Department of Finance and Deregulation
P3M3™ Assessment Report
Version
1.2
Updated
Thursday, 30 September 2010
Authors: Robert Way DoFDTANNER JAMES
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Classification / Commercial In Confidence


Document Control

Confidentiality Statement
COMMERCIAL IN CONFIDENCE documents are to be kept confidential between restricted individuals within Tanner James Management Consultants and partnering organisations. In this case the Australian Government.
This document is uncontrolled if printed.
Page 1 of 38 / Version: / 1.2
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Authors: / DoFD &
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Contents

Executive Summary

1Purpose

2Scope

2.1Inclusions

2.2Exclusions

2.3Assessment Background

2.4Assessment Approach

3Current P3M3™ Ratings

3.1Maturity Summary

3.2Portfolio Management Maturity Description

3.3Programme Management Maturity Description

3.4Project Management Maturity Description

4Recommended Target P3M3™ Ratings

4.1Portfolio Management – Target Rating 2 recommendations

4.2Programme Management – Long term Target Rating 3 recommendations

4.3Project Management – Target Rating 3 recommendations

5Maturing of Specific Attributes

5.1Portfolio Management – Level 1 to Level 2

5.2Programme Management – Level 2 to Level 3

5.3Project Management – Level 2 to Level 3

Appendix A –Overview DoFD Portfolio of ICT Enabled Change

Appendix B – P3M3™ Overview

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P3M3TM Assessment Report

Executive Summary

The Department of Finance and Deregulation (DoFD) has conducted an independently validated P3M3™[1] Self-Assessment of DoFD’s ICT-enabled change portfolio and constituent programmes and projects. This is a mandatory requirement of the ICT reforms extending from the Review of the use of ICT in Government (Gershon, 2008).

The assessment was conducted during June and Julyof 2010. The assessment team comprised Robert Way of CIO Division and John Howarth,registered P3M3 consultant at TANNER JAMES. TANNER JAMES was contracted to provide specialist expertise for conducting the assessment and to promulgate legitimacy for the independent validation of the assessment process.

The following P3M3™ Ratings have been derived from that assessment by way of interviewing selected DoFD staff and reviewing documentation in terms of both centrally defined guidance for management practices and information from programmes and projects. Seventeen individuals were interviewed and many documents were considered to assess the maturity of Portfolio, Programme and Project management practices. Documentary evidence from committees and boards included meeting minutes, terms of reference, guides and management and operations manuals. Documents from individual programmes and projects were examined and the Finance ITGovernance Guide and FeSG Project Management Methodology were examined in detail.

DoFD’scurrent P3M3™ rating for ICT-enabled change management is:

  • Current Rating1 in the PortfolioManagement sub-model. DoFD Executive committees are establishing controls that will enable theICT change portfolio to bedirected and prioritised according totheir requirements. Some aspects, such as Benefits Management, Resource Management and Stakeholder Management arecurrently not defined and managed consistently;
  • Current Rating2 in the ProgrammeManagement sub-model. DoFD does not formally recognise programmes, however, it is evident small groups have some documented controls and skilled resources. Overall, there is insufficient organisational guidance for key programme concepts such as programme risk management, benefits management and future state definition and management; and
  • Current Rating2 in the ProjectManagement sub-model. DoFDICT units ensure that each project is managed according to the various Project Management Frameworks, however, business areas do not apply a common DoFD framework consistently. Overall, there is inconsistent application of organisational guidance, and the current framework lacks detail in key concepts such as project benefits management and resource management;

Finance today is a product of numerous agency amalgamations and receipt of new responsibilities which have been absorbed as a result of Government policy changes. Our operation could be described as an organised federation of service tranches. While this arrangement allows for subject matter specialisation, it lacks elements such as ‘sharing to create efficiencies’ and ‘coordinated approaches to boost the effectiveness’ of programme and project benefits. This shortfall was identified in this assessment and is reflected in the attained ratings. In order to successfully address these challenges and maintain a high standard of delivery for our existing responsibilities, we will need to do more to coordinate the resources that we have - that is, being more efficient and effective at what we do by changing the way we approach it. Coordinated management of ICT-enabled change is key in allowing us to improve our effectiveness and efficiency and continuously progress the Department to success in addressing our current and future responsibilities. Strong ICT portfolio management will ensure all ICT investments are strategically aligned and create measurable value having been consciously scrutinised on a cost-risk-benefit basis.

The assessment team recommends that DoFD:

  • set a longer term P3M3 target rating of3 for both Project Management and Programme Management;
  • Portfolio Management should be targeted for a2 or higher rating; and
  • A Capability Improvement Plan (CIP) is developed, endorsed and funded by the executive.

DoFD should target level 3 maturity in Project Management because:

  • There is a substantial investment in the Project Management Framework (FeSG PMM) that is not delivering its potential benefits. This is largely due to lower PMMusage in Business areas as opposed to ICT areas; and
  • Improvement in the FESG PMM and its use will increase the likelihood of project benefit success from the many projects run by the organization.

DoFD should target level 3 maturity in Programme Management and a 2 in Portfolio management because:

  • DoFD undertakes a small number of large and often risky initiatives; and
  • The people who are governing and managing these initiatives have to work out the processes for doing so without the benefit of a centrally defined framework that also addresses key differences between programme and project management.
  • DoFD as a lead agency and home to AGIMO and the ICT review change program, would want to act as an exemplar of better practice in this area; and,
  • ensure all ICT investments are strategically aligned and create measurable benefit .

The investment to lift the organisation’s programme management capability could be funded from the next large programme initiative DoFD undertakes.

DoFD P3M3 Sub-model Perspectives rating charts:


Portfolio Management – current rating 1
Programme Management – current rating 2
Project Management – current rating 2
P3M3scoring can be expressed by the following descriptors (see the appendix for further information):
  1. Awareness process; Organization recognizes portfolio/programme/projects but has little structured approach to conducting them
  2. Repeatable process; Some areas beginning to use standard approaches but no consistency across the organization
  3. Defined process; A consistent set of standards being used across the organization with clear process owners
  4. Managed process; The organization monitors, measures and improves its delivery processes based on evidence or performance based information
  5. Optimized process; Organization focuses on optimization of its quantitatively managed process taking into account changing business needs & external factors. Anticipates future capacity & capability requirements.
Terminology:
Benefit: the measurable improvement resulting from an outcome perceived as an advantage by one or more DoFD stakeholders.
Portfolio: the totality of DoFD’s investment (or segment thereof) in the changes required to achieve its strategic objectives.
Programme: a temporary, flexible organisation created to coordinate, direct and oversee the implementation of a set or related projects and activities in order to deliver outcomes and benefits related to DoFD’s strategic objectives.
Project: a temporary organisation that is created for the purpose of delivering one or more DoFD business outputs according to a specified business case.

1Purpose

The purpose of this assessmentreport is to:

  • Report upon an independently validatedP3M3™Self-Assessment for DoFD’s ICT-enabled initiatives covering Portfolio, Programme and Project Management maturity assessment;
  • DocumentDoFD’s current P3M3™ Ratings;
  • Document the assessment team’s recommended target P3M3™ ratings;
  • Provide visibility of the statements which would have to be judged as true regarding DoFD’s ICT-enabled change initiatives to achieve theP3M3™ Ratings recommended by the assessment team; and
  • Document the assessment team’s thoughts on specific management attributes that could be addressed in improving DoFD’s capability maturity.

2Scope

2.1Inclusions

The P3M3™ assessment covered the portfolio, programme and project activities across ICT-enabled change within DoFD. This included sampling sufficient ICT programmes and projects to create a representative sample set for the DoFD ICT change portfolio.

The DoFD P3M3 assessment scope/context diagram:

The work covered both ICT and Business run projects and programmes. In total seventeenstaff were interviewed, noting that the original plan was to interview around twenty people. The variances from the original plan included:

  • One person, engaged in the programme sub-model took unexpected personal leave;
  • One project manager was unavailable during the interview process due to early retirement; and
  • A contractor involved in a project had ceased with the organisation.

The assessment team concluded that variancesin the sample set would not compromise or materially change the assessment.

2.2Exclusions

The following aspects of DoFD program/project management have been excluded from this assessment:

  • Property & Construction Division facilities projects due to the construction specific management practices and fact they are not deemed to be specifically ICT enabled.
  • DoFD Policy implementation initiatives on the basis that their dependency upon ICT is largely routine deployment and use of existing ICT infrastructure and applications. These initiatives are not dependent upon change in ICT.

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2.3Assessment Background

This P3M3™ assessment has been triggered in response to the Government’s directive that Commonwealth Government agencies undertake P3M3™ maturity assessments and plan for improvement of their capability to realise benefits from ICT-enabled initiatives. Agency assessment reports, validation statements and capability improvement plans are to accompany all ICT related New Policy Proposals (NPPs) from December 2010.

2.4Assessment Approach

Prior to conducting interviews, the assessment team made an assessment of current documentation of managementprocesses to gain initial understand of what was and wasn’t documented as well as a view of how initiatives (portfolios, programmes and projects) should be managed. At the conclusion of interviews documentation for specific initiatives was reviewed on-line and in print form.

For this assessment DoFD’s entire scope of ICT-enabled change was treated as a single Portfolio. Interviews were conducted with individuals in the roles of Portfolio Director and Investment Committee Member (Executive Board and ITGC members).

Interviews wereconducted with individuals at the programme and project levels. These included Project board members, programme and project sponsors, project and project managers and project office director.

The assessment team spent approx 120 hours effort in;

  • The assessment of process documentation including the:
  • DoFD Project Management Methodology (FESG PMM) Manual 2008 v2;
  • DoFD Governance Guide2008Version 1;
  • intranet site, and;
  • various board and committee meeting minutes.
  • Interviewing DoFD staff to assess application of portfolio, programme and project management;
  • Reviewing evidence of management practices from the change portfolio and individual projects and programmes; and
  • Reviewing previous reports from internal audits as requested by DoFD staff, specifically:
  • Internal Audit.

Section 3 details the current P3M3™ rating attained from assessment of information gathered from interviewing seventeen individuals across DoFD and an analysis of relevant process documentation. A description is provided from OGC’s P3M3™ model for each score attained.
Section 4 details the P3M3™ model statements that are currently true and the statements that would have to be rendered true for DoFD to achieve the target P3M3™ ratings recommended by the assessment team for Portfolio, Programme and Project Management.
Section 5documents the assessment team’s thoughts on specific management attributes that could be addressed in improving DoFD’s capability maturity. These attributes underpin the “statements that would have to be rendered true” from Section 4.
Note : The Capability Improvement Plan (CIP) associated with this assessment, documents DoFD’s target P3M3™ ratings and how DoFD intends to achieve those ratings.

3Current P3M3™ Ratings

3.1Maturity Summary

Process Perspectives
Sub-model Score / Management Control / Benefits Management / Financial Management / Stakeholder Management / Risk Management / Organisational Governance / Resource Management / Generic Attributes Score
Portfolio Management / 1 / 2 / 1 / 3 / 1 / 2 / 3 / 1 / 2
Programme Management / 2 / 2 / 2 / 2 / 2 / 2 / 2 / 2 / 2
Project Management / 2 / 2 / 2 / 3 / 2 / 3 / 3 / 2 / 2
Portfolio Management Sub-model

Level 1 - DoFD Executive committees are establishing controls that will enable the ICT change portfolio to be directed and prioritised according to their requirements. Some aspects, such as Benefits Management, Resource Management and Stakeholder Management are currently not defined and managed consistently.

Programme Management sub-model

Level 2 -DoFD does not formally recognise programmes, however, it is evident small groups have some documented controls and skilled resources. Overall, there is insufficient organisational guidance for key programme concepts such as programme risk management, benefits management and future state definition and management.

Project Management sub-model

Level 2 -DoFD ICT units ensure that each project is managed according to the various Project Management Frameworks, however business areas do not apply a common DoFD framework consistently. Overall, there is inconsistent application of organisational guidance, and the current framework lacks detail in key concepts such as project benefits management and resource management.

3.2Portfolio ManagementMaturity Description

Below are the key observations made by the assessment team during the Portfolio Management assessment. Following the observations are descriptions for each P3M3™ “process perspectives” (seven of) and “generic attributes” (six of).

Key Observations

DoFD does recognise the need for,and have implemented governance arrangements to guide and oversee investment decisions. While portfolio management discipline exists within the agency, this is not part of a comprehensive and consistent organisation-wide approach to the management of all ICT change initiatives (projects and programmes) as a prioritised and integrated set of IT investments that drive the realisation of planned and documented benefits.While DoFD focuses on financial management, risk management and process within portfolio management, it is not balanced equally focussing on benefits and portfolio coordination of ICT investments and change. We could be stronger in promotingunderstanding of the differences in running the business (‘business as usual’ ) to changing the business (programme and change management) ie investment management.This would encompass developing a more top-down approach to controlling ICT programs and projects.

DoFD is missing the benefit of having strong ICT portfolio management that will ensure all ICT investments are strategically aligned and create measurable value through having been consciously scrutinised by the portfolio executive in light of;total cost vs risk vs benefit.

Management Control (Level 2)

There are some pockets of portfolio discipline within individual departments, but this is based on key individuals rather than as part of a comprehensive and consistent organization-wide approach.

Benefits Management (Level 1)

There is a recognition that initiatives may exist within the organizational and divisional portfolio to enable the achievement of benefits for the organization. However, this does not translate into a defined benefits realization process.

Financial Management (Level 3)

There are established standards for the investment management process and the preparation of business cases. Portfolio investment costs are monitored and controlled.

Stakeholder Management (Level 1)

Stakeholder management and communication is rarely used by portfolios as an element of the delivery toolkit.

Risk Management (Level 2)

There is generally a top-down approach to risk identification, focusing on major organisational initiatives, but some initiatives are increasingly carrying out bottom-up risk identification. However, these approaches are inconsistent, not particularly interrelated and often do not address the actual management of risks.

Organisational Governance (Level 3)

Centrally defined organisational controls are applied consistently to the portfolio(s), with decision-making structures in place and linked to organisational governance.

Resource Management (Level 1)

Portfolio resource requirements are recognized but not systematically managed.

Resource allocation is ad hoc, with little, if any, profiling of resources to meet the resource requirements of specific initiatives.

Generic Attributes Score Level 2:

Roles & Responsibilities. Level 2 is defined as:roles, responsibilities and competencies defined in some areas but not consistently across the organisation.

Experience in Portfolio Management. Level 2 is defined as:key individuals may have practical delivery experience and track record.

Capability development. Level 3 is defined as:training is focused on the organisation’s approaches and raising competence of individuals in specific roles. Forums exist for sharing organisational experience to improve individual and organisational performance.

Planning & estimating processes. Level 2is defined asPlanning seen as activity tracking rather than proactive/forecasting. Estimation is more “guesstimation” and doesnot use standard techniques

Information & documentation. Level 3 is defined as:Information has a refresh cycle or is regularly accessed.Formal information release management procedures Organization-wide information standards onconfidentiality, availability and integrity.

Scrutiny & review. Level 3 is defined as:independent reviews take place. Scrutiny largely for compliance reasons, identifying failures rather than opportunities for improvement.