U.S. Department of Housing and Urban Development of the Department of Housing and Urban Development's (HUD) Information Technology Investment Management (ITIM) Process. It provides

U.S. Department of Housing andUrban Development

Information Technology (IT)Investment Management Process

September 2001

September 2001 i

TABLE OF CONTENTS

PREFACE ................................................................................................................................................ 1-1

1 INTRODUCTION ......................................................................................................................... 1-1

1.1 ITIM GOVERNANCE: FEDERAL AND DEPARTMENTAL MANDATES AND GUIDANCE................................... 1-11.2 ITIM PROCESS: GENERAL STATUS AND OUTLOOK ........................................................................... 1-21.3 ITIM PROCESS: SELECT – CONTROL – EVALUATE AT HUD............................................................... 1-31.4 OVERVIEW OF ITIM ROLES AND RESPONSIBILITIES............................................................................ 1-51.5 HUD CAPITAL PLANNING AND BUDGET CYCLE ACTIVITIES AND M ILESTONES ......................................... 1-7

2 SELECT PROCESS........................................................................................................................ 2-12.1 SELECT PROCESS OVERVIEW ........................................................................................................ 2-12.2 SELECT PROCESS PREREQUISITES................................................................................................. 2-12.3 SELECT PROCESS ROLES AND RESPONSIBILITIES ............................................................................. 2-22.4 SELECT PROCESS SUPPORT.......................................................................................................... 2-32.5 PRE-SELECT ACTIVITIES ............................................................................................................... 2-4

2.5.1 Business Need Identification and Concept Development ............................................ 2-42.5.2 Project Initiation .......................................................................................................... 2-5

2.6 SELECT ACTIVITIES ...................................................................................................................... 2-72.6.1 Screening .................................................................................................................... 2-82.6.2 Scoring and Ranking ................................................................................................... 2-92.6.3 Portfolio Selection and Approval................................................................................. 2-9

2.7 MANAGEMENT RESERVE............................................................................................................. 2-11

3 CONTROL PROCESS................................................................................................................... 3-1

3.1 CONTROL OVERVIEW.................................................................................................................... 3-13.2 CONTROL PROCESS PREREQUISITES ............................................................................................... 3-13.3 CONTROL PROCESS ROLES AND RESPONSIBILITIES ........................................................................... 3-23.4 CONTROL PROCESS SUPPORT SYSTEMS ......................................................................................... 3-33.5 PROJECT LEVEL CONTROL ............................................................................................................ 3-3

3.5.1 Project Monitoring ....................................................................................................... 3-43.5.2 Performance Measurement.......................................................................................... 3-43.5.3 Project Documentation and Updates........................................................................... 3-5

3.6 PORTFOLIO CONTROL................................................................................................................... 3-53.6.1 Controlling Portfolio Performance ............................................................................... 3-53.6.2 Post-Control Assessment ............................................................................................ 3-8

4 EVALUATE PROCESS.................................................................................................................. 4-14.1 EVALUATE PROCESS OVERVIEW..................................................................................................... 4-14.2 EVALUATE PROCESS PREREQUISITES ............................................................................................. 4-14.3 ROLES AND RESPONSIBILITIES ....................................................................................................... 4-14.4 EVALUATE PROCESS SUPPORT REQUIREMENTS................................................................................ 4-14.5 EVALUATE PROCESS ASPECTS ....................................................................................................... 4-2

4.5.1 Post Implementation Reviews...................................................................................... 4-24.5.2 System and Technology Succession Management ..................................................... 4-24.5.3 Portfolio Performance Evaluation................................................................................ 4-24.5.4 ITIM Process Improvements......................................................................................... 4-4

September 2001 ii

APPENDIX A. GLOSSARY.................................................................................................................. A-1

APPENDIX B. PROCESS SUPPORT TOOLS AND METHODOLOGIES........................................B-1

APPENDIX C. SELECT SCORING CRITERIA ...................................................................................C-1

APPENDIX D. SEOPMD TECHNICAL ASSESSMENT TEMPLATES............................................ D-1

APPENDIX E. EARNED VALUE ANALYSIS AND METHODOLOGY........................................... E-1

APPENDIX F. RISK MANAGEMENT................................................................................................. F-1

APPENDIX G. HUD'S ITIM PROCESS – STATUS AND OUTLOOK............................................. G-1

TABLE OF FIGURES

Figure 1 – ITIM Stages of Maturity with Critical Processes .............................................................................. 1-2Figure 2 – HUD ITIM Process....................................................................................................................... 1-4Figure 3 – HUD IT Investment Management Process ..................................................................................... 1-5Figure 4 – ITIM Participation and Roles ......................................................................................................... 1-6Figure 5 – Major Activities in the HUD Fiscal Year Budget Cycle..................................................................... 1-7Figure 6 – HUD Select Process .................................................................................................................... 2-1Figure 7 – HUD SDM Activities and ITIM Select Process Documentation Requirements................................... 2-4Figure 8 – Select Process Initiation Documentation Requirements ............................................................... 2-2-7Figure 9 – Guidance for Assessing Project Viability........................................................................................ 2-8Figure 10 – Partial SDM Documentation Score Sheet................................................................................ 2-2-10Figure 11 – HUD IT Portfolio Control Process................................................................................................ 3-1Figure 12 – Project Control Roles and Activities .......................................................................................... 3-3-4Figure 13 – Portfolio Control Roles and Activities ........................................................................................ 3-3-6Figure 14 – Control Screening Criteria........................................................................................................ 3-3-7Figure 15 – Recovery Plan Corrective Action Criteria .................................................................................. 3-3-9Figure 16 – Evaluate Process.................................................................................................................... 4-4-1Figure 17 – IT Initiative Evaluation Data From............................................................................................. 4-4-3Figure 18 - Principles of Earned Value Analysis.............................................................................................E-1Figure 19 – Risk Assessment Matrix .............................................................................................................F-2

IT Investment Management Process

September 2001 1-1

PREFACE

This guide is intended to provide anoverview of the Department of Housing andUrban Development's (HUD) InformationTechnology Investment Management (ITIM)Process. It provides managers and staff withpractical information designed to help thembetter understand IT planning at HUD and meetthe requirements set forth by Congress, the Officeof Management and Budget (OMB), and theDepartment. It also provides the frameworkwithin which HUD can formulate, justify,manage, and maintain a portfolio of ITinvestments. Separate documents detail HUD IT

project management requirements and theDepartment's System Development Methodology(SDM), so only the interfaces between the ITIMProcess, and project management and SDMprocesses are discussed here.

This guide will be updated on a periodicbasis to reflect "lessons learned," as theDepartment's ITIM Process matures and thecapabilities of its Project Sponsors and ProjectManagers are strengthened through training andexperience.

1 INTRODUCTION

Like most Federal Agencies, HUD has limitedresources to allocate to information technology.Consequently, the Department has implemented acomprehensive IT Investment Management (ITIM)Process to ensure that its portfolio of IT projectsadequately address HUD's business strategies, and aremanaged to achieve the expected benefits inaccordance with accurate and complete cost, schedule,technical, and performance baselines. Monitoring andcontrolling investments is as important to ensuresuccess as selecting the right portfolio of projects orinvestments. Control mechanisms have beenestablished to minimize the likelihood of project failureor excessive cost and schedule overruns.

1.1 ITIM Governance: Federal andDepartmental Mandates andGuidance

The Department's ITIM Process fully addresses awide range of Federal and Departmental mandates,including but not limited to:

Ø The Clinger-Cohen Act

Ø The Paperwork Reduction Act

Ø The Government Performance and Results Act

Ø The Government Paperwork Elimination Act

Ø The Computer Security Act

Ø OMB Circular Nos. A-11 and A-130

Ø HUD's IT Investment Management Policy

The ITIM Process also incorporatesguidance on ITIM process maturity, recentlyissued by the General Accounting Office (GAO)and described in Figure 11. At this time, HUD'sITIM Process is at Stage 1, and is expected toachieve Stage 2 by December 2001, and Stage 3 byDecember 2002. The ITIM Process will becontinuously modified to reflect the issuance ofnew or revised mandates and guidance. The CIOorganization is currently exploring opportunitiesto strengthen the provisions of the ITIM processfor cyber security, privacy, work force planningand management, e-Government, andaccessibility.

1 HUD used GAO's exposure draft of Information

Technology Investment Management (ITIM): AFramework for Assessing and Improving Process Maturityto assess the ITIM process maturity

1. INTRODUCTION IT Investment Management Process

September 2001 1-2

FIGURE 1 – ITIM STAGES OF MATURITY WITH CRITICAL PROCESSES

MATURITY STAGE DESCRIPTION CRITICAL PROCESSES

Stage 1 – CreatingInvestment Awareness

There is little awareness of investmentmanagement techniques. ITmanagement processes are ad hoc,project-centric, and have widely variableoutcomes.

• No Defined Critical Processes

Stage 2 – Building theInvestment Foundation

Repeatable investment control processesare in place and key foundationcapabilities have been implemented.

• IT Investment Board Operation• IT Project Oversight• IT Asset Tracking• Business Needs Identification for IT

Projects• Proposal Selection

Stage 3 – Developing aComplete InvestmentPortfolio

Comprehensive IT portfolio selection andcontrol processes are in place thatincorporate benefit and risk criteria linkedto mission goals and strategies.

• Authority Alignment of IT InvestmentBoards

• Portfolio Selection Criteria Definition• Investment Analysis• Portfolio Development• Portfolio Performance Oversight

Stage 4 – Improvingthe InvestmentProcess

Process evaluation techniques focus onimproving the performance andmanagement of the organization's ITinvestment portfolio.

• Post-Implementation Reviews• Portfolio Performance Evaluation

and Improvement• Systems and Technology

Succession ManagementStage 5 – Investing forStrategic Outcomes

Investment benchmarking and IT-enabledchange management techniques aredeployed to strategically shape businessoutcomes.

• Investment Process Benchmarking• IT-Enabled Business Process

Change Management

1.2 ITIM Process: General Status andOutlook

Status. During FY 1999, HUD initiatedimplementation of its ITIM Process. Since thattime, the Department has accomplished thefollowing:Ø Established policy and charters to formalize the

roles and activities of the IT executive leveldecision making boards that govern ITIM.

Ø Formulated policy and direction to delegateauthority and accountability and define rolesand responsibilities for ITIM.

Ø Established and maintain interfaces to externaloversight and review organizations, such asOMB and GAO.

Ø Implemented a Department wide ITIM Processto select, control, and evaluate a comprehensiveportfolio of IT projects.

Ø Initiated the alignment the ITIM Process withother internal processes such as budgetformulation, procurement and acquisition, theSystem Development Methodology (SDM), andprogram management and technical reviews.

Ø Initiated efforts to strengthen the competenciesand capabilities of HUD's IT investment andProject Managers through practical "hands-on"training.

Outlook. For FY 2001, HUD will continueto strengthen its ITIM process. Specific activitiesto be undertaken will include the following2:

Ø Review and annually update HUD’s ITIMProcess to take advantage of lessons learned,address changes to Federal mandates and

2 See Appendix G for further discussion.


September 2001 1-3

guidance, and incorporate government andindustry best practices.

Ø Integrate the ITIM Process with HUD'senterprise architecture management andmaintenance activities.

Ø Establish uniform and consistent projectmanagement methodologies and procedures,and annually update IT investment and projectmanagement training to leverage advances inassociated methodologies and tools.

Ø Continue to integrate, streamline, andconsolidate, as appropriate, the Department'sperformance, budget, acquisition, and ITIMplanning and processes.

Ø Conduct formal post-implementation reviews ofIT projects; implement project performancemeasurement practices; and benchmarkportfolio performance.

Ø Continue to update HUD's training program forIT investment and Project Managers andleverage advances in associated methodologiesand tools.

Ø Increase focus on total life cycle of ITinvestments.

Ø Continue to periodically assess ITIM Processmaturity.

1.3 ITIM Process: Select – Control –Evaluate at HUD

The Department will apply the Select,Control, and Evaluate processes of the ITIMmodel as described below, and illustrated inFigure 2, to formulate, manage, and maintain itsportfolio of IT investments. More detaileddiscussions of the Select, Control, and Evaluateprocesses are presented in chapters 2, 3, and 4,respectively.

Select. The Select process ensures thecareful consideration of return, cost, and riskduring the formulation of HUD's IT investmentportfolio. It involves the activities by whichinitiatives are proposed by HUD organizations,evaluated against selection criteria defined by the

HUD IT executive-level decision making bodies,and included in the HUD IT investment portfolio.The Select criteria include measures such asmission support, agency priorities, materialdeficiencies (or weaknesses), project risk, projectreturn on investment, project managementcontrols, and conformance with the Department’scurrent and target Enterprise Architectures (EA).

Key items to be addressed during the Selectprocess are provided below:3

Ø Needs assessment

Ø Feasibility study

Ø Cost-benefit analysis

Ø Risk analysis

Ø Project plan

Control. The Control process ensures thatHUD's IT portfolio remains healthy and isperforming as expected to meet the Department'sbusiness objectives and goals. It involves on goingefforts to monitor, review, and correct, as necessary,the performance of the IT portfolio. This isaccomplished, primarily, by conducting QuarterlyControl Reviews.4 The objectives of the review areto measure project health in terms of actualperformance against baseline expectations for cost,schedule, risk, and return; identify projects that areperforming below expectations; define and enforcecorrective actions; and identify opportunities toreprogram HUD IT funding, as warranted..

3 The items to be addressed vary in accordance with the

type of project being proposed(Development/Modernization/Enhancement, Non-SystemsDevelopment, Steady State/Maintenance).

4 In addition to the Quarterly Control Reviews, projectmanagers monitor their projects on a more periodic (daily,weekly, monthly) basis. The frequency of the reviewdepends upon the size, scope, complexity of the project aswell as associated risks and potential impacts.


September 2001 1-4

FIGURE 2 – HUD ITIM PROCESS

The overriding intent of the Control Reviewis to identify problems early and to quickly takecorrective action to avoid or remedy them. TheControl Review helps to ensure that project plansand activities adequately reflect changes instrategic goals, legislation, project scope, andbusiness requirements. The results of the ControlReview capture the Department's decision onwhether and how to continue their projects.

Key questions to be addressed during theControl process are provided below:

Ø Does the project still address a current businessneed?

Ø Are project requirements still valid?

Ø What are the status and outlook for project cost,schedule, and technical performance?

Ø Have project risks, contingencies and correctiveactions been addressed?

Ø Are IT development activities being conductedin accordance with approved methodologies?

Sel

ect

Pro

cess

Co

ntr

ol

Pro

cess

Apply LessonsLearned

Apply LessonsLearned

ScreenScreen ScoreScore SelectSelect

DevelopInitiative

Documentation

DevelopInitiative

Documentation

Insert/Update Project Information

in I-TIPS

Insert/Update Project Information

in I-TIPS

Close/Defer Initiativesnot Approved,

DocumentDecision in I-TIPS

Close/Defer Initiativesnot Approved,

DocumentDecision in I-TIPS

Analyze &CompareInitiatives

Analyze &CompareInitiatives

Close Project,Document Decision in

I-TIPS

Close Project,Document Decision in

I-TIPS

Submit Initiativefor Ranking

Submit Initiativefor Ranking Allocate Funding

and BeginControl Process

Allocate Fundingand Begin

Control Process

DetermineInitiativeViability

Assign Initiativeto Investment

Pool

Assign Initiativeto Investment

Pool

ScoreInitiative

TIBECPortfolioApproval

Generate and Submit OMBExhibit 300Bs

Generate and Submit OMBExhibit 300Bs

Approve

AcceptAccept

Disapprove

Reject

Reject

RankInitiatives

RankInitiatives

Submit PortfolioRecommendations

to TIBEC

Submit PortfolioRecommendations

to TIBEC

Monitor andManage Scope,Cost, Schedule, Risk and Quality

Monitor andManage Scope,Cost, Schedule, Risk and Quality

Update ProjectDocumentation


ReassessInitiativeViability


Recommend toContinue, Modify, or Cancel

Initiatives

Recommend toContinue, Modify, or Cancel

Initiatives

Update Baselineand Document

Decisions


Decisions

Conduct PostControl Review

Assessment


Assessment

Pro

ject

Con

trol

Por

tfolio

Con

trol

Establish &Maintain Cost, Schedule and

Performance Baselines

Establish &Maintain Cost, Schedule and


Measure Cost, Scheduleand Performance Variance

of Initiatives


of Initiatives

Report on Portfolio Health andRecommended Portfolio

Adjustments

Report on Portfolio Health andRecommended Portfolio

Adjustments

Introduce New Initiatives that have CompletedScreening & Scoring


Analyze & CompareInitiatives


TIBECApprove/

DisapprovePortfolio

Disapprove

Approve

Evaluate Process

Conduct PostImplementationReviews (PIRs)


Review ITInvestment Strategies

Review ITInvestment Strategies

Evaluate Portfolio

Performance

Evaluate Portfolio

Performance

Manage Systemsand Technology

Succession


Succession

ID Lessons Learned& Recommend

Process Improvement

ID Lessons Learned& Recommend

Process Improvement


September 2001 1-5

GPRAGPRA

Clinger-CohenAct

Clinger-CohenAct

GPEAGPEA

ComputerSecurity ActComputer

Security Act

FARFAR

FASAFASA

GAO GuidanceGAO Guidance

DepartmentBudget/

WCF

DepartmentStrategic

PlanDepartment

AnnualPerformance

Plan

OCIOConcept ofOperationsManual

DepartmentIT Strategic

Plan

Secretary’s Directive(s)

Program Area

Strategic PlanAPP/BOPRehabilitation

Act/Sec 508RehabilitationAct/Sec 508

Select

Evaluate Control

Select

Evaluate Control

IT WorkforcePlan

IT SecurityPlan

GPEAImplementation

PlanIT Capital

Plan

DepartmentBudget/

WCF

DepartmentStrategic

PlanDepartment

AnnualPerformance

Plan


Plan

E-Gov Plan


OMB A-130 &Other GuidanceOMB A-130 &

Other Guidance

OMB A-11OMB A-11

EnterpriseArchitecture/Standards

IT InvestmentManagement

Guide

GPRAGPRA

Clinger-CohenAct

Clinger-CohenAct

GPEAGPEA

ComputerSecurity ActComputer

Security Act

FARFAR

FASAFASA

GAO GuidanceGAO Guidance

DepartmentBudget/

WCF

DepartmentStrategic

PlanDepartment

AnnualPerformance

Plan

OCIOConcept ofOperationsManual


Plan

Secretary’s Directive(s)Secretary’s Directive(s)

Program Area

Strategic PlanAPP/BOPRehabilitation

Act/Sec 508RehabilitationAct/Sec 508

Select

Evaluate Control

Select

Evaluate Control

Select

Evaluate Control

Select

Evaluate Control

IT WorkforcePlan

IT SecurityPlan

GPEAImplementation

PlanIT Capital

Plan

DepartmentBudget/

WCF

DepartmentStrategic

PlanDepartment

AnnualPerformance

Plan


Plan

E-Gov PlanE-Gov Plan


OMB A-130 &Other GuidanceOMB A-130 &

Other Guidance

OMB A-11OMB A-11

EnterpriseArchitecture/Standards

IT InvestmentManagement

Guide

FIGURE 3 – HUD IT INVESTMENT MANAGEMENT PROCESS

Evaluate. The Evaluate sub-processinvolves efforts to assess and improve theperformance of HUD's IT portfolio, specificprojects, and the ITIM process itself. ITinvestments in operation are evaluated todetermine whether they should be retained,modified, replaced or otherwise disposed. Keyquestions to be addressed during the Evaluateprocess are provided below:

Ø Did an IT investment meet performance, cost,and schedule objectives?

Ø Did the Select and Control process optimize theoutcome of the IT investment?

Ø Is the IT portfolio "technically" sufficient todeliver the most cost-effective IT solution tomeeting HUD business goals?

Ø What lessons have been learned to apply to theITIM process to increase the sufficiency of theDepartment's IT portfolio?

The Federal and Departmental directiondocuments governing the Select-Control-Evaluatemodel, as implemented at HUD, is portrayed inFigure 3.

1.4 Overview of ITIM Roles andResponsibilities

The Clinger-Cohen Act recognizes the ChiefInformation Officer (CIO) to be responsible to theAgency Head for establishment of ITIM policyand processes. At HUD, the CIO is fulfilling thisresponsibility. However, the implementation ofHUD's ITM process requires the participation ofthe entire Department. Executive-level boards


September 2001 1-6

have been established to oversee and approveITIM activities. Figure 4 Displays the HUD rolesand responsibilities for ITIM across all select,control and evaluate processes, as established in

HUD's ITIM policy. Chapters 2, 3 and 4 willdetail the roles and responsibilities for eachprocess.

FIGURE 4 – ITIM PARTICIPATION AND ROLES

OCIO

• Establish ITIM• Set ITIM policy

and procedures• Determine IT

Strategy

• Establish thresholds forinternal and externalproject reporting andfor funding decisions

• Determine IT Portfoliomakeup (percentage oftype projects)

• Provide managementand oversight of ITIM

• Work with OCFO tomaintain and monitorthe Working CapitalFund (WCF) thatfunds the IT Portfolio

OCFO

• Fund the IT Portfolio• Work with OCIO to

maintain and monitorthe WCF

OCPO• Approve project

acquisition strategies

TIBEC(Technology Investment

Board ExecutiveCommittee)

• Provide Portfolio selectioncriteria

• Responsible to HUD for the ITPortfolio performance

• Approve IT Portfolio

SRB(Senior Review

Board)

• Review actions of TIBWG and PMRB toensure ready to present to TIBEC

• Work with program/functional areas toresolve Portfolio issues prior to TIBECreview

Project Sponsor

• Initiate the project• Provide business case for the

project• Ensure project viability• Justify the project for inclusion

in the IT Portfolio• Secure funding for the project

via the ITIM process• Provide key control points and

performance measures for theproject

• Responsible and accountable toHUD (via the TIBEC WG andPMRB) for the success or failureof a project

Project Manager

• Manage and control project execution• Provide baseline cost, schedule, and

risk data on the project• Measure earned value on the project at

key control points• Provide actuals for project and

portfolio reviews• Responsible and accountable to the

Project Sponsor for projectmanagement

• Ensure EA conformance

TIBEC WG(TIBEC

Working Group)

(PORTFOLIO LEVEL):• Working arm of the TIBEC to

select, control and evaluate the ITPortfolio

• Look for cross-cutting initiatives• Ensure conformance to the EA• Recommend IT Portfolio actions

(continue, accelerate, defer, cancelprojects) to the TIBEC

• Refer problematic IT projects tothe PMRB for furtherinvestigation

• Communicate to/with the businessareas

PMRB(Project Management

Review Board)

(PROJECT LEVEL):• Provide senior level management

and oversight to major IT projects• Look at cost, schedule and technical

performance at macro level toensure project remains a viableHUD investment

• Look for earned value and keycontrol points

• Look at any project issues requiringsenior management attention orresolution

• Ensure risk management is beingexercised and that risk is acceptable

• Recommendcontinue/decelerate/stop project

ITRB(Information Technology

Review Board)

(PROJECT LEVEL):• 1st level review board looking at

individual project management• Monitor cost, schedule and

technical performance at a microlevel

• Provide for project peer reviews asnecessary

• Validate the WBS, and cost andschedule

• Ensure project reviews are takingplace between project sponsor andproject manager

• Ensure contract deliverables arebeing QA’d

• QA the SDM documentation

FeedsInto

FeedsInto

Feeds Into


September 2001 1-7

1.5 HUD Capital Planning and BudgetCycle Activities and Milestones

The HUD ITIM process supports the majorbudget milestones and procurement activities asoutlined in Figure 5.

Figure 5 – MAJOR ACTIVITIES IN THE HUD FISCAL YEAR BUDGET CYCLE

TIM

EP

ER

IOD

(CU

RR

EN

TF

Y)

PROCESS/EVENT PRODUCTS/DELIVERABLES

OC

TO

BE

R –

DE

CE

MB

ER • OMB recommends funding levels for upcoming fiscal year

(FY +1 year) during the pass-back phase of the budgetprocess

• IT Portfolio is updated to reflect current year budget andprocurement plans

• TIBEC formulates the following year (FY+2) IT priorities

• (Oct) IT portfolio and project quarterly control review isconducted for previous quarter's performance

• (Oct) Emergent projects are considered for inclusion in theIT portfolio

• OCFO issues current funding allocation forfunds appropriated by Congress

• IT portfolio is updated

JAN

UA

RY

–F

EB

RU

AR

Y • OMB reviews Congressional budget justification

• (Jan) IT portfolio and project quarterly control review isconducted for previous quarter's performance

• (Jan) Emergent projects are considered for inclusion inthe IT portfolio

• TIBEC issues FY+2 budget year requirements


MA

RC

H –

MA

Y

• (Apr) IT portfolio and project quarterly control review isconducted for previous quarter's performance

• (Apr) IT portfolio is selected (solidified) for FY+1

• (Apr) IT portfolio is projected for FY+2

• OCFO conducts salaries and expense (S&E) mid-yearreview

• OCFO distributes call for FY+1 budget and legislativeestimates

• OCFO prepares FY+2 IT budget formulation


• TIBEC approves FY+1 and FY+2 IT portfolio

JUN

E –

SE

PT

EM

BE

R • All FY+2 budget requirements are submitted to OCFO andapproved

• (Jul) IT portfolio and project quarterly control review isconducted for previous quarter's performance

• (Jul) Emergent projects are considered for inclusion in theIT portfolio

• FY+1 procurement plans are finalized

• OMB Exhibit 300’s and Exhibit 53’s are generated


• OCPO approves FY+1 procurement plans

• OCFO submits FY+2 budget to OMB

• OCFO submits OMB Exhibit 300’s and Exhibit53's to OMB


September 2001 2-1

2 SELECT PROCESS

2.1 Select Process Overview

Within the IT Portfolio Selection process,HUD chooses the most appropriate mix (in termsof type, scope, schedule, cost, and risk) of ITprojects to support Departmental missions andstrategic goals. Through the Select process (seeFigure 6), proposed IT initiatives are screened,scored, ranked, and selected based on benefit,cost, risk and a set of predetermined "projectviability" criteria. The goal of the Select process isto ensure that only sound and viable initiativesare included in HUD’s IT portfolio.

2.2 Select Process Prerequisites

The following preconditions and activitiesare critical to the successful execution of theSelect process:

Ø Establish and charter HUD's executivemanagement-decision making boards (such asthe TIBEC, SRB, and TIBEC Working Group(WG) to drive all decision making associatedwith the selection of HUD's IT portfolio.

Ø Familiarize HUD IT managers and sponsors,principal staff, TIBEC WG members, and otherkey stakeholders with the SDM initiationdocuments and sound project managementpractices.

FIGURE 6 – HUD SELECT PROCESS

• Screen • Score •• Select

Close Project, Document Decision in

I-TIPS


Insert/Update Project Information in I-TIPS

Develop Initiative Documentation

Screen

Assign Initiative to Investment Pool

Score

ScoreInitiative

Submit Initiative for Ranking


Submit Portfolio Recommendations to

TIBEC

Rank Initiatives

Analyze & Compare Initiatives

Select

Generate and submit OMB Exhibit 300s and

Exhibit 53a

Close/Defer Initiatives not Approved,

Document Decision in I-TIPS

Allocate Funding and Begin Control Process

Accept

Reject

Reject

Accept

Approve

Disapprove

Close Project, Document Decision in

I-TIPS


Insert/Update Project Information in I-TIPS

Develop Initiative Documentation

Screen

Assign Initiative to Investment Pool

Score

ScoreInitiative

Submit Initiative for Ranking


Submit Portfolio Recommendations to

TIBEC

Rank Initiatives

Analyze & Compare Initiatives

Select

Generate and submit OMB Exhibit 300s and

Exhibit 53a

Close/Defer Initiatives not Approved,

Document Decision in I-TIPS

Allocate Funding and Begin Control Process

Accept

Reject

Reject

Accept

Approve

Disapprove

2. SELECT PROCESS IT Investment Management Process

September 2001 2-2

Ø Develop project documentation requirementsand standards to provide Project Managers andsponsors with specific guidance on thedocumentation needed to screen projects andanalyze project performance.

Ø Define and disseminate uniform sets of projectscreening and scoring criteria. These criteriashould be approved by the TIBEC and helpdrive the selection of IT investments inaccordance with HUD’s mission goals andbusiness objectives and operating requirements.

Ø Submit project proposals to the TIBEC WG forreview during portfolio selection that haveundergone judicious screening by ProjectSponsors, and are accompanied by the requisiteinitiation documents.

Ø Clearly articulate and gain acceptance of theroles and responsibilities for stakeholdersparticipating in the Select process.

2.3 Select Process Roles andResponsibilities

The active participation and collaborationof all IT Project Managers, Project Sponsors, HUDprincipal staff, and executive-level decisionmaking bodies will ensure the successfulexecution of portfolio selection. The following isa list of the key stakeholders and participants inHUD's IT Portfolio Selection Subprocess, alongwith their associated roles and responsibilities.

ØØ Project Sponsor

− Sponsors the project during business needidentification and initial concept.

− Assigns and works with the ProjectManager to develop, assemble, andevaluate potential project documentationto determine viability. Ensures that thedocumentation is current, accurate, andthorough.

− Responsible for accuracy of all materialssubmitted on behalf of the project.

− Reviews and approves project initiationdocuments, including, the project needs

statement, feasibility study, cost-benefitanalysis, risk analysis and project plan.

− Manages the timeliness of data entry intoI-TIPS, and adherence to documentationsubmission requirements and deadlines.

− Assigns the project to an investment pool,and prioritizes projects being sponsored.

− Prepares the OMB Exhibit 300 for a majorproject.

− Serves as primary point of contact to theTIBEC WG and the OCIO duringselection.

ØØ Project Manager

− Communicates regularly with ProjectSponsor on project status, confers onunresolved issues, and discusses projectprogress.

− Conducts the project initiation proceduresaccording to the SDM and generates theinitiation documents.

− Develops project performance measuresand outcomes.

− Enters all project information, inconjunction with the Project Sponsor, intoI-TIPS, or updates existing data.

− Assists the Project Sponsor in preparingthe OMB Exhibit 300 for a major project.

− Supports the Project Sponsor throughoutthe Select process.

ØØ Office of the Chief Information Officer(OCIO)

− Initiates and facilitates theimplementation of IT portfolio selection.

− Establishes procedures and guidelines toscreen, score, rank order, and select ITprojects.

− Administers project certification andscoring activities.

− Conducts analyses and creates reports onIT portfolio data for the TIBEC WG, SRB,and TIBEC. Provides the information


September 2001 2-3

and insights needed to support projectselection and executive decision making.

− Convenes and chairs the HUD IT PortfolioSelect sessions of the TIBEC WG and SRB.

− Articulates the IT strategic vision.

− Coordinates the preparation and submissionof Exhibit 300’s and Exhibit 53’s to OMB.

− Ensures that Departmental, program area, andCIO priorities are considered andincorporated into the decision making process.

ØØ Technology Investment Board ExecutiveCommittee Working Group (TIBEC WG)− Conducts the IT Portfolio Select sessions.

− Reviews OCIO recommendations pertainingto IT portfolio selection requirements andactivities.

− Verifies the viability of projects assigned toportfolio investment pools.

− Identifies crosscutting and enterprise wideinitiatives, as well as opportunities for projector system integration.

− Determines funding priorities and works tooptimize the allocation of the HUD WCF.

− Solidifies projects for inclusion in the FY+1year IT portfolio and begins to formulate theFY+2 year portfolio.

− Builds contingency plans and adjusts thecomposition of the IT portfolio in the eventHUD does not receive the appropriationsrequested.

− Proposes the IT portfolio and associatedactions to the SRB and the TIBEC.

ØØ Senior Review Board (SRB)− Evaluates the TIBEC WG's recommendations

on the portfolio selection criteria.

− Reviews the recommended IT portfolioprovided by the TIBEC WG from aDepartment wide perspective, taking intoaccount the portfolio's organizational impactand other institutional considerations (such asthe likely reactions to the portfolio by theDepartment's external oversight and reviewbodies).

− Submits the approved TIBEC WGrecommendations to the TIBEC.

ØØ Technology Investment Board ExecutiveCommittee (TIBEC)− Reviews the soundness and oversees the

execution of HUD's IT portfolio selectionstrategies.

− Approves the criteria to rank and scoreprojects.

− Provides final concurrence onrecommendations concerning the compositionof the HUD FY+1 year and FY +2 year ITinvestment portfolios.

− Provides final approval of funding allocationsand adjustments for the IT portfolio.

2.4 Select Process Support

HUD uses the following guidance andautomated tools to support the Select process:Ø The HUD SDM provides templates and

guidance for the five investment initiationdocuments: Needs Statement, Feasibility Study,Cost-Benefit Analysis, Risk Analysis and ProjectPlan.

Ø I-TIPS5 is an information repository thatfacilitates the collection, review, and analysis ofproject documentation. It also supports thegeneration of OMB Exhibit 300s.

Ø Expert Choice6 is a multi-criteria decisionsupport tool used to establish the relativeimportance of portfolio selection criteria, and torank order IT projects against those criteria inaccordance with HUD's funding constraints.The tool also is used to dynamically supportproject ranking, funding reallocations acrossprojects, and re-optimization of the projectportfolio during TIBEC WG decision makingsessions.

5 See Appendix B for further description.6 Ibid.


September 2001 2-4

2.5 Pre-Select Activities

Pre-Select activities are those conductedprior to the submittal of an IT initiative to theSelect process. To help ensure that only viableand well thought out initiatives are presented forIT portfolio inclusion, work on these activitiesshould commence as soon as the need for an ITproject is determined.

2.5.1 Business Need Identification andConcept Development

All IT projects at HUD support adocumented business need. HUD strives toensure that poor business processes are notautomated. To this end, the business processmust first be assessed for currency, accuracy andefficiency, and possibly re-engineered prior to

developing and proposing a concept for an ITproject. In addition, initiatives must be incompliance with HUD's Enterprise Architecture.Compliance is demonstrated throughdocumentation that describes the consistency andcompatibility of the proposed project with HUD'sbaseline, transitional, and target architectures atthe business, application, data and technologylayers.

HUD will assess the health and well beingof its IT portfolio, including projects that are inthe operational or maintenance phase of their lifecycles. The assessments will be used to adjust theportfolio, as necessary, to reflect changingbusiness and organizational conditions. Thedocumentation must be updated, as appropriate,and submitted for the Select process.

FIGURE 7 – HUD SDM ACTIVITIES AND ITIM SELECT PROCESS DOCUMENTATION REQUIREMENTS

Updated Risk Analysis

Initiate Project Initiate Project

Define System Define System

Design System Design System

Build System Build System

Evaluate System Evaluate System

Operate System Operate System

Initiate Project Plan Initiate Project Plan Assess Feasibility of

Development Approach Assess Feasibility of

Development Approach

Perform Cost/Benefit Analysis

Perform Cost/Benefit Analysis

Perform Risk Analysis Perform Risk Analysis

Refine Project Plan & Re-assess Risk






Risk Analysis Risk Analysis

Project Plan (Operational) Project Plan (Operational)

Define Need Define Need

Cost/Benefit Analysis

Feasibility Study

Project Plan (Outline)

Needs Statement

Updated Project Plan

SDM Project Phases Relevant Initiation Activities Select Process Documentation




September 2001 2-5

2.5.2 Project Initiation

Following the determination that there is aneed for an IT project, specific activities areundertaken to support its selection to the ITportfolio. The SDM details the project initiationactivities. Figure 7 links the SDM project phaseswith the relevant initiation activities and requiredSelect process documentation.

2.5.2.1 Project Categorization

The HUD IT investment process treats ITprojects differently depending on the type ofproject and its phase in the project life cycle.Projects that consist of maintaining an existingoperating system are, and should be, identifiedseparately from initiatives that involve thedevelopment of a new information system. Thisdifferentiation is important when HUD allocatesfunding for an initiative, as well as when itdetermines the type of initiation documents thatmust be prepared. In accordance with theguidance in OMB Circular A-117, HUD’s ITinitiatives are assigned the following categories.

Development, Modernization,Enhancement (DME)

This project category describes new systemsor major modifications to existing systems thatimprove/enhance organizational capability orperformance, and systems changes or changesmandated by legislation or agency leadership.DME projects can include both systems andinfrastructure initiatives.

Steady State/Maintenance

This category describes the activitiesperformed after systems or infrastructureinitiatives are accepted and are in production.These activities are designed to sustain theoperations and the responsiveness of these ITinitiatives. Steady state/maintenance projects donot include enhancements or new development.

7 OMB Circular A-11(2000) revised, Office of Management and

Budget.

Non-Systems Development

This category refers to IT related activitiesconducted in support of HUD’s mission orbusiness areas that do not result in a system, suchas IT consulting. These activities do not includethe development, enhancement, operation,maintenance, or retirement of a system.

Each IT project falls within one of thecategories identified above. However, inaccordance with OMB circular A-11, HUD furtherdistinguishes types of IT initiatives. Within boththe DME and Steady State/Maintenancecategories, projects are additionally categorizedas either Infrastructure or Systems. As a result,HUD categorizes each of its projects in one of fiveways:

Ø DME (Infrastructure)

Ø DME (Systems)

Ø Steady State/Maintenance (Infrastructure)

Ø Steady State/Maintenance (Systems)

Ø Non-Systems.

This further distinction allows HUD torefine its investment priorities and resourceallocations. Each IT project also is identified aseither a major or non-major project. Majorprojects receive special management attention,require generation and submission of an OMBExhibit 300 annually, and have one or more of thefollowing characteristics:

Ø Important to HUD’s mission

Ø High development, operating, or maintenancecosts (such as, life-cycle costs equal to or greaterthan $5 million)

Ø High Risk

Ø High Return

Ø Critical to the administration of HUD’sprograms, finances, property, or other resources


September 2001 2-6

2.5.2.2 Initiation Documents

As was illustrated in Figure 7, the initiationactivities culminate in a required documentationset to be evaluated during the Select process. Therequired documentation set is based on theproject category of an initiative and the project'sstatus as a major or non-major project. Prior toscreening and scoring, Project Managers, inconjunction with the Project Sponsors, mustgenerate and submit the appropriatedocumentation set for all IT investment projects.Figure 8 is a guide to the initiation documentsthat are required for the Select process.

2.5.2.3 I-TIPS Project Data

Once the appropriate documentation hasbeen assembled, Project Managers, in conjunctionwith the Project Sponsor, must upload the files inthe appropriate initiative documentation setfolder (found in the Resource Library of I-TIPS).In addition, they must populate various fields inthe I-TIPS database. The entry and updates toproject data in I-TIPS facilitates the developmentof a project proposal and the analysis of aninitiative against the screening and scoringcriteria. The specific fields that Project Managersmust populate are outlined in the HUD SelectUsers' Guide published prior to each Selectactivity. Additionally, the I-TIPS user manualprovides guidance on using I-TIPS.


September 2001 2-7

FIGURE 8 – SELECT PROCESS INITIATION DOCUMENTATION REQUIREMENTS

SELECT PROCESS DOCUMENTATION REQUIREMENTSPROJECTCATEGORIES

Major Projects Non-Major Projects

DME (includingSystems andInfrastructure)

Submit complete SDM initiation documentationas follows:• Needs statement• Feasibility study• Cost-Benefit analysis• Risk analysis• Project plan, including a paragraph on

technical performanceSummarize the technical performance goalsas described in the statement of work. Identifywhich elements or functionality of the technicalperformance of the system are achieved ineach phase of the SDM.

Submit partial SDM initiation documentation asfollows:• Needs statement• Feasibility study

− General information− Proposed system

• Cost-Benefit analysis− General information− Costs (high-level summary)− Benefits (high-level summary)

• Risk analysis− System security− Risks and safeguards

• Project plan, including technical performance

Non-SystemsDevelopment

Submit Partial SDM initiation documentationas follows:• Needs statement• Project plan• Cost-Benefit analysis

Submit Partial SDM initiation documentation asfollows:• Needs statement• Project plan• Cost-Benefit analysis,

− General information− Costs (high-level summary)− Benefits (high-level summary)

Steady State/Maintenance(includingSystems andInfrastructure)

Partial SDM initiation documentation• Needs statement (update, as necessary)• Risk analysis (update, as necessary)• Cost-Benefit analysis (if available)• Project plan, including technical

performance

Partial SDM initiation documentation• Needs statement (update, as necessary)• Risk analysis (update, as necessary)

− System security− Risks and safeguards

• Project plan, including technical performance

2.6 Select Activities

Project Sponsors and Managers must ensurethat all pre-Select activities have been completedprior to the submittal of an initiative to the Selectprocess.

The Select process is an iterative process.HUD has one IT portfolio whose compositionchanges as projects are modified, added to, ordeleted from the portfolio. Within a given year,there are opportunities to make major changesand minor adjustments to the composition of theIT portfolio through the Control Process. Theprimary Select process occurs each April inconjunction with HUD's budget request andsubmission process. This process results in the

formulation of the IT portfolio for the upcomingfiscal year (FY +1 year) and a projection for thefollowing fiscal year (FY+2 year). The Selectprocess, on a minor scale, also occurs quarterly,in conjunction with the IT portfolio ControlReviews. This is to accommodate emergentrequirements that become known outside of theApril Select timeframe, and to provide anopportunity to adjust the portfolio in response ofchanging business, program, and projectconditions.

The OCIO establishes the sequence ofevents and timetables for the Select process on anannual basis. In terms of the April Select process,the OCIO schedules the TIBEC WG Select sessiontowards the end of April. Consequently, the


September 2001 2-8

loading of SDM documents within I-TIPS, andproject screening and scoring must occur inMarch.

2.6.1 Screening

The primary goal of screening is to assessthe viability of an initiative – that is, is the projectworth undertaking? Project Sponsors mustscreen all proposed IT initiatives to ensure thatsufficient analysis has been conducted to warrantHUD's investment in either a new or an on goinginitiative. They also screen initiatives to ensurethat the appropriate level of documentation isprovided and to flag poorly documented projectsthat contain gaps or substantial weakness in thelevel of information being provided. Figure 9provides guidance on the criteria Project

Sponsors must apply when determining viability.This list is updated by the OCIO, as necessary, toreflect changes in the Department's businessrequirements or legislative mandates. Prior tosubmitting a project for scoring, Project Sponsorsshould direct corrective action to remedy any

deficiencies identified. Projects deemed "notviable" should not be included in the pool ofcandidate projects submitted for scoring. Ratingsagainst the criteria and viability decisions arecaptured in I-TIPS in the “Project ScreeningInformation” module.

If the Project Sponsor deems that aninitiative is viable and worth consideration forfunding, he/she assigns it to an investment poolestablished by the OCIO in I-TIPS. Only theProject Sponsor can assign an initiative to aninvestment pool. The OCIO extracts theassigned projects from the investment pool toscore and consider them for inclusion in theIT portfolio. The Select User's Guide, whichis updated and released in February, prior tothe major Select process provides additionalinformation and guidance to assign aninvestment to an investment pool.

FIGURE 9 – GUIDANCE FOR ASSESSING PROJECT VIABILITY PROJECT SCREENING INFORMATION Viability Criteria: Ø Is the initiative clearly within the scope of HUD's mission or strategic goal(s)? Ø Is HUD the best agency to efficiently carry out this initiative? Ø Does this initiative support work processes that have been simplified or otherwise redesigned?

Viability Considerations: Ø Satisfies Raines' Rules or is otherwise justified Ø Costs and benefits are clearly defined and expected benefits outweigh costs Ø There are clear performance measures Ø The project results in service/program delivery improvements Ø All risks have been identified, assessed and addressed Ø All required documentation is complete and present Ø There are clear project milestones Ø The project is in conformance with the enterprise architecture and advancing HUD towards the target

architecture

Initiative Designation: Ø Is the initiative a Secretarial priority? Ø Does the initiative represent or impact a mission-critical system? Ø Does the initiative have a long development life cycle? Ø Does the initiative have a high life cycle cost? Ø Is the initiative required to satisfy the requirements of a law or regulation? Ø Is the initiative required in response to an identified material weakness or deficiency?


September 2001 2-9

2.6.2 Scoring and Ranking

Cross-functional and multi-organizationalteams of HUD managers are established to scoreproposed IT initiatives. The OCIO has developeda methodology and scorecards to quantify theexpected benefits and risks of IT projects. Thismethodology assigns numeric values to aninitiative based on a set of criteria and associatedweights that have been approved by the TIBEC.The criteria, or discriminators used to scoreinitiatives include, but are not limited to, thefollowing areas:

Ø Response to Material Weakness or Deficiency(Audit Findings)

Ø Support to HUD’s Mission

Ø Evidence of Project Management Capability (andcompleteness of SDM documentation)

Ø Feasibility of Implementation

Ø Compliance with the Enterprise Architecture

Ø Support to Principals' Priorities

The scoring methodology relies on theobjective application of explicitly defined andweighted project scoring criteria in accordancewith well-defined scoring rules. Appendix Cillustrates the project scoring rules and criteriathat are utilized by the Department.

2.6.2.1 Initiative Scoring

The Department's scoring teams, composedof program area representatives, quantify thebenefits and risks of candidate projects byassigning numeric values against the scoringcriteria described above and in Appendix C. Thenumeric values assigned to a project are based onthe scoring teams’ evaluation of the informationwithin the documentation set. Projects areassigned a weighted score for each of the criteria,and an overall total weighted score. These scoresare used to rank the projects within the ITinvestment pool. The scoring teams documenttheir rationale for assigned scores, relevantobservations, and feedback for use by ProjectManagers and the TIBEC WG. In addition, the

scoring teams grade the quality of the initiationdocumentation according to a standard gradingscheme:

Ø Red – The initiative documentation does notmeet SDM requirements

Ø Yellow – The initiative documentation meetsSDM requirements, however, the documentationcan be strengthened.

Ø Green – The initiative documentationsubstantially meets SDM requirements

Figure 10 shows a partial score sheet for theSDM documentation. These grades areincorporated into the decision making processdescribed in Section 2.6.3.

2.6.2.2 Initiative Ranking

The ranking of proposed IT projects issupported by Expert Choice, a commerciallyavailable automated decision support tool8 thatuses the results of the scoring process to analyzeand compare initiatives within the investmentpool. Expert Choice allows HUD to develop aportfolio optimization algorithm to addressproject benefits, risks, and other key factors (suchas mandatory funding requirements). Theoptimization produces a ranking factor, or benefitscore, between 0 and 1 for each initiative,grouped by project type (DME, steady-state, etc.).These rankings are then used as a starting pointfor discussion and decision making within theTIBEC WG.

2.6.3 Portfolio Selection andApproval

2.6.3.1 Select Sessions

Ranked projects are presented by the OCIOto the TIBEC WG as candidates for selection intothe HUD IT investment portfolio. Prior to theselection sessions, the OCIO develops and gainsTIBEC approval of funding targets for each ofHUD's five project types. These targets are basedon the IT needs of the Department, the prior

8 Expert Choice is described further in Appendix B.


September 2001 2-10

Figure 10 – PARTIAL SDM DOCUMENTATION SCORE SHEET

year's rationale and funding distribution, as wellas Government and industry best practices. Tohelp prepare the TIBEC WG for the SelectSessions, the OCIO develops informationpackages that include:

Ø HUD's IT investment selection strategy

Ø Summary report for each initiative underconsideration

Ø Scoring criteria and results

Ø Project documentation quality grades

Ø Initial optimization results by project type

During the Select Sessions, the TIBEC WGanalyzes and compares competing initiativeswithin the investment pool to determine whetherthey will be recommended to the TIBEC forinclusion in the HUD IT investment portfolio. Aspart of its evaluation, the TIBEC WG reviews theproject rankings to identify exceptions that maywarrant special consideration or reprioritization(such as instances where mission criticalinitiatives receive low benefit scores). Whenprojects are required due to their criticality toHUD's mission and business objectives, theworking group directs the Project Sponsor andProject Manager for these projects to identify and

implement corrective actions to ensure theproject's health. The members of the TIBEC WGvotes on the selection of each IT project to beincluded in the portfolio.

The results of the TIBEC WG decisions andrecommendations are captured in I-TIPS.Highlights of the proceedings and the outcome ofthe TIBEC WG Select sessions are documentedand distributed to all stakeholders, including allHUD Principals. The proposed IT portfolio isforwarded to the SRB for executive review priorto the TIBEC for final approval.

2.6.3.2 Recommendations to theSRB and TIBEC

The TIBEC WG provides itsrecommendations on the composition of theHUD IT investment portfolio to the SRB andTIBEC. The SRB uses the following questions todetermine whether it will support the TIBECWG's recommendations and pass the portfolio tothe TIBEC for approval.

Ø Does the portfolio reflect HUD’s strategicpriorities?

PROJECT PLAN FEASIBILITY STUDY COST BENEFIT ANALYSIS

PCAS INITIATIVE NAME REQUESTED ($000) RED YELLOW GREEN ABSENT RED YELLOW GREEN ABSENT RED YELLOW GREEN

NON-SYSTEMS00202940 ENFC03 EC Departmental Tracking System $1,014

00251160 HSG-CO-004-A56-FHA Accounting System [PCAS# 00251160] $80

00251370 HSG-SF-002-A80W-SF Neighborhood Watch [PCAS # 00251370] $889

00251420 HSG-SF-007-F51A-Approval, Recertification, & Review Tracking (ARRTs) [PCAS # 00251420] $314

00251430 HSG-SF-008-F51B-Mortgage Portfolio Analysis System (MPAS) $199

00251480 HSG-OP-003-F60A-Work Request Tracking System [PCAS# 00251480]

00251550 HSG-SF-010-SFDQ Data Quality Cleanup $383

00251870 CPO-009 Electronic Commerce/Electronic Data Interchange (EC/EDI) in Contracting $79

00252600 HSG-004-EDI-U26A Electronic Data Interchange $977

00252950 CFO-Data Standardization/Clean-up $2,178

00304260 Operate Hotline/Helpline, 00304260 $4,606

00306680 HSG-SF-013-F51Q-Quality Assurance Document Library System (QDLS) [PCAS# 00306680] $181

00307160 PIH3020 GMC Support (00307160) $595

00307680 REAC-01 Resident Assessment Subsystem (RASS) - (PCAS# - 00307680) $3,099

00307810REAC-06 Financial Assessment Subsystem - Federal Housing Administration (FASS-FHA) - (PCAS# - 00307810)

$2,297

00307820 REAC-07 Financial Assessment Subsystem - Public Housing (FASS-PH) - (PCAS# - 00307820) $3,685

00307830 REAC-08 Management Assessment Subsystem (MASS) - (PCAS# - 00307830) $2,052

00307880 REAC-11 Quality Assessment Subsystem (QASS) - (PCAS# - 00307880) $1,48400307890 REAC-12 Lender Assessment Subsystem (LASS) - (PCAS# - 00307890) $1,204

00307920 REAC-14 inVentory Assessment Subsystem (VASS) - (PCAS# - 00307920)

00308280 FHEO -3 F42F/MLIS-Mortgage Lending Information System $707

00308430 ODEEO-03(SHOT)Sexual Harassment Training On-Line $30

Total 22 $26,052Totals 0 0 0 0 0 0 0 0 0 0 0


September 2001 2-11

Ø Does the resultant mix of initiatives advanceHUD towards the transitional or targetenterprise architectures?

Ø Have potential funding constraints beenconsidered and contingencies developed toaddress them?

Ø Does the IT portfolio adequately balanceDepartmental priorities with those of theprogram areas?

Ø Is the portfolio positioned to help theDepartment accrue the greatest return for itsinvestment?

Ø Have the ramifications of deciding not to investin certain initiatives been given carefulconsideration?

Ø Have IT initiatives that support theconsolidation, integration, or streamlining ofprojects been explored?

Ø Have all opportunities to invest in crosscuttinginitiatives been appropriately evaluated?

Ø Is HUD capable of successfully executing thechosen IT portfolio (i.e., are the appropriateresources available to execute the includedprojects)?

There are frequent interactions between theTIBEC WG and the SRB until both parties areconfident that all questions are adequatelyaddressed. At that point, the recommendedportfolio is forwarded to the TIBEC for approval.

2.6.3.3 OMB Exhibit 300

At the conclusion of the Select Process,Project Sponsors, with the assistance of ProjectManagers, must generate the OMB Exhibit 300(Capital Asset Plan) for each of their majorprojects, as defined in section 2.5.2.1 above. TheExhibit 300 is a useful mechanism for OMB toidentify the results of HUD's Select process. TheExhibit 300 provides program justification,acquisition strategy, costs analysis, riskmanagement and performance goals andmeasures to OMB. Throughout the life cycle ofthe project, the Exhibit 300 will be revised andadjusted by the Project Manager to ensure that

the document reflects the adjustments within theevolving stages of the ITIM process. Informationto be inserted in the Exhibit 300 is supplied by theProject Manager. The OCIO is responsible fordirecting the preparation of HUD's Exhibit 300reports, ensuring their standardization andcompleteness, and submitting them through theOCFO to OMB each year.

2.7 Management Reserve

HUD uses various techniques to ensure thestrategic management and efficient utilization ofthe HUD Working Capital Fund (WCF), whichfinances the IT portfolio. Mechanisms are inplace to accommodate adjustments to the ITportfolio that may result from changing business,program, and project conditions.

A Management Reserve (MR) fund isallocated as a WCF cost element during the majorSelect process in April. The MR fund is used toaccommodate unanticipated fundingrequirements or contingencies. The MR isseparate from the baseline investment pool and iscentrally managed by the OCIO and OCFO. TheOCIO determines and recommends to the TIBECthe appropriate amount of funding reserve to bemaintained (the allocation for FY 2001 was 2% ofthe WCF). Release of funds from the reservemust be endorsed by the TIBEC WG andapproved by the SRB. Opportunities to presentnew initiatives that may require use of reservedfunds are presented quarterly in conjunction withthe IT portfolio Control Reviews.


September 2001 3-1

3 CONTROL PROCESS

3.1 Control Overview

The IT portfolio and project control process,as displayed in Figure 11, ensures that theDepartment's IT projects continue to supportHUD's mission and business objectives.

IT investment control involves project andportfolio related activities. At the project level,control includes continually monitoring andmanaging project scope, cost, schedule, andperformance; identifying, assessing andresponding to project risk; and ensuring timelydelivery and quality of IT products andsupported services.

Portfolio control focuses on the overallhealth of the Department's IT portfolio bymonitoring and managing project variance andvalidating the portfolio's overall return on

investment. It also seeks to ensure that the mix ofIT projects within the portfolio continues to meetthe needs of the Department and is enabling itsProgram areas to meet their strategic goals andperformance objectives.

3.2 Control process prerequisites

HUD employs the following preconditionsand activities to ensure the successful executionof IT portfolio and project control:

Ø Portfolio and project control standards areestablished and approved by the TIBEC. Theyprovide Project Sponsors and Project Managerswith specific guidance on the tolerable variancesfor cost, schedule, and technical performance.

HUD IT Project Managers are familiar withsound project management techniques andpractices.

FIGURE 11 – HUD IT PORTFOLIO CONTROL PROCESS

••Take corrective actions when necessary • Monitor progress continuously

Monitor andManage Scope,Cost, Schedule,Risk and Quality

Monitor andManage Scope,Cost, Schedule,Risk and Quality

MeasurePerformance

Update ProjectDocumentationUpdate ProjectDocumentation



Recommend toContinue,Modify, or Cancel

Initiatives

Recommend toContinue,Modify, or Cancel

Initiatives


Decisions


Decisions


Assessment


Assessment

Pro

ject

Con

trol

Por

tfolio

Con

trol

Establish &Maintain Cost,Schedule and


Establish &Maintain Cost,Schedule and



of Initiatives


of Initiatives

Report on PortfolioHealth and

RecommendedPortfolio Adjustments

Report on PortfolioHealth and

RecommendedPortfolio Adjustments





Disapprove

ApproveTIBECApprove/

DisapprovePortfolio

TIBECApprove/

DisapprovePortfolio

3. CONTROL PROCESS IT Investment Management Process

September 2001 3-2

Ø Project baselines are documented and reflectdata provided during the Select process.

Ø Cost, schedule, and performance information areaccurate, complete, and are maintained by theProject Manager and periodically reviewed bythe Project Sponsor.

Ø Roles and responsibilities for stakeholdersparticipating in the Control process are definedand institutionalized.

Ø A mechanism to direct and monitor correctiveactions is established and is fully operational.

3.3 Control Process Roles andResponsibilities

The roles and responsibilities of theindividuals and organizations involved in theportfolio and project control processes areprovided below.

ØØ Project Sponsor− Hold ultimate responsibility and

accountability for the health and well being ofthe project(s) they sponsor

− Ensure that their projects are properlymanaged. Communicate regularly withProject Manager.

− Monitor project performance, and initiate andconduct regular project reviews.

− Work with the Project Manager to ensure thatI-TIPS is updated with current and accurateinformation on project cost, schedule, andtechnical performance.

− Work closely with OCIO to providefeedback on project performance inpreparation for quarterly portfolio controlreviews.

ØØ Project Manager− Monitor and manage on going project control

activities and risks. Evaluate project statusand performance.

− Regularly update project performancedocumentation in I-TIPS (such as actual costs,milestones achieved, schedule andperformance variances, resource and scopechanges, etc.).

− Make adjustments to the project plan,schedule, and contingency plans, as necessary.

− Adjust OMB Exhibit 300 to reflect updatedinformation and data.

− Provide regular status reports and alert theProject Sponsor to significant deviations incost, schedule, and performance baselines.

− Define and implement corrective actions orrisk mitigation strategies to avoid, alleviate, orminimize the impact of problems identified.

− Prepare and maintain accurate and completeproject documentation, including the actionsand results associated with project levelreviews.

− Monitor performance outputs and outcomes.Analyze whether the project is meetingestablished performance measures.

ØØ Information Technology Review Board (ITRB)− Conduct frequent detailed project-level

reviews to assess the technical andprogrammatic health of all IT projects.

− Provide feedback to Project Sponsors andProject Managers on technical problems, andrecommend actions to avoid or address them.

− Escalate high risk projects to the ProgramManagement Review Board for furtherreview.

ØØ Program Management Review Board (PMRB)− Evaluate and provide resolution to issues and

concerns for high priority/high risk projectsescalated by the ITRB or the TIBEC WG.

ØØ Office of the Chief Information Officer (OCIO)− Establish and manage the IT portfolio and

project control process, and schedule andfacilitate quarterly IT portfolio and projectcontrol meetings.

− Develop methodologies and procedures tocollect and analyze information on projectcost, schedule, and technical performance.

− Provide analyses and recommendations to theTIBEC WG, SRB, TIBEC, et al, as requested.

− Establish guidelines to conduct the TIBEC WGIT portfolio and project control meetings.

− Present the TIBEC WG's recommendedportfolio adjustments to the SRB and theTIBEC.


September 2001 3-3

ØØ Technology Investment Board ExecutiveCommittee Working Group (TIBEC WG)

− Conduct the quarterly portfolio and projectcontrol sessions.

− Assess the health of the IT portfolio byreviewing the information provided by theOCIO.

− Recommend actions to the SRB and TIBEC tomaintain or adjust the IT portfolio throughthe continuation, acceleration, deferral,cancellation, or addition of IT projects.

− Refer high risk projects to the PMRB forfurther investigation.

− Maintain communications with HUDProgram Areas.

ØØ Senior Review Board (SRB)− Review the TIBEC WG's recommendations on

the composition, adjustments, andmaintenance of HUD's IT portfolio.

− Consider the institutional and organizationaldimensions, risks, and impacts of portfolioand project actions.

− Submit TIBEC WG recommendations to theTIBEC.

ØØ Technology Investment Board ExecutiveCommittee (TIBEC)

− Oversee the control of HUD's IT portfolio.

− Review the TIBEC WG's and SRB'srecommendations on the composition,adjustments, and maintenance of HUD's ITportfolio.

− Provide final approval on the IT portfolio andsubmit revised funding requirements to theCFO.

3.4 Control Process Support Systems

Project Sponsors and Project Managersestablish and maintain project controls to helpavoid or minimize the impacts associated withproject and portfolio risk and maximize thereturn on HUD's IT portfolio.

Project management practices andmethodologies can vary across HUD. To achieveDepartment wide consistency in the hasestablished standard operating procedures to

guide project monitoring and reporting. Theseguidelines include standards for conductingtechnical assessments, cost and risk analyses, anddefinitions of the categories of project data andmethodologies used to analyze projectinformation.

In addition, the following automated toolsare used to support the collection, analysis, andmaintenance of information that supports projectmanagement and analysis, documentation, andIT portfolio and project reviews:

Ø Information Technology Investment PortfolioSystem (I-TIPS)

Ø MicroSoft Project Office

Ø Integrated Capital Investment Support System(ICISS)

Ø HUDCAPS

A more detailed description of the functionssupported by these tools is provided in AppendixB.

3.5 Project Level Control

Project control at HUD involves thefollowing activities:

Ø Project Monitoring

Ø Performance Measurement

Ø Earned Value Management

Ø Project Documentation and Updates

Figure 12 provides a summary of the keyproject-level control roles and functions, and theactivities that support them.


September 2001 3-4

FIGURE 12 – PROJECT CONTROL ROLES AND ACTIVITIES

PHASE ROLE/FUNCTION ACTIVITIES PERFORMED

Project Manager • Project Plan Updates• Risk Assessment• Risk Mitigation Planning and Execution• Performance Trend Analysis

Project Sponsor • Re-evaluation of Business Requirements and AcquisitionStrategy

• Project Status Reviews• Performance Trend Analysis

ITRB • Detailed Technical Performance Reviews• Detailed Project Management Reviews

Monitor andReview Project

PMRB • Technical Performance Reviews• Performance Trend Analysis

Project Manager • Earned Value Measurements• Variance Analysis (Cost, Schedule)• Performance Measurement Baseline (PMB)• Corrective Action Identification• Corrective Action and Follow-Up

Measure ProjectPerformance

Project Sponsor • Performance Measurement Baseline (PMB)• Corrective Action Identification

Project Manager • Progress/Status Reports• Project Documentation Updates• PMB Changes and Variances• I-TIPS Updates


Project Sponsor • PMB Changes and Variances

3.5.1 Project Monitoring

The Project Manager is responsible to theProject Sponsor for day-to-day project executionand control, resource management, and projectdocumentation. The required documentation forproject control includes project status reports,requirements documents, baseline and actualcost, including the OMB Exhibit 300, schedule,and performance data, and risk managementdocumentation. The Project Sponsor is ultimatelyresponsible for the success or failure of a project,and in accordance with such responsibilityconducts periodic project reviews.

The Department's Systems EngineeringOversight and Performance Monitoring Division(SEOPMD) conducts approximately project leveltechnical reviews per quarter. For each project,the SEOPMD assesses technical performance,progress, and architectural compliance. TheSEOPMD's technical reviews also serve to verifythat corrective actions identified during previoustechnical reviews are being addressed.

Projects that have been designated as "highrisk" may be referred to the ProgramManagement Review Board (PMRB) for furtherassessment. Appendix D provides examples ofthe templates and forms that are used within theSEOPMD's technical review process. The resultsof technical reviews are included in the project'scontrol records, which are maintained by theProject Manager.

3.5.2 Performance Measurement

The Project Sponsor is responsible forestablishing baseline performance measures forcost, schedule, technical requirements andprogram area mission related outcomes. Thesebaselines supply the framework and foundationnecessary to assess the health of a project. The ongoing analysis of project performance providesthe Project Sponsor and the Project Manager withperformance trends that are used to help definecorrective actions. For example, projects thatdemonstrate a sustained performance variance of


September 2001 3-5

7% or more can be flagged for more in-depthreview. Project Sponsors also are responsible fordetermining the impact of potentially cascadingor long-term problems associated with projectperformance. Earned value managementtechniques are used to measure projectperformance. Project risk management isdescribed further in Appendix G. Current andpotential performance problems also areaddressed at portfolio control review sessions.

3.5.2.1 Earned Value

OMB requires that all major projects utilizean earned value (or similar) approach to evaluateinterim project outcomes. The determination ofearned value involves an assessment of theestimated dollar value and scheduled datesassociated with completing project milestonescompared to actual costs and milestonecompletion dates. All IT projects are planned,budgeted, and scheduled in measurable andphased "value-added" increments. The twomajor objectives of the earned value approachare:

Ø To encourage the use of an effective internal costand schedule management process.

Ø To provide Project Sponsors with timely data foruse in evaluating project status.

An overview of the process employed byHUD to assess earned value, performancebaseline, and variance analysis is provided inAppendix E.

3.5.3 Project Documentation andUpdates

The Project Manager and Project Sponsorare responsible for maintaining the currency ofproject documentation. This includes the carefulscreening of project data to ensure that it isaccurate, complete, and is entered into therelevant HUD project control systems (such as I-TIPS, HUDCAPS, and Project Office).

If a project is operating on schedule andwithin cost estimates, and other conditionssurrounding the project remain unchanged, the

Project Sponsor must verify that the informationprovided to date is valid. However, if conditionschange, the Sponsor must ensure that projectdocumentation is updated in a timely manner.This includes data entered in the OMB Exhibit300, which is used by OMB to ensure programviability and by HUD to measure performance.Provided below are examples of changes thatwould lead to more in-depth project review andlikely updates to project documentation:

Ø The project shows a sustained variance of 7% ineither cost or schedule.

Ø There are actual or potential changes to projectscope or technology.

Ø The initiative is no longer aligned with HUDstrategic goals or performance objectives, or thealignment has changed significantly.

Ø New risks have been identified or the likelihoodand impacts of current risks are considerablydifferent than initially expected.

3.6 Portfolio Control

Portfolio control focuses on the assessmentof the overall health and performance of the ITportfolio. Quarterly portfolio and project controlreviews are conducted to provide for theassessment and to make necessary adjustments tothe IT portfolio. Figure 13 summarizes the keyroles and functions of portfolio-level control andthe associated activities that support them.

3.6.1 Controlling Portfolio Performance

The performance of HUD's entire ITportfolio is reviewed on a quarterly basis. TheOCIO schedules and manages portfolio controlreviews, including the preparation of supportinganalyses. In practice, the HUD portfolio controlprocess provides the basis to re-affirm or “re-select” funded projects on the basis of continuingto meet a business need, and meeting projectperformance objectives (such as cost, schedule


September 2001 3-6

FIGURE 13 – PORTFOLIO CONTROL ROLES AND ACTIVITIES

PHASE ROLE/FUNCTION ACTIVITIES PERFORMED

Project Sponsor • Re-Affirmation of the Business Need and the ITProject Requirement

Project Manager • Provision of Project Actuals

OCIO • Portfolio Screening and Analysis

• Portfolio Performance Benchmarking

• Earned Value Assessment

Evaluate Portfolio Performanceand Determine CorrectiveActions

TIBEC WG • Mission/Business Priorities Re-Assessment

• Portfolio Risk Assessment and Mitigation

• Portfolio Adjustment Recommendations

SRB • Budget Variance Analysis

• Portfolio Adjustment AssessmentReview and ApproveRecommended Adjustmentsand Corrective Actions TIBEC • IT Portfolio Approval

Conduct Post Control Review OCIO • Performance Trend Analysis

• Best Practices Identification

• Process Improvement Analysis

and technical performance). The quarterlyportfolio control reviews also facilitate therealignment of the IT portfolio based on changesin mission, legislative, or business requirements.

3.6.1.1 Pre-Control ReviewActivities

As displayed in Figure 14, the portfolioControl Review serves to answer some basicquestions that help to determine the health ofeach project, and thereby, the overall IT portfolio.Pre-control review activities consist of thecollection and analysis of this data forpresentation at the control review. At a pointprior to the quarterly control review, ProjectManagers and Project Sponsors are providedguidance by the OCIO to enter actual cost- andschedule- to-date information into I-TIPS andsupply other project information as indicatedbelow. The OCIO will then “freeze” all projectdata in I-TIPS to begin the analysis.

The OCIO will access project informationstored in I-TIPS to help calculate the earned valueto measure cost and schedule variances. Theaggregation and analysis of project informationprovides a picture of the health of the entireportfolio, by project category (such asinfrastructure D/M/E, Systems D/M/E, etc.),

and by special interest (such as e-Government,infrastructure, maintenance, or cross-cuttingprojects). In this manner, HUD gains insight intowhether or not the portfolio is adequatelymeeting Departmental needs, and whetheradjustments are necessary.

3.6.1.2 Control Reviews

Executive decision making during theControl Review by the OCIO ensures that ITfunds are spent efficiently and are providingmaximum benefit to HUD. Once projectscreening and assessment are complete, theinformation is passed on to the TIBEC WG, whomeets to assess portfolio performance. Theiranalysis is based on the cost, schedule, andperformance variance, as well as the workinggroup's level of confidence that projects withdifficulties can recover. The TIBEC WG'sdecision making activities focus on theassessments of high risk and high priorityprojects; making revisions to portfolio priorities;and the approval of requests for modifications tothe portfolio. The TIBEC WG submits statusrecommendations for changes to funding forprojects to the SRB. Based on their analysis, theTIBEC WG will offer one of the followingrecommendations for each project they review:


September 2001 3-7

FIGURE 14 – CONTROL SCREENING CRITERIA

ELEMENT DESIREDINFORMATION

BASELINE DATASOURCE

'ACTUAL' DATASOURCE

ANALYSIS

Business Need • Does the projectstill address acurrent businessneed?

• Needs Statement • Project Sponsor • If the business need isnot valid or haschanged, what is theimpact?

ProjectRequirement

• Are projectrequirements stillvalid?

• Business Case(Needs Statement+ C/BA)

• Project Sponsor • If the current IT projectdoes not adequatelyaddress the businessneed, what is theimpact?

• Is an additionalalternatives analysisrequired?

Project LifeCycle

• Status andoutlook of projectcost, schedule,and technicalperformance

• I-TIPS

• Project Office

• Procurement Plan

• OMB Exhibit 300

• I-TIPS

• Project Office

• HUDCAPS

• Project Manager

• Is the project withinacceptance variances?

• If not, what is theperceived likelihoodthat it can recover?

RiskAssessmentand Mitigation

• Have risks,contingenciesand correctiveactions beenaddressed?

• Risk AssessmentPlan

• Project Manager

• ITRB Results

• Are there new risksthat have not yet beenaddressed?

• Have risks hinderedthe success of theproject?

SDMDocumentation

• Are developmentactivities beingconductedaccording to theapprovedmethodology?

• SDMDocumentation

• ITRB Results • Is the SDMdocumentationsufficient andaccurate?

Ø Continue As-Is: The project is proceeding withinacceptable cost and schedule variances;performance targets and milestones are beingmet; all identified risks are mitigated; thetechnology solution and project scope remainviable. Any deviation from these conditions canbe corrected within the scope and budget of theexisting project.

Ø Modify: A change to the project scope, budgetor timetable is needed to enable the project tomeet its objectives; or objectives have changedthat require modifications to the scope, budgetor timetable.

Ø Accelerate: External factors require the projectto be completed sooner than expected or project

resources are available that can enable anacceleration of project schedule.

Ø Decelerate: The project timetable or fundingneeds to be reduced in order to allow the projectan opportunity to regain acceptable cost,schedule, and/or performance levels. Or,external factors, such as dependence on anotherproject, require expanding the project life cycle.

Ø Suspend: It is not cost-effective to proceed withfurther development or on going activity untilproblems stemming from resource shortfalls,project performance, system dependencies, orother external issues are resolved. Typically, asuspension due to these factors will result in aproject review by the PMRB. In addition, arealignment of Departmental priorities among


September 2001 3-8

existing IT initiatives may result in thesuspension of a project.

Ø Cancel: The project is no longer required orthere is a low probability that it will ever meetacceptable cost, schedule or performance levels.The TIBEC WG deems that it is more economicaland in HUD's best interest to end the project(and potentially replace it) than to fund arecovery effort.

3.6.1.3 Recovery Plans

Project Sponsors and Project Managers aregiven 15 days to complete a recovery plan forprojects that are deemed unhealthy.9 Followingthe review of the recovery plan, the TIBEC WGmakes the recommendation to the SRB todecelerate, suspend, or cancel the project.

The 15-day recovery planning periodprovides Project Sponsors and managers with theopportunity to demonstrate that they can gettheir project(s) under control. They do so bydocumenting and presenting a causal analysis ofthe problem, a new project plan indicatingrecovery techniques, and a new risk management

9 Outside acceptable cost, schedule, or performance variance.

plan. The table presented in Figure 15 providesan overview of the corrective actions and/orremedial measures required for unhealthyprojects that are placed on a 15-day recovery plancycle during the quarterly portfolio and projectcontrol review.

The TIBEC WG reviews all project recoveryplans and makes their final projectrecommendations. Adjustments to the portfoliorecommended by the TIBEC WG are thenforwarded to the SRB for executive review andthen to the TIBEC for final approval.

3.6.2 Post-Control Assessment

At the completion of the IT portfolio andproject Control Review, the OCIO provides asummary of outstanding issues and opportunitiesto the TIBEC WG. The TIBEC WG utilizes thePost-Control Assessment to resolve issues andidentify "lessons learned." The OCIO collects thelessons learned and applies them to subsequentcontrol activities, as appropriate.


September 2001 3-9

FIGURE 15 – RECOVERY PLAN CORRECTIVE ACTION CRITERIA

RECOVERY PLAN REQUIREMENTS FOR UNHEALTHY PROJECTS

For projects with greater than 7% negative variance:

• Provide justification for project continuation:

– Explain why this project is required at HUD and should not be canceled.

– Discuss the impact to HUD if the project is not continued.

– Provide a business case analysis for establishing a new baseline.

FOR ALL:

Perform and report on causal analysis for any cost, schedule, or technical performance variances:

• Identify and analyze the factors that drove the project off plan.

• Identify and explain any causes of variance that were missed by the project risk management plan or howthe risk management plans failed to handle those risks that were identified.

• Give new estimates to and at completion for cost, schedule, and technical performance. For cost andschedule estimates, include the impact of the Control Review’s 15-day recovery requirement.

Describe any changes in scope and their impact on project variances

Provide new planning documentation

• Provide a new WBS that incorporates new cost and schedule estimates from the analysis above.

• Provide key control points and milestones for at least six months into the project’s future. Identify and justifya confidence level (low, medium, high) for meeting each key control point and milestone.

• Indicate any phased, successive segments of the project as narrow in scope and brief in duration aspracticable that can move the project forward or solve a specific part of the business problem and that canbe developed and funded independently (e.g., specific phase of system development such as design; pilots,simulations, or prototypes; different levels of service). Incorporate these discrete modules into the WBS.

• Provide a new risk management plan that clearly identifies how causes of risks will be identified and avoidedor mitigated. If there are risks now identified that were not identified in the original plan, explain what stepswill be or are being taken to insure such “blind spots” will be avoided.

• Provide an updated Cost Benefit Analysis (CBA) for the project, to include costs and benefits for thesuccessive independent modules.


September 2001 4-1

4 EVALUATE PROCESS

4.1 Evaluate Process Overview

The Evaluate process, which HUD hasrecently initiated, is displayed in Figure 16. Aprimary objective of this process is to periodicallyconduct Post Implementation Review (PIR) for allcompleted projects (or discrete operationalincrements of larger projects). Each PIR willassess project performance by comparing actualresults to original estimates, and sharing thelessons learned to improve decision makingabout future projects. IT projects in operation areevaluated to determine whether they should becontinued, modified, replaced, or retired. TheEvaluate process also includes an analysis of theperformance of the entire HUD IT portfolio viaan assessment of how well the portfolio ismeeting HUD’s strategic and programmaticneeds, and the delivery of IT products andservices. Finally, the Evaluate process is themechanism by which users and managementroutinely improve HUD's ITIM process. Theresults and lessons learned from the analysesconducted within the Evaluate process arereflected within HUD's IT

4.2 Evaluate Process Prerequisites

The following preconditions and activitiesenable HUD to successfully evaluate its portfolioand ITIM process.

Ø The policies and procedures necessary tosupport the Evaluate process are established andcommunicated to users and key stakeholders.

Ø Performance measurement metrics are definedand institutionalized.

Ø An IT Strategic Plan is maintained.

Ø The Enterprise Architecture is current, accurate,and routinely updated

FIGURE 16 – EVALUATE PROCESS

4.3 Roles and Responsibilities

Roles and responsibilities for the Evaluateprocess will be developed in FY01 and FY02, asthe process is more fully defined.

4.4 Evaluate process SupportRequirements

The following tools provide for thecollection and analysis of information thatsupports the Evaluate process. The tools aredescribed in Appendix B:

Ø I-TIPS

Ø Microsoft Project Office

• Conduct post implementation reviews •• Make adjustments •• Apply lessons learned



Review IT InvestmentStrategies

Review IT InvestmentStrategies

Evaluate PortfolioPerformance

Evaluate PortfolioPerformance


Succession


Succession

ID LessonsLearned &

RecommendProcess

Improvement

ID LessonsLearned &

RecommendProcess

Improvement

4. EVALUATE PROCESS IT Investment Management Process

September 2001 4-2

Ø HUDCAPS

Ø Enterprise Architecture Management System(EAMS)

Ø OMB Exhibit 300

4.5 Evaluate process Aspects

The Evaluate process is comprised of thefollowing activities: Post ImplementationReviews; Systems and Technology SuccessionManagement; Portfolio Performance Evaluations;and ITIM Process Improvement.

4.5.1 Post Implementation Reviews

Post Implementation Reviews (PIRs) areconducted within 6 to 12 months followingproject completion (such as during the OperateSystem phase of the SDM), or immediately uponits cancellation (to capture lessons learned). TheTIBEC WG, in collaboration with the OCIO andthe Office of Information Technology Reform(OITR), identify the projects that are due tocomplete a PIR. In some cases, an independentor cross-functional team will be assigned toperform the PIR. The OCIO is responsible for themanagement of PIR records and the maintenanceof a "clearinghouse" for the collection anddissemination of lessons learned.

During the project PIR, a range ofqualitative and quantitative factors areconsidered, including:

Ø Impact on customers/customer satisfaction

Ø Support to HUD’s mission and programobjectives

Ø Financial performance

Ø Technical capability

Ø Return On Investment (ROI)

Ø Project-level decisions throughout its life-cycle

Ø Effectiveness of the HUD's Select and Controlactivities to ensure the success of the project

Ø Gaps or deficiencies in the process used todevelop and implement the projects

Ø Best practices that can be applied to sustain orimprove the success of other IT projects

A sample PIR evaluation form is providedin Figure 17. The PIR process will be furtherdefined in FY01 and FY02.

4.5.2 System and TechnologySuccession Management

To minimize inadequate returns on lowvalue or high cost IT investments, HUD conductsperiodic reviews of operational systems todetermine whether they should be retained,modified, replaced or retired. With theemergence of new business and processrequirements, and new and updated technology,systems should be assessed to determine theextent to which they continue to support theDepartment's mission and business objectives.This component of the Evaluate process also willbe further defined in FY01 and FY02.

4.5.3 Portfolio Performance Evaluation

The evaluation of portfolio performance is aresults-driven activity that tracks and measuresperformance outcomes, based on the quantitativeand qualitative data accumulated during theITIM process. The objective of these evaluationsis to utilize aggregated project data to assess theoverall effectiveness of HUD’s IT investments to:

Ø Meet the Department’s overall strategicobjectives and business needs

Ø Deliver useful IT products that support programand end-user requirements

Ø Provide quality services to HUD’s businesspartners

The evaluation of portfolio performance isconducted annually by the TIBEC WG with thesupport of the OCIO. Prior to each evaluation,the OCIO defines and issues guidance onportfolio performance evaluation measures,methodologies, techniques for comparativeanalysis, and reporting requirements. Thisprocess will be further defined in FY01 and FY02.


September 2001 4-3

FIGURE 17 – IT INITIATIVE EVALUATION DATA FROMIT INITIATIVE EVALUATION DATA SHEET

GENERAL INFORMATION

Project Title:

Project Description:

Project Sponsor/Manager:

PCAS No:

PIR Conducted By:

Date of PIR:

PERFORMANCE MEASURES

Baseline Actual Variance Comments

Quantitative

Financial

Non-Financial

Qualitative

BASELINE STATUS

Baseline Actual Variance Comments

Life Cycle Cost

Life Cycle Return

Schedule

ARCHITECTURAL ANALYSIS

Architectural Analysis:

RISK ANALYSIS

Risk Assessment:

STAKEHOLDER ASSESSMENT

General Comments:

LESSONS LEARNED

Project Management Assessment:

Technical Assessment:

IT CAPITAL PLANNING PROCESS ASSESSMENT

Selection Assessment:

Control Assessment:

Evaluation Assessment:


September 2001 4-4

4.5.4 ITIM Process Improvements

The activities conducted during theEvaluate process are essential to the on goingimprovement of the HUD ITIM process and tothe contributions that IT projects make towardthe accomplishment of the Department's goalsand objectives. Careful attention by ProjectSponsors and Managers to the factors thatcontribute to project difficulties and failureswill help to ensure that they do not repeatmistakes. In addition, the lessons learned fromproject performance can be used by individualsand organizations involved in the formulationof HUD's IT portfolio (such as the TIBEC WG,SRB, and TIBEC) to refine portfolio selectioncriteria, improve risk management, anddetermine appropriate work increments andassociated levels of funding.

The OCIO solicits input from key processusers and stakeholders to improve the HUDITIM process. The key questions andconsiderations of this activity include:

Ø Is HUD’s IT spending and project performanceconsistent with expectations? If not, whatadjustments are needed?

Ø Do HUD’s ITIM procedures help or hinder themanagement of individual IT projects?

Ø Is the Department effectively identifyingbusiness needs and subsequently developingIT solutions?

The steps that HUD will take to promote thecontinuous improvement of its ITIM process alsowill be further developed in FY01 and FY02.


APPENDIX A A-1September 2001

APPENDIX A. GLOSSARY

Acquisition The acquiring by contract with appropriated funds of supplies and servicesby and for the use of the Federal government through purchase or lease,whether the supplies or services are already in existence or must becreated, developed, demonstrated, and evaluated. Acquisition begins atthe point when agency needs are established and includes the descriptionof requirements to satisfy agency needs, solicitation and selection ofsources, award of contracts, contract financing, contract performance,contract administration, and those technical and management functionsdirectly related to the process of fulfilling agency needs by contract.

Acquisition Plan Description of the acquisition approach including the contract strategy(defined government and contractor roles and responsibilities), use ofCOTS/NDI, and major milestones (e.g., software releases, hardwaredelivery and installation, and testing).

Activities An ITIM core element that describes the procedures necessary toimplement a critical process. An activity occurs over time and hasrecognizable results. This core element typically involves establishingplans and procedures, performing the work, tracking it and taking correctiveactions as necessary.

Alignment The degree of agreement, conformance, and consistency amongorganizational purpose, vision, and values; structures, systems, andprocesses; and individual skills and behaviors.

AlternativesAnalysis

Assessment of all technological options to determine the optimal solutionfor meeting functional requirements based on cost, scope and schedule,and considers in-house or outsourcing options.

ArchitecturalAlignment

Degree to which the IT initiative is compliant with HUD’s EnterpriseArchitecture

Asset Property, funding, technical knowledge, or other valuable items owned bythe HUD. Assets are typically created by investments.

Benefit Term used to indicate an advantage, profit, or gain attained by anorganization. Tangible benefits are those benefits that can be explicitlyquantified. Such benefits may include reducing costs, increasingproductivity, decreasing cycle time, or improving service quality. Intangiblebenefits are those benefits that may be easily identifiable but are difficult toquantify. These may include more efficient decision making, greater dataaccuracy, improved data security, reduced customer burden, or increasedorganizational knowledge.



Business Case Justification that the initiative supports the HUD’s core business or strategicgoals and meets legislative requirements. Includes documentation ofperformance measures, analysis of business process performance andassociated needs or problems, proposed alternative solutions,assumptions, constraints and a risk-adjusted cost/benefits analysis.

CapabilityMaturityModel SM

A descriptive model of the stages through which organizations progress asthey define, implement, evolve, and improve their organizationalprocesses. This model serves as a guide for selecting processimprovement strategies by facilitating the determination of the currentprocess capabilities and the identification of issues most critical to qualityand process improvement

Control Ongoing monitoring process that manages IT projects againstpredetermined schedules, budgets, and performance measures.

Cost Term used to indicate the expenditure of funds for a particular investmentalternative over an expected time period. Cost may include direct andindirect initial costs plus any periodic or continuing costs for operation andmaintenance.

Cost-BenefitAnalysis

Technique used to compare the various costs associated with aninvestment with benefits that it proposes to return. Both tangible andintangible factors should be addressed and accounted for in the analysis.

Development/Modernization/Enhancement(D/M/E)

Acronym used to define new systems development or modernization toexisting or legacy systems that improve organizational capability orperformance; changes mandated by legislation or agency leadership;personnel costs for project management and direct support. D/M/Einitiatives can include both systems and infrastructure projects.

EnterpriseArchitecture

A strategic model of information asset represented by integratedcomponents comprising business, data, application and technologyarchitecture layers that are aligned with HUD’s mission, business goals andobjectives. The architecture defines the business requirements, theinformation systems and technologies necessary to execute businessactivities and the transitional processes needed to implement newtechnologies in response to and in support of changing business needs.

Evaluate Review process that takes place after an investment is operational todetermine whether the investment meets expectations.

SM Capability Maturity Model (CMM) is a service mark of Carnegie Mellon University



ExpectedOutcome

Projected end result of an initiative (e.g. system(s) or improvements incustomer service) that is directly linked with pre-determined performancemeasures.

Feasibility Study Preliminary research performed to determine the viability of a proposedinitiative by performing alternatives analysis including conducting marketresearch and extensive interviews with subject matter experts. Alsoincludes a proposed technical approach and preliminary cost, scope andschedule data.

InformationTechnology

Includes any equipment used in the automatic acquisition, storage,manipulation, management, movement, control, display, switching, inter-change, transmission, or reception of data or information (e.g., computers,software, telecommunication equipment, and peripheral informationmanagement and processing devices), capital and non-capital purchasesor leases.

IT Investment The decision by a HUD organization to expend resources or the actualexpenditure of resources on selected information technology or IT-relatedinitiatives with the expectation that the benefits from the expenditure meetsor exceeds the value of the resources expended.

IT InvestmentControl

The ongoing monitoring and management of the performance of IT projectsthat comprise HUD’s IT investment portfolio against cost, schedule, risk,and technical baselines, and the identification of corrective actions tomanage and mitigate project risk.

IT InvestmentEvaluation

The formal assessment of an operational IT project (also known as a Post-Implementation Review) to determine the degree to which it satisfies theperformance outcomes and expectations established by the business case,project justification, and/or the current expectations of the project'sstakeholders. Lessons learned during the Evaluation process are used tomodify future Select and Control decisions.

IT InvestmentPortfolio

The collection of IT projects approved by the TIBEC to address HUD’sstrategic and programmatic objectives, and to support managerial,business operations and administrative functions.

IT ProjectManagement

The activities necessary to ensure that an IT project accomplishes itsobjectives in accordance with planned or revised cost, schedule, technicalbaselines as well as performance outcomes. It involves the application ofknowledge, skills, tools and techniques by IT Project Managers to direct,control, administer, and regulate a project team creating an IT asset suchthat the resultant product meets its requirements upon delivery.



IT Project An organizational initiative employing or producing IT or IT-related assets.Each project has or will incur costs for the initiative, has expected orrealized benefits arising from the initiative, has a schedule of projectactivities and deadlines, and has or will incur risks associated withengaging in this initiative.

IT Project Value The measurable contribution that an IT project makes towards theachievement of HUD goals and objectives.

IT InvestmentSelection

The decision making process within which all new, ongoing, andoperational IT projects are considered for inclusion in the HUD ITInvestment Portfolio. The Selection process combines rigorous technicalreviews of project proposals and performance together with the applicationof uniform portfolio selection criteria.

Life Cycle Costs The total cost of an IT initiative over its expected life. This cost should bebroken down in accordance with the phases defined in HUD SystemDevelopment Methodology (SDM) and the I-TIPS “A - J” cost categories.The lifecycle cost categories are: Project Initiation/Planning; RequirementsDefinitions; Systems Design; Software Acquisition; Hardware/InfrastructureAcquisition; New Development/Perfective Maintenance; SystemsIntegration and Testing; Installation and Deployment; Systems Operations;Corrective and Adaptive Maintenance.

Milestone The completion of a scheduled, discrete project phase or task. A milestoneis typically used to measure progress.

Non-SystemsDevelopment

Information technology related activities conducted in support of HUD’smission or business objectives that do not involve D/M/E, operation,maintenance, or retirement of a system or infrastructure.

Outcome The actual results, effects or impacts of a business initiative, program, orsupport function. Actual outcomes are typically compared to expectedoutcomes.

OrganizationalCommitment

An ITIM core element that describes the management actions that ensurethat the critical ITIM support processes are established and will endure.This typically involves establishing organizational policies and seniormanagement sponsorship.

Payback Period The forecasted timeframe in which a given investment is anticipated toachieve the projected ROI Ratio (ROI Ratio = Return/Investment Cost)equal to 1.0.



Passback/OMB This period in the budget process is when OMB notifies the Departmentregarding the President's funding decisions for the upcoming fiscal year.This process occurs during the October through November time periodprior to the budget submission to Congress.

PerformanceMeasurement

The process of systematically tracking metrics or indicators to evaluateprogress made in achieving predetermined goals and using such metricsand indicators to assess progress in achieving these goals.

PerformanceMeasure

Metrics or indicators used to evaluate the success of an investment incontribution to predetermined strategic goals. Measures can bequantitative (i.e., staff hours saved, productivity improvement, dollarssaved, reduction in errors) or qualitative (improvements in quality of life,customer satisfaction, etc.)

Project Manager Provides oversight for project performance and maintains informationproject status, control, performance, risk, corrective action and outlook.This person has the lead responsibility for project execution and isaccountable to the Project Sponsor on issues related to the project.Regardless of organizational affiliation, the Project Manager is responsiblefor ensuring that project activities and decisions consider the perspectivesof all affected organizations.

Project Plan Outlines the technical and management (performance-based) approach tobe followed for a project. This includes project milestones and associatedresources, tools and techniques and organizational roles andresponsibilities.

ProjectSponsors

Individual who has authority and ownership for a project, and ultimateresponsibility and accountability for a project's success or failure. ProjectSponsors initiate projects, and help to ensure effective planning,management, and commitment. The Project Sponsor serves as a leader,providing guidance to the project team, and secures from seniormanagement the required reviews and approvals.

Post-ImplementationReview (PIR)

Evaluation of the IT project after it has been fully implemented to determinewhether the targeted outcome (e.g., performance measures) of the projecthas been achieved. The PIR should also include an evaluation of theeffectiveness of the Select—Control—Evaluate process as it relates to anIT initiative.

Return onInvestment(ROI)

The quantitative amount of benefit to be gained compared to theinvestment into the initiative.

Risk An uncertain event that affects the performance objectives (cost, schedule,scope or quality) of a project, usually negatively.



RiskManagement

An approach for addressing the risks associated with investment. Riskmanagement includes identification, analysis, prioritization, and control ofrisks. Especially critical are those techniques that help define preventativemeasures to reduce the probability of these factors from occurring andidentify countermeasures to successfully deal with these constraints if theydevelop.

SelectionCriteria

Factors that are identified by HUD to prioritize and discriminate ITinvestments selected for subsequent funding.

Senior ReviewBoard

Reviews and ranks initiatives to determine relative positioning within theHUD IT Portfolio. Serves as an advisory board to the TechnologyInvestment Board Executive Committee (TIBEC).

SensitivityAnalysis

Analysis of the degree of sensitivity of outcomes to changes inassumptions or risk regarding an initiative. Those that warrant the mostattention depend largely on the dominant benefit and cost elements andthe areas of greatest uncertainty of the program or process being analyzed.

Steady State/Maintenance

Pertains to activities performed as part of systems or infrastructuredeployment activities following the completion of development,implementation and acceptance. This includes post-production activitiesrequired to keep these systems operational and responsive to users’ needsas originally intended. Steady state/maintenance projects do not includeenhancements or new development.

SystemsDevelopmentLife Cycle(SDLC)

A sequence of phases and/or stages that comprise the process fordeveloping software applications and systems. The sequence spans fromthe identification of need through deployment, operation and retirement.

SystemsDevelopmentMethodology

The set of methods, techniques, and procedures of an SDLC process. Themethodology provides a general framework for systems design,development and deployment and outlines roles and responsibilities,development activities and subordinate tasks that produce formal endproducts, conducting quality reviews, and gathering milestone concurrence.

TechnologyInvestmentBoard ExecutiveCommittee(TIBEC)

Chaired by the Secretary, Co-Chaired by the Deputy Secretary andcomprised of HUD Assistant Secretaries and Principals. The TechnologyInvestment Board Executive Committee makes final managementdecisions regarding the effective use of HUD information technologyinvestments and resources, including systems development, infrastructure,maintenance and IT consulting.


APPENDIX B B-1September 2001

APPENDIX B. PROCESS SUPPORT TOOLS ANDMETHODOLOGIES

EAMS – ENTERPRISE ARCHITECTURE MANAGEMENT SYSTEM

The Enterprise Architecture Management System (EAMS) is a repository for collecting information onHUD's business processes and activities, the data created and used within the processes, theapplications that manipulate the data, and the technology used to support the applications and data.Graphical links exist to display the interfaces and associations among these four layers of thearchitecture. Users can access the EAMS to determine existing processes, data and systems thatcomplement their envisioned technical solution to a business need prior to expending resources. TheEAMS is also a tool to assist in Business Process Re-engineering (BPR) or Improvement (BPI) prior toautomating business processes.

HUD's current architecture and standards are maintained within the baseline architecture view. Targetarchitecture and transitional architecture (interim architectures to be achieved while in pursuit of thetarget architecture) views will also be derived and maintained starting in FY01. Compliance with thetechnology standards employed at HUD, and support to achieving the target architecture arerequirements for project inclusion in the IT portfolio.

EXPERT CHOICE Expert Choice is a multi-criteria decision support software product that was developed on the principlesof a popular decision making methodology—the Analytic Hierarchy Process (AHP). Expert Choiceprovides the capability to define goals, identify decision criteria and alternatives, and evaluate keytrade-offs. In addition, Expert Choice enables the creation of decision based-models and drives theuse of pair-wise comparisons to conduct assessments of the relative importance of variables. ExpertChoice synthesizes such assessments to facilitate the drawing of conclusions and also allows forsensitive analysis of various criteria.

HUDCAPS

HUDCAPS is a system that provides a central and standardized accounting environment and captures,reports, controls, and summarizes financial results of accounting processes. The system standardizesthe primary accounting functions (i.e., budget execution and funds control, accounts receivable andcollections, accounts payable, and general ledger) and provide for a user-driven system that supportsthe financial aspects of the users' programs. In addition HUDCAPS will conform to the following coreaccounting standards as mandated by Federal Government:• OMB Circulars A-34, A-123, A-127, and A-130.• GAO Title 2/FMFIA (Federal Managers Financial Information Act).• FHA Program Managers Reporting Requirements.• Joint Financial Management Improvement Program (JFMIP) Core Financial systems Requirements.

HUDCAPS is sponsored by the Chief Financial Officer and the Council of Comptrollers. The primaryusers of HUDCAPS is the Office of Finance and Accounting (OFA), the Comptroller for FederalHousing Administration (FHA), the Comptroller for Government National Mortgage Association(GNMA), the Comptroller for Community Planning and Development (CPD), theComptroller for Public and Indian Housing (PIH), the Office of Budget, and the Regional and FieldOffices.



HUDCAPS serves as the focal point for integrating all HUD financial systems and will provide theframework for systems to communicate with each other. HUDCAPS provides HUD managers easy adhoc access to financial information that will allow them to evaluate the true cost of delivering HUD'sprograms.

HUDCAPS provides benefits to the Department by:• Providing timely, complete, and comparable financial management information.• Improving accounting processing control to detect, prevent and mitigate mistakes, fraud, waste, andmismanagement of funds• Centralizing and providing uniformity in financial information and reporting• Reducing data redundancy• Improving data integrity• Automating many existing manual accounting systems• Complying with Standard General Ledger (SGL) requirements and Generally Accepted AccountingPrincipals (GAAP)

ICISS – INTEGRATED CAPITAL INVESTMENT SUPPORT SYSTEM

The Integrated Capital Investment Support System, ICISS, is an innovative Intranet applicationdeveloped to integrate and interpret contract, financial, and project information for better monitoring andreporting to Managers, GTRs, GTMs, Project Leaders and Contractors.

The overall mission of ICISS is to minimize the manual labor requirements by centralizing access tocritical statistics and automating reports. ICISS also aims to reduce data anomalies by highlightingdiscrepancies between the various systems. Ultimately, ICISS will empower stakeholders in managingthe WCF and eventually Salary & Expenses (S&E) funds.

ICISS is a front end system to HUDCAPS, HPS, Project Office and I-TIPS. Users can build queries toaccess consolidated project information from these systems.

I-TIPS – INFORMATION TECHNOLOGY INVESTMENT PORTFOLIO SYSTEM

The Information Technology Investment Portfolio System (I-TIPS) is a Web-based information systemdeveloped to automate and assist in the management of the IT Capital Planning and InvestmentControl Process. I-TIPS was originally developed for the Department of Energy and is currently in useat a number of other Federal agencies, including the U.S. Department of Agriculture, the U.S.Department of Labor, the Small Business Administration, the General Services Administration, and theU.S. Department of the Treasury, as well as HUD. I-TIPS is a web-based decision-support tool thatsupports HUD's IT investment management process. It collects, stores, and organizes IT project andportfolio data that supports decision making by HUD. Specifically, I-TIPS:

• Assists managers in implementing the Select-Control-Evaluate process;• Allows users to share information across the Department;• Assists managers in assessing IT initiatives in terms of their costs, risks, and expected returns;• Helps IT investment managers assess the impacts of alternative investment scenarios toward thedevelopment of a “balanced” IT investment portfolio;• Assists in monitoring initiative progress, and supports and documents decisions regarding the

continuation of ongoing IT initiatives; and,• Provides a forum to analyze, disseminate and store information about initiative progress against

planned functional, technical, cost, and schedule goals.



OMB EXHIBIT 300

The Exhibit 300 is a tool utilized by OMB to identify Federal agencies capital asset plans andjustification. The Exhibit 300 is used by OMB to determine funding recommendations and identifyagencies IT priorities. This document also meets Congressional reporting requirements in compliancewith the Federal Acquisition Streamlining Act of 1994 (FASA) and the Government and Performanceand Results Act of 1993 (GPRA). Not only is the Exhibit 300 utilized by OMB, it is also a useful tool forenabling HUD to effectively measure whether costs are on schedule and whether performancemeasures are adequately being met in accordance with original stated goals. The Exhibit 300 alsoprovides a historical baseline data source for HUD when commencing new projects.

PROJECT OFFICE

For several years, the Office of Information Technology (OIT) has been using the PARMS system forproject and resource management. This system was identified as not fully Year 2000 compliant, andscheduled for termination at the end of FY99. In December of 1998, Project Office was identified as thereplacement for the IT standard tool for project management.

Project Office is COTS software developed by Pacific Edge as an enterprise project management toolthat is fully integrated with Microsoft Project 98, another Departmental standard. In FY98, HUDprocured a site license for Project Office, and accomplished more than half of the deployment acrossIT. Project Office is being upgraded in FY01.

Project Office will permit all HUD decision makers display status of every project, person, and budget,under their responsibility. It is a system that simplifies and eases the process of tracking and monitoringHUD projects. Through Project Office, HUD managers can create and modify projects, tasks, andbudgets. They can also assign resources, both personnel and financial, to projects and tasks. Thissystem allows managers and oversight organizations to maintain a global perspective on the projectswithin the organization because all relevant information is centrally compiled and readily accessible.

SDM – SYSTEMS DEVELOPMENT METHODOLOGY

HUD's System Development Methodology (SDM) provides a structured approach for the solution ofinformation management problems that require consideration of automated systems. The SDM hastwo objectives:

• To explain the importance, objectives, and benefits of system life cycle management to all potentialparticipants in the system life cycle; and

• To describe the progression of the life cycle through individual activities and processes, in terms of

their respective objectives and products, and to describe the relationships among the activities.

The SDM has been developed to address a wide range of information systems, includingComputer-Aided System Engineering (CASE) method, techniques, and tools. Systems thatsupport HUD programs vary greatly in size, scope of application, complexity of processing,technologies used, and the methodologies and tools used to support the evolution of the systemfrom initial problem statement through the operation and ultimate termination of the system. Suchvariation reflects the diversity of HUD programs. Thus, this methodology does not prescribe asingle method, or present a "cookbook" approach applicable without change, to every system.Rather, it presents a structured, disciplined approach for solving problems, and for selecting andusing the methods, tools, and techniques appropriate to each problem.


APPENDIX C C-1September 2001

APPENDIX C. SELECT SCORING CRITERIA

QUESTION GUIDANCE SOURCE DATA SCORE SYSTEMS/INFRA

NON-SYSTEMS

1. Is the initiativeresponding to a materialweakness identified in anIG audit?

0 = The initiative is notresponding to a materialweaknesses.

1 = The initiative isresponding to onematerial weaknesses.

2 = The initiative isresponding to two ormore materialweaknesses.

§ Material weaknessesare deficiencies orfindings identified bythe Office of InspectorGeneral or theGeneral AccountingOffice.

§ How well does thisproject addressmaterial weakness oravoid weakness orcondition.

§ Business Case

§ NeedsStatement

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

2. Have performancemeasures beendeveloped to assess andidentify how well theinitiative achieves its’goals?

0 = Performance measuresdo not exist

1 = Performance measureslack appropriate metrics

2 = Performance measuresare clearly identified andare closely linked to theproject goals andobjectives

§ Performancemeasures provide ameans to measure theextent to which theproject achieves itsstated goals. In otherwords, is there a wayto identify if the projectwas a success orfailure in achieving theoriginal objective.

§ Well-definedperformancemeasures should bemeasurable,quantifiable, andobtainable.

§ Performancemeasures can befinancial or non-financial that providean ability to measureproject objectives.

§ PerformanceMeasures

§ ExpectedOutcome

§ ProjectDescription

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

3. Are the performancemeasures accurate,reliable, valid, verifiable,cost effective and linkedto expected outcomes?

0 = The metrics are hard toverify and are difficult toobtain supporting data

1 = Some measures areaccurate, reliable, validand verifiable

2 = All metrics are accurate,reliable, valid, verifiableand are closely linkedwith the achievement ofthe expected outcomes.

§ Performancemeasures (metrics)must produce anaccurate, reliable,valid and verifiableindication of missionaccomplishment.

§ The set of measuresshould be built ondata that are availableat reasonable cost,appropriate, andtimely for the purpose.


§ ExpectedOutcome


SCORE:

WEIGHT: 3

WEIGHTEDSCORE:

√√ √√



QUESTION GUIDANCE SOURCE DATA SCORE SYSTEMS/INFRA

NON-SYSTEMS

4. Is a performance-basedmanagement systembeing used to monitorachievement of ordeviation from baselinegoals?

0 = A performance-basedmanagement system isnot being used.

1 = A performance-basedmanagement system isbeing used to identifycost, schedule, andtechnical performancevariances.

§ Identifies the amountof planned workactuallyaccomplished.

§ Compares actual workaccomplished againstplanned work andactual costs incurredagainst planned cost.

§ Establishes thedeviation percentagefrom the goals.


§ ExpectedOutcome


SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

5. Is project data of highquality?

0= Project data is notconsistently accurate,timely, complete, and/orcredible.

1= Project data isconsistently accurate,timely, complete, andcredible.

§ Identifies if projectmanagementdocumentation iscomplete and meetsall SDM requirements.

§ Identifies if cost,schedule, andperformance data isup to date.

§ Verify if the initiativecontains

a reasonable dataquality

control plan.

§ Project Plan

§ Cost BenefitAnalysis

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

6. Is the contractperformance-based?

0 = The project will involve anew acquisition duringFY2001 but it is notperformance-based

1 = The project is under anexisting contract and nonew acquisitions willoccur in FY 2001, or theproject will involve a newacquisition during FY2001 that isperformance-based.

§ Performance-basedcontracts generallycontain one or more ofthe followingelements:

§ Fixed price contracttype.

§ Quality assuranceprovisions, includingformal, measurableperformancestandards.

§ Performance-basedstatement of work thatdefines “what” therequired output israther than “how” thework is to beaccomplished.

§ Performanceincentives anddeduction schedules.

§ AcquisitionStrategy

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√



Support of HUD’s Mission

QUESTION GUIDANCE SOURCEDATA SCORE SYSTEMS/

INFRANON-

SYSTEMS

1. How well does theproject link to HUD’smission?

0 = The project does notsupport nor is there alinkage with themission.

1 = The project supports afew of HUD's missionsor linkages are weak orindirect.

2 = The project stronglysupports several ofHUD’s mission.

§ Cross references theStrategic Goals andlinks the project withthe BusinessOperating Plan.

§ NeedsStatement

§ HUD BudgetOperatingPlan

§ HUD 2020Plan

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

2. Is this initiative cross-cutting (i.e., does itsupport more than oneHUD mission ororganization)?

0 = This initiative is notcross-cutting.

1 = This initiative supportstwo missions ororganizations.

2 = This initiative supportsmore than two missionsor organizations.

§ The more cross-cutting the project,the greater the costsavings or thegreater the benefit toHUD.

§ Project Plan

§ BusinessCase

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

3. What are theconsequences of notgoing forward with theproject at this time?

0 = There are no adverseimpacts if the project isnot funded.

1 = The project isnecessary to maintaincurrent businessfunctions OR delays willhave adverse impacts.

2 = The project isnecessary to maintaincurrent businessfunctions AND delayswill have significantadverse impacts thatmay compromise corebusiness functions.

§ The decision not tofund a project canhave significantimpacts on HUD ifthe project is criticalto the operations ofthe organization.

§ If a one-year or moredelay in deployingthe project has littleor no impact onHUD’s mission, thanthere are nosignificantconsequences fordelaying or notfunding the project.

§ NeedsStatement

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√




INFRANON-

SYSTEMS

4. Is this initiative requiredby law or mandated byCongress?

0 = no

1 = yes

Many initiatives arebeing implemented asa result oflegislation/directivessuch as:

§ OMB CIRCULARA-127, "FinancialManagementSystems,'' mandatesthat each FederalDepartment andagency "establishand maintain asingle, integratedfinancialmanagementsystem."

§ OMB CIRCULARA-130.,"Management ofFederal, InformationResources"describes systemssecurityrequirements.

§ OMB CIRCULARA-123, "InternalControl Systems,"provides policies andprocedurespertaining toestablishing,maintaining,evaluating,improving, andreporting on internalcontrols by federalagencies.

§ NeedsStatement


SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√

5. Does the initiativesupport theGovernment PaperworkElimination Act(GPEA)?

0 = The initiative does notsupport the GPEA.

1 = The initiative supportsthe GPEA.

§ Paper avoidance isone factor that cangreatly impact theAgency’sproductivity.

§ GPEA was signedinto law in 1998making it possible forAgency’s to fullycreate electronicwork environmentsand eliminate paper.Agencies aremandated to supportthe “electronicmaintenance,submission, ordisclosure ofinformation…”

§ Project Plan

§ BusinessCase

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√



Project Management


INFRANON-

SYSTEMS

1. How soon does thepayback period occur?

0 = Payback occurs after 5years (or does not have apayback period)

1 = Payback occurs between2 to 5 years

2 = Payback occurs within 2years

§ Payback period is theperiod of time (in years)required for theinvestment to recoverthe cost of theinvestment. Thesebenefits are intended tobe equal to or greaterthen the cost of theproject.

§ Project Plan

§ Cost-BenefitAnalysis

§ NeedsStatement

SCORE:

WEIGHT: 1

WEIGHTEDSCORE:

√√ √√

2. The cost estimate is highlydependent uponuncontrolled variables(e.g., availability ofexternal funding sources,changes in componentpricing or maintenancecontracts and is thereforesubject to significantchange (i.e., 10% orgreater)?

0 = Cost variance may exceed10%

1 = Minimal cost variance (nomore than 10%) isexpected

2 = There is high confidencethat there will be novariance from the plannedcosts.

§ Situations may arisewhich may cause thisyear’s costs to vary byno more than 10% ofthe estimate


SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ √√

3. Does the project containmajor phases, tasks andmilestones that follow alogical sequence and thatare comprehensiveenough to ensure projectcompletion?

0 = There are significant gapsor holes in the phasing ofthe project and/or not allaspects of the project areaccounted for.

1 = Project phasing and majortasks are reasonable butleave some minor gapsthat could lead toproblems with projectexecution.

2 = The project is phased in alogical manner and everymajor aspect of the projectis taken into consideration.

§ Proper and thoroughproject planning dictatesthe identification of themajor tasks andmilestones at the outsetof the project.

§ A project has a muchhigher likelihood forsuccess if the projectplan is logically phasedand does not containany major gaps.

§ Project Plan SCORE:

WEIGHT: 1

WEIGHTEDSCORE:

√√ √√




INFRANON-

SYSTEMS

4. Is there a specific plan formonitoring, managing andmitigating project risks?

0 = No Risk Managementplan.

1 = Risk management planlacks mitigation measuresfor each identified risk.

2 = Risk management planclearly identifies categoriesand factors withassociated probability ofoccurrences, severity ofimpacts, priorities andmitigation strategies.

§ A Risk Mitigation Planidentifies, analyzes,plans for, and reportsrisks that could affectthe successful deliveryof the project. The planincludes descriptions ofthe project's risks andthe correspondingmitigating action.

§ Risk Plan SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ √√

5. How much does theinitiative depend onanother project orinitiative?

0 = The initiative’s impactdepends upon anotherproject still requiringcompletion.

1 = The initiative’s impactdoes not significantlydepend on anther project.

2 = There are no foreseen orpredicted impacts on theinitiative’s schedule.

§ Dependence on otherprojects increases theoverall project risk.

§ Project Plan

§ FeasibilityStudy

SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ √√



Feasibility of Implementation

QUESTION GUIDANCE SOURCEDATA SCORE SYSTEMS

/INFRANON-

SYSTEMS

1. Are Total Life Cycle Costs– including training costs -distributed in a logicalmanner over the life of theproject and is thedistribution consistent withbest practices?

0 = Life Cycle Costs are notconsistent with theproposed developmentand maintenancetimeframes and/or there isno apparent logic to thecost distribution.

1 = The Life Cycle Costs aregenerally consistent withthe proposed developmentand maintenancetimeframes but there aresome inconsistencies.

2 = Life Cycle Costs arelogically sequenced andthere are noinconsistencies with theproposed developmentand maintenancetimeframes.

§ The seven non-recurring costs (A – G)should typically occurbeforeinstallation/deploymentand the two recurringcosts (I-J) should occurfor the rest of theproject life.

§ Typical SystemOperations andMaintenance costs arefairly consistentthroughout the lifecycle.

§ ProjectInitiation/Planning coststypically end beforeSoftware and HardwareAcquisition is initiated.

§ The project costs istypically high in the firsttwo years and thendrop significantlythereafter.

§ Life CycleCosts

§ Project Plan


SCORE:

WEIGHT: 1

WEIGHTEDSCORE:

√√ √√

2. How large is the proposedinitiative in comparison tothe overall proposed ITbudget?

0 = Greater than 5% of thetotal IT budget

1 = Less than 5% but greaterthan 1% of the total ITbudget

2 = Less than 1% of the totalIT budget

§ Divide the cost of theinitiative by theproposed IT budget.Generally, the higherthe cost, the riskier theproject.

§ NeedsStatement

§ Estimated orproposed ITbudget

SCORE:

WEIGHT: 1

WEIGHTEDSCORE:

√√ √√

3. How well does the costbenefit analysis supportthe initiative?

0 = Value of the benefits isless than 110% of thetotal cost of the initiative.

1 = Value of the benefits isgreater than 110% butless than 140% of thetotal cost of the initiative.

2 = Value of the benefits isgreater than 140% of thetotal cost of the initiative.

§ The value of the benefitcan include qualitativeestimates for costsavings, costavoidance, andproductivity increases.The value of benefitscan also includeestimates for the valueof intangible benefits.


SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ √√



QUESTION GUIDANCE SOURCEDATA SCORE SYSTEMS

/INFRANON-

SYSTEMS

4. Was a business processimprovement analysisconducted prior toconsidering this initiative?

0 = No business processimprovement analysis wasconducted

1 = A business processimprovement analysis wasconducted

§ Processes have beensimplified, improved orotherwise redesigned toreduce costs, improveeffectiveness, etc.


§ ExpectedOutcome


§ FeasibilityStudy

SCORE:

WEIGHT: 1

WEIGHTEDSCORE:

√√ √√

Compliance with Enterprise Architecture


INFRANON-

SYSTEMS

1. Is the proposedtechnology consistent withthe organization'stechnical standards(including computersecurity compliance)?

0 = The project is not incompliance with theorganization's technicalstandards and/or thestandards are not definedor addressed and requiresall or nearly all customdesigned components.

1 = The project is partially incompliance with theorganization's technicalstandards.

2 = The project is fully incompliance with theorganization's technicalstandards.

§ HUD's StandardInformation Technologywill serve as thebenchmark forcompliance. The Officeof InformationTechnology developeda standard environmentthat integrates desktopcomputers (multi-function workstations),Local Area-Networks(LANs), mainframecomputers, and a WideArea Network (WAN),which facilitates sharedaccess to themainframe computersand LAN-to-LANconnectivity. Thesestandards are describedin “HUD’s StandardInformation TechnologyEnvironment” and "Network StandardsGuide." Both of theseguides can be found inHUDWEB.

§ ArchitecturalData

§ FeasibilityStudy

SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ N/A

2. Does the initiative usecommercial-off-the-shelftechnology (COTS) orGovernment off-the-shelftechnology (GOTS)?

0 = The project does not useCOTS or GOTS or willchange or makemodifications to theCOTS/GOTS it plans touse.

1 = The project partially usesCOTS or GOTS withoutchange or modifications.

2 = The project fully usesCOTS or GOTS withoutchange or modification.

§ COTS or GOTSreduces the overallproject risk.

§ Project Plan

§ BusinessCase

§ FeasibilityStudy

SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ N/A



Principal’s Priorities


INFRANON-

SYSTEMS

1. How significant are thebenefits that will berealized by carrying outthis project?

0 = The project does not resultin significant benefits forinternal (within HUD) andexternal customers

1 = The project provides somebenefit to internal and/orexternal customers but thebenefit is not well defined.

2 = The project provides asignificant benefit tointernal and/or externalcustomers and thebenefits can be measuredaccurately.

§ Benefits to internaland/or externalcustomers can bemeasured in manyways, includingincreased efficiencies,improved customersatisfaction, reduction incosts, increase inrevenues, improvedpublic access to HUDinformation, etc.

§ DirectBeneficiaries


§ NeedsStatement

SCORE:

WEIGHT: 2

WEIGHTEDSCORE:

√√ √√

2. How well does theinitiative address theProgram Area priorities?

0 = The initiative does notsupport or identifies anyProgram Area priorities.

1 = The initiative supports oridentifies some ProgramArea priorities.

§ Check the plannedproject outcomes toidentify which ProgramAreas are addressed.

§ Project Plan

§ BusinessCase

SCORE:

WEIGHT: 4

WEIGHTEDSCORE:

√√ √√



Scoring Summary

FY2000 SELECT FY2001 SELECT

Number of questions 10 24

Discriminators Response Range Weights Response Range Weights

Material Weakness Addresses or avoids .325 0 – 34 .318

Supports HUD’s Mission 0 – 14 .302 0 – 32 .299

Project Management 0 – 18 .130 0 – 16 .150

Feasibility ofImplementation

0 – 7 .089 0 – 9 .084

Compliance withArchitecture

Fully or partially .079 0 – 8 .075

Principal’s Priorities High, Med, Low .075 0 – 8 .075


APPENDIX D D-1September 2001

APPENDIX D. SEOPMD TECHNICAL ASSESSMENTTEMPLATES

Invitation

Chairperson: SEOPMDSent by:

Start:End:

Description: Workshop for (System Name, Contact Name, Phone Number andLocation of Meeting)

This meeting repeats starting on (if the date occurs on a weekend the meeting).

Meeting Dates:

Detailed description:You are cordially invited to attend the (System Name) Workshop on (Date) at (Time), in(Meeting Location). The purpose of this Workshop is to assist you in preparing for theupcoming Tech Review. Please complete the attached documents (Tech ReviewTemplate, TR Report Card, and Tech Review Invitee List) and bring them to the Workshop.You are welcome to invite others to the Workshop (additional staff, contractors, etc.).In addition please ensure the following items are updated:

A. SDM Documentation (provide the date when last updated) 1) Needs Statement 2) Feasibility Study 3) Cost Benefit Analysis 4) Risk Assessment 5) Project Plan

B. Project Office

C. Inventory of Automated Systems (IAS)

D. Tech Review Invitee List. Please indicate on the Invitee List additional people you wishto be invited to the Tech Review.



BACKGROUND /MISSION

INTEGRATED PROJECTTEAM

FY 2000ACCOMPLISHMENTS

(Provide a short project description.Include information deemedrelevant; suggestions includeproject history, benefits, expectedoutcomes, systems being replaced,etc.)

Type of System(Developmental or Operational):

Interfaces with:

Platform:

Project Number: ______PCAS #: _________Sponsor: __________________Project Manager: _____________IT Project Leader: ____________GTR: ______________________GTM: ______________________Customer: __________________Contractor Support:

FIRM # FTE'sHUD

Total:

Preliminary BriefingQuestions

1. Please list contract(s) andexpiration date(s):________________________________________________________________________________________

2. Is the project currently onschedule?Circle one: Y N

3. When is the next majordeliverable date (signoffrequired)? ___________

4. Is the project fully staffed?Circle one: Y N

Has all required funding for thisproject been identified andacquired?Circle one: Y N

Recent(Provide description of recentsignificant project events.Examples include: plans completed,approved or executed, releases,rollouts, certifications,implementations, sign-off,acceptance tests, etc.)

·

·

·

Planned

·

·



SCHEDULE/MILESTONES

xxxxxxxXX

X Xxxxxxxx

X X X

Xxxxx

Xxxxxxxx XX

XXxx

XXXX

Xxxxx Xxxxxx

Xxxxxxxxxxxx

J F M A M J J A S O N D

1999

J F M A M J J A S O N D

2000

ISSUES RECOMMENDATIONS FY 2001

(Indicate principal issues and/orchallenges facing project)

•

•

•

(For each Issue identified, method ofaddressing, proposed solution, orassistance required)

•

•

•

(Outline major goals orintended efforts for the nextfiscal year)

•

•

•



FY 2000 FUNDING IMPACT

Budget / WBS Categories FY00 BudgetExpended as

of __________

Balance Projected for FY01

DEVELOPMENTA. Project Initiation/PlanningB. Requirements DefinitionC. System DesignD. Software AcquisitionE. Hardware/Infrastructure AcquisitionF. New Development / Perfective MaintenanceG. System Integration and Testing

H. Installation and DeploymentMAINTENANCEI. System Operations J. Corrective and Adaptive Maintenance

TOTAL $0 $0 $0 $0

FUNDING HISTORY

FY 94-97 Budget Expended

FY98 Budget Expended

FY99 Budget Expended



BUDGET GRAPH

Actual Expenditure (Cum) $0

$0

$0

$0

$0

$0

$1

$1

$1

$1

$1

$1

Baseline 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

WCF Budget

Planned Expenditure(Cum)

Actual Expenditure(Cum)



1. Has an IT project leader been assigned in writing to manage this project?

Is the project/system referenced in an employee performance plan?

2. Has a Work Breakdown Structure (WBS) been developed for the project?

YES

3.

Name: Yangja Lee

Number of elements: 94

Are program reviews included in the schedule?

MANAGEMENT

Performance Measurement

4.

Deliverables

Are contractor deliverables completed in timely fashion?Is the quality of the deliverable satisfactory?

Will the next deliverable be met on schedule?

Will the next deliverable be within budget?

Is the contractor's performance satisfactory?

1.

2.

3.

4.

5.

Reviews

Has an internal A-123 review of the project been conducted and are findingsdocumented?

Are there any active GAO/OIG reviews ongoing for of this project/system?

Is this a TIBEC Priority Project?

Does the current project plan include all actions documented from OIG and/or GAOaudits?

1.

2.

3.

4.

SDM Initiating Documents

Have the SDM Initiating Documents for the current PCAS# been completed:

Needs Statement

Feasibility Study

Project Plan

Cost / Benefit Analysis

Risk Assessment

1.

2.

3.

4.

5.

Resident Assessment Subsystem (RASS)PROJECT

DESIG. PCAS #

DATE

307680

02/09/2000

OPS DIVISION

IT SELF ASSESSMENT SCORECARD

YES

YES YES

YES YES YES NO

YES

Not Applicable

YES Yes

Not Applicable

YES YES YES YES YES

Score


APPENDIX E E-1September 2001

APPENDIX E. EARNED VALUE ANALYSIS ANDMETHODOLOGY

OVERVIEW OF METHODOLOGY FOR CONDUCTING EARNED VALUE ANALYSIS

As illustrated in Figure 18, the following approach outlines the key steps necessary for establishing aprocess for assessing a project’s earned value:• Develop a Work Breakdown Structure (WBS)• Define project scope of work or project activities• Allocate costs to each WBS element• Schedule each activity• Chart and evaluate the project’s status

FIGURE 18 - PRINCIPLES OF EARNED VALUE ANALYSIS

SCHEDULE AND BUDGET

Earned Value Management =Basic Management Principles

DEFINE THE WORK

20

20

20

20

1010

40

204

20

6

8

0

12

CONTRACT TARGET - 150

PLANNED

ACCOMP

MEASURE PERFORMANCE

J | F | M | A | M | J | J | A | S | O | N | D | J | F J | F | M | A | M | J | J | A | S | O | N | D | J | F

TARGET COST - 150

ACTUAL COST(ACWP)

ACCOMP(BCWP)

$150

100

50

PLANNED(BCWS)

TIME NOW

BASELINE

COST VARIANCE

SCHEDULE VARIANCE

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Completion of the above steps will provide the basis for evaluating project performance. This includesupdating and reporting on the project’s schedule of activities (i.e., started or completed with a remainingduration). The percent complete of unfinished activities should also be reported. Once the project’sschedule is updated, actual costs should be recorded. After recording actual project costs for thereporting period, Earned Value measures are calculated and reports generated (as illustrated in Figure18 under “Measure Performance”).



Definition of Key Earned Value Measures as Illustrated in Figure 18:

Actual Cost of Work Performed (ACWP) – The cost actually incurred and recorded in accomplishingthe work performed within a given time period

Budgeted Cost for Work Performed (BCWP) –The sum of the budgets for completed work packagesand completed portions of open work packages, plus the applicable portion of the budgets for level ofeffort and apportioned effort.

Budgeted Cost of Work Scheduled (BCWS) – The sum of all WBS element budgets that are plannedor scheduled for completion.

Cost Variance – Earned Value minus the actual cost (BCWP - ACWP)

Performance Measurement Baseline (PMB) or Baseline – The time-phased budget plan against thatproject performance is measured

Schedule Variance (SV) – Earned Value minus the planned budget for the completed work (BCWP-BCWS)

PERFORMANCE MEASUREMENT BASELINE (PMB) OR BASELINE PROCEDURES

Maintaining a Performance Measurement Baseline is a controlled process by that a project teamestablishes a budget, incorporates formal changes, conducts internal re-planning and adjusts past,present and future information to accommodate budgetary changes. The following baselinemaintenance procedures are based on the Industry Standard Guidelines for Earned ValueManagement System10 as outlined in the March 15, 2000 publication of the United States CustomsService Investment Management Process System Description11.

1. Develop a Performance Measurement Baseline

The Performance Measurement Baseline (PMB) is formed by developing a budget for eachWork Breakout Structure (WBS) element. The PMB should be developed shortly after projectauthorization is granted. When practical, all WBS elements should be planned, at least at asummary level, throughout the project’s life cycle. Any WBS that cannot be established initiallyshould identify the critical event(s) necessary to develop the PMB.

2. Summary Level Planning Packages

In instances where it is impractical to plan authorized cost at a detailed WBS element level,budgeted work should be aggregated to a higher WBS level for later subdivision into detailedWBS elements. This budget must map to specific elements, be time-phased, periodicallyassessed, assigned organizational and individual responsibility, and limited to activitieswithin the project’s scope. Summary level planning is not a substitute for early anddefinitive detail planning.

10 Industry Standard Guidelines for Earned Value Management Systems: Management Systems Subcommittee of the

National Security Industrial Association, January 15, 1997.11 United States Custom Service. Service Investment Management Process System Description, Version 2.1, p. c-29, March

15, 2000.



3. Authorized, Unbudgeted Projects

For projects that have been authorized but unbudgeted, the Project Manager should plan andbudget the near-term effort in detailed WBS elements, with the remaining effort and budgetassigned to a summary level WBS.

4. Incorporate and Document Project Changes

Changes in major projects are inevitable. The PMB should reflect any authorized budget andschedule changes. Changes that have been incorporated into the PMB must be documentedand traceable to the original baseline.

5. Trace and Benchmark Project Against Initial Budgets

The PMB process should constitute a traceable basis against which project growth can bemeasured. The starting point or base on which the original budget is built is the initial projectbudget. This value increases or decreases only as a result of authorized changes. Adequaterecords should be maintained for reconciling all changes back to the baseline budget.

6. Establish Measures to Control Internal PMB Changes

Future plans may vary significantly from the original baseline and as such the Project Managermay choose to re-align the project’s scope, schedule or budget. Examples of instances when itmay be appropriate to conduct internal re-planning (i.e., within the project’s target cost orapproved total allocated budget) include:

• Changes resulting from design reviews that modify requirements• A major shift in the resources needed to complete the project• Funding restrictions or modifications that effect future resource availability• Rate (labor, overhead, direct costs, etc.) changes that are significant enough to warrant re-

planning

VARIANCE ANALYSIS12

Variance analysis is the systematic comparison of planned versus actual project performancemeasures in order to explain deviations from the project plan. Variance analysis therefore provides thebasis for identifying the root cause of deviations in project performance and implementing appropriatecorrective action. As such, variance analysis provides early warning of variances that can becomesignificant if ignored. In addition, variance analysis provides Project Managers with the capability to dothe following:• Determine the immediate and underlying cause(s) of variances• Understand both the short term and total project impact• Identify when work is being performed out-of-scope• Identify and select the appropriate corrective action alternatives• Verify whether corrective action taken is resulting in the planned recovery

12 United States Customs Service. Service Investment Management Process System Description, Version 2.1, p.C-23,March 15, 2000.



Significant Variances

Analyzing every cost and schedule variance (for large projects) can be time consuming. By estimatingcost and schedule variance thresholds, variances can be identified effectively by assessing only eventsthat exceed a predetermined threshold. Variance thresholds typically established prior to projectdevelopment are Cost Variance (CV), Schedule Variance (SV), and Estimate at Completion (EAC).

Cost Variance (CV): Compares the cost of completed work with the value of planned work. Analysis ofthis difference reveals the factors contributing to the variance. Examples include poor initial taskestimate, technical difficulties that required additional resources, differences in planned versus actualcost of labor or materials, rates or personnel productivity.

Schedule Variance (SV): Is earned value minus the planned budget for completed work (BCWP-BCWS). Comparing the value of work completed to the value of work scheduled during a specificperiod provides a valuable measure of progress achieved to date. This variance, when evaluated inhours, quantifies the amount of time the project is behind or ahead of schedule. However, this variancemay not indicate clearly whether or not scheduled milestones are being accomplished since some tasksmay have been performed out of sequence or ahead of schedule. Schedule variance also does notindicate whether a completed activity is a critical event or if delays in completing an activity will impactthe completion date of the contract. Therefore, it is important that the schedule variance analysisprocess provides a means of determining, not only the status of specific activities, but the impact onachieving milestones and on critical events.

Variance at Completion (VAC): Is the difference between the total budget assigned to a contract,WBS element, organizational entity or cost account and the Estimate at Completion (EAC). Itrepresents the amount of expected overrun or underrun. When the EAC exceeds the total budget, anunfavorable variance overrun exists. Project Managers should be alert to circumstances that affect theEAC and, therefore, the VAC.


APPENDIX F F-1September 2001

APPENDIX F. RISK MANAGEMENT

A risk is any event, about which there is uncertainty, which may interfere with achieving the projectobjectives of remaining within cost, schedule, scope or quality. It is important to identify risks in everyproject, and just as important to proactively respond to the risk.

Risk management consists of the following 6 phases:

• Risk management planning

• Risk identification

• Risk assessment

• Risk quantification

• Risk response planning

• Risk monitoring and control

Risk Management Planning: The activity of deciding how to approach and plan for risk management,and practicing that management in a consistent, coordinated and controlled manner throughout theproject life cycle. Factors to take into consideration when planning risk management include:

• HUD's risk management policies, experience and practices

• Assigning roles and responsibilities in measuring, monitoring and controlling risk

• Project decision making authority

• Stakeholder risk tolerances and thresholds of acceptable risk

• Timing of risk management processes

• Risk reporting formats and timing

• Methodologies to be used

Risk Identification: The activity of identifying all potential risks that could impact the project, anddocumenting the characteristics of the risk. Types of risk associated with IT projects include schedulerisk, cost risk, risk of impact to other projects, risk of dependence on other projects, project size andscope, technical feasibility, resource availability and skills, and business requirements. Risks can beinternal (i.e., those that the project team controls or influences) and external (i.e., those beyond thecontrol or influence of the project team).



Risk Assessment: The activity of performing a qualitative analysis of project risks and conditions toprioritize their effects on project objectives. Risk assessment is a measurement of the inability toachieve an objective of a project within known technical, cost and schedule constraints. It ischaracterized by 3 factors:

• Risk Event: The precise description of what might happen to the detriment of the project.

• Risk Probability: The degree to which the risk event is likely to occur.

• Impact: The extent of adverse consequences which could occur to the project if the risk eventoccurs.

Figure 19 displays a risk assessment matrix, indicating risks that portray a high probability ofoccurrence and a high level of impact are risks that require proactive responses. It is also desirablethat responses be planned for those risks that are considered moderate. Low level risks are typicallydocumented in the "Assumptions" list of a project.

FIGURE 19 – RISK ASSESSMENT MATRIX

Risk 4

Risk 5

Risk 8 Risk

6

Risk 7

Low HighMedium

Lo

wM

edium

Hig

h

Im

pa

ct

o

f

Ev

en

t

Probability of Occurrence

Risk 3

Risk 1

Risk 2

Management Focus

Risk ResponsePlan Development-Mandatory

Risk ResponsePlan Development -Highly Desirable

Risk Quantification: Compared to the qualitative analysis of risk assessment, this activity is aquantitative analysis of risk that uses simulation and decision analysis. Risk quantification measuresthe severity of the impact of the risk against the probability to derive specific schedule and cost threat.Additionally, all risk to individual project objectives (e.g., cost or schedule), can be calculated. COTSsoftware packages are available to compute these risk values, as it would be an arduous task to do somanually.

Risk Response Planning: The activity of determining, in advance, appropriate action to Avoid,Mitigate, Transfer or Accept the risk.

• Avoid: Change the project plan to eliminate the risk or condition (e.g., adopt a familiar ratherthan an innovative technical approach).



• Mitigate: Reduce the probability and/or impact of a risk, usually by taking preventive action(e.g., building in redundancy).

• Transfer: Transfer the impact of a risk to a third party, together with ownership of the response(e.g., using a fixed price contract to transfer cost and schedule risk to the contractor).

• Accept: There exists no cost-effective way to avoid, mitigate or transfer a risk. Contingencyplanning is usually done to identify action that will be taken in the event the risk does occur.

Risk Monitoring and Control: The activity of putting the risk response plan into action, and followingthe risk management plan. Risk triggers should be identified and tracked to know when a risk event isimminent. Risks may get larger or smaller as the project proceeds necessitating trend analysis beperformed. The change in risk will indicate a greater or lesser urgency for risk management actions.



APPENDIX G. HUD'S ITIM PROCESS – STATUS ANDOUTLOOK

Planned Activities FY 01 Planned Activities FY 02ProcessAspect Status Comments Q3 Q4 Q1 Q2

Develop anddocumentprocedures fortraining andorienting newITIM boardmembers.

Define the rolesandresponsibilitiesof integratedproject teams.

Verify theeffectiveness ofthe authorityalignment ofthe ITIMboards.

Increase theutility of theprojectmanagementreview boardsin the ITIMprocess.

ITIM roles andresponsibilities 3

Formulated policy anddirection to formalizethe roles,responsibilities,authority, andaccountability of ITIMparticipants. Determine and implement methods to increase the maturity of Project

Manager – Project Sponsor relationships.

Interfaces withoversight andrevieworganizations

4

Established and maintained relationshipswith external oversight (OMB and GAO).Conducted an independent audit of ITIMprocesses and procedures.

Increase level of partnership with and participation onthe Capital Planning and Investment ManagementCommittee of the Federal CIO Council. Update HUD'sITIM process audit and action plan as required.

Selectprocedures 3

Implemented aDepartment wideprocess to Select acomprehensiveportfolio of IT projects.

Refine selectprocedures,includingimproving theefficiency ofworking groupmeetings.

Determine amethod toannuallyupdate portfoliocharacteristicsandperformanceexpectations.

Update scoringcriteria withmore completerisk, security,and Section508 factors.

Increase focuson total lifecycle of ITinvestments.

Controlprocedures 2

Initiated efforts todevelop andimplement an effectiveprocess for monitoringthe performance of theIT portfolio.

Determine and incorporate amechanism to capture andeffectively utilize real-time projectfinancial data.

Implementprojectperformancemeasurementpractices.

Benchmarkportfolioperformance.

Evaluateprocedures 1

Initiated developmentof HUD's Evaluateprocess andprocedures.

Develop rolesandresponsibilities.

Define the ITproject andportfolioEvaluationprocess.

Initiate alessons learnedfeedbackmechanism.

Make formalimprovementsto the ITIMprocess.

Alignment withbudgetformulation

3

Initiated the alignmentof the ITIM processwith budgetformulation.

Use Expert Choice software toweight the Department's goals andobjectives and revalidate ITproject priorities.

Develop a procedure for assistingthe CFO to successfully analyzeIT vs. non-IT considerations.

Alignment withprocurementand acquisition

2

Initiated the alignmentof the ITIM processwith procurement andacquisition.

Refine the data sharing betweenthe ITIM (OCIO) and acquisitionprocesses (OCPO).

Work with OCP to develop clearguidance for performance-basedcontracting.

Alignment withthe SystemDevelopmentMethodology(SDM)

2Initiated the alignmentof the SDM and ITIMprocess.

Revise the Riskinitiationdocument tomorethoroughlycapture risksand mitigationplans.

Tailor the SDM initiationdocuments to account for differingproject types, classifications, size,criticalities, and life-cycle phases.

Determine aschedule ofreviews formajor projectsbased on life-cyclemilestones.

Integration ofHUD'sEnterpriseArchitecture(EA)

1

Developed HUD'sbaseline EA andcaptured it in the EAManagement System(EAMS).

Determine how the EA data will beused to identify IT needs andopportunities for savings,consolidation, e-Gov, etc.

Begin to define the target andintermediate EAs. Decide howthey will be used for the FY '03/'04Select.



Developformal policiesandprocedures forIT assettracking.

Tailor I-TIPS tocapture GPEAtransactioninformation.

Develop a methodology to gaugethe validity and effectiveness ofbusiness processes supported bysystems in maintenance.

Integration ofother IT areas(maintenance,security, GPEA,e-Gov, Section508)

1

Incorporated numerouskey IT managementaspects into the ITIMprocess, includingsecurity plans andevaluations, and e-Govselection criteria.

CollectSection 508data duringFY '02/'03Select.

Begin system and technologysuccession managementpractices.

Improve ITsecurity-scoringcriteria.

ProjectManagementProfessional(PMP)certificationcourse.

Conduct PMP testing and obtaincertifications.

ITIM and ITProjectManagertraining

2

Began efforts tostrengthen thecompetencies andcapabilities of HUD's ITinvestment and ProjectManagers throughpractical hands-ontraining.

Phase II of the ITIM and PM training program.

Conductassessment oftrainingprogram andreview needsfor follow ontraining.

Key

4 Aspect is fully developed and implemented

3 Aspect is mostly developed and implemented

2 Aspect is partially developed and implemented

1 Aspect is under development

0 Aspect has not been addressed