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FEDERAL
SECTOR
REPORT
September
2005
IN THIS ISSUE
Smarter
Business Case Reviews
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the Month
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(c) 2005 by the
P2C2 Group, Inc.
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SMARTER BUSINESS CASE REVIEWS
What
Are Business Case Reviews?
Most Federal
agencies conduct independent reviews of their Exhibit
300
business cases, which they submit to the Office of Management
and Budget as justification for capital investments. In government
circles, the review process is known as business case reviews (BCRs),
scoring, and Independent Verification and Validation (IV&V):
BCRs
can range from informal reviews to highly structured methods that also
encompass scoring and IV&V. The reviews are typically
performed by a contractor or representatives in the agency Office of
the Chief Information Officer.
Scoring
evaluates how well a business case is likely to score, using OMB's 10
criteria, which are described in one of
our previous newsletters. No one can predict exactly the final OMB
score, but this is a valuable diagnostic tool for highlighting specific
areas where a business case needs improvement.
IV&V
is a fully structured BCR that seeks to follow a defined, repeatable
methodology. It is well documented with written procedures, standards,
and methods for validating the business case. It may encompass both the
content of the business case and the methodology by which it was
prepared. For example, did an Integrated Project Team (IPT) really
participate in developing the Exhibit 300? Have costs been
validated?
For
contractors reading this newsletter, BCRs are similar to proposal Red
Teams, where independent reviewers attempt to identify weaknesses,
areas of noncompliance, financial issues, and failure to score well on
evaluation criteria. The philosophy is to catch and correct problems
yourself … so that you are ultimately successful.
BCRs are
invaluable at several points in the Exhibit 300 business case process:
- Evaluation of last
year's business cases. This is performed during winter or
spring before developing the current business cases. It is sometimes
termed a Gap Analysis, and it is particularly useful on an agency-wide
basis. When applied to the entire portfolio, it can often identify
patterns of weakness that can be corrected on an agency-wide basis
through improvement of business processes and policies, training,
consulting, and guidance.
- Early Draft Review.
Assessment of the early draft of the Exhibit 300 is useful for helping
the business case developers to prioritize and focus their efforts on
areas that will answer critical questions and optimize score
results. This generally should occur in May after OMB has issued
any draft updates to Circular
A-11.
- Final Review. The
final
review is conducted in late July or early August to identify any
errors, the need for final fixes, and verification that the business
case is ready to go to OMB.
- Passback Assessment.
This review takes place when the Exhibit 300 comes back with comments
from OMB, giving one last chance to address issues raised. This review
should occur in early December.
A caveat is
that BCRs are valuable only if the diagnostic information is actually
used by the preparers of the business case. Managers who ignore the
feedback do so at their own peril.
How
Does the P2C2 Group Conduct BCRs?
The P2C2
Group has a structured process for reviewing and scoring business
cases, and our methodology has been developed to assure consistency in
business case assessments. We use detailed evaluation formats to
evaluate each segment of the Exhibit 300 and also the 10 evaluation
criteria, which in some cases span multiple sections of the Exhibit
300. We produce a structured report with:
- Estimated OMB scores
- Point-by-point
recommendations for strengthening each business case.
OMB is
generally clear about how it scores the Exhibit 300. Our methodology
seeks to replicate OMB's approach, which usually includes reviews by
senior CPIC specialists from multiple Federal agencies.
The P2C2
methodology is similar: Our reviewers are senior consultants who have
current experience in Capital Planning and Investment Control (CPIC) at
multiple Federal agencies. Their broad, multi-agency experience is
invaluable, and they can provide perspectives that are sometimes missed
by narrower internal reviews. While reviewers do not share information
between agencies, our team has direct access to multiple
problem-solving techniques that can be applied to individual Exhibit
300s.
The P2C2
methodology also uses input from agency specialists, because each
agency has unique issues in addressing topics like enterprise
architecture, acquisition, information security, and Earned Value
Management Systems (EVMS). Whenever possible, this is accomplished
through early meetings with subject matter specialists within the
agency. The result is a customized review process tailored to the
agency.
At least two
reviewers are involved in preparing each report--the individual
reviewer and a manager who is responsible for monitoring the
consistency of the methodology and alignment with any issues that are
unique to the agency. Very large or unusual projects may require
additional reviewers.
P2C2 Group
review teams are separate from our business case development teams, and
a firewall is established between the two teams. In many cases, the
P2C2 Group is also tasked with developing business cases, and it is
crucial to protect the independence of the reviewers. Our company
assigns a separate manager who has autonomy over the BCR process.
Do
Reviews Benefit Business Case Developers?
I personally
work primarily on the development side, usually developing totally new
or greatly modified programs and business cases to support strategic
initiatives. As such, I am also a customer of BCRs.
I welcome the
independent reviews, though I have been known to utter an "ouch"
occasionally. Developing business cases without ongoing reviews would
be like piloting an airliner without radar. It is normal for a good
developer to become so immersed in the details of the business case
that a crucial point is missed. When on deadline for developing
business cases, the preparer is also faced with the temptation of
taking shortcuts, a temptation that is minimized by the knowledge that
an independent audit will catch any weak responses.
Then there is
the matter of clear communication. Text that may be obvious to a PM or
project writer may be murky as mud to OMB reviewers. The independent
reviewers challenge the development team to communicate clearly for
outsiders. The ultimate audience, after all, is outside the agency and
may know nothing about your nifty rocket-science technology.
How
Else Can Reviewers Help?
The P2C2
Group's reviewers are excellent coaches and trainers. A smart idea is
to involve them in conducting training for your project teams before
the business cases are developed. Early coaching can help with
preparatory activities that should be underway for business cases:
requirements planning, market research, alternatives analysis, project
plans, security processes, and operational analysis reviews. In
addition to benefiting projects, training sessions and coaching will
also give reviewers an opportunity to meet the project managers and to
understand the agency's projects.
After the
review process begins, our reviewers can provide face-to-face briefings
and discussions about how to improve the business cases. This is a
valuable follow up to the written reports and scoring.
The BCR
process also gives agencies a tool for monitoring business case
progress. It provides an early warning system for Exhibit 300s that may
be in trouble. Based on monitoring, the agency can provide technical
support and corrective action.
How
should the Review Process Be Managed?
BCR functions
should be integrated into an ongoing business process of portfolio
management, governance, and Information Technology Investment
Management (ITIM). It is an internal control that must be a coherent
part of enterprise IT management. As we have
previously stated, ITIM including CPIC processes, should be a
year-round activity.
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Governance
Architecture
Portfolio
Management
Investment Control
Acquisition
Performance
Project
Management
Risk Management
Security
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Everyone in
the Federal Sector has been hearing a lot about Personal Identity
Verification (PIV), a hot topic because of Homeland Security
Presidential Directive 12. An excellent place to keep track of this
initiative is at the National Institute of Standards and Technology.
The PIV project is at http://www.csrc.nist.gov/piv-project/,
and
it includes postings of latest developments as well as links to
additional documents.
The basic
requirements are encompassed in Federal Information Processing Standard
(FIPS) 201, entitled Personal Identity Verification of Federal
Employees and Contractors. FIPS 201 was developed to satisfy the
requirements of HSPD 12,
approved by the Secretary of Commerce, and issued on February 25, 2005.
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The P2C2
Group, Inc. is widely accessible through world-class prime contractors,
GSA schedules and other multiple-award contracts, and 8(a) firms. Call
Jim Kendrick at 301-942-7985 to discuss vehicles appropriate to your
agency.
We provide
services only on a subcontract basis. This enables us to work ethically
and non-competitively through a wide range of outstanding companies who
already have established contract vehicles.
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Work hit like
a tidal wave during the summer of 2005, and I did 80-hour weeks nonstop
for three months. It was the first time in 10 years that I have not had
time to write the newsletter, but I was pleased with the work results
for customers.
The entire
P2C2 Group's team worked darned hard this summer. They responded to
demanding deadlines, situations, and deliverables. I'm truly grateful
for their intelligent performance and quality work. All members of the
P2C2 team are independent consultants with strong past performance
histories, and that approach is producing extraordinary results.
With the
upcoming shift in fiscal years, I took time for a Labor Day weekend in
Manhattan and combined it with the P2C2 annual strategic planning
session. In late September, I will combine a quick business trip to San
Diego with a fun weekend there, visiting the Zoo and Balboa Park. In
early October, there will be a few days in Miami with my
twenty-something kids. Work hard and play hard sounds like a good life.
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