Portfolio Management as a Strategic Tool in Achieving a Digital Government

In December 2010, CIO.gov published an document titled, 25 Point Implementation Plan to Reform Federal Information Technology Management. The article stated that, agency CIOs and the Federal CIO Council spend a majority of their efforts on policymak­ing and maintaining the IT infrastructure. It also stated that as the government moves forward with the IT reforms, the CIO focus must shift toward portfolio management, the implementation of  Investment Review Boards, and a move away from low-value activities.  In addition, CIOs will be responsible for managing the portfolio IT projects within their agencies. This portfolio management role will include continuously identifying unmet needs to be addressed by new projects, terminating or turning around poorly performing projects, and retiring IT investments which no longer meet the needs of the organization.

The Implementation Plan also stated that agencies will turnaround or terminate at least one-third of poorly performing projects in their portfolio June 2012. The Federal CIO Council will play a similar portfolio management role, but at a cross-agency level, and will include periodic reviews which will enable CIOs to share best practices and common sources of failure to improve success rates over time.

In May 2012, the Whitehouse issued a report titled, Digital Government: Building a 21st Century Platform to Better Serve the American People. The report outlines the Whitehouse’s Digital Government Strategy, which sets out to accomplish three primary things:

• Enable the increasingly mobile workforce to access high-quality digital government information and services anywhere, anytime, on any device by creating a system architecture that facilitates interoperability and openness, modernizes content publication, and delivers better, device-agnostic digital services at a lower cost.
• Ensure that as the government adjusts to this new digital world, by seizing the opportunity to procure and manage devices, applications, and data in smart, secure and affordable ways by breaking free from the inefficient, costly, and fragmented practices, building a sound governance structure for digital services, and implementing mobile technology capabilities correctly from the beginning.
• Unlock the power of government data to spur innovation by enabling the public, entrepreneurs, and government programs to better lever­age federal data for applications and services by ensuring that data is open and machine-readable by default.

While the above documents are typical of those released during the past several years, they have highlighted many goals, objectives, and benefits to be derived from e-government initiatives including:

• Improved services to citizens and businesses
• Improved productivity and efficiency within government agencies
• Clear priorities within federal and economic sectors
• Improved communication and increased public participation in governmental activities

The move toward  a more digital friendly government, at both the federal and local levels, find agencies facing ever-increasing internal and external challenges regarding scarcity of resources, narrowing windows of technology obsolescence, and constantly changing environments. In addition new projects are continually being added, changed, and removed in response to political pressure and on-going demands from constituents and industry. This demand for better and faster access to information and technology, necessitates the implementation of projects that  require data, skills, funding, and other resources that frequently exceed an agency’s ability to provide. This mandates that project priorities be continuously reviewed, evaluated, managed, and changed. In other words, effective project and portfolio management.

An effective e-government/digital strategy includes establishing a portfolio management process that aligns government and agency objectives, builds agency consensus, clarifies ranks and prioritizes financial, human, and material resource investments.

While all agencies, especially smaller, less visible ones, may struggle to find resources, technical skills, and funding to implement all of their desired e-government initiatives, it is important to remember that any initiative must deliver value to its stakeholders. In any governmental environment value is generally measured across four dimensions:

• Value to “investors”: Financial return on investment to government
• Value to users: Creating value through improved services or reduced cost to constituents
• Value to agency employees: Creating improved skills and tools that enable public sector employees to create value to investors and users
• Value of infrastructure: Creating infrastructure solutions that enable value creation to investors or users in the e-government and private sector projects.

A primary objective of Project Portfolio Management (PPM) is to minimize risks while maximizing the benefits received from project-related investments. Smart executives will adopt portfolio management processes that help qualify and quantify e-government projects and clearly demonstrate project alignment with strategic goals and objectives. Given the high priority of e-government projects and shrinking availability of resources, experience has demonstrated that without a formal PPM methodology and toolset to help determine which projects to fund, project prioritization, resource allocation and commitment will most likely continue to be based on those stakeholders with the perceived political clout. It is important that organizations should establish an environment where:

• Executives and agencies work together
• Resources are shared and fully utilized
• Effective communication occurs between executives, portfolio managers, and project managers
• All organizations are working on the right e-government projects
• Bureaucracy is minimized and integrated processes are maximized to streamline project execution

Unfortunately, whether the project portfolio is an e-commerce, e-business, or an e-government portfolio, reasons for project failure seem to be the same:

• Unclear sponsorship and ineffective leadership from executives and portfolio managers
• Poor communication and interaction with stakeholders
• Lack of project management and risk management skills
• Evaluation of projects based on short term return-on-investment and election cycles, rather than long-term value
• Trying to do too much, too quickly instead of implementing the portfolio via manageable steps
• Inadequately applying technical and managerial resources and skills to right projects
• Failure to apply lessons learned  from successful (and less successful) portfolio implementations

So how does an agency overcome these challenges? While not necessarily easy, there are several factors that can positively influence the implementation of an effective project portfolio management process. Some of the obvious ones include:

• Political sponsorship and desire: Political leaders must not only support e-government initiatives with words, but through their actions. Leaders need to publicly take “ownership” of initiatives, but need to demonstrate their commitment on a sustained basis
• Information policy: Willingness to share information across government and agency boundaries and with the public at large is critical for maintaining a functional portfolio management process. Stakeholders might not always like what they hear, but they still need to hear it
• Infrastructure: Investment in information and communication technology infrastructure may be needed.
• Human capital: Sufficient numbers of skilled, literate human resources (including managers) are crucial the success. It’s ensuring that the right people, with the right skills, are working on the right projects
• Existing and expected budgetary resources: Availability and control of financial resources. This will require establishing an environment and discipline that communicates and reinforces the concepts that not all projects can, nor should, be funded.
• General e-government climate: Amount of trust and willingness to cooperate on the part of stakeholders, specifically with respect to information and data security, is a key element.

E-government and digital-oriented projects and portfolios are quite diverse in terms of scope, resource requirements, replication in other agencies, as well as the roles of national, state,  and local governments in the execution of these projects. Successful project implementation requires shared goals and objectives, a common vision, and a sense of solidarity among key stakeholder and agencies. Organizations that apply rules of governance and a portfolio management discipline are more likely to  achieve a greater return on their investment and faster, more effective implementation. Finding the optimal combination of technology, project balance, and practical portfolio management application for e-government implementation can be difficult, but the rewards will be worth it.