Government Capability To Evaluate High Risk or High Cost Projects

The Client's Challenge

The Victorian Government had experienced a number of large, visible IT-project failures or substantial overruns. The new Government, having campaigned against this wastage, wanted to ensure no future IT project disasters occurred during its time in office.

It, therefore, established a new group to review all large-scale IT/high risk projects. We were asked to define its role and modus operandi.

Scope

All high-cost (over $5m) IT-related projects

All high-risk IT-related projects

Across all Government departments and agencies but not including government-owned enterprises.

Approach

The current processes were reviewed to identify how disastrous projects could be approved and continue once their problems became apparent. We found, for example,

• the 7-stage “gateway” process did not (as everyone assumed) assess the project’s health and capability to successfully complete – giving everyone a false belief that this was happening

• the use of the Investment Logic Map approach to benefits management allowed non-benefits and un-measurable outcomes to be proposed and approved

• once approved, projects were unlikely to be cancelled due to political, departmental and personal preferences not to admit any failure.

We also conducted thorough evaluations of all submitted high-cost/high-risk proposals submitted for the year’s funding cycle.

The Results

• All submitted proposals were returned for further work to validate their value proposition and feasibility

• Accountabilities for approval were clarified across the different government departments involved (to eliminate both existing duplications and mis-allocations)

• The end-to-end evaluation and approval process was streamlined to cull poor proposals earlier while reducing the ‘last minute’ workload expense of the previous process

• The required levels of specificity for outcomes, benefits and value calculations were redefined to prevent non-benefits being accepted and approved

• The need for effective health checks reporting to the new central unit to identify problem projects early was identified for action by the newly created unit.

The Payoff

Further expenditure on existing failing and incorrectly framed projects was stopped and the funds reallocated to more deserving and worthwhile projects.

The costs incurred in generating business cases for approval were reduced due to the removal of the requirement for business cases to be generated ‘over Christmas’.

The quality of ongoing projects became visible within the government allowing early intervention.

The clarity and quality of business cases improved making evaluation and prioritization decisions easier.