GAO issues new guidance on info tech investments

Federal information technology managers have a new tool to aid them in making IT investment decisions, thanks to recently released in-depth guidance from the General Accounting Office.

GAO's guidance, called "Information Technology Investment Management: A Framework for Assessing and Improving Process Maturity" (AIMD-10.1.23), has been in development for nearly two years, and aims to clarify and improve upon guidance that currently exists regarding IT investments in order to cut the risk of costly mistakes.

"As we have described in numerous reports and testimonies, federal IT projects too frequently incur cost overruns and schedule slippages while contributing little to mission-related outcomes," GAO said.

Congress passed the Clinger-Cohen Act in 1996 as a means of keeping tabs on federal IT investments. Under the act, agencies must present business plans for large-scale IT purchases. The Office of Management and Budget and GAO followed up with a three-step process for managing IT investments that covers selection, monitoring and evaluation of IT projects. But reviews of agencies' IT investment management processes show that agencies haven't yet nailed down all three steps.

The three-step process "provides sound advice, but does not provide a comprehensive discussion of the organizational processes involved," GAO said. What's lacking is specific guidance on what should be in place before the investment process takes shape, and what needs to be done to achieve continuous improvement, the report said.

The new Information Technology Investment Management (ITIM) guidance is intended to extend the three-step investment oversight process and create a framework that defines the underlying processes needed for each step to be effective. It breaks the three general steps down into 15 critical processes, which are further defined by key practices.

"This shift reflects both the maturation of the thinking in the area of IT investment management and the feedback we received from organizations based upon their experiences creating their IT investment mechanisms and processes," the report said.

According to Lester Diamond, assistant director of GAO's Accounting and Information Management Division, GAO has been using the ITIM guidance in its evaluations for about a month. "We're much more explicit about what our expectations are," in the new approach, he said. "We're not going in and applying ad hoc standards when we use this."

Agencies should view ITIM as a road map for progress, Diamond said. "Once they apply the framework and they see where they stand within it they have a very good idea of what they need to do to improve."

The five stages of the ITIM process are:

• Creating investment awareness.
  The initial investment selection step, when, GAO says, the selection process is "frequently rudimentary, poorly documented, and at times inconsistent."
• Building the investment foundation.
  The focus in this stage is on attaining repeatable and successful investment control and selection processes for on-schedule and on-budget projects.
• Developing a complete investment portfolio.
  This step involves taking a proactive look at future IT needs and establishing priorities in support of agency missions.
• Improving the investment process.
  At this stage, the agency evaluates and reviews its IT investment processes and portfolio.
• Leveraging IT for strategic outcomes.
  In this step, agencies look beyond their internal processes to learn from other organizations and shape future improvements.

An online version of the guide is available at on GAO's Web site (in PDF format) at http://www.gao.gov/special.pubs/10_1_23.pdf.