Final | October 2018 | v1.0.0 | OFFICIAL-Public | QGCIO
The purpose of this guideline is to outline the importance of, and approach for, developing initiative proposals to support digital or ICT strategies or plans and associated roadmaps. The culmination of an integrated digital or ICT planning approach typically culminates in the development of proposals that take the outputs from the vision, strategy and roadmap activities and establish the need to invest in specific initiatives to achieve the agency’s digital or ICT vision and objectives.
Some agencies may have adopted their own investment lifecycle and investment logic methodologies and these guidelines should be considered within the context of those methodologies.
A practitioner in the context of this guideline can include one or more of the following roles:
- Digital or ICT strategic planners
- Agency and service strategic planners
- Investment or portfolio specialists
- Benefits specialists
- Enterprise architects.
Relationship between planning, enterprise architecture and portfolio management
The relationship between the disciplines of digital and ICT planning, enterprise architecture and portfolio management within the context of digital or ICT planning activities is highlighted in figure 1.
Figure 1 - Integration of digital and ICT planning, enterprise architecture and portfolio management functions
The relationship between digital and ICT strategic planning and enterprise architecture became evident during the development of the target state architecture and roadmaps based on the digital or ICT strategy or plan. Planning and enterprise architecture practitioners must work iteratively with stakeholders to develop roadmaps to enable the achievement of the digital or ICT vision and objectives.
Planning and enterprise architecture practitioners must also work with investment and portfolio specialists to translate the digital or ICT strategy or plan and roadmaps into specific initiatives.
Digital and ICT strategic planning establishes the context within which portfolio management operates by providing the basis for determining the scope of the digital and ICT portfolio and the basis for the prioritisation of individual initiatives through the development of initiative proposals.
By collectively analysing all the initiative proposals, portfolio management addresses six fundamental questions:
- Are the programs and projects in our portfolio necessary in the context of our strategic objectives?
- Is the agency’s portfolio, together with BAU activities, sufficient to its strategic objectives?
- Is the overall level of risk acceptable?
- Is the portfolio of initiatives achievable?
- Is the portfolio affordable – and if not, which initiatives should be dropped or re-scheduled?
- What are the measures against which the performance of the portfolio will ultimately be assessed?
Through selection and prioritisation based initiative proposals; portfolio management seeks to ensure the agency’s change initiatives represent the optimum allocation of limited resources in the context of the agency’s strategic objectives and broader investment portfolio, and this is maintained if conditions change.
Portfolio management also provides information on the contribution that current programs and projects are making to the strategic objectives. This can lead to a change in strategy, based on achievement of unplanned benefits or failure to realise planned benefits.
Proposals that are evidence based, highlight the need for change, level of investment, strategic alignment, strategic approaches and other resources are important to compete for the limited financial resources of the agency and from government. The development of initiative proposals requires the input from several specialist resources including:
- Digital or ICT strategic planners
- Agency and service strategic planners
- Investment or portfolio specialists
- Benefits Specialists
- Enterprise architects.
Working across the disciplines of planning, enterprise architecture and portfolio management will strengthen the position of digital or ICT investment against the other investments proposed by agency.
Roadmaps and the gap analysis will form the basis for the development of initiative proposals. An initiative proposal may take into consideration a single element or group of elements represented on a roadmap.
The format of the initiative proposal will depend on the planning objectives, agency specific processes and even whole-of-government processes relating to investment. Practitioners will need to consider aligning the format of initiative proposals to the templates required by the funding process in which they are participating.
Examples of types of initiative proposals include but are not limited to:
- Strategic Business Case – Building Queensland
- Program Brief – Managing Successful Programs
- Outline Business Case – PRINCE2.
Regardless of the template used for an initiative proposal, there are many elements that should be considered as part of an initiative proposal.
These include but are not limited to:
- the service need or opportunity including its context, background and the nature of the issue
- how the potential initiative aligns to the agency’s vision and strategic priorities of government
- linkages to other initiatives/activity
- problem statement including the relative importance of the problem/opportunity
- proposed business benefits including an investment logic map or similar if appropriate
- stakeholders impacted by the change
- strategic approaches including non-asset related approaches as well as opportunities for enhancement to the current environment, re-use, leverage and collaboration opportunities
- estimated costs
In some cases, it may be appropriate to conduct a workshop with internal and external stakeholders, subject matter experts and service partners to develop the material necessary for an initiative proposal.
The workshop can be used to shape the problem statement, define or refine the benefits confirm the business changes and identify the strategic options.
The introduction or background should set the context for the investment concept and summarise the current state in terms of services and stakeholders affected as well as any current performance issues, risks or drivers. This also may include statements regarding changing business models or emerging technologies as well as their potential impact on the agency.
This section will use information gathered during the Vision activities such as the drivers, PESTEL analysis or SWOT analysis and benefits as well as the contextual information such as the narrative contained in strategic planning documents regarding the current state and the service vision.
This section clearly articulates the problem (opportunity) to be addressed. This section draws on information gathered during the Vision activities such as the drivers, PESTEL analysis or SWOT analysis.
The following guidelines have been extracted from Building Queensland’s Strategic Business Case Guide:
Typically, there may be two or three main problem statements. A problem statement should be:
- expressed in plain English and include a clearly defined cause and effect within the statement
- supported by evidence to verify both the problem and the cause and effect
- compelling and something the organisation and/or community care about (e.g. if the effect or consequence are of little importance or concern, the problem is not compelling).
Key questions to consider when developing a problem statement include:
- What are the likely causes and impacts?
- What will happen if we do nothing?
- What trigger has made us think we need to respond now?
- What are the impacts and can we minimise the cause?
- What evidence is there to support the relationship between the cause and the impact?
Helpful hints when developing a problem statement include:
- Focus on the core problem rather than the symptoms of the problem.
- If the investment is driven by a political imperative (e.g. it’s an election promise or a Ministerial request), set out to identify the community need that stimulated the political response.
- Seek to take a strategic view rather than a tactical view, which is often asset or solution focused. Avoid problem statements that might indicate a specific asset solution.
- Frame the problem statement around the impacts the problem is having on people rather than comment on the adequacy of specific assets.
This section should clearly demonstrate the alignment to both the business strategic direction and the digital or ICT strategic direction of the agency.
It is not sufficient to simply state the name of relevant strategies and plans. Practitioners need to identify the specific objectives the proposed initiative is likely to directly contribute to.
How the initiative will contribute to the achievement of the objectives should also be identified.
The benefits outlined in the digital or ICT strategy or plan can be used as the basis to start refining benefits of the proposed initiative. It may be appropriate to include an investment logic map or benefits dependency network from the vision planning activities and modify it to suit the specific circumstances of the proposed initiative.
In some cases, it may be necessary to conduct a workshop to develop a separate or revised benefits dependency network or investment logic map with internal and external stakeholders and subject matter experts.
Benefits statements need to reflect successful outcomes to the community, enterprise or organisation that will be delivered because of investment. The benefits should also address the negative consequences outlined in the problem statement.
The benefits sections should also include the key performance indicators that demonstrate how the benefits will be measured.
The section should outline the stakeholders or groups of stakeholders who will benefit from the business change and related investment. These stakeholders can include citizens, customers, service delivery partners, other government agencies, organisational units and staff for example.
Strategic options and approaches
Strategic options and approaches may include a number of high-level interventions that describe a response, resolve the problem, or take advantage of the opportunity. All strategic options must have the potential to deliver some or all the required business changes as well as address the related problem. To ensure an option is strategic there must be more than one possible solution.
The information collected during the Discover planning activities may assist with the analysis of options.
The identification and analysis of strategic options uses the business changes information from a benefits dependency network or investment logic map and identifies and evaluates options for delivering the required changes.
In some cases, it may be necessary to conduct a workshop or interviews to identify the strategic options with internal and external stakeholders and subject matter experts.
Strategic options should include non-asset related options including service and process efficiencies, changing the flow of the demand for services or providing a solution using an ‘as-a-service’ model of delivery. Options to use or expand the use of current assets of services used by the agency should also be considered. Strategic options should also include a ‘do nothing’ option.
Evaluation of strategic options
Each option should be evaluated. The information collected during the Discover planning activities may assist with the analysis of options.
The methods used to evaluate options will depend on the agencies own investment lifecycle methodology or framework. Two methods have been outlined in this guideline including:
- Weighted options method
- Public Value Scorecard
Practitioners should consider using workshops with stakeholders to evaluate strategic options. This will provide the opportunity to discuss and record the opinions or justification by key stakeholders as to which options are preferred or better.
This method involves identifying criteria against which options will be evaluated and selected. These criteria could be based on the business changes required, specific investment objectives or the statements of benefit. Selection criteria should address elements of attractiveness, achievability and affordability.
A percentage is then assigned to each criterion for each option, based on the contribution each option will make to achieving or satisfying that selection criteria.
Selection Criteria 1
| || |
Selection Criteria 2
Selection Criteria 3
| || |
Selection Criteria 4
Selection Criteria 5
Table 1 - Sample weighted options analysis
When using any method of weighting or ranking, it is important to supply the evidence or justification for rating an option. This should include data based on research and in some cases, may include the reasoning, opinions or themes identified during stakeholder engagement.
Information to substantiate the weighting may include but is not limited to:
- Current actual or projected service delivery costs
- Whole of life cost estimates based on a conceptual design, similar projects conducted in the past, cost benchmarks or similar project costs in other agencies or other jurisdictions.
- Evidence of whole-of-life costs, unit costs or improved performance based on industry models and patterns.
- Evidence of improved performance identified through research.
- Market research into product or service offerings.
The extent to which a solution is expected to be offset by revenue should also be considered.
Public value scorecard
This method is more subjective and involves overlaying the results of conversations with diverse groups of stakeholders on a graph regarding the merits of each option. The criteria include:
- Is it useful?
- Is it decent?
- Is it politically acceptable?
- Is it a positive experience?
- Is it profitable?
An example is provided in figure 2 below:
Figure 2 - Public value scorecard
A separate graph should be produced for each option so the relative merits of each options according to different stakeholder groups can be compared. It is also important to record both the best case and worst-case scenarios.
Whilst this method is subjective it does take into consideration the opinions of different stakeholder groups when broad consultation is undertaken.
As with weighted options analysis, it is important to supply the evidence or justification for selecting an option. This is likely to include the reasoning, opinions or themes identified during stakeholder engagement.
As part of proposing an investment it may be necessary provide indicative cost estimates for all options. Agencies may have their own methodologies for developing cost estimates and these guidelines should be considered within the context of those methods and techniques.
There are several sources of information that may assist with developing cost estimates. These sources include but are not limited to:
- Portfolio dashboards
- Information relating to actual costs from past projects
- Domain costs collected as part of the whole-of-Government ICT profiling activities
- Industry research
- Details of actual or proposed costs of initiatives conducted in other agencies or other jurisdictions.
- Known costs of services derived from the service catalogue.
- Vendor or supplier marketing information that is publicly available.
The costs of previous programs and projects, particularly where the approach and capability being delivered is similar, can be used as a predictor of future costs.
A more subjective approach is to use historical costs and develop typical cost ranges for initiatives that are considered small, medium or large or alternatively low complexity, medium complexity and high complexity. The options identified in the initiative proposal can then be classified according to size or complexity and the indicative cost ranges assigned to them.
Costs per domain using data from agency or whole-of-government ICT profiling activities can also be used to derive cost estimates. A conceptual or target state architecture, specific to the initiative can be developed. Domain costs for estimated capital or implementation cost as well as an annual cost of operation can then be used to estimate the cost of an approach or solution.
When using this method, it is important to omit the statistical outliers from the data so the average cost per domain information is more accurate. It is also important to include non-solution related costs such as program and project management costs, business or organisation change costs including service and information improvement, organisational unit changes, workforce development and training, marketing and communication costs.
Another agency or business unit within the Queensland Government or in other jurisdiction may have, or is about to undertake. a similar initiative. It may be worthwhile for practitioners or representatives from the business sponsoring the initiative, to engage external partners who are willing to provide indicative cost information based on their experience.
Whichever method of cost estimating is used, details of how costs were derived should be included in the initiative proposal as footnotes or as an attachment or appendix of the proposal. This should include any assumptions made so decision makers are aware of any limitations regarding decision making based on cost. It may also be necessary to include a level of contingency into each cost estimate.
This section should document the risks that are specific to the proposed initiative.
Most agencies will have an existing risk management framework or methodology and these guidelines should be considered within the context of that methodology or framework.
The identification and evaluation or risks can be conducted as part of a workshop. Risk analysis conducted as part of the digital and ICT strategic planning activities may form the basis for the identification of risks related to this initiative.
When identifying risks, it may be useful to first consider categories of risk. These may include but are not limited to:
- Service delivery risks
- Legal and compliance risks
- Reputational risks
- Risks to business continuity
- Financial risks
- Workforce and organisational risks
Once the risks have been identified the consequences and likelihood of the risk occurring should also be identified. A risk rating (typically Extreme, High, Medium or Low) can then be derived based on the consequences and likelihood scores, applying the risk assessment matrix adopted by the agency.
In many cases it may be necessary to identify and outline the risk management strategies as part of the initiative proposal. It may also be necessary to discuss how each option contributes to resolving or mitigating those risks.
In many cases, only risks that are ‘Extreme’ or ‘High’ are discussed in the initiative proposal.
Based on the analysis of approaches, costs, benefits and risks, a recommended option can be identified. The recommendation should include the rationale for selecting that option based on the evidence gathered through the analysis of options. The recommendation should also identify the intended sponsor of the initiative. It may also be necessary to identify or recommend an intended source of funds.
Depending on the agency’s investment governance and assurance processes, the recommendation may be to simply progress to the next investment gate. This may include developing a business case or conducting an implementation planning study for example. While the full estimated cost would be included in the proposal. Only enough funding and resources to proceed to the next stage would be requested as part of the recommendation.
The initiative proposal should be approved by the proposed sponsor or Senior Responsible Officer.
Once approved the initiative proposal will be submitted for prioritisation and approval in accordance with the agency’s and whole-of-government investment governance processes.
Building Queensland's guide for developing a strategic business case
Weighted options analysis