Showing posts with label IT stock market model. Show all posts
Showing posts with label IT stock market model. Show all posts
Tuesday, July 1, 2008
Managing Government Technology Like Your Investments
When Mayor Adrian Fenty appointed me to his Cabinet as Chief Technology Officer for the District of Columbia, I asked a simple question: Why can I find the real-time stock price and performance of any publically traded company with a few keystrokes, but I can’t get solid information on the performance of technology projects in the government?
My answer was to create a “Wall Street” model to manage the $950-million-plus District technology portfolio as a portfolio of stocks. Each project is a “company,” its team is company management, its schedule and financial status are captured in market reports, and customer satisfaction is the market reaction. The model allows us to balance riskier strategic IT investments with more conservative ones and rebalance the portfolio whenever necessary. The model also fosters government transparency and accountability--we deliver accurate, real-time performance data to government officials and citizens using web reports, podcasts, and YouTube videos.
I built a team of five Portfolio Managers to run the Wall Street model according to three core principles:
Apply the Efficiency of the Stock Market to IT Governance
In an environment of shrinking budgets, rising energy costs, and growing citizen expectations of government, evaluating the performance and promise of IT projects continuously and accurately is critical. With the Wall Street model, we can make fast and sound decisions to “buy,” “hold,” or “sell” an IT project—i.e., invest more financial resources or change management to improve performance, maintain the current resource level, or cancel a failing initiative.
Capture Quantitative and Qualitative Data
The IT stock model incorporates both quantitative and qualitative analysis to provide a holistic picture of the investment. Quantitatively, the Portfolio Managers analyze vital project statistics including schedule, spend against budget, and return on investment. Qualitatively, the Portfolio Managers evaluate the management team, customer satisfaction, and current project-related events to ensure a deep, integrated understanding of the project’s drivers and results.
Treat Taxpayers like Investors
We define the Portfolio Managers’ roles as guardians of taxpayer funds. Ultimately, these managers must ensure that all District agencies spend taxpayer dollars wisely and well on technology investments.
Here are a few cases where we turned “Dogs” into “Stars” by rebalancing our IT investment portfolio:
District Intranet: The District planned to invest $4 million to develop a government-wide Intranet—but with outdated technology. I withdrew the $4 million and switched the technology to free, flexible open-source software. The only cost was $10,000 for a server. The result: a cost reduction of 97.5%.
Report card system: The District planned to build a costly new complete automated report card system for the DC Public Schools. But the holistic stock market evaluation revealed that secondary schools already had automated report cards. So I switched to a much smaller $160,000 investment to install a primary school report card system and integrate it with the existing secondary school software.
DC-Net: DC-Net is a state-of-the-art fiber-optic DC government network that delivers high-bandwidth, high-reliability voice and data services to District agencies. A year ago, the project was a perfect example of excellent technology badly managed. Every month it ran a deficit, it had not added new customers at the planned rate, and costly contract staff sat idle. I changed the management, dismissed the contract staff, and re-invested the funds in a smaller group of less costly, more focused District employees. The result: a consistent monthly surplus since June 2007, renewed customer growth from 15,800 phone numbers as of June 1, 2007 to 21,580 phone numbers as of June 5, 2008 (37% in a year), and high customer satisfaction.
The genius of the American stock market is to put capital to the most efficient use, continuously redirecting funds from low-performing companies to high performers. Our IT stock market model infuses the same efficiency in government, assuring citizens the highest and best use of the tax dollars they entrust to us.
My answer was to create a “Wall Street” model to manage the $950-million-plus District technology portfolio as a portfolio of stocks. Each project is a “company,” its team is company management, its schedule and financial status are captured in market reports, and customer satisfaction is the market reaction. The model allows us to balance riskier strategic IT investments with more conservative ones and rebalance the portfolio whenever necessary. The model also fosters government transparency and accountability--we deliver accurate, real-time performance data to government officials and citizens using web reports, podcasts, and YouTube videos.
I built a team of five Portfolio Managers to run the Wall Street model according to three core principles:
Apply the Efficiency of the Stock Market to IT Governance
In an environment of shrinking budgets, rising energy costs, and growing citizen expectations of government, evaluating the performance and promise of IT projects continuously and accurately is critical. With the Wall Street model, we can make fast and sound decisions to “buy,” “hold,” or “sell” an IT project—i.e., invest more financial resources or change management to improve performance, maintain the current resource level, or cancel a failing initiative.
Capture Quantitative and Qualitative Data
The IT stock model incorporates both quantitative and qualitative analysis to provide a holistic picture of the investment. Quantitatively, the Portfolio Managers analyze vital project statistics including schedule, spend against budget, and return on investment. Qualitatively, the Portfolio Managers evaluate the management team, customer satisfaction, and current project-related events to ensure a deep, integrated understanding of the project’s drivers and results.
Treat Taxpayers like Investors
We define the Portfolio Managers’ roles as guardians of taxpayer funds. Ultimately, these managers must ensure that all District agencies spend taxpayer dollars wisely and well on technology investments.
Here are a few cases where we turned “Dogs” into “Stars” by rebalancing our IT investment portfolio:
District Intranet: The District planned to invest $4 million to develop a government-wide Intranet—but with outdated technology. I withdrew the $4 million and switched the technology to free, flexible open-source software. The only cost was $10,000 for a server. The result: a cost reduction of 97.5%.
Report card system: The District planned to build a costly new complete automated report card system for the DC Public Schools. But the holistic stock market evaluation revealed that secondary schools already had automated report cards. So I switched to a much smaller $160,000 investment to install a primary school report card system and integrate it with the existing secondary school software.
DC-Net: DC-Net is a state-of-the-art fiber-optic DC government network that delivers high-bandwidth, high-reliability voice and data services to District agencies. A year ago, the project was a perfect example of excellent technology badly managed. Every month it ran a deficit, it had not added new customers at the planned rate, and costly contract staff sat idle. I changed the management, dismissed the contract staff, and re-invested the funds in a smaller group of less costly, more focused District employees. The result: a consistent monthly surplus since June 2007, renewed customer growth from 15,800 phone numbers as of June 1, 2007 to 21,580 phone numbers as of June 5, 2008 (37% in a year), and high customer satisfaction.
The genius of the American stock market is to put capital to the most efficient use, continuously redirecting funds from low-performing companies to high performers. Our IT stock market model infuses the same efficiency in government, assuring citizens the highest and best use of the tax dollars they entrust to us.
Thursday, June 5, 2008
District of Columbia CTO Recognized Among Nation's Best
Today District of Columbia Mayor Adrian M. Fenty announced that District Chief Technology Officer (CTO) Vivek Kundra has been honored with two major national information technology (IT) awards.
IDG's InfoWorld named Kundra among the nation's top CTOs with its "CTO 25 for 2008" award. Each year the technology publisher honors 25 senior IT leaders from government, nonprofits, and private industry who apply creativity, tech savvy, and management skills to drive excellent results in their organizations. In addition, the MIT Sloan CIO Symposium recognized Kundra among outstanding IT innovators who use leadership skills, business-technology acumen, and out-of the-box thinking to address ever-increasing challenges facing their organizations.
Mayor Fenty appointed Kundra CTO for the District effective May 7, 2007. Kundra joined the District government after a technology career spanning government, private industry, and academia. As District CTO, Kundra leads the District's central technology organization, the Office of the Chief Technology Officer (OCTO). Its mission is leveraging the power of technology to improve service delivery, drive innovation, and bridge the digital divide to build a world-class city.
The accomplishment that won recognition for Kundra from both InfoWorld and MIT Sloan was the introduction of a new model to manage technology investments in the District. Kundra's idea was to manage IT as a portfolio of stocks, with each project as a company, its team as the management, its schedule and financial status captured in market reports, and customer satisfaction as the market reaction. By applying these stock-market practices to government technology, Kundra was able to identify problem projects early and either switch managers or kill the projects, freeing resources for more promising initiatives.
"My administration has worked hard to attract top talent to government," said Mayor Fenty. "Vivek Kundra is one of the most dedicated,innovative, and people-savvy executives I've ever encountered-within government or outside it. Even with my administration's commitment to flat budget growth, he's been able to produce consistently outstanding results. He's a tremendous asset to my administration and the whole city."
"I'm humbled to receive this recognition," said Kundra. "The real driver of the work that won this award is the challenge and inspiration I get from serving the District of Columbia."
The InfoWorld CTO 25 and MIT Sloan awards are not the only national technology honors that Kundra and his organization, OCTO, have won this year. OCTO won two Public Technology Institute's 2007-2008 Technology Solutions Awards for local governments that use technology to enhance service delivery, lower operating costs, and open new revenue opportunities.
To learn more about DC Government technology initiatives, visit http://octo.dc.gov/
IDG's InfoWorld named Kundra among the nation's top CTOs with its "CTO 25 for 2008" award. Each year the technology publisher honors 25 senior IT leaders from government, nonprofits, and private industry who apply creativity, tech savvy, and management skills to drive excellent results in their organizations. In addition, the MIT Sloan CIO Symposium recognized Kundra among outstanding IT innovators who use leadership skills, business-technology acumen, and out-of the-box thinking to address ever-increasing challenges facing their organizations.
Mayor Fenty appointed Kundra CTO for the District effective May 7, 2007. Kundra joined the District government after a technology career spanning government, private industry, and academia. As District CTO, Kundra leads the District's central technology organization, the Office of the Chief Technology Officer (OCTO). Its mission is leveraging the power of technology to improve service delivery, drive innovation, and bridge the digital divide to build a world-class city.
The accomplishment that won recognition for Kundra from both InfoWorld and MIT Sloan was the introduction of a new model to manage technology investments in the District. Kundra's idea was to manage IT as a portfolio of stocks, with each project as a company, its team as the management, its schedule and financial status captured in market reports, and customer satisfaction as the market reaction. By applying these stock-market practices to government technology, Kundra was able to identify problem projects early and either switch managers or kill the projects, freeing resources for more promising initiatives.
"My administration has worked hard to attract top talent to government," said Mayor Fenty. "Vivek Kundra is one of the most dedicated,innovative, and people-savvy executives I've ever encountered-within government or outside it. Even with my administration's commitment to flat budget growth, he's been able to produce consistently outstanding results. He's a tremendous asset to my administration and the whole city."
"I'm humbled to receive this recognition," said Kundra. "The real driver of the work that won this award is the challenge and inspiration I get from serving the District of Columbia."
The InfoWorld CTO 25 and MIT Sloan awards are not the only national technology honors that Kundra and his organization, OCTO, have won this year. OCTO won two Public Technology Institute's 2007-2008 Technology Solutions Awards for local governments that use technology to enhance service delivery, lower operating costs, and open new revenue opportunities.
To learn more about DC Government technology initiatives, visit http://octo.dc.gov/
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