1.4.3 Corporate Project and Program Management
In December, 1997, the WSIB Board of Directors approved the development of an information technology (IT) strategy with assistance from an external consulting firm. The IT Strategy presented to the Board of Directors in December 1998 concluded that WSIB's information technology systems were not well positioned to meet existing and future business requirements and legislative mandate. The 1998 IT Strategic Plan had four key elements:
- Computer systems must be replaced to support current and future business;
- Computer systems cannot support future business;
- The work required to achieve the IT strategic plan objectives would take approximately five years, and would cost $200 million;
- Targeted business systems for improvement included Claims, Provider and Account Management, Executive Information Warehouse, Prevention Management, Actuarial and Infrastructure.
In July, 1999, the Agility Program began with the primary goals of redesigning business processes and replacing information technology as necessary. The Agility Program had four phases:
- Discovery;
- Envision;
- Detailed Design and Testing; and,
- Implementation and Mastery.
The objective of the Agility Program was to manage individual projects and the Program as a whole, manage risk, track and report benefits, and act as an agent in procurement.
On December 13, 2000, the Board of Directors discussed four options to proceed with some or all of the components of the Agility Program. The estimated cost of these options ranged from $360 million to $451 million. In December, 2000, a high-level review of the Agility Program was performed by an independent consulting firm, given the change in scope from the December, 1998, IT Strategy and the increased cost projections. In summary, this independent review noted that the increased budget was caused by expanded applications and corresponding requirements for infrastructure and services, and recommended the number and size of projects being executed by the organization be reduced significantly, and that WSIB improve program and project governance.
As at December 31, 2003, the total cost, both IT and non-IT, for Agility Program related projects was $185 million, against a revised budget of $215 million. For 2004 to 2009, apart from $810 thousand spent on the Accounts Receivable system within the Integrated Financial System (IFS) project, Integrated Case and Account Management (ICAM) is the only ongoing project associated with the original Agility Program. Total budgeted expenditures, both IT and non-IT, for ICAM for 2004 to 2009 are $140 million.
The total projected cost of the current plan to develop and implement projects that originated from the Agility Program, from 1999 to 2009, is $325 million. This is comprised of $185 million in costs incurred to December 2003, plus the projected cost of $140 million to complete the ICAM series of projects up to 2009. This can be compared to the potential costs WSIB faced in November, 2000, for the Agility Program, of between $360 million to $451 million. Based on our review of the options presented to the Board of Directors in November 2000, the option that most approximates the plan that WSIB continued with from 2001 to 2004, and now plans to proceed with, would have incurred estimated cost of $451 million.
Over the last five to seven years, large projects within WSIB have been impacted by the following external events and decisions:
- The introduction of an expanded mandate arising from legislation, which required the organization to undergo significant change;
- The launch of the Agility Program, primarily in support of the new legislated mandate, which, under any circumstances, was a large and complex undertaking;
- Assignment of IT planning and development responsibilities to the Executive Project Leader for the Agility Program, which separated traditional IT processes (planning and development from delivery, support and monitoring) that normally exist under one 'roof', thereby increasing the complexity of integrating IT activities; and,
- Engaging an external consultant to assist with the Agility Program, without giving sufficient attention to the reality that the ultimate responsibility for project management lies with the organization, and requires clear separation of project management, risk management and quality assurance functions from the role and activities undertaken on behalf of the organization by third parties.
These factors brought about the situation where an organization in transition, with IT functions organized in an unusual manner, embarked on a large and complex 'transformational' undertaking that would test the capabilities and resilience of any organization.
Recent surveys quoted by the IT Governance Institute note that the majority of projects continue to fail (49%), while 28% are 'challenged' and only 23% are considered successful. When the above factors are considered, the Agility Program was handicapped from the beginning in its chances for success.
Oversight and Risk Management governance and control mechanisms put in place to manage the Agility Program were not commensurate with its the size, nature, and complexity. It then appears that rigorous compliance with planned project and financial controls were not enforced.
The improvements brought about by application of the 'lessons learned' from the Agility Program across the organization, and the re-integration of traditional IT responsibilities and functions within the IS Division, has resulted in some progress in increasing the ability of the WSIB to more effectively and efficiently manage the extensive investment and risks inherent in large and complex IT related projects. However, a number of corporate project management practices and processes should be improved before WSIB moves forward with the investments planned for the ICAM Project starting in 2005.
Our review of Programs and Projects was limited to identifying significant concerns with project management, and did not comprise a detailed 'systems under development' review of either the Agility Program or subsequent projects. Based on the work we performed, and the understanding that this provided us of WSIB's prior and current 'program' and project management processes, we have summarized the level of 'project management maturity' for critical success factors within WSIB's project management environment, using the control maturity model incorporated into the Information Systems Audit and Control Association's CobiT model:
Overall WSIB appears to have made progress with respect to its project management processes. Significant improvements are still required in the areas of project feasibility analysis (estimation, and regular refinement of costs and benefits); project management expertise; thorough identification and aggressive mitigation of project risks, including the inherent capability of WSIB to accommodate and manage very large projects; compliance with established project methodology and contracting requirements; and finally definition and acceptance of deliverables.
- 0 Non-Existent
Management process are not applied at all - 1 Initial Ad Hoc
Processes are ad-hoc and disorganized - 2 Repeatable
Processes follow a regular pattern - 3 Defined
Processes are documented and communicated - 4 Managed
Processes are monitored and measured - 5 Optimized
Best Practices are followed and authorized
As noted above, we recommend that WSIB ensure it has addressed these critical success factors by December, 2004, prior to proceeding with the large project expenditures planned for 2005 to 2009 to complete the ICAM Program.
| Project Management Critical Success Factors[ 1 ] | Agility Program Maturity Assessment | Current State Maturity Assessment | Suggested Maturity Target by December 2004 |
|---|---|---|---|
| Value of project established in a business case and approved by senior management prior to project initiation | 1 | 2 | 4 |
| Experienced and skilled project managers available | 1 | 2 | 3 |
| Senior management sponsorship of projects, and stakeholders and project participants share in the definition, implementation and management of projects | 0 | 3 | 4 |
| Business sponsors are held accountable for ensuring and demonstrating expected benefits | 0 | 3 | 4 |
| There is an understanding of the abilities and limitations of the organization in managing large, complex projects | 1 | 2 | 3 (not really a process rating, but an awareness rating |
| An organization-wide project risk assessment methodology is defined and enforced | 0 | 2 | 4 |
| All projects have a plan with clear, traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, a quality plan and a transparent change process | 1 | 2 | 4 |
| Effort is focused on ensuring traceability of approved business case objectives to business and systems requirements, and into the design and building of the system | 0 | 2 | 4 |
| The project system architecture is developed within the context of the enterprise architecture plan and guidelines | 1 | 3 | 4 |
| The transition from the project team to the operational team is a well-managed process | 1 | 3 | 4 |
| A system development life cycle methodology has been defined and is used by the organization | 1 | 1 | 2 Requirement depends on extent of internal systems development |
| The projects implement clear quality management strategies | 0 | 2 | 3 |
| A common project methodology is established, communicated and used in the organization | 1 | 2 | 4 |
| There is an understanding of the importance of project formalities (mandate, contracts, etc.) | 0 | 2 | 4 |
| Unambiguous deliverables with acceptance criteria are agreed on before development start-up | 0 | 3 | 4 |
| Business process impacts and adjustments are identified and implemented as part of the project implementation | 0 | 4 | 4 |
| Clear Go/No-Go decision points are established and controlled | 0 | 2 | 3 |
| Project management is regarded as a professional discipline | 0 | 2 | 3 |
[ 1 ] Project Management: Skill and Knowledge Requirements in an Information Technology Environment, by the Information Systems Audit and Control Foundation.
Management's Responses
The lessons learned from Agility and related initiatives are acknowledged in this report which references the progress made with the Integrated Case and Account Management program (ICAM). Since 2002, the WSIB has undertaken significant steps to improve business practices in the areas of strategic planning, project management, system development, risk management contracting and business case management at the WSIB.
The WSIB agrees to further improve the management of large projects. The WSIB agrees to the auditor's proposed December 2004 timelines as they relate to support programs for ICAM.
PRIVATE AND CONFIDENTIAL
