**       230,000     400,000     0.5626        129,409         225,060         95,651      (31,556)

  **10**      230,000     400,000     0.5258        120,943         210,336         89,393      57,837

  **Total**   2,820,000   3,200,000                 2,100,171       2,158,008       57,837      
  ----------- ----------- ----------- ------------- --------------- --------------- ----------- ---------------

**Table D-11** Sample Payback Period

**Return on Investment**---ROI is often used when comparing proposed
investments. Total Net Present Value (Total Discounted Benefits minus
the Total Discounted Costs) is often referred to as the return or profit
from an investment. ROI is calculated by dividing the Total Net Present
Value by the Total Discounted Cost. In the figure above, ROI is the
Total Net Present Value (\$57,837) divided by Total Discounted Costs
(\$2,100,171) and equals 0.0275. Since ROI is often cited as a
percentage, multiplying by 100 converts the decimal rate to 2.75.

The ROI is really just another way to express the BCR. In the example
above, the BCR is the Total Discounted Benefit (\$2,158,008) divided by
the Total Discounted Costs (\$2,100,171) and equals 1.0275. The 1.0275
can also be expressed as 102.75 percent. This means that the benefits
are 2.75 percent greater than the costs. Compute the ROI by subtracting
1 from the BCR.

The ROI must also be adjusted for risk. To adjust ROI for risk, use the
process described for calculating the risk factor described in Appendix
G.2. The "risk factor" for all risks should be totaled and added to the
investment cost. Adjusting the ROI for risk will aid in comparing
alternatives with different potential risk levels and will help ensure
that returns for investments with higher risk potential are fully
understood. (See **Appendix E: Risk Management** for a more detailed
discussion on risk analysis.)

# Appendix E: Risk Management

## E.1 Purpose

A risk is an uncertain event of condition that, if it occurs, has a
positive or negative affect on a project objective. Risk, is one of
those words that immediately conjure up an image of something bad, but
it is important to remember that risk can also provide positive benefits
as well as negative ones.

Risk management is the systematic process of identifying, analyzing and
responding to project risk. We want to maximize the probability and
impact of any positive risk factors and minimize the probability and
impact of those that might negatively affect the project.

The need to manage risk increases with the complexity of the investment.
It is an ongoing process that requires continuous risk identification,
assessment, planning, and monitoring.

## E.2 Process

The Risk Management process includes two phases:

**Risk assessment** involves identifying, analyzing and prioritizing
risks; and

**Risk response** involves developing and planning risk response
strategies, executing those plans, evaluating the results of the
responses and documenting the results.

There are several ways that a Project Manager may choose to manage or
respond to a specific risk. These options can be categorized into three
broad areas:

**Avoid** the specific threat, usually by eliminating the cause. (e.g.;
conduct a study or develop a prototype)

**Mitigate** the specific threat by reducing the expected monetary or
schedule impact of the risk, or by reducing the probability of its
occurrence.

**Manage** (accept) the consequences of the risk.

Risk management activities need to be balanced. The magnitude of the
effort required to identify, assess, manage, and monitor risks, must be
commensurate with the magnitude of the potential impact to the project.
Making informed decisions by consciously assessing what could go wrong,
as well as the likelihood and the severity of the impact is at the heart
of risk management.

##### 1. Risk Assessment

It is the responsibility of everyone associated with an investment to
identify and document risks. A risk identification process should be
identified, communicated and supported.

**Table E-1** provides a means by which risk identification can be
easily captured, documented, and analyzed.

+------+-------+--------+------------+-------------+---------+-------+
| **R  | *     | **Date | **Risk\    | **Overall   | **Risk  | **Sta |
| isk\ | *Risk | Identi | Des        | Risk        | R       | tus** |
| Pr   | Categ | fied** | cription** | Rating**    | esponse |       |
| iori | ory** |        |            |             | Str     |       |
| ty** |       |        |            | **          | ategy** |       |
|      |       |        |            | *(h-m-l)*** |         |       |
+------+-------+--------+------------+-------------+---------+-------+
|      |       |        |            |             |         |       |
+------+-------+--------+------------+-------------+---------+-------+
|      |       |        |            |             |         |       |
+------+-------+--------+------------+-------------+---------+-------+
|      |       |        |            |             |         |       |
+------+-------+--------+------------+-------------+---------+-------+

**Table E-1** Example of Risk Management Table

Each risk must be:

-   Described as completely as possible

-   Identified by phase or stage, along with who identified the risk,
    the date it was identified, and who was assigned as the primary
    point of contact

-   Analyzed for its probability of occurrence (high, medium, low)

-   Analyzed in terms of impact to the project schedule and budget

-   Given an overall risk (severity) rating (high, medium, low);

-   Categorized within the mandatory and optional areas of risk as
    identified by OMB

-   Prioritized among all identified risks.

##### 2. Risk Response Development and Control

After all risks have been identified, rated and categorized, each risk
is then prioritized. Not all risks identified will be carried into the
risk plan for mitigation and management. Project managers should
establish a pragmatic cut-off that is consistent with the scope of the
project. Each significant risk must then include a description of the
risk response strategy and activities. The risks must then be
categorized by strategy - eliminate, mitigate, or manage.

The risk management plan provides a means by which risks can be easily
tracked and managed. It identifies the priority, area of risk,
description, overall rating, risk response strategy category, and status
(new, increasing, static, decreasing, or eliminated). The risk
management plan will be used to track and communicate risk response
activities, their status and their potential impact on the schedule and
budget.

##### 3. Common Areas of Risk

The following common areas of risk are consistent with OMB Circular A-11
risk requirements. There are either, mandatory or optional categories,
all areas of risk should be addressed in the risk management plan. Below
are some examples of risks included in each category.

**MANDATORY RISK AREAS** --- at least one risk must be identified, rated
and prioritized, and include a risk response strategy in each of the
following risk areas.

***Technology*** --- Lack of expertise, software and hardware maturity
or immaturity, installation requirements, customization, O&M
requirements, component delivery schedules availability, uncertain and
or changing requirements, design errors and or omissions, technical
obsolescence.

***Project Schedule and Resources*** --- Scope creep, requirements
changes, insufficient or unavailable resources, overly optimistic task
durations, unnecessary activities within the schedule, critical
deliverables or reviews not planned into the schedule.

***Business*** ---Poorly written contracts, market or industry changes,
new competitive products become available, creating a monopoly for
future procurements.

***Organizational and Change Management*** --- Business process
re-engineering acceptance by users and management, time and commitment
managers will need to spend overseeing the change, lack of participation
of business owners in the re-engineering process, necessary change in
manuals and handbooks, personnel management issues, labor unions.

***Strategic*** --- Project does not tie to Department's mission or
strategic goals, project is not part of the Department's IT Capital
Planning and Investment Control (CPIC) process.

***Security*** --- Project does not conform to the requirements of OMB
Circular A-130.

***Privacy*** --- Project does not conform to the requirements of OMB
Circular A-130.

***Data*** --- Data standards not defined, data acquisition and or
conversion cost are unknown.

**OPTIONAL RISK AREAS** --- other areas of risk that should be
considered, but are not mandatory to address.

-   Integration Risks

-   Project Team Risks

-   Requirements Risks

-   Cost Risks

-   Project Management Risks.

# Appendix F: Performance Measurement

## F.1 Purpose

Performance measurement is the process whereby an organization
establishes the parameters to measure how programs, investments, and
acquisitions are reaching the desired results in support of mission
goals. Performance measures are set during the Select Phase and assessed
during subsequent phases. The focus of performance measurement is on
outcomes, or how well the IT investment enables the program or
Department to accomplish its primary mission. Consequently, performance
measurement should look beyond measures of input (resource consumption),
activities (milestones), and output (production numbers), which are more
directly related to operational performance. This focus, however, does
not imply that input, activity, and output measures are not useful.
Indeed, internal measures are used to track resources and activities and
make necessary adjustments since investments are only successful if
hardware, software, and capabilities are delivered on time and meet
specifications.

To be useful, performance measure must evaluate the proper activities.
It is therefore vital that performance measures be aligned to the goals
of any investment to the outcomes specified in the Department's
Strategic Plan, and to the Interior Enterprise Architecture.

Performance is evaluated using two criteria---effectiveness and
efficiency. Effectiveness demonstrates that an organization is doing the
correct things, while efficiency demonstrates that an organization is
doing things optimally. New acquisitions and upgrades should include an
Exhibit 300 or 300-1 business case indicating the investment will result
in effectiveness or efficiency improve­ments. For example, a new computer
network might result in enhanced efficiency because work is processed
faster, digital images are transferred among remote sites, or messages
are transmitted more securely.

Some questions that facilitate performance measure development include:

-   What product will be produced, shared, or exchanged?

-   Who will use the results?

-   What decisions or actions will result from delivery of products from
    this system?

Answers to these questions will help Project Managers develop effective
performance measures with the following characteristics:

-   Strategically relevant

-   Directed to factors that matter and make a difference

-   Promote continuous and perpetual improvement

-   Focus on the customer

-   Agreed to by stakeholders.

-   Short, clear, and understandable

-   Meaningful.

-   Realistic, appropriate to the organizational level, and capable of
    being measured.

-   Valid

    -   Link to activity and provide a clear relationship between cause
        and effect

    -   Focus on managing resources and inputs, not simply costs

    -   Discarded when utility is lost or when new, more relevant
        measures are discovered.

OMB has developed a Performance Reference Model (PRM) as part of the
Federal Enterprise Architecture. The PRM contains a set of performance
measures that can be tailored to fit the specific Departmental needs and
a framework for using them. These performance measures are categorized
into four broad areas: mission & business results, customer results,
processes & activities, and technology. This model should be used to
develop specific investment performance measures.

For example: DOI's E-Government Program has two tiers of performance
measures; the top tier (program level performance measures) presents
metrics that indicate the overall performance of the E-Government
program. The measures listed in this tier were derived from the
Departmental Strategic Plan, Interior's E-Government priorities, and the
PRM. The DOI IRB will apply these metrics annually, at a minimum, as
they assess the effectiveness of E-Government efforts across Interior.
The results will be used to shape the annual refinement of the
E-Government Strategy. The table below shows the measures as they map to
the goals of the Departmental Strategic Plan. This table also
categorizes the measures into those evaluating mission impact and those
evaluating the success of governance and coordination.

Table: E-Gov Program Performance Measures (Mapped to DOI Strategic Plan)

  -------------------------- -------------------------- ------------------
  Performance Measures       Link to Goals of the       Category
                             Departmental Strategic     
                             Plan                       

  Business manager           Strategic Goals of all     Mission Impact
  satisfaction with          mission areas              
  E-Government solutions.                               

  IT spending as %of         Management Excellence: End Governance and
  Interior budget            Outcome Goal 4             Coordination
  (benchmark)                (Integration)              

  \% of GPEA transactions    Management Excellence: PMA Mission Impact
  that are GPEA compliant.   Strategy 4 (E-Government)  

  \% of systems that serve   Management Excellence: End Governance and
  multiple Bureaus           Outcome Goal 4             Coordination
                             (Integrations)             

  \% of capital investments  Management Excellence: PMA Governance and
  fully compliant with the   Strategy 4 (E-Government)  Coordination
  CPIC process                                          

  \% system availability     Management Excellence: End Mission Impact
                             Outcome Goal 3             
                             (Modernization)            

  \% of systems certified    Management Excellence: End Governance and
  and accredited             Outcome Goal 3             Coordination
                             (Modernization)            

  \% of major IT projects    Management Excellence: PMA Governance and
  that are within 10% of     Strategy 4 (E-Government)  Coordination
  schedule and cost                                     

  \% external customers      Management Excellence: End Mission Impact
  satisfied with IT Services Outcome Goal 5 (Customer   
  of the Department          Value)                     

  \# of web hits             Management Excellence: End Mission Impact
                             Outcome Goal 3             
                             (Modernization)            
  -------------------------- -------------------------- ------------------

## F.2 Process

Outcome-based performance measures are developed through a series of
steps. It is important to understand that developing measures is only
one part of the more comprehensive process. After measures are
developed, baseline informa­tion is gathered if it does not already
exist, and performance informa­tion is collected, analyzed, interpreted,
and used throughout the investment's life. These steps require a
commitment of management attention and resources.

The following five steps are recommended to establish performance
measures:

> 1\. Analyze how the investment supports the mission goals and
> objectives and reduces performance gaps
>
> 2\. Develop IT performance objectives and measures that characterize
> success
>
> 3\. Develop collection plan and collect data
>
> 4\. Evaluate, interpret, and report results
>
> 5\. Review process to ensure it is relevant and useful.

Steps one to three are completed during the Pre-Select and Select
Phases. Steps four and five are completed during the Control Phase, with
follow-up during the Evaluate and Steady State Phases. Each of these
process steps is defined in the following sections.

##### 1. Analyze How the Investment Supports the Mission and Reduces Performance Gaps

Effective outcome-based performance measures are derived from the
relationship between the new investment and how users will apply
investment outputs. Specifically, the users' mission and critical
success factors (those activities and outputs that must be accomplished
if users are to achieve their mission) must be clearly understood. The
critical element of this step is linking proposed and in-process IT
investments and activities to the user mission and critical success
factors.

This concept is often described as a method of strategically aligning
programs and support functions with the Department's mission and
strategic priorities. The first step in effectively developing
outcome-based IT performance measures is to identify the organization's
mission, the critical tasks necessary to achieve the mission, and the
strategies that will be implemented to complete those tasks. One
structured method of accomplishing this step is to develop a Logic Model
linking the mission to IT performance measures.

Answers to the following questions will aid logic model development:

Identify the system.

-   What will the system do?

-   What are major functions or features that the system will provide
    (for example, what functionality or information)?

-   Is this system a stand-alone system or is it used or integrated with
    another system?

-   What is the purpose of that system?

-   How is it used?

What aspects of the system, service, and information quality are needed
for the system to perform optimally or acceptably?

Identify who will use the system. What is the principal business task
they perform? How will using the system help them with that task?

How does completion of that task contribute to a business function?

How does completion of the business function contribute to achievement
of program goals?

How does completion of program goals contribute to organizational goals?

How does completion of organizational goals contribute to Departmental
goals?

Determine whether there are related IT investments that impact the
mission area and goal(s) selected. Understand the relationships between
various IT investments that address the same or similar needs. This will
help identify potential areas for consolidation.

Once the mission is clearly defined, a gap analysis is performed to
understand how IT can improve mission performance. The analysis begins
with the premise that IT will improve effectiveness, efficiency, or
both. To accomplish this, requirements are defined and the following
questions are answered:

-   Why is this application needed?

-   How will the added functionality help users accomplish the mission?

-   How will the added functionality improve day-to-day operations and
    resource use?

The investment initiation and requirement documentation also describes
gaps between the current and future mission and strategy in terms of how
overall efficiency and effectiveness will be improved. Project managers
assist users in developing a baseline measurement of the current IT use
and in comparing the baseline to the business objective to identify
gaps. This analysis defines the investment need as the basis for
determining what success will look like (e.g., the investment is
successful when the gap is reduced by "x" amount).

##### 2. Develop IT Performance Measures that Characterize Success

Well-designed performance measures define success parameters for the IT
initiative. The following questions should be asked for each performance
measure and answered affirmatively before deploying the measure:

Is it useful for monitoring progress and evaluating the degree of
success?

Is it focused on outcomes that stakeholders will clearly understand and
appreciate?

Is it practical? Does it help build a reliable baseline and
cost-effectively collect performance data at periodic intervals?

Can the performance measure be used to determine the level of investment
risk and whether the investment will meet performance targets?

Answering these questions affirmatively results in an agreement that the
IT investment, by supporting improvements identified earlier, will
support organizational goals and objectives. Additionally, it will help
limit the number of performance measures and focus management attention
on the requirements that have the greatest priority or impact. After
three to five major requirements have been identified, the following
questions are asked:

What are the performance indicators for each major requirement?

How well will those outputs satisfy the major requirements?

What additional steps must be taken to ensure outputs produce intended
outcomes?

How does this IT investment improve capabilities over the current
method?

Once requirements to be measured are identified, determine when each
requirement is met. Some requirements may need to be changed if they are
too difficult to measure. Or, if the requirement has indirect rather
than direct outcomes, it may be necessary to use "surrogate" performance
measures that mirror actual outcomes. For example, it is difficult to
measure the direct benefit of computer-based training (CBT) systems. In
this case, a surrogate measure might be the percentage of staff
achieving certifications through the CBT with implications that
certified staff are more desirable than non-certified staff because they
have demonstrated initiative and are more proficient.

Of the possible performance indicators, select one or more to report
performance against each requirement. One performance indicator may
provide information about more than one requirement. The objective is to
select the fewest number of performance indicators that will provide
adequate and complete information about progress.

Selecting the fewest performance indicators necessary is important
because data collection and analysis can be costly. The cost is
acceptable if the benefit of the information received is greater than
the cost of performance measurement, and if the data collection does not
hinder accomplishment of primary missions. Costs are calculated by
adding the dollars and staff time and effort required to collect and
analyze data. When calculating costs, you must consider whether they are
largely confined to initial or up-front costs, or will occur throughout
the IT lifecycle. For example, the cost of developing and populating a
database may have a large initial cost impact but diminish significantly
for later maintenance. Answers to the following questions will help to
determine the cost of tracking a specific performance indicator:

-   What data are required to calculate the performance measure?

-   Who collects the data and when?

-   What is the verification and validation strategy for the data
    collection?

-   What is the method to ensure the quality of the information
    reported?

In addition to determining costs, it is also necessary to determine the
baseline performance, target performance, and expected time to reach the
target. The baseline value is the start point for future change. If
performance measures are currently in use, the data collected can
provide the baseline. Otherwise the manager must determine the baseline
by a reasonable analysis method including the following:

-   Benchmarks from other agencies and private organizations

-   Initial requirements

-   Internal historical data from existing systems

-   Imposed standards and requirements.

To determine the target value, obtain stakeholder agreement regarding
the quantifiable benefits of the new system. These targets may be
plotted as a function over time, especially for IT investments that are
being installed or upgraded or as environmental factors change.

##### 3. Develop Collection Plan and Collect Data

To ensure performance data is collected in a consistent, efficient, and
effective manner, it is useful to develop and publish a collection plan
so all participants know their responsibilities and can see their
contributions. The collection plan details the following items:

-   Activities to be performed

-   Resources to be consumed

-   Target completion and report presentation dates

-   Decision authorities

-   Individuals responsible for data collection.

In addition, the collection plan answers the following questions for
each performance measure:

-   How is the measurement taken?

-   What constraints apply?

-   Who will measure the performance?

-   When and how often are the measurements taken?

-   Where are the results sent and stored, and who maintains results?

-   What is the cost of data collection?

While costs should have been considered during the previous step, the
actual cost will be more evident at this stage. Excessively costly
performance measures may require project managers to find a different,
less costly mix of performance measures for the IT investment. Or it may
be necessary to creatively collect the measures to reduce collection
cost. For example, a sampling may produce sufficiently accurate results
at significantly less cost than counting every occurrence, and some
results can be automatically generated by the system and accessed
through a standard report.

To ensure data is being collected in a cost-effective and efficient
manner, it is important to ensure the data collectors are involved in
developing performance measures. The collectors will do a much better
job if they believe the performance measures are valid and useful, and
they will have insight regarding the best way to collect the data.

##### 4. Evaluate, Interpret, and Report Results

Performance measures are useful in monitoring the investment against
expected benefits and costs. To evaluate performance, data is compiled
and reported according to the collection plan that was previously
constructed. The data is then evaluated and the following questions are
answered regarding the collected data and the investment's performance:

-   Did the investment exceed or fall short of expectations? By how much
    and why?

-   If the data indicates targets are successfully reached or exceeded,
    does that match other situational perceptions?

-   What were the unexpected benefits or negative impacts to the
    mission?

-   What adjustments can and should be made to the measures, data, or
    baseline?

-   What actions or changes would improve performance?

This evaluation reveals any needed adjustments to the IT investment or
performance measures. It also helps surface any lessons learned that
could be fed back to the investment management process.

##### 5. Review Process to Ensure It Is Relevant and Useful

Performance measures provide feedback to managers and help them make
informed decisions on future actions. To ensure that performance
measures are still relevant and useful, answer the following questions:

Are the measures still valid?

-   Have higher-level mission or IT investment goals, objectives, and
    critical success factors changed

-   Are threshold and target levels appropriate in light of recent
    performance and changes in technology and requirements?

-   Can success be defined by these performance measures?

-   Can improvements in mission or operations efficiency be defined by
    the measures?

-   Have more relevant measures been discovered?

Are the measures addressing the right things?

-   Are improvements in performance of mission, goals, and objectives
    addressed?

-   Are all objectives covered by at least one measure?

-   Do the measures address value-added contributions made by overall
    investment in IT and or individual programs or applications?

-   Do the measures capture non-IT benefits and customer requirements?

-   Are costs, benefits, savings, risks, or ROI addressed?

-   Do the measures emphasize the critical aspects of the business?

-   Are measures linked to a specific and critical organizational
    process?

Are the measures the right ones to use?

-   Are measures targeted to a clear outcome (results rather than inputs
    or outputs)?

-   Are measures understood at all levels that must evaluate and use
    them?

-   Do the measures support effective management decisions and
    communicate achievements to internal and external stakeholders

-   Are measures accurate, reliable, valid, and verifiable?

-   Are measures built on available data at reasonable costs and in an
    appropriate and timely manner for the purpose?

-   Are measures able to show interim progress?

Are measures used in the right way?

-   Are measures used in strategic planning (e.g., to identify
    baselines, gaps, goals, and strategic priorities) or to guide
    prioritization of program initiatives?

-   Are measures used in resource allocation decisions and task, cost,
    and personnel management?

-   Are measures used to communicate results to stakeholders?

# Appendix G: Project Management

## G.1 Purpose 

Project Management is a crucial element for IT investment success. It
involves executing the necessary skills and management practices to
ensure successful investment development and implementation. This
integrated skill set addresses such areas as project planning, scope
management, cost, schedule, performance, risk, and organizational
management. The Project Manager is ultimately responsible for the
investment's success and ensuring the investment delivers the
functionality and capabilities expected by stakeholders (e.g., users,
customers, and senior leaders.) Perhaps the greatest project management
challenge is the development of a realistic risk-adjusted plan that can
be executed successfully in scope, on schedule and within budget.

DOI's project management (PM) practice and competency policies are based
on the ANSI/PMI/99-001-200 standard Project Management body of Knowledge
(PMBOK®) and the Office of Management and Budget (OMB)-Federal chief
Information Officers Councils (OCIO) guidance on information technology
(IT) project management. The PMBOK describes and recognizes nine
management areas that are generally accepted as PM professional
practices. Listed below are the nine management (knowledge) areas:

1.  Integration Management

2.  Scope Management

3.  Time Management

4.  Cost Management

5.  Quality Management

6.  Human Resource Management

7.  Communication Management

8.  Risk Management

9.  Procurement Management

When optimized, the CPIC and Project Management processes come together
as described in the following section titled; Relationship of Project
Management to Investment Management.

## G.1 Relationship of Project Management to Investment Management

Diagram G. 1 Project Management & CPIC

## G.2 Components

Management (program sponsors and project managers) should complete the
following project management components to help ensure the investment's
successful completion:

**Project Charter**---Project charter is a critical element of every
successful investment. It provides a foundation on which to base
anticipated efforts. The project charter is developed by senior
management (sponsor) and accepted by the Investment Review Board. The
charter formally authorizes the existence of the project. It provides
the project manager with the authority to apply organizational resources
to project activities. Project Chartering includes:

-   This event and document should follow PMBOK guidance.

-   The chartering process should be defined part of the CPIC/PM process
    sequence, (see diagram G. 1 in the previous section.)

-   The project charter is the responsibility of the business sponsor.

-   The chartering process should be under the IRB's authority and an
    IRB responsibility before the project starts or is authorized to
    expend resources.

-   The definition of a Project Charter can be found in Appendix O:
    Glossary of Terms and Acronyms.

-   The project charter should be an acceptance prerequisite to the
    project planning document.

**Project Plan:**

This event and document should follow PMBOK Guidance and should include
the nine project management areas sub-plans that include their
respective execution controls and change control management (CCM)
procedures. (Please see: *DOI's Change and Configuration Management*
process document, for a detailed description.) The nine sub-plans
include:

1.  **Integration Management Plan**, including integrated change control

2.  **Scope Management Plan**, including the scope definition

3.  **Time Management Plan**, including the project schedule baseline

4.  **Cost Management Plan**, including the cost baseline

5.  **Quality Management Plan**, including the quality monitoring and
    control

6.  **Human Resource Management Plan**, including responsibility matrix

7.  **Communication Management Plan**, including performance reporting

8.  **Risk Management Plan**, including the risk adjusted plan

9.  **Procurement Management Plan**, including solicitation, selection
    and contract administration

**(Guidance for these plans can be found in the PMBOK. A copy of this
can be found on this web-site: [U. S. Department of the Interior -
OCIO - IT Capital Planning](http://www.doi.gov/ocio/cp/index.html) )**

-   The planning process should be a defined part of the CPIC/PM process
    sequence, (see diagram G.1 in previous section)

-   The project plan's development is the responsibility of the project
    manager

-   The project plans acceptance should be under the Bureau or DOI IRB's
    authority and a Bureau or DOI IRB responsibility as appropriate.

-   The project plan's review of adherence to standards should be by the
    project review process, organized and supported by the OCIO.

-   The project plan should be an acceptance prerequisite to the OMB's
    developmental phase start (see diagram G.1 in previous section)

-   Project plan changes and re-baselining should conform to Interior's
    CCM policies and guidance.

-   Project plan changes and re-baselining should result in changes
    (updates) to the 300 or 300-1 (version N) (see diagram G.1 in
    previous section.)

**Work Breakdown Structure (WBS)**

Investments typically involve multiple components that may be complex or
interface with other proposed or existing systems or data. Integrating
these components is very challenging. To support improved integration
and management, it is useful to develop a Work Breakdown Structure
(WBS). A WBS provides a management framework by separating the
investment lifecycle into distinct, manageable components related to
various phases or stages of activities and interfaces. Each component is
defined with appropriate sub-components and activities, such that one
individual or team can implement each component. This enables the
Project Manager to more effectively estimate the cost and schedule for
completing individual components, supports sequencing activities and
identification of interdependencies, and provides a basis to identify
milestones and develop resource and schedule estimates.

**Table G-1**---WBS Example

  ----------- -----------------------------------------------------------
  **Plan      
  Project**   

  100         Define Project

  10          Determine Project Objectives

  20          Define Project Scope

  30          List Project Products

  40          Determine Project Constraints

  50          Select Project Approach

  60          Determine Project Standards

  70          Assess Project Risks

  200         Make Project Plan

  10          Define Work Breakdown Structure

  20          Determine Activity Dependencies

  30          Define Project Milestones

  40          Determine Project Organization

  50          Estimate Effort

  60          Allocate Resources

  70          Schedule Activities

  80          Develop Budget

  90          Assess Project Risks

  300         Obtain Project Approval

  10          Assemble Project Plan

  20          Present Project Plan

  30          Agree to Project Plan
  ----------- -----------------------------------------------------------

**Table G-1** Example of a Project Planning WBS Activities during the
Select Phase

**Scope Management**---The scope frames what is expected of the
investment's ultimate capability and functionality, it directly impacts
functional and system requirements development. The Project Manager
should obtain the Project Sponsor's concurrence on the investment's
scope, and then effectively manage that scope and mitigate scope creep.
This can be accomplished by maintaining requirements traceability
throughout the project lifecycle and implementing configuration
management procedures. It is important for the Project Sponsor to
determine whether existing requirements have been redefined, new
requirements have been identified, or existing requirements eliminated
based upon events.

The project scope should be based on the business requirements
identified during the Pre-Select Phase and traced throughout the project
lifecycle. All system features, functions, and capabilities should be
linked to original customer requirements throughout the entire planning,
acquisition, design and implementation phases to ensure accurate system
or network design.

**Risk**---Risk is inherent in every investment. To aid in effectively
identifying, analyzing, developing responses, and managing risk, Project
Managers should develop a risk management plan early in the planning
stages, ideally during the Select Phase. Project Managers should employ
subject matter experts (SMEs) among the various functional areas of the
investment to identify risk and provide mitigation strategy. Key risk
areas may include technology, cost, schedule, and performance or
quality. The risk management plan is continually updated throughout the
investment's lifecycle and is part of periodic reviews. Appendix E: Risk
Management provides additional guidance on risk assessment and
management.).

**Cost and Schedule Management**---Effective investment management
entails establishing cost and schedule baselines. Actual information is
collected, analyzed, and compared to original projections and the
current baseline. Variances are identified, and appropriate actions are
taken to inform senior management and mitigate the impacts of increased
costs and schedule slippages. The WBS, milestones, activities, and
project plan assist the development and tracking of cost and schedule.
Earned value techniques provide a means to more completely evaluate
costs and schedule, and assist in early risk identification (see
**Appendix H: Earned Value Analysis**).

**Performance**---An investment's ultimate objective is to meet or
exceed stakeholder performance expectations by ensuring the investment
satisfies the mission need and business requirements. In the Pre-Select
and Select Phases, performance planning includes defining performance
measures and identifying activities required to ensure performance
objectives will be met (see **Appendix F: Performance Measurement**).
This may include benchmarking to establish a baseline and to further
refine the investment's performance objectives. The Control Phase
includes a continual monitoring of the performance baseline to
potentially include quality reviews, tests, or pilot tests. In the
Evaluate Phase, a PIR helps compare actual investment performance with
expectations (see **Appendix I: Post-Implementation Reviews**). During
the Steady State Phase, performance measures are analyzed to determine
whether investments are continuing to meet mission needs and performance
expectations.

**Organizational Management**---Organizational management skills needed
to manage an investment include project staffing, communications, and
organizational understanding. Project Managers should be able to
identify the needed skill sets and assign appropriate personnel to
accomplish a given set of activities. Project Managers should also have
the requisite interpersonal and leadership skills to communicate with
the project team, Project Sponsor, and stakeholders. This includes
possessing a vision for the investment and how to best meet stakeholder
expectations, as well as ensuring the project team is able to focus on
assigned tasks or activities. Additionally, Project Managers should be
able to communicate and build consensus with key stakeholders, since
this ultimately impacts the investment's success or failure.

# Appendix H: Earned Value Analysis

## H.1 Purpose

Earned value analysis is a program management technique that uses an
investment's past performance and work to evaluate and forecast the
investment's future performance. This enables the Project Manager to
make changes that keep the investment at or bring the investment closer
to planned expectations.

Earned value analysis is part of a performance based management system
required by OMB for all IT investments. Earned Value analysis is built
into the Exhibit 300 business case template. The Project Manager plans
work breakdown structure (WBS) tasks and builds budget estimates for
each task in the project plan. As the plan is executed, the Project
Manager tracks actual progress and expenditures at the completion of
each WBS against planned figures to obtain cost and schedule variances.
These variances can then be used to identify schedule and cost-over or
under-runs so they can be resolved as quickly as possible.

The earned value methodology requires an investment to be fully defined
at the outset. The information that is required to complete an earned
value analysis includes:

-   List of all WBS tasks and critical milestones

-   Planned cost of each WBS task

-   Planned WBS start and completion dates

-   Total budget for the investment

-   Any project reserve.

-   As the project plan is executed, the Project Manager tracks:

-   Work (WBS tasks) completed

-   Value of the completed work

-   The actual cost of the work performed.

Earned Value analysis is based on the budgeted cost of work performed
(BCWP), the budgeted cost work scheduled (BCWS) and the actual cost of
work performed (ACWP). These three parameters provide the Project
Manager, Project Sponsor, and other with all the input data required to
assess project cost and schedule performance.

The approach can provide accurate and reliable assessments from as early
as 15 percent into the investment's lifecycle. It provides early
indications of cost and schedule variances, which help project managers,
take appropriate risk mitigation steps. Typically, investments that are
over-budget, cost variance percentage, when 15 percent of the investment
is finished will result in cost overruns. Once a cost overrun is
identified, it can generally be reduced by only 10 percent, which
indicates the need to support early awareness of potential cost and
schedule risks. Early investment assessment and identification of cost
and schedule variances is critical for the overall success of the
investment, and supports improved cost and schedule control.

When calculating Earned Value, the following perspective should be
considered:

-   Government Activities

-   Second and Third Party Agreements; contacts, inter-organization
    agreements.

Components of Government expenditures include:

-   Labor (like staff time)

-   Equipment

-   Materials

-   Facilities (like office space)

-   Activities (like travel)

Second and Third Party agreements are based on (contract) terms
including:

-   A "firm-fixed" contract, tracking specified deliverables
    expenditures by planned verse actual delivery schedules (dates).

-   A "time and materials" contract, tracking expenditures (as with the
    government):

    -   Labor

    -   Equipment

    -   Materials

    -   Facilities

    -   Activities

## H.2 Process

Before completing earned value analysis, the Project Manager needs to
complete the following project management tasks (see

-   Define investment activities

-   Develop a project plan for the activities

-   Develop a WBS for each activity

-   Allocate costs to each WBS element

-   Schedule each activity

-   Chart and evaluate the investment's status.

The Project Manager will then have the basis for periodically assessing
the investment's performance and completing the following four steps in
the earned value analysis process:

##### 1. Update the Schedule

The scheduled activities are reported as started, completed, or with a
remaining duration as appropriate. For unfinished activities, the
percent complete is reported. For work that results in discrete or
concrete deliverable products (e.g., reports, studies, briefings, etc.),
it generally is easy to determine the percent complete. For efforts that
are not so easily measured, special "earning rules" may be employed. A
common "earning rule" is to report percent complete according to
completed milestones within an activity.

##### 2. Record Actual Costs

After updating the schedule, actual costs from the investment's or
organization's accounting system are recorded. In situations where the
accounting system does not provide the level of detail required to
obtain actual accounting costs, the Project Manager may need to estimate
what percentage of actual costs should be assigned to the investment,
but this should only be done when actual costs are not readily
available.

##### 3. Calculate Earned Value Measures

After recording actual costs for the reporting period, earned value
measures are calculated and reports generated. This can be done, in
part, by creating an earned value chart as shown below.

**Figure H-1---Sample Earned Value Analysis Chart** (This can be
accomplished using a standard project management or spreadsheet
software's charting functionality.)

![](media/image10.png){width="5.9631944444444445in"
height="4.178472222222222in"}

**Figure H-1.** Sample Earned Value Analysis Chart

The sample chart includes the following earned value measures:

**Actual Cost of Work Performed (ACWP)---**The sum of costs actually
incurred and recorded in accomplishing the work performed through the
data date.

**Budget at Completion (BAC)---**The sum of all planned budgets
established for the investment.

**Budgeted Cost for Work Performed (BCWP)---**The sum of the budgets for
completed work packages and completed portions of open work packages,
plus the applicable portion, usually a percentage, of the budgets for
level of effort and apportioned effort as of the data date, this is also
called the "earned value."

**Budgeted Cost of Work Scheduled (BCWS)---**The sum of all WBS element
budgets that were planned or scheduled for completion as of the data
date.

**Contract Budget Base (CBB)---**The total cost of all budgeted
activities necessary to complete a task.

**Cost Performance Index (CPI)---**Earned value divided by the actual
cost (BCWP divided by ACWP).

**Cost Variance (CV)---**Earned value minus the actual cost of work
performed (BCWP minus ACWP).

**Cost Variance Percentage (CV percentage)---**Cost variance divided by
earned value (CV divided by BCWP).

**Estimate at Completion (EAC)---**The actual costs incurred, plus the
estimated costs for completing the remaining work (BAC divided by CPI).

**Estimate to Complete (ETC)---**The budget necessary to complete all
tasks from the ACWP end date through the investment's conclusion (EAC
minus ACWP).

**Management Reserve (MR)---**The amount of the total allocated budget
withheld for management control purposes rather than designated for the
accomplishment of a specific task or set of tasks; not part of the
performance measurement.

**Performance Measurement Baseline (PMB)---**The time-phased budget plan
against which investment performance is measured.

**Schedule Performance Index (SPI)---**Earned value divided by the
planned budget for the completed work (BCWP divided by BCWS).

**Schedule Variance (SV)---**Earned value minus the planned budget for
the completed work (BCWP minus BCWS).

**Schedule Variance Percentage (SV percentage)---**Scheduled variance
divided by the planned budget for the completed work (CV divided by
BCWS).

**Variance at Completion (VAC)---**The difference between the total
budget assigned to a contract, WBS element, organizational entity, or
cost account and the estimate at completion; represents the amount of
expected overrun or under run.

##### 4. Analyze the Data and Report Results

The critical path milestones used to complete the earned value analysis
are directly derived from the project plan. These are the milestones
that require completion before a successive milestone can begin. The
data is collected and monitored for each milestone throughout the
project to achieve maximum effectiveness.

# Appendix I: Post-Implementation Reviews

## I.1 Purpose

Post-Implementation Reviews (PIRs) support the Evaluation Phase of the
process (see **Chapter 5---Evaluate Phase**). PIRs help determine
whether investments have achieved expected benefits, such as lowered
cost, reduced cycle time, increased quality, or increased speed of
service delivery.

The PIR has a dual focus:

It provides an assessment of the implemented investment, including an
evaluation of the development process.

It indicates the extent to which the DOI's decision-making processes are
sustaining or improving the success rate of IT investments.

The PIR usually occurs either after a system has been in operation for
about six months or immediately following investment termination.

In order to ensure independent validation and verification, a team
should conduct the PIR. The team [should not include members from the
investment under review]{.underline}. The PIR team should review the
following investment elements:

-   Mission alignment

-   IT architecture including security and internal controls

-   Performance measures

-   Project management

-   Customer acceptance

-   Business process support

-   Cost versus anticipated savings.

As a minimum, the PIR team will evaluate stakeholder and customer or
user satisfaction with the end product, mission or program impact, and
technical capability, as well as provide decision-makers with lessons
learned so they can improve investment decision-making processes.

The review will provide a baseline to decide whether to continue the
system without adjustment, to modify the system to improve performance
or, if necessary, to consider alternatives to the implemented system.
Even with the best system development process, it is quite possible that
a new system will have problems or even major flaws that must be
rectified to obtain full investment benefits. The PIR should provide
decision-makers with useful information on how best to modify a system,
or to work around the flaws in a system, to improve performance and
bring the system further in alignment with the identified business
needs.

## I.2 Process

There are seven major steps to conducting a PIR:

##### 1. Initiate PIR

CIO and the investment sponsor select the PIR review team. The review
team initiates a PIR by preparing and sending a memorandum to the
Project Manager stating the review has begun. The memorandum should
include a schedule for the planned review and indicate any areas that
may receive special review emphasis.

##### 2. Analyze Documentation

The review team reviews existing investment documentation and analyzes
the information to understand the investment scope, generate interview
and survey questions, prepare for system overview briefings, and plan
the PIR. The review team also reviews any existing reports and memoranda
from the Pre-Select, Select, and Control Phases to uncover any findings
or outstanding issues.

##### 3. Interview Key Players

The review team interviews all key IT and business process players. The
interviews should help the team develop an understanding of the system's
goals, objectives, benefits, and costs as described in the Exhibit 300
or 300-1 business case submitted during the Select Phase. Additionally,
the interviews will help the team determine how efficiently and
effectively the system's objectives, goals, performance measures, and
benefits are being achieved, as well as identify system deficiencies and
enhancement needs.

##### 4. Measure Performance

The review team assesses the investment performance measures established
during the Select Phase. These performance measures are compared to
actual data generated during the operations and or production stage. In
the absence of certain statistics, the review team may perform onsite
observations to measure specific criteria.

##### 5. Perform User Surveys

The review team conducts qualitative surveys with users to determine
user satisfaction with the system. Executing the survey may include
designing questionnaires, distributing survey questionnaires to remote
users' locations, receiving responses, analyzing results, and generating
a survey results memorandum. The survey measures the system's efficiency
and effective­ness in achieving its stated goals and benefits and in
satisfying user needs.

If users are external to DOI we need approval from OMB prior to sending
them a questionnaire.

##### 6. Perform Analysis

The review team analyzes all documentation, survey results, and
performance measurements to determine if the system efficiently and
effectively achieved its objectives.

##### 7. Findings and Recommendation Report

After comments are received from the Project Sponsor, the review team
prepares the Final Report and submits it for the Bureau CIO, EWG, and
Bureau IRB review. Report findings and recommendations must be clear and
concise to avoid any misunderstandings.

##### 8. Final Decision

The CIO, project manager and Department sponsor determine the
appropriate course of action to resolve any outstanding issues.
Decisions will also be made whether to continue the system without
adjustment, modify, or terminate, based on the PIR recommendations.

## I. 3 Sample Initiative Evaluation Sheet

  -------------------- -------------- -------------- -------------- --------------
  **SAMPLE INITIATIVE                                               
  EVALUATION SHEET**                                                

  General information                                               

  Title:                                                            

  Description:                                                      

  Project Sponsor:                                                  

  UPI:                                                              

  PIR Conducted By:                                                 

  Date of PIR:                                                      

  Performance Measures                                              

  Item                 Baseline       Actual         Variance       Comments

  Quantitative                                                      

  Financial                                                         

  Non-Financial                                                     

  Baseline Status                                                   

  Item                 Baseline       Actual         Variance       Comments

  Lifecycle Cost                                                    

  Lifecycle Return                                                  

  Schedule                                                          

  Enterprise                                                        
  Architectural                                                     
  Analysis                                                          

  Enterprise                                                        
  Architectural                                                     
  Assessment                                                        

  IT Accessibility                                                  
  Analysis                                                          

  IT Accessibility                                                  
  Assessment                                                        

  Telecommunications                                                
  Analysis                                                          

  Telecommunications                                                
  Assessment                                                        

  Risk Analysis                                                     

  Risk Management                                                   

  Security Analysis                                                 

  System security risk                                              
  management or                                                     
  mitigation review.                                                
  Additional                                                        
  mitigation                                                        
  strategies and                                                    
  counter measures (if                                              
  needed).                                                          

  Stakeholder                                                       
  Assessment                                                        

  General Comments                                                  

  Lessons Learned                                                   

  Project Management                                                
  Assessment                                                        

  Technical Assessment                                              
  -------------------- -------------- -------------- -------------- --------------

**Table I-1 IT Initiative Evaluation Data Sheet**

## I.4 Investment Management Report

  -----------------------------------------------------------------------
  **INVESTMENT MANAGEMENT REPORT**

  Name of Investment:

  Project Sponsor:

  Date of PIR:

  Background (Description of Project)

  Management Approach

  Organizational Structure

  Resources

  Acquisition Strategy

  Contracting Strategy

  Security Strategy

  Documentation

  Technical Approach

  Architecture (description, adherence to ISTA, and IT accessibility
  requirements, security, telecommunications, and architecture standards)

  Development (if applicable)

  Testing

  Lessons Learned

  List of lessons learned

  Recommended best practices
  -----------------------------------------------------------------------

**Table I-2 IT Investment Management Report Data Sheet**

## I.5 IT Initiative Evaluation Data Sheet

  ---------------- --------------- ------------ ----------- ---------------- ------------ ------------- -------------- ----------
                   **Initiative    **Screen**   **Score**   **Pre-Select**   **Select**   **Control**   **Evaluate**   **Steady
                   Development**                                                                                       State**

  Was each phase                                                                                                       
  conducted at the                                                                                                     
  appropriate time                                                                                                     
  in the process?                                                                                                      

  Was the data                                                                                                         
  content                                                                                                              
  sufficient to                                                                                                        
  move forward to                                                                                                      
  the next phase                                                                                                       
  in the process?                                                                                                      

  Were there                                                                                                           
  enough resources                                                                                                     
  (e.g., people)                                                                                                       
  allocated for                                                                                                        
  each phase in                                                                                                        
  the process?                                                                                                         

  Were the right                                                                                                       
  types of people                                                                                                      
  and expertise                                                                                                        
  involved?                                                                                                            

  Was there an                                                                                                         
  acceptable level                                                                                                     
  of information                                                                                                       
  flow?                                                                                                                

  Was eCPIC able                                                                                                       
  to support the                                                                                                       
  activity in each                                                                                                     
  phase in the                                                                                                         
  process?                                                                                                             

  List suggested                                                                                                       
  corrective                                                                                                           
  actions for any                                                                                                      
  phase in the                                                                                                         
  process.                                                                                                             

  Comments:                                                                                                            
  ---------------- --------------- ------------ ----------- ---------------- ------------ ------------- -------------- ----------

**Table O-3** IT Initiative Evaluation Data Sheet

# Appendix J: IT Investment Rating and Ranking Criteria

## J.1 Purpose

To define the criteria that will be used to rate and rank the IT
investments being presented to the IT Investment Review Board and other
executive management committees.

## J.2 Background

Ongoing Departmental IT portfolio management activities require
development of rating and ranking criteria to compare IT investments in
support of investment management decisions. Competition for resources
may only allow a portion of the proposed investments to be approved and
funded. In addition, a structured investment decision making process is
required by OMB. The proposed criteria will produce one standard view
for comparing major IT investments across the Department. The Investment
Review Board requested that the previous rating criteria be revised to
reflect value, risk, health of the project, and quality of the business
case. The table below describes the source for each of criteria. Each of
these categories contains a structured set of criteria; for example, the
quality category reflects the OMB business case scoring criteria.

+-------------------------------------+--------------------------------+
| Category                            | Source of Rating Criteria      |
+-------------------------------------+--------------------------------+
| Value                               | These criteria are defined     |
|                                     | further below in this          |
| Measures the value of the           | appendix.                      |
| investment to the Department or     |                                |
| Bureau.                             |                                |
+-------------------------------------+--------------------------------+
| Risk                                |                                |
|                                     |                                |
| Measures high-level risks           |                                |
| associated with the investment.     |                                |
+-------------------------------------+--------------------------------+
| Quality                             | Based on the OMB scoring       |
|                                     | criteria contained in circular |
| Measures the current quality of the | A-11. Scores will reflect the  |
| business case.                      | most current version of the    |
|                                     | business case (Exhibit 300)    |
|                                     | for each of the major          |
|                                     | investments.                   |
+-------------------------------------+--------------------------------+
| Health of the Project               | Cost, schedule, and            |
|                                     | performance variances will be  |
| Measures the current status of the  | derived from the latest        |
| major investments for projects that | quarterly or monthly reports.  |
| are spending money for Development, |                                |
| Modernization, and Enhancement.     |                                |
+-------------------------------------+--------------------------------+

## J.3 Value Criteria

+------------+------------------------------------------------+--------+
| **Decision | **Scoring**                                    | **We   |
| Criteria** |                                                | ight** |
+============+================================================+========+
| **Value    | **Weights for Risks ∑=100%**                   |        |
| Factors**  |                                                |        |
+------------+------------------------------------------------+--------+
| **V-1:     | 6 -- Very high value or effectiveness;         | 20%    |
| Business   | directly supports multiple objectives, and     |        |
| Impact or  | supports multiple agencies or Departments.     |        |
| Mission    |                                                |        |
| Effec      | 5 -- High value or effectiveness;              |        |
| tiveness** | significantly supports at least one objective, |        |
|            | potential for use in more than one Interior    |        |
| How well   | Bureau.                                        |        |
| does the   |                                                |        |
| investment | 4 -- Medium value or effectiveness; moderately |        |
| contribute | supports multiple objectives at one Bureau.    |        |
| toward     |                                                |        |
| meeting    | 3 -- Low value or effectiveness; supports one  |        |
| DOI or     | objective at one Bureau.                       |        |
| Bureau     |                                                |        |
| objectives | 2 -- Neutral -- does not support or conflict.  |        |
| in terns   |                                                |        |
| of         | 1 -- Extremely low value; conflicts with or    |        |
| effe       | counters objectives.                           |        |
| ctiveness? |                                                |        |
+------------+------------------------------------------------+--------+
| **V-2:     | 6 -- Very high value; supported or needed by   | 20%    |
| Customer   | many customers and provides critical or        |        |
| Needs**    | mandatory capabilities and benefits to         |        |
|            | citizens.                                      |        |
| How well   |                                                |        |
| does the   | 5 -- High value supported or needed by many    |        |
| investment | customers and provides substantial benefits.   |        |
| address    |                                                |        |
| identified | 4 -- Medium value supported or needed by a     |        |
| internal   | moderate number of customers and provides only |        |
| and or     | moderate benefits.                             |        |
| external   |                                                |        |
| customer   | 3 -- Low value supported or needed by a        |        |
| needs?     | limited number of customers and provides       |        |
|            | limited benefits.                              |        |
|            |                                                |        |
|            | 2 -- Very low value supported or needed by     |        |
|            | only a few people and provides insignificant   |        |
|            | benefits.                                      |        |
|            |                                                |        |
|            | 1 -- Extremely low value supported or needed   |        |
|            | by one person and provides no increased        |        |
|            | benefits.                                      |        |
+------------+------------------------------------------------+--------+
| **V-3:     | 6 -- Well done ROI analysis completed, with    | 20%    |
| Financial  | positive ROI achieved within 1 year after      |        |
| Analysis** | system implementation, or the investment is in |        |
|            | Steady State and it is currently delivering a  |        |
| Is the     | positive ROI.                                  |        |
| be         |                                                |        |
| nefit-cost | 5 -- Well done ROI analysis completed, with    |        |
| analysis   | positive ROI achieved within 2 year after      |        |
| reliable   | system implementation, or the investment is in |        |
| and        | Steady State and it is currently delivering a  |        |
| t          | positive ROI.                                  |        |
| echnically |                                                |        |
| sound?     | 4 -- Well done ROI analysis completed, with    |        |
|            | positive ROI within 3-4 years after system     |        |
| Are        | implementation.                                |        |
| a          |                                                |        |
| ssumptions | 3 -- Well done ROI analysis completed, with    |        |
| valid and  | positive ROI within more than 5 years after    |        |
| realistic? | system implementation.                         |        |
|            |                                                |        |
|            | 2 -- Unclear ROI analysis, or an ROI analysis  |        |
|            | done that shows a positive ROI achieved more   |        |
|            | than 9 years after system implementation.      |        |
|            |                                                |        |
|            | 1 -- No ROI analysis completed, or the         |        |
|            | analysis done identifies a negative ROI.       |        |
+------------+------------------------------------------------+--------+
| **V-4:     | 6 -- The investment completely reengineers     | 20%    |
| Expected   | internal processes and greatly enhances a      |        |
| Imp        | user's ability to perform their tasks (e.g.,   |        |
| rovement** | productivity increase of 75% or greater).      |        |
|            |                                                |        |
| What is    | 5 -- The investment greatly enhances its users |        |
| the        | ability to complete their jobs (e.g.,          |        |
| expected   | productivity increase of 50-75% or greater).   |        |
| magnitude  |                                                |        |
| of the     | 4 -- The investment provides significant       |        |
| p          | improvements in operational efficiency (e.g.,  |        |
| erformance | productivity increase of 25-50%).              |        |
| i          |                                                |        |
| mprovement | 3 -- The investment provides some improvement  |        |
| or         | in user's operational efficiency (e.g.,        |        |
| pr         | productivity increase of 10-25%).              |        |
| oductivity |                                                |        |
| achieved   | 2 -- The investment enables users to           |        |
| from the   | accomplish their job, and does not either      |        |
| i          | enhance or hinder the users in that work       |        |
| nvestment? | (e.g., no increase in productivity).           |        |
|            |                                                |        |
|            | 1 -- The investment hinders its users from     |        |
|            | accomplishing their job.                       |        |
+------------+------------------------------------------------+--------+
| **V-5:     | The criteria encompassed herein will be used   | 20%    |
| Arch       | to assess alignment of DOI's information       |        |
| itecture** | technology (IT) investments with all layers of |        |
|            | the Interior Enterprise Architecture (IEA).    |        |
|            | Investments will be evaluated to ascertain the |        |
|            | following:                                     |        |
|            |                                                |        |
|            | -   Strategic Alignment with DOI goals and     |        |
|            |     objectives via the Performance Reference   |        |
|            |     Model (PRM).                               |        |
|            |                                                |        |
|            | -   Absence of duplicative functionality with  |        |
|            |     other target systems/investments via the   |        |
|            |     Business Reference Model (BRM).            |        |
|            |                                                |        |
|            | -   Absence of redundant data with other       |        |
|            |     target systems/investments via the Data    |        |
|            |     Reference Model (DRM).                     |        |
|            |                                                |        |
|            | -   Extent to which component based            |        |
|            |     architecture and re-use/sharing of service |        |
|            |     components is realized via the Service     |        |
|            |     Reference Model (SRM).                     |        |
|            |                                                |        |
|            | -   Adherence to the technologies approved by  |        |
|            |     DOI as identified in the current DOI       |        |
|            |     Technical Reference Model (TRM).           |        |
|            |                                                |        |
|            | \*see J.2 EA Rating Criteria below.            |        |
+------------+------------------------------------------------+--------+
| **Sum of   |                                                | 100%   |
| Value      |                                                |        |
| Factors**  |                                                |        |
+------------+------------------------------------------------+--------+

## J.4 IEA Rating Criteria:

> The DOI Enterprise Architecture Repository (DEAR), which contains DOI
> systems and investments, should be used by project managers in
> conjunction with their bureau chief architects, as a key source of
> information to review an investment relative to other DOI investments
> and legacy systems. For example, a project manager can view any other
> systems and investments that are mapped to like functions in the DOI
> BRM in order to evaluate whether the investment may duplicate existing
> functionality with other systems. This information should be
> considered a starting point for further questions such as: Does the
> investment perform aspects of the function in question that other DOI
> systems/investments do not perform? If so the investment may not be
> duplicative, but the BRM should be decomposed further to show this
> distinction in functionality. This feedback should be provided to the
> bureau chief architect and the DOI Chief Architect for expanding the
> DOI BRM. Other questions that may be researched are: Will this
> investment produce service components that can be re-used/shared by
> other systems? Are there service components from other systems that
> can be leveraged by this investment?

**Strategy NOTE: Key Objectives**

a)  Influence the movement towards strategic investments that are
    horizontal in nature including not only the shared mission
    capabilities between bureaus but also the common infrastructure
    services and common application services.

b)  Eliminate duplicative planned investments with other target
    solutions.

c)  Drive due diligence in the research of artifacts (affected as-is
    state and future) to preclude redundant and duplicative investments
    and functionality in target solutions. Note: The DOI Enterprise
    Architecture Repository (DEAR) should be mined to evaluate an
    investments relationship with other legacy systems and proposed
    investments. Contact your bureau's chief architect to coordinate.

d)  Influence sound architectural planning to ensure legacy systems are
    properly addressed in the target investment's migration and
    transition plans.

e)  Develop way to prioritize business cases in a relative or
    comparative architecture index.

f)  Ensure adherence to the approved modernization blueprints.

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1.  **Performance Reference Model:** The Investment must demonstrate
    quantified or measurable improvements in the associated intermediate
    or end outcomes as defined in the DOI Strategic Plan and its
    supporting performance targets and measures, and OMB Performance
    Model.

> **High** -- 5 points.

-   Investment links to the OMB PRM and quantitatively (1%-X%) improves
    the achievement of specific outcomes, end and intermediate, in the
    DOI Strategic Plan.

-   The investment addresses the performance measures that have
    cross-cutting Departmental (i.e., all bureaus) benefit(s).

-   Investment identifies specific supporting program/project level
    measures and targets in the context of the PRM.

> **Medium** -- 3 points

-   Investment links to the OMB PRM and quantitatively (1%-X%) improves
    the achievement of specific outcomes, end and intermediate, in the
    DOI Strategic Plan.

-   The investment addresses the performance measures that have
    multi-bureau benefit(s) (i.e., benefits more than one but not all
    DOI bureaus).

-   Investment identifies specific supporting program/project level
    measures and targets in the context of the PRM.

> **Low --** 1 point

-   Investment provides minimal support for achieving Strategic Outcomes
    in the DOI Strategic Plan, OMB PRM linkage is unclear or
    questionable and program/project goals are unclear.

-   The investment addresses the performance improvement of a single
    bureau or program

-   Investment links to the OMB PRM and qualitatively improves the
    achievement of specific outcomes, end and intermediate, in the DOI
    Strategic Plan.

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-   Investment identifies specific supporting program/project level
    measures and targets in the context of the PRM.

2.  **Business Reference Model** - Investment clearly supports key
    mission or supporting administrative functions necessary for the
    successful implementation of the DOI mission.

> **High** -- 5 points

-   Investment has demonstrated in its business case the actual or
    planned value (quantitative performance measures) of a
    **re-engineered** business process(es) that benefits multiple DOI
    agencies.

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-   Investment has identified and mapped the relevant business models
    (business processes, functions, rules and/or procedures) and
    integrated them into their business concept and solution strategy.

-   Investment does not duplicate functionality with other target
    systems/investments. The DOI EA Repository (DEAR) should be reviewed
    in concert with the bureau chief architect to determine potential
    duplication of existing systems/investments and functionality.

-   Investment adequately addresses migration and transition plans
    (e.g., data, functional, funding, workforce planning, etc.) for all
    legacy systems that will be retired/integrated as a result of the
    target investment.

> **Medium** - 3 points

-   Investment has identified the need for business process
    re-engineering but has not provided adequate planning evidence in
    preparation for it.

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-   Investment has identified and mapped the relevant business models
    (business processes, functions, rules, and/or procedures) and
    integrated them into their business concept and solution strategy.

-   Investment does not duplicate functionality with other target
    systems and investments. The DOI EA Repository should be reviewed in
    concert with the bureau chief architect to determine potential
    duplication of existing systems/investments/and functionality.

-   Investment identifies specific targets for completing migration and
    transition plans (e.g., data, functional, funding, workforce
    planning, etc.) for all legacy systems that will be
    retired/integrated as a result of the target investment.

> **Low** -- 1 point

-   There is no demonstrable evidence of business process
    re-engineering.

-   Investment does not reference any intent to optimize the existing
    business models (business processes, functions, rules and/or
    procedures) available throughout the DOI.

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-   Investments have **not** identified and mapped the relevant business
    models (business processes, rules, functions and/or procedures), and
    integrated them into their business concept and solution strategy.

-   Investment duplicates functionality with other target
    systems/investments. The DOI EA Repository should be reviewed in
    concert with the bureau chief architect to determine potential
    duplication of existing systems/investments/and functionality.

-   Investment does not adequately address or plan for the development
    and completion of migration and transition plans (e.g., data,
    functional, funding, workforce planning, etc.) for all legacy
    systems that will be retired/integrated as a result of the target
    investment.

3.  **Data Reference Model** - Investment adheres to established DOI
    data reference model and associated data standards where applicable
    and does not \"create\" duplicate data associated with other IT
    investments/systems. Conforms to the data architecture
    recommendations in DOI modernization blueprints.

> **High** -- 5 points

-   Investment adheres to applicable Federal and DOI data standards.

-   Investment has identified and mapped the relevant data subject areas
    and information types to existing data repositories (implemented and
    design to) and integrated them into their business concept and
    solution strategy.

-   Investment identifies the data subject areas and information types
    that it proposes to become the DOI-wide authoritative data source.
    Also identifies all duplicative data sources that currently exist
    and planned retirement/integration of these sources into the target
    solution's data migration/integration plans.

-   Investment is engineered to optimize shared investments of data and
    information repositories available throughout the DOI.

> **Medium** - 3 points

-   Investment adheres to applicable Federal and DOI data standards.

-   Investment has not identified and mapped the relevant existing data
    repositories and data standards, (implemented and design to) and
    integrated them into their business concept and solution strategy.

-   Investment identifies the data subject areas and information types
    that it proposed to become the DOI-wide authoritative data source.
    Investment discusses the future development of data
    migration/integration plans to ensure that no duplicative data
    sources will exist after the target solution has been implemented.

-   Investment is engineered with the intent to optimize shared
    investments of data and information repositories available
    throughout the DOI.

> **Low** -- 1 point

-   Investment does not adhere to relevant Federal and DOI data
    standards.

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-   Investment has **not** identified and mapped the relevant existing
    data repositories and data standards, (implemented and design to)
    and integrated them into their business concept and solution
    strategy.

-   Investment duplicates data with other legacy or target
    systems/investments and does not address plans for
    retirement/integration into a target solution.

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-   Investment has not engineered its business case with the intent to
    optimize the shared existing data repositories and data standards
    available throughout the DOI.

4.  **Service Reference Model -** Investment embraces a service
    oriented, component-based architecture by providing or leveraging
    components for enterprise re-use/sharing.

> **High** -- 5 points

-   Investment has engineered its business case to optimize the shared
    investments of system and applications services available throughout
    the DOI.

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-   Investments has identified and mapped the relevant existing service
    standards, (implemented and design to) and integrated them into
    their business concept and solution strategy.

-   Investment recognizes the planning and risk management required to
    integrate with existing services and has developed the risk
    mitigation strategies (cost, schedule, technical, etc\...)

> **Medium** - 3 points

-   Investment has engineered its business case to optimize the shared
    investments of system and applications services available throughout
    the DOI.

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-   Investments has not identified and mapped the relevant existing
    service standards, (implemented and design to) and integrated them
    into their business concept and solution strategy.

-   Investment recognizes the planning and risk management required to
    integrate with existing services and has developed the risk
    mitigation strategies (cost, schedule, technical, etc\...)

> **Low** -- 1 point

-   Investment has not engineered its business case to optimize the
    shared investments of system and applications services available
    throughout the DOI.

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-   Investments have **not** identified and mapped the relevant existing
    service standards, (implemented and design to) and integrated them
    into their business concept and solution strategy.

-   Investment does not recognize the planning and risk management
    required to integrate with existing services and has developed the
    risk mitigation strategies (cost, schedule, technical, etc\...)

> **5. Technical Reference Model** - Investment adheres to the best
> practices, principles and standards embodied in the current version of
> the DOI TRM.
>
> **High** -- 5 points

-   Investment adheres to the technology standards, best practices and
    principles embodied in the current version of the DOI TRM.

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-   Investment has identified and mapped the relevant existing
    technology standards, (implemented and design to) and integrated
    them into their business concept and solution strategy.

-   Investment recognizes the planning and risk management required to
    integrate with existing technology and standards and has developed
    the risk mitigation strategies (cost, schedule, technical, etc\...)

> **Medium** - 3 points

-   Investment adheres to the technology standards, best practices and
    principles embodied in the current version of the DOI TRM.

-   Investment has identified and mapped the relevant existing
    technology and standards, (implemented and design to) and integrated
    them into their business concept and solution strategy.

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-   Investment document does not adequately address the planning and
    risk management required to integrate with existing services and has
    developed the risk mitigation strategies (cost, schedule, technical,
    etc\...)

> **Low** -- 1 point

-   Investment does not adhere to the technology standards, best
    practices and principles embodied in the current version of the DOI
    TRM.

-   Investment has **not** identified and mapped the relevant existing
    service standards, (implemented and design to) and integrated them
    into their business concept and solution strategy.

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-   Investment does **not** recognize the planning and risk management
    required to integrate with existing DOI technologies and standards
    and has failed to develop the risk mitigation strategies (cost,
    schedule, technical, etc\...)

**Overall Interior Enterprise Architecture Rating**

Currently, all models are weighted equally. Therefore to calculate your
overall score, add up your individual reference model scores and divide
by five.

  -------------------------------------------------- --------------------
  IEA Business Case Rating Criteria                  Score

  Performance Reference Model                        

  Business Reference Model                           

  Data Reference Model                               

  Service Reference Model                            

  Technical Reference Model                          

  Subtotal Score                                     

  Total Overall (Subtota/5)                          
  -------------------------------------------------- --------------------

## J.5 Risk Factors

+--------------------+-------------------------------------------+-----+
| **Decision         | **Scoring**                               | *   |
| Criteria**         |                                           | *We |
|                    |                                           | igh |
|                    |                                           | t** |
+====================+===========================================+=====+
| **Risk Factors**   | **Weights for Risks ∑=100%**              |     |
+--------------------+-------------------------------------------+-----+
| **R-1: Funding     | 6 -- Extremely Difficult - Congressional  | 25% |
| Risks -- Ability   | support is needed for funding this        |     |
| to Secure          | investment.                               |     |
| Budgetary          |                                           |     |
| Resources**        | 5 -- Very Difficult - OMB or other        |     |
|                    | Executive Branch support is needed for    |     |
| How difficult will | funding this investment.                  |     |
| it be to obtain    |                                           |     |
| funding for this   | 4 -- Difficult - DOI Secretary level      |     |
| investment, given  | support is needed for funding this        |     |
| competing          | investment.                               |     |
| resources and      |                                           |     |
| priorities?        | 3 -- Not Difficult - Assistant Secretary  |     |
|                    | level support is needed for funding this  |     |
|                    | investment.                               |     |
|                    |                                           |     |
|                    | 2 -- Easy - Bureau Director or Head of    |     |
|                    | Office level support is needed for        |     |
|                    | funding this investment.                  |     |
|                    |                                           |     |
|                    | 1 -- Very Easy - Support for funding this |     |
|                    | investment is below the Bureau Director   |     |
|                    | or Head of Office level.                  |     |
+--------------------+-------------------------------------------+-----+
| **R-2: Project     | 6 -- Extremely High Risk -- The           | 25% |
| Implementation or  | investment has no schedule                |     |
| Scheduling Risks** |                                           |     |
|                    | 5 -- High Risk - The investment has a     |     |
| Do projects adopt  | schedule with unverifiable milestones or  |     |
| a modular approach | unrealistic timeframes                    |     |
| that combines      |                                           |     |
| controlled systems | 4 -- Medium High Risk - The investment    |     |
| development with   | has a schedule for new development work   |     |
| rapid prototyping  | with well defined activities and          |     |
| techniques?        | milestones with measurable completion,    |     |
|                    | realistic timeframes but dependencies are |     |
| Are projects as    | not identified or evident.                |     |
| narrow in scope    |                                           |     |
| and brief in       | 3 -- Medium Risk -- The investment has a  |     |
| duration as        | schedule for new development work with    |     |
| possible to reduce | well defined activities and milestones    |     |
| risk by            | with measurable completion, realistic     |     |
| identifying        | timeframes, and well documented           |     |
| problems early and | dependencies.                             |     |
| focusing on        |                                           |     |
| projected versus   | 2 -- Low Risk -- The investment is        |     |
| realized results?  | already completed but future planning is  |     |
|                    | not evident.                              |     |
| Schedule includes  |                                           |     |
| appropriate        | 1 -- No Risk -- The investment is already |     |
| milestones and     | completed and future planning for         |     |
| review points      | enhancements or upgrades is evident.      |     |
| typical of system  |                                           |     |
| lifecycle phases.  |                                           |     |
+--------------------+-------------------------------------------+-----+
| **R-3: Technical   | 6 -- Very significant infrastructure      | 25% |
| Risks**            | changes and additional support required,  |     |
|                    | changes affect many infrastructure        |     |
| How will proposed  | components, all technology used in the    |     |
| investments be     | system or investment is untried or not    |     |
| integrated into    | approved for use within the Department or |     |
| existing ones?     | Bureau; custom developed application.     |     |
|                    |                                           |     |
| Will proposed      | 5 -- Moderate to high infrastructure      |     |
| investment take    | changes or additional support required.   |     |
| advantage of       | Changes affect several infrastructure     |     |
| Commercially       | components. Several untried or unapproved |     |
| Available and      | technologies are used in the investment.  |     |
| Non-Developmental  | COTS not utilized. Custom developed       |     |
| Items?             | application                               |     |
|                    |                                           |     |
| How will the       | 4 -- Moderate infrastructure changes or   |     |
| complexity of the  | additional support required, several      |     |
| investment's       | untried or unapproved technologies are    |     |
| design affect the  | used in the investment. COTS utilized     |     |
| development of the | with formal customization (associated     |     |
| project?           | programs).                                |     |
|                    |                                           |     |
|                    | 3 - Some minor infrastructure changes or  |     |
|                    | additional support required, very limited |     |
|                    | or no use of untried or unapproved        |     |
|                    | technologies.                             |     |
|                    |                                           |     |
|                    | 2 - No impact to infrastructure,          |     |
|                    | technology already available at DOI but   |     |
|                    | some investment is required to procure    |     |
|                    | additional licenses, hardware, etc        |     |
|                    |                                           |     |
|                    | 1 - No impact to infrastructure uses      |     |
|                    | technology already available at DOI. All  |     |
|                    | technologies used in the investment       |     |
|                    | follow Department and Bureau standards,   |     |
|                    | or the investment needs no technologies.  |     |
|                    | COTS utilized with no modification and    |     |
|                    | easily customized via user interfaces.    |     |
+--------------------+-------------------------------------------+-----+
| **R-4:             | 6 -- The implementation of the investment | 25% |
| Organizational     | is extremely complex, requires major      |     |
| Risks**            | cultural change, and will require all     |     |
|                    | users to radically change the way they do |     |
| How is the         | business. Investment affects all or       |     |
| investment being   | nearly all of the DOI organization.       |     |
| accepted by the    |                                           |     |
| user community?    | 5 -- The implementation of the investment |     |
|                    | is moderately to highly complex, requires |     |
| How many           | significant cultural change, and requires |     |
| organizations are  | users to significantly change the way     |     |
| being affected by  | they operate. Investment affects a larger |     |
| the implementation | number of users and or multiple Bureaus,  |     |
| of this            | offices or programs.                      |     |
| investment?        |                                           |     |
|                    | 4 -- The implementation of the investment |     |
|                    | is moderately complex, requires moderate  |     |
|                    | cultural change, and will require modest  |     |
|                    | changes in the way users do business.     |     |
|                    | Implementation impacts a moderate number  |     |
|                    | of users and or organizations.            |     |
|                    |                                           |     |
|                    | 3 - The implementation of the investment  |     |
|                    | is simple, fits Department or Bureau      |     |
|                    | culture, and will require only minimal    |     |
|                    | accommodation by the users.               |     |
|                    | Implementation impacts a low number of    |     |
|                    | users and or organizations.               |     |
|                    |                                           |     |
|                    | 2 -- The implementation of the investment |     |
|                    | is in progress, all cultural issues are   |     |
|                    | being addressed, and the users are        |     |
|                    | accepting the investment. Implementation  |     |
|                    | impacts a very small number of users and  |     |
|                    | or DOI organizations.                     |     |
|                    |                                           |     |
|                    | 1 -- The implementation of the investment |     |
|                    | has been accomplished, all cultural       |     |
|                    | issues have been addressed, and the users |     |
|                    | have accepted the investment              |     |
+--------------------+-------------------------------------------+-----+
| **Sum of Overall   |                                           | 1   |
| Risk Factors**     |                                           | 00% |
+--------------------+-------------------------------------------+-----+

# Appendix K: Security Infrastructure Guide

## K.1 Overview

The Chief Information Officer (CIO) of the Department is responsible for
providing policy, guidance, advice and oversight for IT security. The
CIO is supported by the Departmental IT Security Manager (DITSM).
(further information may be found at
[www.doi.gov/ocio/security]{.underline})

The senior official for IT systems (or Information Resources) management
at each Bureau is responsible for the security and protection of Bureau
IT systems. Each Bureau shall appoint a Bureau IT Security Manager
(BITSM) and an alternate to serve as the focal point for IT security
matters and to coordinate IT security program requirements with the
Department. In addition, each IT installation shall appoint an
Installation IT Security Officer to ensure that users know and
understand the security responsibilities for the IT resources they
control.

Departmental policy requires managers and users, including contractors,
at all levels to be responsible and accountable for protecting the
information technology resources they utilize. Departmental policy also
places emphasis on risk management, contingency planning, and awareness
training.

Departmental policy requires the development of an IT security program
that is consistent with, and an integral part of the Department's
Enterprise Architecture. (EA)

+------------------+---------------------------------------------------+
| ###              | DOI will safeguard its IT systems through the     |
| K.1.1 Objectives | implementation of the DOI IT Security Program,    |
|                  | which will accomplish the following:              |
|                  |                                                   |
|                  | Establish a level of IT security for all          |
|                  | unclassified IT systems and information           |
|                  | commensurate with the sensitivity of the          |
|                  | information and with the risk and magnitude of    |
|                  | loss or harm resulting from improper operation or |
|                  | losses resulting from fraud, waste, abuse,        |
|                  | disasters, or mismanagement.                      |
+------------------+---------------------------------------------------+

Define, manage, and support the security planning process for all DOI
systems.

Establish a program to formally certify and authorize processing of SBU
data on all systems within DOI.

Define and manage the contingency planning process, including training
and testing, to provide IT systems with adequate continuity of
operations upon disruption of normal operations.

Understanding, by all levels of DOI, the critical role of IT security to
achieve DOI's missions and be appropriately and periodically trained
through IT security awareness and training program.

Define and manage the computer security incident response capability
program for all DOI employees.

Use the procedures outlined in Federal Information Processing Standards
(FIPS) and other Federal government guidance except where the costs of
using such standards exceed the benefits or where use of the standards
will impede DOI in accomplishing its mission.

+------------------+---------------------------------------------------+
| ### K.1.2 Polici | Several documents establish and define the        |
| es and Bulletins | Department's policy for the security of its       |
|                  | information technology resources. These include:  |
|                  |                                                   |
|                  | -   Departmental Manual Chapter 375 DM 19,        |
|                  |     "Information Technology Security Program"     |
+------------------+---------------------------------------------------+

-   Departmental Information Technology Security Plan (ITSP), April 2002

-   Risk Assessment Guide

-   Contingency Planning Guide

-   System Security Plan for General Support Systems

-   System Security Plan for Major Applications

-   Asset Valuation Guideline

+------------------+---------------------------------------------------+
| ### K.1.3 Inte   | The Department established the IT Security Team   |
| rior IT Security | (ITST) in January 2002. The Team's mission is to  |
|  Guidance & Team | ensure the successful implementation of the       |
|                  | Office of Management and Budget (OMB) Circular    |
|                  | A-130, Appendix III. The ITST is chaired by the   |
|                  | DITSM with membership comprised of BITSMs and     |
|                  | representatives from the Inspector General's      |
|                  | office. The team works on issues relating to IT   |
|                  | security such as policy, procedures and reporting |
|                  | to oversight agencies.                            |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### K.1.4 Traini | Awareness training plays an important role in     |
| ng and Awareness | achieving the Department's goal for computer      |
|                  | security. Periodic computer security awareness    |
|                  | training is provided to employees who are         |
|                  | involved with the management, use, or operation   |
|                  | of computer systems under its control. The        |
|                  | training objectives are to enhance employee       |
|                  | awareness of the threats to and vulnerability of  |
|                  | computer systems; and to encourage the use of     |
|                  | improved computer security practices within the   |
|                  | Department.                                       |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ###              | IT related supervisors, in conjunction with their |
|  K.1.5 Personnel | respective personnel and security officers,       |
|                  | review positions within the Department and        |
|                  | assigned a sensitivity level based on the program |
|                  | supported and duties assigned. Personnel Officers |
|                  | arrange for background investigations for         |
|                  | personnel assigned to sensitive positions.        |
+------------------+---------------------------------------------------+

# Appendix L: eCPIC Requirements by Phase

The following is a checklist for eCPIC Investment and Portfolio Managers
to use when entering information in eCPIC on their Bureaus' investments.
This list is divided into the five phases of the Capital Planning and
Investment Control (CPIC) process. For further instructions on using
eCPIC, please refer to the *eCPIC Users' Guide, Version 2.0*

## L.1 Pre-Select Phase

Create the new investment.

Create a contacts list for this investment.

Add the investment to your Department's Investment Portfolio.

Designate the investment as Major IT Investment, Non-major IT
Investment, Non-major IT Investment that is a Sub-component of a Larger
Asset, or Major IT Investment Multi-Agency Joint Effort.

Ensure that points of contact such as the Project Sponsor and or
Functional Manager are kept updated within the General Information
folder.

Complete the Select Screening Criteria checklist found in the Selection
Screening information of the Selection Information section.

Use the established scoring weights and rules to assist in ranking this
investment with others in the portfolio, using the scoring defined in
Appendix J: Investment Rating and Ranking.

Complete Lifecycle Cost and Lifecycle Budget information located in the
Financial Information folder.

Add supporting information to the Resource Library for the investment,
such as preliminary budget estimates and spreadsheets and the Investment
Review submission package.

Grant permissions to allow OCIO, EWG, IRB, and others to view the
investment.

## L.2 Select Phase

Update the Lifecycle Cost and Lifecycle Budget information located in
the Financial Information folder as required.

Add any new or revised documentation that supports the initiative to the
Resource Library. This includes documentation such as the Investment
Review submission package, the Performance Measures Plan, Project Plan
with schedule and costs, and Security and Telecommunications
information. It also includes the Business Case, Risk Profile, Technical
Profile, and Management and Planning Profile information.

Complete the Performance Measures information.

Complete the Planned Cost and Schedule information.

Review and complete the Select Screening Criteria checklist found in the
Selection Screening information of the Selection Information section.

Complete the Select Scoring Scorecard Information located in the
Selection Scoring Information section of the Investment Manager.

Grant permissions as needed to enable editing, viewing, and scoring.

## L.3 Control Phase

Update the Lifecycle Cost and Lifecycle Budget information located in
the Financial Information folder as required.

Add any new or revised documentation that supports the initiative to the
Resource Library, such as the Investment Review submission package.

Update the Performance Measures information.

Update the Planned Cost and Schedule information.

Complete the Control Screening Criteria checklist found in the Control
Screening Information section.

Complete the Control Scoring Scorecard information located in the
Control Scoring Information section of the Investment Manager.

Review initiative history and background information to support
assignment of individual scores located in the General Information
folder and in the initiative's Resource Library.

Ensure all folders from the Select Phase are completed and the Selection
Status folder indicates the investment is approved and finalized so it
can advance to the Control Phase.

Complete the Control Screening and Control Scoring data screens in the
Control Information folder.

Complete the Control Cost and Schedule Information folder, including
milestones to the 2nd level, associated costs, and variances.

Grant Permissions as needed to enable editing, viewing, and scoring.

## L.4 Evaluate Phase

Update the Performance Measures information.

Update the Planned Cost and Schedule information.

Add any new or revised documentation that supports the initiative to the
Resource Library, such as the Investment Review submission package.
Include copies of the Post-Implementation Review and Independent
Verification and Validation.

Grant permissions as needed to enable editing, viewing, and scoring.

## L.5 Steady State Phase

Update the performance measures information.

Update the planned cost and schedule information.

Add any new or revised documentation that supports the initiative to the
resource library, such as the investment review submission package.

Add any new or revised documentation that supports the initiative to the
resource library, such as the investment review submission package.
Include copies of the post-implementation review and independent
verification and validation.

Grant permissions as needed to enable editing, viewing, and scoring.

# Appendix M: Monthly and Quarterly Scorecards, and Corrective Actions Report (CAR)

## M.1 Introduction

The *Monthly* and *Quarterly Scorecards* (**Figures P-1, P-2**) and
*Corrective Actions Report* (**Figure P-5**) enable DOI to review,
analyze, and report for DOI metrics on the progress of information
technology (IT) investments, including programs, projects, and systems.
They also enable DOI to document and execute corrective action when
cost, schedule, risk, and benefit expectations are not being met -- a
critical IT investment management process.

All major investments, including those currently in development,
modern­ization, and or enhancement (D/M/E); steady state; and mixed life
cycle are to report quarterly. Project managers need to work within the
project plan, in coordination with the program managers, to explain
variances, viable remedial alternatives, remedial steps, schedules, and
current status. This information should be reviewed with Bureau-level
budget personnel and the CIO. Changes to funding levels, resulting from
corrective actions and other events, shall be coordinated as directed by
Departmental and Bureau financial procedures. Update quarterly reporting
information and maintain the Exhibit 300 to include any proposed
re-baselining agreed upon by the investment manager. These new baseline
proposals will be reviewed by the CIO\'s office and the DOI\'s budget
office for approval.

On a quarterly basis, Project Managers are required to complete the
*Quarterly Scorecard* that provides project status on cost, schedule,
benefits, and risks by assigning green, yellow, or red "stoplight"
scores. If there are "yellow," or "red," variances, or the Category's
status has changed since the previous quarter, projects are required to
submit a Monthly Scorecard until variances are within the acceptable
control range. In addition, monthly scorecards may be requested for high
profile projects. Regardless of the reporting process, investment
performance data, based upon earned value (EV) and or operational
analysis, must be captured and maintained monthly to enable appropriate
trending and annual reporting.

If there are "yellow," "red," or "blue" variances, or the Category's
status has changed since the previous quarter, a *Corrective Actions
Report(s)* must accom­pany the *Quarterly Scorecard*. The DOI Chief
Information Officer (CIO) will submit these reports on all major DOI
projects to the Investment Review Board (DOI IRB) and, as appropriate,
to the Office of Management and Budget (OMB). They will also ensure that
any planned or in-progress investments do not duplicate E-Government
initiatives.

Each quarter, the reports are due as soon as possible but no later than
21 days after the end of the quarter.

  --------------- ----------------------------------- -------------------
  **Quarter**     **Period**                          **Due Date**

  1st Quarter     October 1 -- December 31            As soon as
                                                      possible, but no
                                                      later than
                                                      twenty-one calendar
                                                      days following the
                                                      end of the Quarter.

  2nd Quarter     January 1 -- March 31               

  3rd Quarter     April 1 -- June 30                  

  4th Quarter     July 1 -- September 30              
  --------------- ----------------------------------- -------------------

Should the reporting date fall on a non-workday, reports are due the
next workday following the due date.

Monthly Scorecards are due as soon as possible but no later than 15 days
after month's end.

## M.2 Quarterly and Monthly Scorecards

Both the *Quarterly and Monthly Scorecards* must be completed using an
Excel template (Excel Version 2000 or higher is needed). The latest
templates can be downloaded from the DOI IT Capital Planning website at
[http://www.doi.gov/ocio/cp/]{.underline}. Quarterly and Monthly
Scorecard examples (Figures P-1 and P-2) can be found on the following
page.

![](media/image11.wmf){width="5.4006944444444445in"
height="8.450694444444444in"}

**Figure M-1:** Quarterly Report Template

![](media/image12.wmf){width="5.689583333333333in"
height="8.363888888888889in"}

**Figure M-2:** Monthly Report Template

The following describes the 6 categories within the *Scorecards* that
the Project Manager must complete:

+------------------+---------------------------------------------------+
| ###              | **Project Name** -- *input* name                  |
|  M.2.1 Input Adm |                                                   |
| inistrative Data | **Unique Project ID** -- *input* Unique Project   |
|                  | Identifier used in Exhibit 300                    |
|                  |                                                   |
|                  | **Project Manager** -- *input* name               |
|                  |                                                   |
|                  | **Project Status** -- *input* Planning,           |
|                  | Acquisition, Steady State, or Mixed Life Cycle    |
|                  |                                                   |
|                  | **Lead Bureau** -- *input* name                   |
|                  |                                                   |
|                  | **Date and Quarter** -- *input* the submission    |
|                  | date and Fiscal Year Quarter (*Quarterly          |
|                  | Scorecard*).                                      |
|                  |                                                   |
|                  | -- *input* the submission date and month the      |
|                  | Scorecard reflects (*Monthly Scorecard)*.         |
|                  |                                                   |
|                  | **Telephone Number** -- *input* 10 digit          |
|                  | telephone number                                  |
|                  |                                                   |
|                  | **eCPIC rev \#** -- *input* the eCPIC revision    |
|                  | number created for this reporting period          |
+------------------+---------------------------------------------------+

+------------------+---------------------------------------------------+
| ### M            | The project's EV data must be updated monthly in  |
| .2.2 Reporting E | eCPIC. Once updated, an eCPIC revision must be    |
| arned Value Data | created to preserve this "snapshot" data point.   |
|                  | The updated eCPIC EV data can be the source for   |
|                  | the *Quarterly or Monthly Report's* infor­mation.  |
|                  | While projects are expected to use actual         |
|                  | schedule and cost data to perform EV              |
|                  | calculations, cost estimates may be used only in  |
|                  | cases where unforeseen circumstances will not     |
|                  | allow actual data to be obtained and processed in |
|                  | time for the reporting due date. (ANSI 748        |
|                  | permits estimated Actual Cost Work Performed      |
|                  | (ACWP)). Actual cost estimation can be addressed  |
|                  | as follows:                                       |
+------------------+---------------------------------------------------+

For DOI direct expenses (primarily labor), data can be extrapolated from
the accounting system or time cards.

For contractor charges, obtain the estimated "actuals" (including open
commitments) data directly from contractors. If not, estimate "actuals"
(for a given time period) using the time-phased Estimate at Completion
(EAC) data in eCPIC for your latest Exhibit 300.

> [**IMPORTANT**: If estimated "actuals" are used in a given reporting
> period, estimates must be reconciled to the actual cost incurred. This
> will have to be done by the next reporting period and, consequently,
> the measured categories' values must also be revised.]{.underline}

These Variances and Index can be calculated by entering source data in
the EV Summary tab. The EV Summary tab will automatically populate the
Reporting Template. A sample of the EV Summary tab is provided in
**Figure P-2** below.

![](media/image13.png){width="5.991666666666666in" height="3.29375in"}

**Figure M-2:** EV Summary Tab (Quarterly Report)

Alternatively, the Cost Variance, Schedule Variance, Variances at
Completion, and "To Complete" Performance Index data may be entered
directly into the Reporting Template tab. Planning, Acquisition, and
Mixed Life Cycle data should be entered in the D/M/E column.

+-----+------------+---------------------------------+----------------+
| *   |            | **Definition**                  | **Formula**    |
| *Me |            |                                 |                |
| tri |            |                                 |                |
| c** |            |                                 |                |
+=====+============+=================================+================+
| A   | Actual     | The sum of costs actually       |                |
| CWP | Cost for   | incurred and recorded in        |                |
|     | Work       | accomplishing the work          |                |
|     | Performed  | performed through the data      |                |
|     |            | date.                           |                |
+-----+------------+---------------------------------+----------------+
| BAC | Budget At  | The sum of all planned budgets  |                |
|     | Completion | established for the investment. |                |
|     |            | The OMB approved baseline.      |                |
+-----+------------+---------------------------------+----------------+
| B   | Budgeted   | The sum of the budgets for      |                |
| CWP | Cost for   | completed work packages and     |                |
|     | Work       | completed portions of open work |                |
|     | Performed  | packages, plus the applicable   |                |
|     |            | portion, usually a percentage,  |                |
|     |            | of the budgets for level of     |                |
|     |            | effort and apportioned effort   |                |
|     |            | as of the data date. Also       |                |
|     |            | called the "earned value."      |                |
+-----+------------+---------------------------------+----------------+
| B   | Budgeted   | The sum of all WBS element      |                |
| CWS | Cost for   | budgets that were planned or    |                |
|     | Work       | scheduled for completion as of  |                |
|     | Scheduled  | the data date. Known also as    |                |
|     |            | "Planned Value."                |                |
+-----+------------+---------------------------------+----------------+
| CPI | Cost       | The dollar value of work        | BCWP / ACWP    |
|     | P          | accomplished for each dollar    |                |
|     | erformance | spent. An efficiency measure.   |                |
|     | Index      |                                 |                |
+-----+------------+---------------------------------+----------------+
| CV  | Cost       | Difference between the cost of  | BCWP - ACWP    |
|     | Variance   | work accomplished and what the  |                |
|     |            | baseline said that work should  |                |
|     |            | have cost.                      |                |
+-----+------------+---------------------------------+----------------+
| EAC | Estimate   | The projected final cost of     | 1\. \[ACWP     |
|     | At         | work when completed. EAC may be | +(1/CPI)\] x   |
|     | Completion | calculated using either of the  | (BAC- BCWP)    |
|     |            | two formulas in the next        |                |
|     |            | column.                         | 2\. \[ACWP     |
|     |            |                                 | +(1/CPI x      |
|     |            |                                 | SPI)\] x (BAC- |
|     |            |                                 | BCWP)          |
+-----+------------+---------------------------------+----------------+
| SPI | Schedule   | The dollar value of work        | BCWP / BCWS    |
|     | P          | accomplished for each dollar of |                |
|     | erformance | work planned. An efficiency     |                |
|     | Index      | measure.                        |                |
+-----+------------+---------------------------------+----------------+
| SV  | Schedule   | The numerical difference        | BCWP - BCWS    |
|     | Variance   | between earned value less       |                |
|     |            | planned value.                  |                |
+-----+------------+---------------------------------+----------------+
| T   | To         | The measure of a project's      | ((CPI -- TCPI) |
| CEV | Complete   | capability to complete its EAC. | / CPI) x 100   |
|     | Efficiency | It is measured by comparing the |                |
|     | Variance   | CPI and To Complete Performance |                |
|     |            | Index (TCPI) numbers. This      |                |
|     |            | measure relates the project's   |                |
|     |            | historic efficiency to the      |                |
|     |            | needed efficiency to complete   |                |
|     |            | the project with the remaining  |                |
|     |            | estimated budget.               |                |
+-----+------------+---------------------------------+----------------+
| VAC | Variance   | The difference between the      | BAC-EAC        |
|     | At         | baseline and actual budget at   |                |
|     | Completion | completion. Given the two       |                |
|     |            | different EAC calculations,     |                |
|     |            | there are two valid VAC         |                |
|     |            | calculations.                   |                |
+-----+------------+---------------------------------+----------------+

**Figure M-3**. Earned Value Summary

#### M.2.2.1 Cost Category

This is the project's cumulative Cost Variance percentage (CV %),
rounded to the nearest one percent. The CV% provides a snapshot of the
project's Cost Variance history. If entering directly into the Quarterly
Reporting Template tab, enter the CV% into the SS Value cell and or DME
Value cell, and enter the total CV% into the Combined Value cell
adjacent to the current Quarter. If using the Excel spreadsheet to
calculate values, update the EV Summary tab (bolded cells with a border
only) and the CV% cells will be calculated automatically. If using the
Monthly Report, follow the same steps but only enter information for the
appropriate month.

![](media/image14.wmf){width="5.992361111111111in"
height="0.7597222222222222in"}

+---------------------------------------+---+----------------------------+
| Based on the Cost Variance % formula  |   | **Cost Variance %**        |
| shown in the adjacent figure, the     |   |                            |
| report assigns scores based on the    |   |                            |
| following ranges:                     |   |                            |
|                                       |   |                            |
| Blue = CV% is greater than 10%        |   |                            |
|                                       |   |                            |
| Green = CV% is greater than -- 6%     |   |                            |
|                                       |   |                            |
| Yellow = CV% is between --6% and --9% |   |                            |
|                                       |   |                            |
| Red = CV% is less than --10%          |   |                            |
+---------------------------------------+---+----------------------------+
|                                       |   | CV% = (BCWP-ACWP)/BCWP x   |
|                                       |   | 100%                       |
+---------------------------------------+---+----------------------------+
|                                       |   |                            |
+---------------------------------------+---+----------------------------+

#### M.2.2.2 Schedule Category

This is the project's [cumulative]{.underline} Schedule Variance
Percentage (SV %), rounded to the nearest one percent. The SV% provides
a snapshot of the project's Schedule Variance history. If entering
directly into the Quarterly Reporting Template tab, enter the SV% into
the SS Value cell and or DME Value cell, and enter the total SV% into
the Combined Value cell adjacent to the current Quarter. If using the
Excel spreadsheet to calculate values, update the EV Summary tab (bolded
cells with a border only) and the SV% will be calculated automatically.
If using the Monthly Report, follow the same steps but only enter
information for the appropriate month.

![](media/image15.wmf){width="5.992361111111111in"
height="0.7604166666666666in"}

+--------------------------------------+---+----------------------------+
| Based on the Schedule Variance %     |   | **Schedule Variance %**    |
| formula shown in the adjacent        |   |                            |
| figure, the report assigns scores    |   |                            |
| based on the following ranges:       |   |                            |
|                                      |   |                            |
| Blue = SV% is greater than 10%       |   |                            |
|                                      |   |                            |
| Green = SV% is greater than -- 6%    |   |                            |
|                                      |   |                            |
| Yellow = SV% is between --6% and     |   |                            |
| --9%                                 |   |                            |
|                                      |   |                            |
| Red = SV% is less than --10%         |   |                            |
+--------------------------------------+---+----------------------------+
|                                      |   | SV% = (BCWP-BCWS)/BCWS x   |
|                                      |   | 100%                       |
+--------------------------------------+---+----------------------------+
|                                      |   |                            |
+--------------------------------------+---+----------------------------+

#### M.2.2.3 Estimate at Completion Category

The OMB Exhibit 300 allows for Estimate at Completion (EAC) to be
calculated using two different formulas. One EAC measure is based purely
on the Cost Performance Index, the other is based on a combination of
the Cost and Schedule Performance Indices. Both measures provide
predictions about how the project *will* perform. If entering directly
into the Quarterly Reporting Template tab, enter the VAC% into the SS
Value cell and/or DME Value cell. If using the Excel spreadsheet to
calculate values, update the EV Summary tab (bolded cells with a border
only) and both VAC% numbers will be calculated automatically. If using
the Monthly Report, follow the same steps but only enter information for
the appropriate month.

![](media/image16.wmf){width="5.992361111111111in"
height="1.2486111111111111in"}

+-------------------------------------+---+----------------------------+
| Based on the VAC % formula shown in |   | **Variance at Completion 1 |
| the adjacent figures, the report    |   | %**                        |
| assigns scores based on the         |   |                            |
| following ranges:                   |   |                            |
|                                     |   |                            |
| Blue = CV% is greater than 10%      |   |                            |
|                                     |   |                            |
| Green = CV% is greater than -- 6%   |   |                            |
|                                     |   |                            |
| Yellow = CV% is between --6% and    |   |                            |
| --9%                                |   |                            |
|                                     |   |                            |
| Red = CV% is less than --10%        |   |                            |
+-------------------------------------+---+----------------------------+
|                                     |   | VAC 1 % = (BCWP-EAC1)/BAC  |
|                                     |   | x 100%                     |
+-------------------------------------+---+----------------------------+
|                                     |   | VAC 2 % = (BCWP-EAC2)/BAC  |
|                                     |   | x 100%                     |
+-------------------------------------+---+----------------------------+
|                                     |   |                            |
+-------------------------------------+---+----------------------------+

#### M.2.2.4 Total Earned Value Score

The Total Earned Value Score reflects the lowest score among the Cost,
Schedule, and Estimate at Completion categories. For example, if 3 of 4
metrics are Green and the 4th category is Red, a Red score is reported.
The overall project color signifies the following:

Green = Project is on target.

Yellow = Project is within scope in all of the measured criteria, BUT
the Project Manager is expressing concern about the potential for a
deviation from plan.

Red = Project is out of scope in one or more of the measured criteria
AND the Project Manager does not have the ability within the limits of
their authority and resources to bring the criteria back to within the
threshold limits. The Project Manager is asking for, or needs, immediate
assistance.

Current DOI procedures provide the status of all Projects to OMB as part
of the DOI quarterly reporting process.

+------------------+---------------------------------------------------+
| ### M.2.3 Rep    | #### Collaboration Category                       |
| orting Collabora |                                                   |
| tion Information | This category reflects the commitment             |
|                  | demonstrated by the investment's partners (e.g.,  |
|                  | industry, other agencies, State, local, or Tribal |
|                  | governments). This section is mandatory for DOI   |
|                  | investments that have been categorized as "E-Gov" |
|                  | or "Cross-Cutting" by the DOI IRB. This section   |
|                  | is not applicable for investments categorized as  |
|                  | "Bureau Specific" by the DOI IRB. A fully         |
|                  | collaborative project requires each partner's     |
|                  | full participation as the Department and Federal  |
|                  | Government transitions to single enterprise-wide  |
|                  | or Federal-wide systems. For interagency or       |
|                  | collaborative projects for which DOI is the       |
|                  | managing partner, please describe the status of   |
|                  | each participating partner's funding              |
|                  | participation, whether the project is meeting its |
|                  | milestones for migration or integration, and      |
|                  | partner's participation in decision-making. For   |
|                  | interagency or collaborative projects for which   |
|                  | DOI is a participating partner, please describe   |
|                  | the status of DOI Office of the Secretary and     |
|                  | Bureau funding participation, whether the project |
|                  | is meeting DOI milestones for migration or        |
|                  | integration, and DOI's participation in           |
|                  | decision-making. If the investment is not a       |
|                  | collaborative project, answer "Y" and state,      |
|                  | "This is not a collaborative investment."         |
|                  |                                                   |
|                  | The Report Templates automatically assigns an     |
|                  | overall score based on self scoring for each      |
|                  | question. If a response is "Y," enter "G" in the  |
|                  | self scoring cell. If a response is "N," enter    |
|                  | "R" in the question's self scoring cell. If the   |
|                  | response is Not Applicable, enter "NA" in the     |
|                  | self scoring cell.                                |
|                  |                                                   |
|                  | If a response is "N", but in the PM's expert      |
|                  | judgment, the corrective action will positively   |
|                  | resolve the situation or the question is not      |
|                  | relevant, a G entered into the question's self    |
|                  | scoring cell.                                     |
|                  |                                                   |
|                  | The Overall Score is Red if any response receives |
|                  | a Red score. If all scores are Green, the Overall |
|                  | Score is Green.                                   |
+------------------+---------------------------------------------------+

![](media/image17.wmf){width="6.490972222222222in"
height="1.4534722222222223in"}

+------------------+---------------------------------------------------+
| ### M            | #### Risk Category                                |
| .2.4 Reporting R |                                                   |
| isk Information  | This category is a snapshot of the project's risk |
|                  | management assessment. Project managers must      |
|                  | maintain updated risk management plans from which |
|                  | this data should be extracted. For the identified |
|                  | risks, preferably high probability -- high        |
|                  | impact, please describe 1) the risk, 2) the       |
|                  | consequence, and 3) the mitigation plan or        |
|                  | desired managerial action. These risks should be  |
|                  | those that have significantly impacted project    |
|                  | performance since the last report or are          |
|                  | anticipated to impact project performance during  |
|                  | the next reporting period.                        |
|                  |                                                   |
|                  | For each risk description, assign either a "G" or |
|                  | "R" in the self scoring cell. A "G" is assigned   |
|                  | if the mitigation plan or managerial action will  |
|                  | reduce the consequence to an acceptable level. An |
|                  | "R" is assigned if the consequence cannot be      |
|                  | reduced to an acceptable level.                   |
|                  |                                                   |
|                  | The Overall Score is Red if any response receives |
|                  | a Red score. If all scores are Green, the Overall |
|                  | Score is Green.                                   |
+------------------+---------------------------------------------------+

![](media/image18.wmf){width="6.490972222222222in" height="1.59375in"}

+------------------+---------------------------------------------------+
| #                | The Project Manager should provide any            |
| ## M.2.5 Comment | explanatory comments in the Comment block         |
| s and Signatures | including a brief assessment of overall project   |
|                  | health.                                           |
|                  |                                                   |
|                  | OMB seeks to avoid projects that duplicate        |
|                  | Presidential E-Gov initiatives. As such respond   |
|                  | "Y" or "N" to the certification questions located |
|                  | in the signature block.                           |
|                  |                                                   |
|                  | While the reports will be forwarded               |
|                  | electronically to the CIO through the project's   |
|                  | respective DOI IRB member, project managers are   |
|                  | expected to obtain their signatures for the       |
|                  | files.                                            |
+------------------+---------------------------------------------------+

#### 

#### M.2.5.1 Reports Verification and Validation

These scores are intended to reflect verifiable project information. A
Project Manager is expected to base *Scorecard* scores on verifiable
reports, data, or information, and retain the supporting documentation.
To enhance reporting integrity, PMD will designate teams to validate
Project Manager scores by reviewing supporting documentation. Supporting
documentation should include:

-   eCPIC Exhibit 300 reports and or Contractor Cost Performance
    Reports,

-   Current risk management plans, and

-   Signed and dated Quarterly Reports.

## M.3 Corrective Actions Report

Project Managers must complete a *Corrective Actions Report* for each
issue Category for any project that reports:

-   A "yellow" and or "red" light in any *Scorecard* category,

-   An "improving but still outside control bounds" and/or
    "deteriorating" trend in any *Scorecard* category, or

-   Corrective actions taken since the previous *Scorecard*.

**Figure M-5** is the template for the *Corrective Action Report*. The
*Corrective Action Report(s)* must accompany the *Scorecard*.

  ---------------------------------- ---- ------------ --------------------------
  **Corrective Actions Report**\                       
  (If any Scorecard category scores                    
  a red, complete one report for                       
  each issue identified)                               

  **Project Name:**                                    **Date:**

  **Project Manager:**                                 **Quarter or Month:**

  **Category:** *Scorecard Category*                   

  **Issue:** *Brief descriptor*                        

  **Cause:** *Description*                             

  **Impact:** *Describe how issue                      
  impacts Scorecard category(s) and                    
  specify impact on cost (\$) and or                   
  schedule (e.g.,, days, weeks,                        
  months)*                                             

  **Corrective Actions Response:**                     
  *Provide step-by-step corrective                     
  actions; effect on staffing, cost                    
  and or schedule. Discuss external                    
  risks that cannot be addressed                       
  within project.*                                     

  **"Get Well" Date:**                                 

  **Comments** (Project Sponsor                        
  Only):                                               

  **Project Manager**\                    **Project    
  Signature & Date                        Sponsor**\   
                                          Signature &  
                                          Date         
  ---------------------------------- ---- ------------ --------------------------

**Figure M-5:** Corrective Actions Report Template

+-----------------+----------------------------------------------------+
| #####           | *Identify* the Category from the *Scorecard* that  |
|  M.3.1 Category | you are addressing. Only one *Corrective Action    |
|                 | Report* should be completed for each Category.     |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ##              | *Identify* or *name* the issue. This name will be  |
| ### M.3.2 Issue | used to track or monitor the project's Corrective  |
|                 | Action in subsequent quarterly reporting periods.  |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ##              | *Describe* the cause of the problem or issue in    |
| ### M.3.3 Cause | detail.                                            |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ###             | *Describe* how the issue relates to one or more    |
| ## M.3.4 Impact | *Scorecard* category(s) (e.g., Cost, Schedule, and |
|                 | Estimate to Completion, Performance, or Risk) and  |
|                 | impacts the cost (e.g., estimated dollar impact)   |
|                 | or schedule (e.g., days, weeks, and months).       |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ##### M.3.5 Cor | *Describe* your planned corrective actions,        |
| rective Actions | including step-by-step corrective actions. Explain |
|                 | the consequences to staffing (government or        |
|                 | contractor), cost estimates or schedule (e.g.,     |
|                 | days, weeks, months) using a time-phased budget.   |
|                 | Discuss external issues that cannot be addressed   |
|                 | within the project.                                |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ##### M.3.6     | *Indicate* when the corrective action(s) will be   |
| "Get Well" Date | completed.                                         |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| ##### M.3.7     | Upon completion of the *Corrective Actions         |
| Project Manager | Report*, sign and date the Report. Submit the      |
|                 | *Scorecard* and *Corrective Actions Report(s)* to  |
|                 | the Project Sponsor.                               |
+-----------------+----------------------------------------------------+

+-----------------+----------------------------------------------------+
| #####           | *Review* the *Corrective Actions Report(s)* and    |
| M.3.8 Project S | provide any comments. The *Corrective Actions      |
| ponsor Comments | Report(s)* and the *Scorecard* must be submitted   |
|                 | through the respective Bureau CIO (or CPIC         |
|                 | designee) to the Department CIO.                   |
+-----------------+----------------------------------------------------+

A sample *Corrective Actions Report* is provided in **Figure M-6**:

+---------------------------------+---+-----+-------------------------+
| **Corrective Actions Report**\  |   |     |                         |
| (If any Scorecard category      |   |     |                         |
| scores a red, complete one      |   |     |                         |
| report for each issue           |   |     |                         |
| identified)                     |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Project Name:** Global        |   |     | **Date:** 10/1/04       |
| Recreation Project              |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Project Manager:** Bill D.    |   |     | **Quarter/ or Month:**  |
| Bridges                         |   |     | 4                       |
+---------------------------------+---+-----+-------------------------+
| **Category:** Cost Category     |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Issue:** Contractor Security  |   |     |                         |
| Clearances                      |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Cause:***\                    |   |     |                         |
| *Bureau security requirements   |   |     |                         |
| were changed in June 2004. As a |   |     |                         |
| result, all contractors working |   |     |                         |
| on the Project were prevented   |   |     |                         |
| from accessing secure Bureau    |   |     |                         |
| facilities. All contractors     |   |     |                         |
| must be cleared by Security     |   |     |                         |
| before continuing to work in    |   |     |                         |
| Bureau facilities.              |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Impact:***\                   |   |     |                         |
| *This issue impacts both cost   |   |     |                         |
| and schedule variances. The     |   |     |                         |
| overall project schedule will   |   |     |                         |
| be delayed 4 weeks, since the   |   |     |                         |
| Prime contractor took 4 weeks   |   |     |                         |
| in May to establish an off-site |   |     |                         |
| facility that mirrors the       |   |     |                         |
| Bureau's system. These new      |   |     |                         |
| security clearances will cost   |   |     |                         |
| the project an additional       |   |     |                         |
| \$5,000 per contractor;         |   |     |                         |
| affecting 35 contractors; and,  |   |     |                         |
| totaling \$175,000. The cost to |   |     |                         |
| establish the alternate site;   |   |     |                         |
| to pay Contractor rental        |   |     |                         |
| expense; and, pay off-site      |   |     |                         |
| Contractor labor rates is       |   |     |                         |
| estimated to total an           |   |     |                         |
| additional \$500,000 than       |   |     |                         |
| originally projected. In total, |   |     |                         |
| the schedule delay is 4 weeks,  |   |     |                         |
| and cost impact is an           |   |     |                         |
| additional \$675,000.           |   |     |                         |
|                                 |   |     |                         |
| The risk management plan did    |   |     |                         |
| not anticipate this event.      |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Corrective Actions            |   |     |                         |
| Response:***\                   |   |     |                         |
| *OPM will complete preliminary  |   |     |                         |
| security clearances by October  |   |     |                         |
| 30, 2004\                       |   |     |                         |
| Bureau's Security Office will   |   |     |                         |
| authorize temporary clearance   |   |     |                         |
| by November 30, 2004, pending   |   |     |                         |
| OPM final security clearances.\ |   |     |                         |
| Project and contractor staff    |   |     |                         |
| will resume activities at       |   |     |                         |
| Bureau facilities by December   |   |     |                         |
| 31, 2004.\                      |   |     |                         |
| OPM will finalize security      |   |     |                         |
| clearances by January 30, 2005, |   |     |                         |
| wherein Bureaus Security Office |   |     |                         |
| will simultaneously approve     |   |     |                         |
| contractor's clearances.        |   |     |                         |
|                                 |   |     |                         |
| Program Office will provide     |   |     |                         |
| additional funding to contract. |   |     |                         |
| Monthly costs allocations are   |   |     |                         |
| as follows:\                    |   |     |                         |
| May: \$50,000\                  |   |     |                         |
| June: \$150,000\                |   |     |                         |
| July: \$50,000\                 |   |     |                         |
| August: \$50,000\               |   |     |                         |
| September \$50,000\             |   |     |                         |
| October: \$50,000\              |   |     |                         |
| November: \$50,000\             |   |     |                         |
| December: \$225,000             |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **"Get Well" Date:** January    |   |     |                         |
| 30, 2005                        |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Comments** (Project Sponsor   |   |     |                         |
| Only):                          |   |     |                         |
+---------------------------------+---+-----+-------------------------+
| **Project Manager**\            |   | **P |                         |
| Signature & Date                |   | roj |                         |
|                                 |   | ect |                         |
|                                 |   | S   |                         |
|                                 |   | pon |                         |
|                                 |   | sor |                         |
|                                 |   | **\ |                         |
|                                 |   | Sig |                         |
|                                 |   | nat |                         |
|                                 |   | ure |                         |
|                                 |   | &   |                         |
|                                 |   | D   |                         |
|                                 |   | ate |                         |
+---------------------------------+---+-----+-------------------------+

**Figure M-6:** Corrective Actions Report Sample

# Appendix N: CPIC Process Assessment

## N.1 Introduction

In 2000, the Government Accountability Office (GAO) published an
exposure draft of *Information Technology Investment Management: A
Framework for Assessing and Improving Process Maturity (ITIM)*. This
Framework is based upon the select or control or evaluate approach
described in the Clinger-Cohen Act of 1996 for selecting and managing
Information Technology (IT) investments. Later in March 2004, GAO
released Version 1.1 of its ITIM Framework. The ITIM Framework is
composed of 5 stages of increasing maturity, as shown in **Figure Q-1**
and provides the following:

A rigorous, standardized tool for internal and external evaluations of
IT investment processes,

A consistent and understandable mechanism for reporting the results of
IT assessments, and

A road map that agencies can follow in improving their IT investment
processes.

![](media/image19.wmf){width="5.991666666666666in"
height="3.3041666666666667in"}

**Figure N-1.** ITIM Stages of Maturity

Each ITIM stage contains critical processes that in turn contain
component key practices. Each critical process and each key practice
within an ITIM stage must be met in order to fully achieve an ITIM stage
rating.

The Department of the Interior (DOI) and its Bureaus are implementing
ITIM-related processes while addressing recommendations from GAO. The
ITIM Self Assessment Tool was developed to aid the DOI with ITIM
assessments, highlight strengths and weaknesses, and assist with
planning. The ITIM Self Assessment Tool is designed for use on Microsoft
Excel Version 2000 or later. The ITIM Self Assessment Tool is a
self-contained spreadsheet developed in Microsoft Excel, and requires no
special installation procedures. A copy can be obtained by contacting
OCIO CPIC Working Team at <OS_PIO_CPIC@ios.doi.gov>

This document provides guidance on using the ITIM Self Assessment Tool
to determine an organization's maturity level.

## N.2 ITIM Self Assessment Tool 

The data is organized into tabs to allow for easy presentation and data
entry. Each tab in the ITIM Self Assessment Tool is explained in
**Figure O-2**.

  ------------------------------------------------------------------------------
  **\#**   **Name**      **Notes**
  -------- ------------- -------------------------------------------------------
  1        Summary       Provides high-level ITIM rating results. There is no
                         user input on this tab.

  2        Graphics      Graphically depicts the progress for each key practice
                         within each ITIM maturity level. There is no user input
                         on this tab.

  3        Critical      Provides progress details for each key practice within
           Processes     each ITIM maturity level. There is no user input on
                         this tab.

  4        Stage2        Captures the user's input for the ITIM Stage 2
                         self-assessment.

  5        Stage3        Captures the user's input for the ITIM Stage 3
                         self-assessment.

  6        Stage4        Captures the user's input for the ITIM Stage 4
                         self-assessment.

  7        Stage5        Captures the user's input for the ITIM Stage 5
                         self-assessment.
  ------------------------------------------------------------------------------

**Figure N-2.** ITIM Self Assessment Tool Tabs

Before using the tool, the user needs to obtain a copy of version 1.1 of
GAO's *Information Technology Investment Management: A Framework for
Assessing and Improving Process Maturity (ITIM)*, and become familiar
with the ITIM stages and the evidence and artifacts required to fulfill
each key practice.[^1]

Using the information in the GAO guidance, along with the evidence
collected to support each key practice for each ITIM stage, assess
whether the practices are in place by selecting the rating from the
"Rating" drop-down box, using the following definitions:

**Executed---**The practice is in place.

**NA---**The practice is not relevant to the Bureau or Department's
particular circumstances.

**Not Executed---**The Bureau or Department does not exhibit any aspect
of the practice in place.

**Partially Executed---** The Bureau or Department has some, but not
all, aspects of the practice in place. Examples of circumstances in
which the Bureau or Department would receive this designation include:

\(1\) Some, but not all, of the elements of the practice were in place;

\(2\) The Bureau or Department documented that it has the information or
process in place but it was not in the prescribed form (e.g., in a
specific document as required by law or the Office of Management and
Budget (OMB));

\(3\) The Bureau or Department's documentation was in draft form; or

\(4\) The Bureau or Department has a policy related to the practice but
evidence supported that it had not been completely or consistently
implemented.

Enter the evidence that supports the selected rating in the "Summary of
Evidence or Comments" column, and supply the point of contact (POC) for
the evidence in the POC column. This will greatly aid in not only
identifying potential weaknesses, but also in preparing for a GAO audit.
Following entry of the data, the results will be displayed in the
"Summary," "Graphics," and "Critical Processes" tabs.

# Appendix O: Glossary of Terms and Acronyms

## O.1 Glossary of Terms

+--------------------+---+-------------------------------------------------+
| **Acquisition      | D |                                                 |
| Plan**             | e |                                                 |
|                    | s |                                                 |
|                    | c |                                                 |
|                    | r |                                                 |
|                    | i |                                                 |
|                    | p |                                                 |
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|                    | o |                                                 |
|                    | n |                                                 |
|                    | o |                                                 |
|                    | f |                                                 |
|                    | t |                                                 |
|                    | h |                                                 |
|                    | e |                                                 |
|                    | a |                                                 |
|                    | c |                                                 |
|                    | q |                                                 |
|                    | u |                                                 |
|                    | i |                                                 |
|                    | s |                                                 |
|                    | i |                                                 |
|                    | t |                                                 |
|                    | i |                                                 |
|                    | o |                                                 |
|                    | n |                                                 |
|                    | a |                                                 |
|                    | p |                                                 |
|                    | p |                                                 |
|                    | r |                                                 |
|                    | o |                                                 |
|                    | a |                                                 |
|                    | c |                                                 |
|                    | h |                                                 |
|                    | i |                                                 |
|                    | n |                                                 |
|                    | c |                                                 |
|                    | l |                                                 |
|                    | u |                                                 |
|                    | d |                                                 |
|                    | i |                                                 |
|                    | n |                                                 |
|                    | g |                                                 |
|                    | : |                                                 |
|                    |   |                                                 |
|                    | - |                                                 |
|                    |   |                                                 |
|                    |   |                                                 |
|                    |   |                                                 |
|                    | C |                                                 |
|                    | o |                                                 |
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|                    | s |                                                 |
|                    | t |                                                 |
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|                    | t |                                                 |
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|                    | g |                                                 |
|                    | y |                                                 |
|                    |   |                                                 |
|                    |   |                                                 |
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|                    | ( |                                                 |
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|                    | f |                                                 |
|                    |   |                                                 |
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|                    |   |                                                 |
|                    | g |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Actual Cost of   | T |                                                 |
| Work Performed**   | h |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Architectural    | D |                                                 |
| Alignment**        | e |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Architecture**   | A |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Benefit**        | Q |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Benefit-Cost     | T |                                                 |
| Ratio**            | h |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Budget at        | T |                                                 |
| Completion**       | h |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Budgeted Cost    | T |                                                 |
| for Work           | h |                                                 |
| Performed**        | e |                                                 |
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|                    | . |                                                 |
+--------------------+---+-------------------------------------------------+
| **Budgeted Cost of | T |                                                 |
| Work Scheduled**   | h |                                                 |
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+--------------------+---+-------------------------------------------------+
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+--------------------+---+-------------------------------------------------+
| **Business         | A |                                                 |
| Process**          | c |                                                 |
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+--------------------+---+-------------------------------------------------+
| **Business Process |   | A systematic, disciplined approach to improving |
| Reengineering**    |   | business processes that critically examines,    |
|                    |   | rethinks, and redesigns mission delivery        |
|                    |   | processes.                                      |
+--------------------+---+-------------------------------------------------+
| **Capital Asset**  |   | Tangible property, including durable goods,     |
|                    |   | equipment, buildings, installations, and land.  |
+--------------------+---+-------------------------------------------------+

  -------------------- --------------------------------------------------
  **Control Phase**    Capital planning phase that requires ongoing
                       monitoring of information technology investments
                       against schedules, budgets, and performance
                       measures.

  **Cost-Benefit       An evaluation of the costs and benefits of
  Analysis**           alternative approaches to a proposed activity to
                       determine the best alternative.

  **Cost Performance   Earned value divided by the actual cost incurred
  Index**              for an investment.

  **Cost Variance**    Earned value minus the actual cost incurred for an
                       investment.

  **Customer**         Groups or individuals who have a business
                       relationship with the organization; those who
                       receive or use or are directly affected by the
                       products and services of the organization.

  **Data               Compilation of materials including data
  Documentation**      dictionary, decomposition diagrams, and data
                       models.

  **Design             Document that includes system design diagrams.
  Documentation**      

  **Discount Factor**  The factor that translates expected benefits or
                       costs in any given future year into present value
                       terms. The discount factor is equal to 1/ (1 + I)
                       *t* where *I* is the interest rate and *t* is the
                       number of years from the initiation date for the
                       program or policy until the given future year.

  **Discount Rate**    The interest rate used in calculating the present
                       value of expected yearly benefits and costs.

  **Earned Value       A structured approach to project management and
  Analysis**           forecasting including comparisons of actual and
                       planned costs, work performed, and schedule.

  **Estimate at        The actual costs incurred, plus the estimated
  Completion**         costs for completing the remaining work.

  **Estimate to        The cost necessary to complete all tasks from the
  Complete**           actual cost of work performed end date through the
                       investment's conclusion.

  **Evaluate Phase**   Capital planning phase that requires information
                       technology investments to be reviewed once they
                       are operational to determine whether the
                       investments meet expectations.

  **Expected Outcome** Projected end result of the initiative (e.g.,
                       system(s) being replaced or improved customer
                       service) that is directly linked with performance
                       measures.

  **Feasibility        Preliminary research performed to determine the
  Study**              viability of the proposed initiative by performing
                       an alternatives analysis, including market
                       research and extensive interviews with subject
                       matter experts. Also includes a proposed technical
                       approach and preliminary cost, scope, and schedule
                       data.

  **Functional         A description of system capabilities or functions
  Requirements**       required to execute a required process such as a
                       communication link between several locations and
                       generating specific reports.
  -------------------- --------------------------------------------------

+--------------------+---+-------------------------------------------------+
| **Hardware or      |   | Includes any equipment used in the automatic    |
| Equipment**        |   | acquisition, storage, manipulation, management, |
|                    |   | movement, control, display, switching,          |
|                    |   | interchange, transmission, or reception of data |
|                    |   | or information (e.g., computers and modems);    |
|                    |   | capital and non-capital purchases or leases.    |
+--------------------+---+-------------------------------------------------+
| **Independent      |   | An independent review conducted by persons      |
| Verification and   |   | separate from the management and operation of   |
| Validation**       |   | the investment or system.                       |
+--------------------+---+-------------------------------------------------+
| **Inflation**      |   | The proportionate rate of change in the general |
|                    |   | price level, as opposed to the proportionate    |
|                    |   | increase in a specific price. Inflation is      |
|                    |   | usually measured by a broad-based price index,  |
|                    |   | such as the implicit deflator for Gross         |
|                    |   | Domestic Product or the Consumer Price Index.   |
+--------------------+---+-------------------------------------------------+
| **Information      |   | A discrete set of information resources         |
| System**           |   | organized for the collection, processing,       |
|                    |   | maintenance, transmission, and dissemination of |
|                    |   | informa­tion in accordance with defined          |
|                    |   | procedures, whether automated or manual.        |
+--------------------+---+-------------------------------------------------+
| **Lifecycle**      |   | The duration of the system life typically       |
|                    |   | organized into four phases: initiation,         |
|                    |   | development, operation, and disposal.           |
+--------------------+---+-------------------------------------------------+
| **Information      |   | Any equipment or interconnected system or       |
| Technology**       |   | subsystems or equipment used in the automatic   |
|                    |   | acquisition, storage, manipulation, management, |
|                    |   | movement, control, display, switching,          |
|                    |   | interchange, transmission, or reception of data |
|                    |   | or information.                                 |
+--------------------+---+-------------------------------------------------+
| **Infrastructure** |   | The IT operating environment (e.g., hardware,   |
|                    |   | software, and communications).                  |
+--------------------+---+-------------------------------------------------+
| **Lifecycle        |   | The overall estimated benefits for a particular |
| Benefits**         |   | program alternative over the time period        |
|                    |   | corresponding to the life of the program        |
|                    |   | including:                                      |
|                    |   |                                                 |
|                    |   | -   Cost or expense reduction (productivity and |
|                    |   |     headcount),                                 |
|                    |   |                                                 |
|                    |   | -   Other expense reductions (operational),     |
|                    |   |                                                 |
|                    |   | -   Cost or expense avoidance, and              |
|                    |   |                                                 |
|                    |   | -   Revenue-related savings.                    |
+--------------------+---+-------------------------------------------------+
| **Lifecycle Cost** |   | The overall estimated cost for a particular     |
|                    |   | program alternative over the time period        |
|                    |   | corresponding to the life of the program,       |
|                    |   | including direct and indirect initial costs     |
|                    |   | plus any periodic or continuing costs of        |
|                    |   | operation and maintenance.                      |
+--------------------+---+-------------------------------------------------+
| **Management       |   | The amount of the total allocated budget        |
| Reserve**          |   | withheld for management control purposes rather |
|                    |   | than designated for the accomplishment of a     |
|                    |   | specific task or set of tasks; not part of the  |
|                    |   | performance measurement.                        |
+--------------------+---+-------------------------------------------------+
| **Net Present      |   | The difference between the discounted present   |
| Value**            |   | value of benefits and the discounted present    |
|                    |   | value of costs. Also referred to as the Net     |
|                    |   | Present Value.                                  |
+--------------------+---+-------------------------------------------------+
| **Opportunity      |   | Cost of not investing in the initiative or cost |
| Costs**            |   | of a forgone option.                            |
+--------------------+---+-------------------------------------------------+
| **Payback Period** |   | The number of years it takes for the cumulative |
|                    |   | dollar value of the benefits to exceed the      |
|                    |   | cumulative costs of an investment.              |
+--------------------+---+-------------------------------------------------+
| **Performance      |   | Description of:                                 |
| Indicator**        |   |                                                 |
|                    |   | -   What is to be measured, including the       |
|                    |   |     metric to be used (e.g., conformance,       |
|                    |   |     efficiency, effectiveness, costs, reaction, |
|                    |   |     or customer satisfaction)                   |
|                    |   |                                                 |
|                    |   | -   Scale (e.g., dollars, hours, etc.)          |
|                    |   |                                                 |
|                    |   | -   Formula to be applied (e.g., percent of "a" |
|                    |   |     compared to "b," mean time between          |
|                    |   |     failures, annual costs of maintenance,      |
|                    |   |     etc.)                                       |
|                    |   |                                                 |
|                    |   | -   Conditions under which the measurement will |
|                    |   |     be taken (e.g., taken after system is       |
|                    |   |     operational for more than 12 hours,         |
|                    |   |     adjusted for constant dollars, etc.)        |
+--------------------+---+-------------------------------------------------+
| **Performance      |   | The time-phased budget plan against which       |
| Measurement        |   | investment performance is measured.             |
| Baseline**         |   |                                                 |
+--------------------+---+-------------------------------------------------+
| **Performance      |   | Method used to determine the success of an      |
| Measures**         |   | initiative by assessing the investment          |
|                    |   | contribution to predetermined strategic goals.  |
|                    |   | Measures are quantitative (e.g., staff-hours    |
|                    |   | saved, dollars saved, reduction in errors,      |
|                    |   | etc.) or qualitative (e.g., quality of life,    |
|                    |   | customer satisfaction, etc.).                   |
+--------------------+---+-------------------------------------------------+
| **P                |   | Evaluation of the information technology        |
| ost-Implementation |   | investment after it has been fully implemented  |
| Review**           |   | or terminated to determine whether the targeted |
|                    |   | outcome (e.g., performance measures) of the     |
|                    |   | investment has been achieved.                   |
+--------------------+---+-------------------------------------------------+
| **Pre-Select       |   | Capital planning phase that provides a process  |
| Phase**            |   | to assess whether information technology        |
|                    |   | investments support strategic and mission       |
|                    |   | needs.                                          |
+--------------------+---+-------------------------------------------------+
| **Project Plan**   |   | A document that describes the technical and     |
|                    |   | management approach to carrying out a defined   |
|                    |   | scope of work, including the project            |
|                    |   | organization, resources, methods, and           |
|                    |   | procedures and the project schedule.            |
+--------------------+---+-------------------------------------------------+
| **Project          |   | A document issued by senior management that     |
| Charter**          |   | provides the project manager with the authority |
|                    |   | to apply organizational resources to project    |
|                    |   | activities                                      |
+--------------------+---+-------------------------------------------------+
| **Return**         |   | The difference between the value of the         |
|                    |   | benefits and the costs of an investment. In a   |
|                    |   | cost-benefit analysis it is computed by         |
|                    |   | subtracting the Total Discounted Costs from the |
|                    |   | Total Discounted Benefits, and is called the    |
|                    |   | Total Net Present Value.                        |
+--------------------+---+-------------------------------------------------+
| **Return on        |   | Calculated by dividing the Total Net Present    |
| Investment**       |   | Value by the Total Discounted Costs. To express |
|                    |   | it as a percentage, multiply by 100. It can     |
|                    |   | also be expressed as (Total Discounted Benefits |
|                    |   | minus Total Discounted Costs) divided by Total  |
|                    |   | Discounted Costs.                               |
+--------------------+---+-------------------------------------------------+
| **Risk**           |   | A combination of the probability that a threat  |
|                    |   | will occur, the probability that a threat       |
|                    |   | occurrence will result in an adverse impact,    |
|                    |   | and the severity of the resulting impact.       |
+--------------------+---+-------------------------------------------------+
| **Risk Management  |   | A description of potential cost, schedule, and  |
| Plan**             |   | performance risks, and impact of the proposed   |
|                    |   | system to the infrastructure. Includes a        |
|                    |   | sensitivity analysis to articulate the effect   |
|                    |   | different outcomes might have on diminishing or |
|                    |   | exacerbating risk. Provides an approach to      |
|                    |   | managing all potential risks.                   |
+--------------------+---+-------------------------------------------------+
| **Risk             |   | The process concerned with identifying,         |
| Management**       |   | measuring, controlling, and minimizing risk.    |
+--------------------+---+-------------------------------------------------+
| **Schedule         |   | Earned value minus the planned budget for the   |
| Variance**         |   | completed work.                                 |
+--------------------+---+-------------------------------------------------+
| **Security**       | M |                                                 |
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|                    | . |                                                 |
+--------------------+---+-------------------------------------------------+

  -------------------- --------------------------------------------------
  **Security Plan**    Description of system security considerations such
                       as access, physical or architectural
                       modifications, and adherence to Federal and DOI
                       security requirements.

  **Select Phase**     Capital planning phase used to identify all new,
                       ongoing, and operational investments for inclusion
                       into the information technology portfolio.

  **Sensitivity        An analysis of how sensitive outcomes are to
  Analysis**           changes in assumptions. Assumptions about the
                       dominant cost or benefits elements and the areas
                       of greatest uncertainty deserve the most
                       attention.

  **Software**         Any software, including firmware, specifically
                       designed to make use of and extend the
                       capabilities of hardware or equipment.

  **Steady State       Capital planning phase that provides the means to
  Phase**              assess mature information technology investments
                       to ensure they continue to support mission, cost,
                       and technology requirements.

  **Sunk Cost**        A cost incurred in the past that will not be
                       affected by any present or future decisions. Sunk
                       costs should be ignored in determining whether a
                       new investment is worthwhile.

  **Technical          Description of hardware, software, and
  Requirements**       communications requirements associated with the
                       initiative.

  **Variance at        The difference between the total budget assigned
  Completion**         to a contract, WBS element, organizational entity,
                       or cost account and the estimate at completion;
                       represents the amount of expected overrun or under
                       run.
  -------------------- --------------------------------------------------

## O.2 Acronyms

  ----------- -----------------------------------------------------------
  **AB**      Annual Benefit

  **AC**      Annual Cost

  **ACWP**    Actual Cost of Work Performed

  **AS**      Agency Sponsor

  **BAC**     Budget at Completion

  **BCR**     Benefit-Cost Ratio

  **BCWP**    Budgeted Cost for Work Performed

  **BCWS**    Budgeted Cost of Work Scheduled

  **BPR**     Business Process Reengineering

  **CBA**     Cost-Benefit Analysis

  **CCA**     Clinger-Cohen Act

  **CFO**     Chief Financial Officer

  **CIO**     Chief Information Officer

  **COTS**    Commercial-off-the-shelf

  **CPI**     Cost Performance Index

  **CPIC**    Capital Planning and Investment Control

  **CPWT**    Capital Planning Working Team

  **CSBR**    Cost, Schedule, Benefit, and Risk

  **CV**      Cost Variance

  **DB**      Discount Benefit

  **DC**      Discount Cost

  **DF**      Discount Factor

  **EAC**     Estimate at Completion

  **EBT**     Electronic Benefit Transfer

  **IRB**     Investment Review Board

  **ETC**     Estimate to Complete

  **EWG**     Executive Working Group(s)

  **FASA**    Federal Acquisition Streamlining Act

  **FM**      Functional Manager

  **FTEs**    Full-Time Equivalents

  **FY**      Fiscal Year

  **GAO**     Government Accountability Office

  **GISRA**   Government Information Security Act of 2000

  **GPEA**    Government Paperwork Elimination Act of 1998

  **GPRA**    Government Performance and Results Act

  **GSA**     General Services Administration

  **IPT**     Integrated Project Team

  **IRM**     Information Resource Management

  **ISSPM**   Information System Security Program Manager

  **ISTA**    Information System Technology Architecture

  **IT**      Information Technology

  **eCPIC**   Information Technology Investment Portfolio System

  **IV&V**    Independent Verification and Validation

  **MNS**     Mission Needs Statement

  **MR**      Management Reserve

  **NIST**    National Institute of Standards and Technology

  **NPV**     Net Present Value

  **O&M**     Operations and Maintenance

  **OCFO**    Office of the Chief Financial Officer

  **OCIO**    Office of the Chief Information Officer

  **OMB**     Office of Management and Budget

  **PIR**     Post-Implementation Review

  **PMB**     Performance Measurement Baseline

  **PRA**     Paperwork Reduction Act

  **RFP**     Request for Proposals

  **ROI**     Return on Investment

  **SV**      Schedule Variance

  **SME**     Subject Matter Expert

  **DOI**     United States Department of the Interior

  **VAC**     Variance at Completion

  **VPN**     Virtual Private Network

  **WBS**     Work Breakdown Structure
  ----------- -----------------------------------------------------------

# Appendix P: References

*Assessing Risks and Returns: A Guide for Evaluating Federal Agencies'
IT Investment Decision-Making,* U.S. General Accounting Office,
Accounting and Information Management Division, February 1997.

*Capital Programming Guide,* Office of Management and Budget, July 1997.

*Circular A-11:* Preparing and Submitting Budget Estimates, Office of
Management and Budget, July 2004

*Circular A-76:* Performance of Commercial Activities, Office of
Management and Budget, May 29^th^ 2003.

*Circular A-94:* Discount Rates to be Used in Evaluating
Time-Distributed Costs and Benefits, Office of Management and Budget,
January 2002.

*Circular A-127:* Financial Management Systems, Office of Management and
Budget, 1993.

*Circular A-130:* Management of Federal Information Resources, Office of
Management and Budget, January 28, 2000.

*Citizen-Centered Governance: Customer Value Through Accountability,
Modernization, and Integration, Second Edition;* A Progress Report,
Department of the Interior, October 9, 2002.

*Clinger-Cohen Act of 1996* (formerly the Information Technology
Management Reform Act \[ITMRA\]).

*Earned Value Management Systems (EVMS) Basic Concepts,* Project
Management Institute, [Project Management Institute (PMI) Home
Page](http://www.pmi.org/info/default.asp)

*Evaluating Information Technology Investments,* Office of Management
and Budget, February 1995. http://www.whitehouse.gov/omb/index.html

*Executive Guide: Leading Practices in Capital Decision-Making,* U.S.
General Accounting Office, Accounting and Information Management
Division, December 1998.

Fleming, Quentin W., Joel M. Koppelman, *Earned Value, Project
Management,* Second Edition, Project Management Institute, Inc., 2000.

Grant, Eugene L., W. Grant Ireson, *Principles of Engineering Economy,*
Fifth Edition, The Ronald Press Company, 1970.

*Information Technology Investment Management: A Framework for Assessing
and Improving Process Maturity (Exposure Draft),* U.S. General
Accounting Office, Accounting and Information Management Division, May
2000. *http://www.gao.gov/new.items/d04394g.pdf*

*Smart Practices in Capital Planning,* The Federal CIO Council, Capital
Planning and IT Management Committee, Industry Advisory Council (IAC),
October 2000.

[^1]: ^1^ Version 1.1 of the ITIM Framework can be obtained from
    [www.gao.gov/cgi-bin/getrpt?GAO-04-394G](http://www.gao.gov/cgi-bin/getrpt?GAO-04-394G).