All across Europe government spending on information technology is being scrutinized. For example the Dutch Government Accounting Office ’s suggested the introduction of a law comparable to the American Clinger-Cohen Act. The Clinger-Cohen Act has been in force in the United States for about 11 years. So now is a good time to take the US experiences and review them against our European (political and administrative) context and culture.
Achievements under Clinger-Cohen
According t the annual Chief Information Officer (CIO) survey by the Information Technology Association of America (ITAA) among current and former US Federal Government CIO’s, Clinger-Cohen has:
· Shifted the focus of government IT from acquisition to management
· Led to a common management framework for all government IT
· Improved investment planning
· Provided the necessary foundation for better project management
· Improved the alignment of IT with the agency’s mission
· Given CIO’s a seat at the boardroom table
The central theme of Clinger-Cohen is the business-based implementation of IT. It’s remarkable that, in contrast with earlier regulations or with a regulation like Sarbanes-Oxley, that not a certain level of compliance was made mandatory. Instead realizing an annual, demonstrable improvement was the ‘only’ obligation. In other words, the journey was seen as more important than the destination.
At first, many IT organizations (sometimes jokingly referred to as Cylinders of Excellence) took a ‘wait and see’ approach to Clinger-Cohen, and the first years showed little progress. Real improvement started when additional regulation set out both the what and how of such a “business-based approach to IT”. With as main characteristics a portfolio management approach (see sidebar) and mandatory public reporting using standards such as Earned Value Management (EVM) to objectively measure project progress.
A recent report by the Netherlands Government Accounting Office observes that government IT projects often become too ambitious and complex due to a combination of political, organizational and technological factors. In the initial phases of government IT projects the different players (minister, House of Representatives and suppliers) typically accelerate rather than slow down the spiral towards too large, too complex projects. Resulting in a higher risk of failure and a generally bad track record of government IT projects.
The portfolio approach set out by Clinger-Cohen forces government agencies to explicitly state risks, costs and possible yields in relation to core government tasks. The basis for such a dialogue preferably is a continuous improvement plan for government IT spending. In past years, many of the points set out by Clinger-Cohen have been tried or even implemented in some form in Europe, but not under the umbrella of one single program supported and enforced by countries highest authorities.
SIDEBAR: Clinger-Cohen Act
The Clinger-Cohen Act was passed by US Congress in 1996 and gave the American Office of Management and Budget (OMB) final responsibility for improving the acquisition and use of IT within the federal government. The law centers on a more business-driven approach to IT. Therefore the OMB mandates that all federal government IT budget holders use a portfolio approach (see sidebar) as the standard process for analyzing, tracking and evaluating the risks and results of all IT investments.
SIDEBAR: A Portfolio Management approach
IT Portfolio Management offers an approach for IT investment decisions that’s similar to the approach commonly used for investment decisions in financial markets. IT Portfolio Management started out as Project Portfolio Management (PPM), focused on control of (IT) development projects. When the number of parallel projects increases and multiple branches, departments and divisions or even countries have to work together, one central source of truth regarding the availability of resources and about project progress becomes essential. Today, IT Portfolio Management is increasingly deployed to substantiate and monitor all IT investments, including recurring costs for maintenance, support, and service. A report European government report gives a striking description of the impact: “IT administrators suddenly turn into asset investment managers.