April 25, 1997
M-97-12
MEMORANDUM FOR HEADS
OF SELECTED AGENCIES
| FROM: |
Franklin
D. Raines
Director |
| |
|
| SUBJECT: |
Evaluation
of Agency Implementation of Capital Planning and Investment
Control Processes |
As the first-year
anniversary of the Information Technology Management Reform Act
(ITMRA) of 1996, P.L. 104-106 approaches, OMB would like to evaluate
your agency's implementation of the act. Specifically, OMB would
like to ascertain the status of agencies' capital planning processes.
In addition, OMB would like to verify the status of compliance
with OMB Memorandum 96-20, Implementation of the Information
Technology Management Reform Act of 1996, regarding the duties,
qualifications, and placement of the chief information officer
(CIO). This memorandum requests that you provide to OMB by May 1,
1997, information to assist us in this evaluation. Subsequent
to providing these written materials, each agency may be invited
to meet with OMB to discuss the agency's ITMRA implementation
status.
Background
ITMRA directs the
head of each executive agency to design and implement processes
for ensuring effective and efficient management and acquisition
of information technology (IT), and makes the CIO responsible
for providing assistance to the agency head in implementing these
IT management and acquisition practices, focusing on:
- selecting, managing
and evaluating investments in IT
- linking the
selection of IT investments to the budget, financial and program
management processes of the agency; and
- identifying
and cooperating in cross-governmental IT investments.
A review of best
practices in the private sector and Federal government demonstrates
that these processes are critical elements of an agency's success
in using IT. These planning and performance based management processes
are consistent with the ITMRA, OMB Circular A-11 guidance, and
OMB's forthcoming Capital Programming Guide. This guide has been
developed with input from many agency staffs and will be available
soon for agency use.
Meeting with
OMB
After materials are
received, OMB may schedule a meeting with the chief operating
officer and CIO of your agency to discuss your agency's implementation
of ITMRA, to identify improvements for the coming year, and where
appropriate, discuss preliminary agency plans for the FY 1999
budget request. In addition, each agency should be able to discuss
its strategy with regard to the transition to year 2000. You should
also be able to discuss how the IT investments listed in Table
IV-3, Program Performance Benefits from Major Information
Technology Investments (pp.45-46, The President's Budget,
FY 1998) comply with each of the eight investment criteria contained
in OMB Memorandum 97-02, Funding Information Systems Investments(October
25, 1996).
Written Materials
Requested
In responding to this
request, the creation of new materials should be minimized --
existing materials should be referenced and attached to the submission
whenever possible. If materials are not readily available, the
agency should provide a timetable indicating when the materials
will be provided. In instances where an agency has several investment
review processes underway -- at the department-wide level as well
as at the subcomponent (or bureau level), please provide information
on the integration of the review processes, discussing how the multi-level
capital planning processes will interact. For the purposes of this
memorandum, military departments should coordinate their submissions
through the Department of Defense CIO.
By May 1, 1997, each
agency listed in the Attachment needs to describe its activities
in the following areas:
1. The agency organization(s)
and process(es) involved in selecting information technology investments.
Such a description may include:
a) a listing of your
agency's IT Investment Review Board's membership and a copy of its
charter; and
b) the process by which
the IT Investment Review Board makes its decisions for selecting
investments. (For example, describe how that decision process is
linked to the finance and budget process, how the Board factors
programmatic priorities into investment selection decision making,
or how each investment helps the agency achieve its strategic goals).
2. The agency organization(s)
and process(es) involved in assuring the success of an IT investment.
Such a description may include:
a) your process for
tracking milestones in IT investments and selected tracking
examples. For example, describe your agency's use of earned-value
process or other processes that ask, "Do incremental
deliverables arrive on schedule within the anticipated budget
and work as expected?"
b) your process to
ensure that IT investments are compliant with the agency's IT architecture
as well as the other investment criteria described in OMB Memorandum
97-02; and,
c) your evaluation
criteria for deciding whether to continue, modify, or terminate
an investment, which should include how senior management will be
able to determine, in a timely manner, that IT investments are meeting
their anticipated milestones and that developing risks are being
adequately addressed.
3. The process used
to quantitatively asses the costs, benefits, and risks associated
with a particular investment, and the process of reporting these
scores to the agency officials responsible for making the investment
decisions. Such a description may include:
a) a method for doing
Return-On-Investment (ROI) calculations, such as an economic analysis
that provides net present value dollar estimates of costs and savings
for the status quo versus alternative(s); and,
b) a method for conducting
IT prototype evaluations -- with the focus on validating projected
benefits.
4. The way the agency
obtains other Federal agency, State, and local government input
in IT investments when there are shared issues being addressed.
Provide an updated
version of the materials requested under OMB. Specifically provide:
1. An organizational
chart which identifies the CIO by name, the CIO's position relative
to the head of the agency and other senior agency officials, and
the agency staff assigned (or to be assigned) to the CIO for the
performance of functions described by the PRA and ITMRA.
2. A description of
the CIO's authority, responsibilities, and qualifications.
Additional Information:
Inquiries may be directed
to Jasmeet Seehra, (202) 395-3123, or Lew Oleinick (202) 395-4638.
Please mail all materials to the Information Policy and Technology
Branch, Room 10236, NEOB, Washington, DC, 20503.
Attachment
Department of State
Department of Treasury
Department of Defense
Department of Justice
Department of the Interior
Department of Agriculture
Department of Commerce
Department of Labor
Department of Health and Human Services
Department of Housing and Urban Development
Department of Transportation
Department of Energy
Department of Education
Department of Veterans Affairs
Environmental Protection Agency
Federal Emergency Management Agency
Central Intelligence Agency
Small Business Administration
Social Security Administration
Department of the Army
Department of the Navy
Department of the Air Force
National Aeronautics and Space Administration
Agency for International Development
General Services Administration
National Science Foundation
Nuclear Regulatory Commission
Office of Personnel Management