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Making Smart IT Choices: Understanding Value and Risk in Government IT Investments



Chapter 1. The risks of IT innovation in government

How this guide can help

Government managers need to analyze and evaluate IT choices because these choices are among the most complex and expensive decisions they are expected to make. Whether you are a local official considering a new system to support building permits or an administrator at a large federal agency considering a new network infrastructure, you are faced with a complex and relatively expensive decision-making process. The consequences of your IT decisions often have a significant and direct impact on the public. For example, the safety of the flying public rests on the ability of the Federal Aviation Administration to implement systems that control air traffic. A state child welfare agency gathers and responds to information that protects the health and well being of children in that state. A local government emergency response application ensures that emergency vehicles are routed to incidents in the fastest and safest way possible. Systems that support law enforcement make a big difference in the ability of federal, state, and local criminal justice agencies to provide public safety. These systems cost thousands, millions, even billions of dollars. They are important because the goals they serve are crucial to our quality of life. The risks of system failure are linked to the risks of service failure for hundreds, thousands, or even millions of people.

This guide can't tell you what technology to buy, or even what problem is most important to solve. It can't tell you how much money you will save using IT, or even if you will save any money at all. This book is about how to think about an IT investment. It offers a set of analytical techniques to understand the issues and opportunities and to build a business case for investing in a particular path. It shows how to use that business case to get the support you need to move forward with your project. We think of this phase of the IT investment process as the one that comes "before the beginning." It is necessary before the first design meeting, before an RFP is written, before the budget is developed. We believe this kind of up front analysis is essential to doing all of those things well because it uncovers both risks and resources that lead to smarter IT decisions.

In short, three kinds of analysis mitigate the risks of these investments:
  • thoroughly understand both the problem to be solved and its context
  • identify and test possible solutions to the problem
  • evaluate the results of those tests against clear service and performance goals
The following chapters present a well-tested methodology that can help you to understand and carry out these three critical tasks.

References
Hammer, Michael. (1990.) "Reengineering Work: Don't Automate, Obliterate," Harvard Business Review, July-August.

Isenberg, Phillip. (1994.) "Point of View: When BIG IT Projects Falter," Government Technology, July, 7(7).

Miller, Brian. (1994.) "DMV Project Hits Dead End," Government Technology, July, 7 (7) pp. 1, 53-54.The Standish Group. (1995). The CHAOS Report. On line at