Advances in the use of IT and the Internet are continuing to change the way that federal agencies communicate, use, and disseminate information; deliver services; and conduct business. For example, electronic government (e-government) has the potential to help build better relationships between government and the public by facilitating timely and efficient interaction with citizens. To help agencies more effectively manage IT, the Congress has established a statutory framework of requirements and roles and responsibilities relating to information and technology management. In particular, the Paperwork Reduction Act of 1995 and the Clinger-Cohen Act of 1996 require agency heads, acting through agency CIOs to, among other things, better link their IT planning and investment decisions to program missions develop and maintain a strategic information resources management (IRM) plan that describes how IRM activities help to accomplish agency missions; develop and maintain an ongoing process to establish goals for improving IRM’s contribution to program productivity, efficiency, and effectiveness; methods for measuring progress toward these goals; and clear roles and responsibilities for achieving these goals; develop and implement a sound IT architecture; implement and enforce IT management policies, procedures, standards, and guidelines; establish policies and procedures for ensuring that IT systems provide reliable, consistent, and timely financial or program performance data; and implement and enforce applicable policies, procedures, standards, and guidelines on privacy, security, disclosure, and information sharing. Nevertheless, the agencies face significant challenges in effectively planning for and managing their IT. Such challenges can be overcome through the use of a systematic and robust management approach that addresses critical elements such as IT strategic planning and investment management. Federal agencies did not always have in place important practices associated with IT laws, policies, and guidance related to strategic planning/performance measurement and investment management (see fig. 1). A well-defined strategic planning process helps to ensure that an agency’s IT goals are aligned with its strategic goals. Moreover, establishing performance measures and monitoring actual-versus- expected performance using those measures can help to determine whether IT is making a difference in improving performance. Finally, an IT investment management process is an integrated approach to managing investments that provides for the continuous identification, selection, control, life-cycle management, and evaluation of IT investments. Agency IT officials could not always identify why practices were not in place, but in those instances in which reasons were identified, a variety of explanations were provided; for example, that the CIO position had been vacant, that not including a requirement in the agency’s guidance was an oversight, or that the process was being revised. Nevertheless, these practices are based on law, executive orders, Office of Management and Budget (OMB) policies, and our guidance, and are also important ingredients in ensuring effective strategic planning, performance measurement, and investment management that, in turn, make it more likely that the billions of dollars in government IT investments will be wisely spent. Critical aspects of the strategic planning/performance measurement area include documenting the agency’s IT strategic planning processes, developing IRM plans, establishing goals, and measuring performance to evaluate whether goals are being met. Although the agencies often had these practices, or elements of these practices, in place, additional work remains, as demonstrated by the following examples: Strategic planning process. Strategic planning defines what an organization seeks to accomplish and identifies the strategies it will use to achieve desired results. A defined strategic planning process allows an agency to clearly articulate its strategic direction and to establish linkages among planning elements such as goals, objectives, and strategies. About half of the agencies had fully documented their strategic planning processes. Such processes are an essential foundation for ensuring that IT resources are effectively managed. Strategic IRM plans. The Paperwork Reduction Act requires that agencies indicate in strategic IRM plans how they are applying information resources to improve the productivity, efficiency, and effectiveness of government programs. An important element of a strategic plan is that it presents an integrated system of high-level decisions that are reached through a formal, visible process. The Paperwork Reduction Act also requires agencies to develop IRM plans in accordance with OMB’s guidance. However, OMB does not provide cohesive guidance on the specific contents of IRM plans. Accordingly, although agencies generally provided OMB with a variety of planning documents to meet its requirement that they submit an IRM plan, these plans were generally limited to IT strategic or e-government issues and did not address other elements of IRM, as defined by the Paperwork Reduction Act. In particular, these plans generally include individual IT projects and initiatives, security, and enterprise architecture elements but do not often address other information functions—such as information collection, records management, and privacy—or the coordinated management of all information functions. OMB IT staff agreed that the agency has not set forth guidance on the contents of agency IRM plans in a single place, stating that its focus has been on looking at agencies’ cumulative results and not on planning documents. These staff also noted that agencies account for their IRM activities through multiple documents (e.g., Information Collection Budgets and Government Paperwork Elimination Act plans). Nevertheless, half the agencies indicated a need for OMB to provide additional guidance on the development and content of IRM plans. Accordingly, we recommended that OMB develop and disseminate to agencies guidance on developing IRM plans. IT goals. The Paperwork Reduction Act and the Clinger-Cohen Act require agencies to establish goals that address how IT contributes to program productivity, efficiency, effectiveness, and service delivery to the public. We have previously reported that leading organizations define specific goals, objectives, and measures, use a diversity of measure types, and describe how IT outputs and outcomes impact operational customer and agency program delivery requirements. The agencies generally had the types of goals outlined in the Paperwork Reduction Act and the Clinger- Cohen Act. However, five agencies did not have one or more of the goals required by the Paperwork Reduction Act and the Clinger-Cohen Act. It is important that agencies specify clear goals and objectives to set the focus and direction for IT performance. IT performance measures. The Paperwork Reduction Act, the Clinger- Cohen Act, and an executive order require agencies to establish a variety of IT performance measures—such as those related to how IT contributes to program productivity, efficiency, and effectiveness—and to monitor the actual-versus-expected performance using those measures. Although the agencies largely had one or more of the required performance measures in place, these measures were not always linked to the agencies’ enterprisewide IT goals. Moreover, few agencies monitored actual-versus- expected performance for all of their enterprisewide IT goals. Specifically, although some agencies tracked actual-versus-expected outcomes for the IT performance measures in their performance plans or accountability reports and/or for specific IT projects, they generally did not track the performance measures that were specified in their IRM plans. As we have previously reported, an effective IT performance management system offers a variety of benefits, including serving as an early warning indicator of problems and the effectiveness of corrective actions; providing input to resource allocation and planning; and providing periodic feedback to employees, customers, stakeholders, and the general public about the quality, quantity, cost, and timeliness of products and services. Moreover, without enterprisewide performance measures that are tracked against actual results, agencies lack critical information about whether their overall IT activities are achieving expected goals. Benchmarking. The Clinger-Cohen Act requires agencies to quantitatively benchmark agency process performance against public- and private-sector organizations, where comparable processes and organizations exist. Benchmarking is used because there may be external organizations that have more innovative or more efficient processes than their own processes. Seven agencies in our review had mechanisms in place—such as policies and strategies—related to benchmarking their IT processes. In general, however, agencies’ benchmarking decisions were ad hoc. Few agencies had developed a mechanism to identify comparable external private- or public-sector organizations and processes and/or had policies related to benchmarking, although all but 10 of the agencies provided examples of benchmarking that they had performed. Our previous study of IT performance measurement at leading organizations found that they had spent considerable time and effort comparing their performance information with that of other organizations. Agency IT officials could not identify why strategic planning/performance measurement practices were not in place in all cases, but in those instances in which reasons were identified, a variety of explanations were provided. For example, reasons cited by agency IT officials included that they lacked the support from agency leadership, that the agency had not been developing IRM plans until recently and recognized that the plan needed further refinement, that the process was being revised, and that requirements were evolving. Without strong strategic management practices, it is less likely that IT is being used to maximize improvement in mission performance. Moreover, without enterprisewide performance measures that are being tracked against actual results, agencies lack critical information about whether their overall IT activities, at a governmentwide cost of billions of dollars annually, are achieving expected goals. Critical aspects of IT investment management include developing well- supported proposals, establishing investment management boards, and selecting and controlling IT investments. The agencies’ use of practices associated with these aspects of investment management was wide- ranging, as follows: IT investment proposals. Various legislative requirements, an executive order, and OMB policies provide minimum standards that govern agencies’ consideration of IT investments. In addition, we have issued guidance to agencies for selecting, controlling, and evaluating IT investments. Such processes help ensure, for example, that investments are cost-beneficial and meet mission needs and that the most appropriate development or acquisition approach is chosen. The agencies in our review had mixed results when evaluated against these various criteria. For example, the agencies almost always required that proposed investments demonstrate that they support the agency’s business needs, are cost-beneficial, address security issues, and consider alternatives.