1. CaseStudy
MANAGING FOR RESULTS
DOD A GENCY T URNS TO P ORTFOLIO M ANAGEMENT FOR I MPROVED
P ERFORMANCE AND E FFICIENCY
B ACKGROUND
TAKING THE F IRST S TEP
In 1993, Congress passed the Government Performance and Results Act,
Meeting all of the legislative requirements along with the OMB/GAO IT invest-
which required federal agencies to measure program results by linking per-
ment management guide would require the agency to ensure its IT investments
formance to investments. Because Congress provides capital to federal
resulted in measurable improvements to its mission-related and administrative
agencies, it wanted to ensure agencies’ investments yielded value and that
processes. In April 2000, determined to satisfy the intent of the legislation and
the means to achieve value were measurable. Three years later, the Clinger-
comply with the OMB/GAO guide, the agency engaged Robbins-Gioia, a manage-
Cohen Act mandated that the Department of Defense implement a process
ment consulting company with more than 20 years of experience managing com-
whereby information technology investments are managed and evaluated
plex initiatives. Robbins-Gioia was tasked to establish a program executive
based on measurable contributions to DOD mission goals and priorities. As
office (PEO) structure as an initial step in managing the agency’s emerging IT
a result of this legislation the Office of Management and Budget and
investment programs. The company had been helping the agency to success-
Government Accounting Office established an IT investment evaluation guide
fully execute its business systems modernization effort and was on site when
directed at the IT investment management process.
the DOD began to embrace the legislative intent of the Clinger-Cohen Act and
resulting guidelines. The agency turned to Robbins-Gioia for help in defining the
To comply with legislation and federal guidance and establish metric perform-
legislation, evaluating the agency’s programs and investments, and implement-
ance measures, a critical DOD agency set out to identify and establish
ing an overall methodology to support the agency’s acquisition and portfolio
processes to effectively manage its IT investments and ensure those invest-
management process.
ments were aligned with its strategic missions, business goals, and objec-
tives. With more than $3 billion in IT investments over a 5-year planning
cycle, investment management and oversight is critical to the agency’s mis-
sion. “The agency understands the significance of performance measure- With more than $3 billion in IT investments
ment in the federal government and is committed to achieving effective man-
over a 5-year planning cycle, investment
agement and oversight of its investments,” said Rex Lovelady, senior pro-
gram management consultant from Robbins-Gioia, a company engaged to management and oversight is critical to the
help the agency achieve its aims. “This initiative enables the agency to agency’s mission.
acknowledge the dollars being spent on IT, while determining outcome meas-
ures and the expected benefit and return on investment.”
Solutions used:

2. (1) identifying IT investments; (2) baselining cost, schedule, and perform-
ance; (3) establishing the business value for each portfolio investment; and
Portfolio management is a unique process that aligns
(4) identifying expected mission outcomes. The portfolio managers, in a col-
investments with strategic missions, business goals,
laborative effort with the functional proponents, were also responsible for
and outcomes while grouping like investments into managing the portfolio investments during the critical budget planning
portfolios. process by monitoring IT investment baseline changes, analyzing portfolio
impact in the selection of new IT investments, assessing portfolio risks, and
making investment decisions that impacted other portfolios.
M EASURING U P THROUGH P ORTFOLIO M ANAGEMENT
It didn’t take long to determine the agency would benefit from a disciplined yet
FACING R EALITY H EAD O N
flexible portfolio management approach to manage and oversee its IT invest- Right from the start, the agency faced several barriers in implementing the
ments in support of its functional and mission areas. Portfolio management is portfolio management process. As an integral part of the portfolio manage-
a unique process that aligns investments with strategic missions, business ment solution, the agency was required to implement a PEO acquisition
goals, and outcomes while grouping like investments into portfolios. This solu- structure, which would provide greater management and oversight of the
tion would manage investment risks to maximize ROI and contribution to mis- agency’s automated information systems (AIS). At the time, the agency
sion outcome, empower agency senior executives to make decisions with lacked an adequate program management structure to support either the
greater confidence, and provide visibility into the implementation of the total portfolio management or PEO initiative, and discovered that it would need
integrated investment strategy. to merge more than just its AIS systems. The agency would also need to
oversee contemporary systems, legacy systems, infrastructure, and other
Once on board, Robbins-Gioia helped the agency interpret IT investment man- emerging programs and project relationships to maximize IT investment con-
agement requirements and used best practices to define portfolio management. tribution to mission outcome.
A portfolio was defined as the resources, management, and related investments
required to accomplish a mission-related or administrative outcome. Portfolio Additionally, the agency was finalizing a major reorganization that required
management, then, was the process of managing and overseeing those IT the refinement of organizational roles and responsibilities. To facilitate the
investments to maximize the contribution each IT investment and portfolio process and provide direction for the implementation, Robbins-Gioia devel-
makes toward mission accomplishment. oped several of the agency’s directives. PEO operations, portfolio manage-
ment and oversight, and AIS life cycle management for emerging systems
Robbins-Gioia assisted the agency in identifying the best portfolio approach to directives documented the process and clearly defined roles and responsi-
manage the agency’s investments and laid out an overall methodology and plan bilities.
that mapped out the activities necessary to successfully implement the mission
analysis through the selecting, controlling, and evaluating phases of the portfo-
lio management process. Robbins-Gioia was instrumental in establishing an IT
investment management self-assessment questionnaire and conducting the Right from the start, the agency faced
agency’s self-assessment in accordance with the GAO investment management
maturity model. This self-assessment helped to validate the overall portfolio
several barriers in implementing the
management process and implementation plan and provided the initial frame-
work to address GAO’s subsequent IT investment management audit.
portfolio management process.
Portfolio managers were chosen to manage each portfolio’s investment areas.
The portfolio managers established the management structure responsible for

3. After identifying the portfolio managers and outlining their roles and respon-
sibilities, a plan was created that established critical action items.
“Then we took that plan and encompassed
“We created a schedule with the activities and key milestones to help keep
the agency on track to accomplish this task,” said Lovelady. “Then we took it into the agency’s overall organization, and
that plan and encompassed it into the agency’s overall organization, and it it took off from there.”
took off from there.”
–Rex Lovelady, Robbins-Gioia senior program management
consultant
From then on, the agency transitioned into the four phases that make up a
successful portfolio management process of mission analysis, selection,
control, and evaluation.
and corporate portfolio impact. The investment proposal is briefed as a mile-
Mission Analysis stone decision to the PEO review board for selection. The selection process is
To budget for an IT investment program with portfolio management, the embedded in the budget planning process and development of the annual budg-
agency would need to determine specific requirements for IT investments. et submission.
The agency’s mission areas conducted analysis that linked their mission
goals to performance outcomes. This enabled mission areas to identify Control
gaps in missions, prioritize deficiencies, and determine the strategic direc- Management and oversight is provided for those IT investment programs that
tion for the agency’s mission-related and administrative processes. are selected through the established PEO operations and life cycle management
process. The acquisition executive delegates management and oversight
If a mission deficiency was found, the mission areas would then conduct a responsibilities of the selected IT investment to the PEO, who establishes mile-
trade-off analysis to identify possible solutions for the deficiency. stone decision reviews, testing and evaluation processes, and program docu-
Nonmaterial solutions—such as reengineering business processes, organi- mentation requirements. The PEO also tailors life cycle requirements and initi-
zational and policy changes, and training and education—were considered ates program baseline reporting. IT investment program status is reported on a
first to resolve the deficiency. If the mission area determined that an IT solu- monthly basis and in-progress reviews are conducted on a quarterly or
tion was needed, it had to document the trade-off analysis, develop a mis- as-needed basis.
sion needs statement, and document the functional requirements that an
IT capability must meet to eliminate the deficiency. Evaluation
In the evaluation stage, the achievement of program goals and objectives are
“The functional proponents are responsible for defining the mission need evaluated and lessons learned documented. The PEO maintains oversight over
and functional requirements for an IT capability,” said Lovelady. “The IT com- the assessment and reporting of performance information and planned versus
munity then provides the IT solution that supports that requirement.” actual benefits as well as planned versus actual costs.
Selection The agency has implemented 75 percent of the stage 2 critical processes and
Once it is established that an IT capability would best resolve a deficiency, should reach stages 2 and 3 of the GAO portfolio management maturity frame-
an IT investment proposal is developed, transitioning the portfolio manage- work as the agency runs through the next budget planning cycle in 2003. This
ment solution into life cycle management. Prepared by the functional mis- will provide the documented, physical, and testimonial evidence of an opera-
sion area and information operations team, the IT investment proposal sum- tional and improving IT investment management process within the agency.
marizes the mission need, possible IT alternatives and recommended alter-
native, estimated cost, anticipated benefits, initial resource requirements,

4. Headquarters
11 Canal Center Plaza
Robbins-Gioia has been dedicated to delivering management
Alexandria, VA 22314
t: 800.663.7138
f: 703.684.5189
solutions to government agencies and Fortune 500 companies for
New York
65 Broadway
Suite 906
New York, NY 10006
more than 21 years. We help our global customers optimize their
212.509.6260
Ottawa business processes, accelerate change, and establish time, cost,
180 Elgin Street, Suite 900
Ottawa, Ontario
Canada K2P-2K3
613.236.3773
and quality improvements to transform their businesses.
Detroit
26555 Evergreen Road
Suite 1290
Southfield, MI 48076 Selected Client List
248.359.7807
COMMERCIAL GOVERNMENT
Toronto AT&T Agriculture
8th Floor Avaya Air Force
2425 Matheson Blvd E. AXA Financial Army
Mississauga, Ontario
Canada L4W 5K4
DaimlerChrysler BLM
905.361.2803 EDS Customs Service
Ford Motor Company Defense
Los Angeles FuGen Energy
Sales Office General Motors FAA
112 Third Street
Seal Beach, CA 90740
Hewlett-Packard FBI
562.594.8739 Johnson & Johnson INS
Lockheed Martin Interior
Dayton Lucent Technologies Justice
1360 Technology Court Merrill Lynch NRO
Suite 200
PricewaterhouseCoopers Navy
Beavercreek, OH 45430-2200
937.426.8081 Public Service Electric & Gas PTO
United Airlines Transportation
Qwest Treasury
Warner Robins, GA
402 Corporate Pointe Verizon TSA
Warner Robbins, GA 31088 VBA
478.329.0009
Montgomery, AL
Two East Building
400 Eastern Bypass
Suite 200B
Montgomery, AL 36117
334.271.4654
www.robbinsgioia.com
info@robbinsgioia.com
800.663.7138
©2003 Robbins-Gioia, LLC®
All rights reserved
02-09u042803