1. General Institutional Framework

1.1 Background

The Canadian government is committed to deliver its programs and services more efficiently and effectively through the use of information technology. In 1994 the Treasury Board Secretariat published a "Blueprint for Renewing Government Services Using Information Technology". Since that time, the development and rapid growth in use of the Internet has revolutionized approaches to IM/IT usage. The government recognizes the need to adapt its services to the new technology. In the October 1999 Speech from the Throne, the government committed to having all its information and services on-line by 2004. The government's goal is "to be known around the world as the government most connected to its citizens, with Canadians able to access all government information and services on-line at the time and place of their choosing."

However, for some time past, failures of major information technology investments and key systems development projects have raised concerns for the achievement of service improvement through information technology. In 1995, in recognition of these concerns, the Treasury Board Secretariat (TBS) carried out a review of 25 significant government IM/IT projects, with a total estimated cost of $2 billion. The review identified business, project management, risk management, and human resource issues influencing the outcome of these projects.

Also in 1995, the Auditor General of Canada, as part of his annual review of government, studied four large systems development projects, with a combined value of $490 million, being undertaken by government departments, and found that only one of the four was being managed in a way that dealt effectively with the risks associated with the project.

The report described the results of these reviews, and also quoted private sector research (the Standish Group's CHAOS research) indicating that the likelihood of large multi-year systems development initiatives being completed on time, within budget and with the desired functionality (what the system should do for its users) in the public and private sectors was extremely low. In 1994, the chance of a project developed by a Fortune 500 company coming in on time and within budget was only 9%. At that time 31% of IM/IT projects surveyed by the Standish group in both the private and public sectors were cancelled before completion. Subsequent CHAOS research shows that higher proportions of projects are being completed successfully, but the proportion cancelled has remained about the same.

The focus of reviews by the Treasury Board Secretariat and the Auditor General was on large IM/IT projects. These may be defined by a number of criteria, for example:

• with a value over $10 million;
• taking 18 months or longer to implement;
• involving extensive business or organizational change;
• involving significant new technology and/or technical complexity;
• requiring implementation in numerous and widely dispersed locations, or across more than one organization.

However, it was evident that the conclusions emerging from the reviews of large IM/IT projects were applicable to all sizes of project in this area. These reviews led to a reexamination of the government's policy and procedures for the management of systems development projects, and ultimately to a new focus on the management of IM/IT investments in general - portfolio management.