ict benchmarking better practice roadmap guide

7/25/2019 ICT Benchmarking Better Practice Roadmap Guide

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0BICT Benchmarking:1BBetter Practice Roadmap

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ICT Benchmarking: Better Practice Roadmap | 1



!icen"ing

The Department of Finance and Deregulation is licensed to use,reproduce, adapt, modify, distribute and communicate the informationcontained in the ICT Benchmarking Better !ractice "oadmapdocument# $ith the e%ception of the Common&ealth Coat of 'rms, and sub(ect toany copyright notices contained in indi)idual documents, all materialpresented in the ICT Benchmarking Better !ractice "oadmapdocument is pro)ided under a Creati)e Commons 'ustralia *icence+'ttribution-onCommercial .#0 /nported+httpcreati)ecommons#orglicensesbync.#0# To the e%tent thatcopyright subsists in a third party +such as in the material relating tothe denitions of cost elements and ser)ice to&ers at pages 3 to 4,permission &ill be re5uired from the third party to reuse the material#

The document must be attributed 6ICT Benchmarking Better !ractice"oadmap7# Use of the Coat of Arms

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Contact usIn5uiries regarding the licence and any use of this data are &elcome at

ICT 9kills, Capability and In)estment Branch'ustralian :o)ernment Information ;anagement <=ceDepartment of Finance and Deregulation >ohn :orton Building ?ing@d&ard Terrace !arkes 'CT 2300@mail 8T/ ':I;<#feedbackAnance#go)#au /8T

The capability maturity model used in this document is loosely aligned&ith C;; and other maturity model principles, but it is in no &ayendorsed by Carnegie ;ellon 9oft&are @ngineering Institute, orrepresented as a )alid C;; or C;;Icompatible product#

ICT Benchmarking: Better Practice Roadmap | #

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CMM, CMMI and Capability Maturity Model are registered in the USPatent & Trademark Ofce by Carnegie Mellon Uniersity!

ICT Benchmarking: Better Practice Roadmap | $



Content"

1. Executive Summary 4

1.1 Purpose 4

1.2 Roadmap to improved ICT Benchmarkin 4

1.! The Bene"its o" Improvin Benchmarkin #aturity $

2. ICT Benchmarkin Roadmap %

2.1 Capa&i'ity #aturity #ode' %

2.2 Strateies to Improve #aturity (

2.! )eve' 1 to )eve' 2 (

2.4 )eve' 2 to )eve' ! 1*

2.$ )eve' ! to )eve' 4 1*

2.+ )eve' 4 to )eve' $ 11

2.% Imp'ementation ,ssistance 12

!. #ode's "or Preparin Cost and Personne' -ata 1!

!.1 Preparin Cost and Personne' -ata 1!

!.2 Investment 1$

4. o'ume In"ormation 1+

4.1 Co''ectin o'ume -ata 1+

,ttachments Separate document Part 2

ICT Benchmarking: Better Practice Roadmap | %



1.1 E&ec'ti(e S'mmar)

A mature ICT organisation actively manages ICT expenditure; the benchmarking process is

integrated within the management planning and control framework.

1.1.1 Purpose

Benchmarking is the process of impro)ing performance by continuously

identifying, understanding, and adapting practices and processes#

The 'ustralian :o)ernment conducts ICT Benchmarking to measureimpro)ement in the e=ciency and eecti)eness of ICT ser)ices in Financial;anagement and 'ccountability 'ct agencies#

This :uide has been de)eloped to

• impro)e the 5uality of the benchmarking data and

• streamline the preparation process for agencies#

The :uide pro)ides a number of alternati)e solutions for preparing ICTbenchmarking data, &hich can be tailored to the indi)idual re5uirements ofagencies and the le)el of in)estment that is considered appropriate# Theproposed solutions are based on actual &orking models from 'ustralian:o)ernment agencies#

The :uide, intended for Chief Information <=cers, Chief Financial <=cers, seniormanagers, and the practitioners responsible for preparing the benchmarkingdata, pro)ides a frame&ork for self assessment based on a capability maturitymodel#

'gencies are encouraged to share better practice in ICT benchmarking and':I;< can facilitate this by pro)iding contacts in mature organisations +seesection 2#8#

1.1.2 Roadmap to improved ICT Benchmarkin

'gencies can identify &hat le)el of maturity they currently ha)e and de)elopstrategies to impro)e performance and mo)e to the ne%t le)el of maturity#

The capability maturity model +C;; pro)ides a road map to ad)ise agencies onthe strategies to achie)e the ne%t le)el of maturity# Based on a continuum of )ele)els!0F

1! as presented in Figure 1, each le)el in the C;; incrementally builds on

the performance criteria in the lo&er le)els#

1 The C;; le)els are based on the !.;. format#



ET"igure # $ Capability Maturity Model

1.1.! The Bene"its o" Improvin Benchmarkin #aturity

;any agencies are using benchmarking as a systematic tool for better ICTe%penditure decision making# They benchmark their performance against theirpeers, identify &here impro)ements can be made and seek out best practicefrom other organisations# The follo&ing table summarises ho& using this :uideto impro)e your benchmarking maturity can ha)e &ider organisational benets#

ICT Benchmarking: Better Practice Roadmap | *



ETTable #% The ene'ts o( Improing enchmarking Maturity

Organisational Benet Benchmarking Maturity Improvement

9ustainability of operations @)idencebased funding

;aintenance of assets9trategy and best practice dened for each9er)ice To&er

Better system performance Business systems generate )olume data

;aintain human resourcecapability

;onthly attribution of personnel costs to9er)ice To&ers

Better inhouse outsourcedecisions

Clearly dened B'/ baseline

Better ser)ice le)elsDepth of understanding of the cost structure,dri)ers and pressures

Impro)ed relationship &ithbusiness

Informed negotiations to support fundingre5uirements

ICT Benchmarking: Better Practice Roadmap | +



1.# ICT Benchmarking Roadmap

1.2.1 Capa&i'ity #aturity #ode'

To assist agencies determine their current le)el of maturity the enchmarkingCMM Tool is pro)ided on the Finance &ebsite#

Table 2 pro)ides a high le)el o)er)ie& of the C;; and a guide to determiningcurrent maturity the people, process and system elements re5uired to mo)e tohigher le)els# ' detailed description C;; is a)ailable in 'ttachment '#

ETTable ) $ *lements o( the Capability Maturity Model ET

Criteria Level 1 -Initial

Level -!epeata

"le

Level #-

$ene%

Level &-

Manage%

Level ' -Optimis

e%

Benchmarking (rocess

(eople

'ppropriately skilled ande%perienced practitioner

)

'ssign responsibility for each9er)ice To&er to IT ;anagers ) )

(rocess

Business rules dened ) )

alidation process to ensure

correctness of data) )

Centralised procurement andpurchase orders

) ) ) )

*ystem

Functional tool in place to preparebenchmarking data

)

Code supplier transactions to9er)ice To&ers

) ) )

ICT Benchmarking: Better Practice Roadmap | ,




Level -!epeata

"le

Level #-

$ene%

Level &-

Manage%

Level ' -Optimis

e%

Business systems generate )olume

data) ) )

@%ternal personnel data isa)ailable from standard process

) ) )

;onthly attribution of personnelcosts to 9er)ice To&ers

) ) ) )

!ro(ect ledger &ith $orkBreakdo&n 9tructure +$B9

) ) ) )

Benchmarking data is a)ailable atthe ser)ice to&er le)el at any timeduring the year

) ) ) )

Management of IC+ ,pen%iture

(eople

9enior ;anager appointed at theappropriate le)el of seniority &ithfunctional responsibility formanaging resources andcontrolling ICT e%penditure

) ) )

(rocess

@%plain )ariations bet&een years ) )

Clearly dene business as usualbaseline

) )

Depth of understanding ofbenchmarking structure

) )

B; data informs strategies ) )

9trategy and best practice denedfor each 9er)ice To&er ) ) )

Depth of understanding of the coststructure, dri)ers and pressures

) ) ) )

Centralised CI< organisation ) ) ) )

Informed negotiations to supportgro&th in B'/ funding

) ) )

*ystem

ICT Benchmarking: Better Practice Roadmap | -




Level -!epeata

"le

Level #-

$ene%

Level &-

Manage%

Level ' -Optimis

e%

'lign benchmarking data

structures &ith managementplanning and control frame&ork+e#g# budgeting and reporting

) ) ) )

1.2.2 Strateies to Improve #aturity

The roadmap is intended to ad)ise agencies on the strategies to achie)e thene%t le)el of maturity in the C;;# 'ny in)estment by agencies to impro)e theICT benchmarking process re5uires a )alue proposition +i#e# benets out&eighthe costs# Further in)estment can be more readily (ustied if the benchmarkingprocess is integrated &ithin the management planning and control frame&orkand is not )ie&ed as an annual compliance process# Further detail on the C;; isa)ailable in the 'ttachments#

Figure 2 illustrates the highle)el strategies to mo)e from one le)el to the ne%talong the roadmap#

ET"igure ) $ ICT enchmarking +oad Map ET

1.2.! )eve' 1 to )eve' 2

*e)el 1 G Initial !rocess is an adhoc process that is not &ell dened and isconsidered ine=cient, relying on the eort of key indi)iduals# *e)el 2 G"epeatable !rocess is an established process &hich is repeated on a consistent

basis each year using a common language and appropriately skilled ande%perienced sta#




The proposed strategies to ad)ance from *e)el 1 to *e)el 2 include

Dene the process for the preparation of the benchmarking data to

establish a common language

9ocialise the Business "ules &ith IT ;anagers to impro)e the le)el of

a&areness

@nsure that an appropriately skilled and e%perienced person is assigned to

prepare the benchmarking data +i#e# depth of understanding of ICT

processes and business functions and ICT cost dri)ers and cost structure,

and business and cost analyst skills and

De)elop a cost attribution process, ie the Base ;odel +see section . to

assign input costs to 9er)ice To&ers, including documenting the

management estimates used to attribute cost and personnel data to

9er)ice To&ers etc#

1.2.4 )eve' 2 to )eve' !

*e)el . G Dened !rocess has &ell dened policies, processes and procedures&hich are uniformly applied to generate 5uality data in an e=cient and timelyprocess#

The proposed strategies to ad)ance from *e)el 2 to *e)el . include

De)elop a functional attribution model to calculate the costs and attribute

the personnel data +ie the Base ;odel

@stablish a &ell dened data collection process for collecting source data

+nancial, human resources, and operational 1F

2

Dene Business "ules in a formal document &hich has been disseminated

to all IT ;anagers

'ssign responsibility for each 9er)ice To&er to an IT ;anager &ho is

re5uired to sign o on the benchmarking data, e%plain any material

)ariations bet&een years, consider the benchmarking data, discuss &ith

comparable agencies, and suggest performance impro)ement strategies

&here rele)ant and

Clearly dene the B'/ baseline and separate resources bet&een B'/ and

nonB'/ acti)ities#

1.2.$ )eve' ! to )eve' 4

*e)el H G ;anaged !rocess in)ol)es management engaging in e%tensi)e debateon funding le)els, performance and resource management strategies based onsubstanti)e e)idence &hich has been generated from robust systems andprocesses#

The proposed strategies to ad)ance from *e)el . to *e)el H include

# Operationa data i" /a"ed on e(idence and not 0g'e""timate".




'lign the data structures in the Financial ;anagement Information 9ystem

+F;I9 and supporting systems to the benchmarking data formats, ie the

@%tended ;odel +see 9ection .

Direct data capture of supplier transaction data against 9er)ice To&ers

using purchase orders

Time recording and pro(ect ledger to capture sta eort and attribute

costs and FT@ to B'/ and nonB'/ acti)ities

;ap asset classes to 9er)ice To&ers in the 'sset "egister to determine

depreciation costs

<perational )olume data and IT contractor FT@ is directly accessible from

functioning business systems as a standard reporting process

Centralise ICT e%penditure +i#e# minimise decentralised ICT functions

De)elop performance impro)ement strategies for each 9er)ice To&er

&hich ha)e been informed by the benchmarking data and follo& up

discussions &ith comparable agencies

'ppoint a 9enior ;anager +i#e# Financial Controller 2F

. to be responsible for

controlling ICT e%penditure and managing resources and ensuring an

eecti)e front doorJ +i#e# no additional funding no additional ser)ices

De)elop separate budgets for B'/ and nonB'/ and

-egotiate funding le)els &ith the @%ecuti)e based on informed discussionsunderpinned by substanti)e e)idence#

1.2.+ )eve' 4 to )eve' $

*e)el K G <ptimised !rocess is a source of competiti)e ad)antage that enablesagencies to e%ploit opportunities and achie)e best in class results#

The proposed strategies to ad)ance from *e)el H to *e)el K include

Integrate the ICT benchmarking process into the management planning

and reporting processes and generate management information by

9er)ice To&er as a standard management report, ie the 'd)anced ;odel

+see 9ection .

/se the benchmarking data to inform the sourcing strategy and dene

ser)ice categories for market testing

9hare better practice processes &ith peer agencies

Dene the B'/ baseline 9er)ice *e)el 9tandards +9*9 for each 9er)ice

To&er and socialise &ith business units and

$ The 2inancia Controer 3o'd ha(e management re"pon"i/iit) 4or a 4'nction" de"cri/ed in the paper

entited 05anagement o4 ICT E&pendit're.

ICT Benchmarking: Better Practice Roadmap | 1#



De)elop a funding model &hich accounts for gro&th in &orkload

associated &ith changes in the business and ICT en)ironment and agree

any changes in the B'/ baseline upfront in business cases +i#e# Lo& on

costs#

ICT Benchmarking: Better Practice Roadmap | 1$



1.2.% Imp'ementation ,ssistance

Further detail on implementing the "oadmap is a)ailable in the 'ttachments#

' number of agencies, &hich are currently at dierent le)els of maturity, ha)eindicated their &illingness to assist other agencies &ith strategies and practicalad)ice to impro)e operations#

AGI! is able to provide contact details and facilitate discussionsbetween agencies.

ICT Benchmarking: Better Practice Roadmap | 1%



1.$ 5ode" 4or Preparing Co"t andPer"onne 6ata

1.!.1 Preparin Cost and Personne' -ata

Three alternati)e models are pro)ided for the preparation of the cost andpersonnel data re5uired for the ICT benchmarking process

• Base Mo%el. this is an end of year attribution process &hich is largely

based on management estimates +*e)el 2G"epeatable, and .GDened!rocess

• ,ten%e% Mo%el. this builds on the Base ;odelJs attribution process

&ith a more robust costing tool, capture of supplier costs by 9er)ice To&er

at the transaction data entry point, and utilises sta eort data from time

recording system to attribute internal and e%ternal personnel costs to

9er)ice To&er +*e)el HG;anaged !rocess and

• A%vance% Mo%el. fully integrated F;I9 solution &ith the nancial source

data capture at the transaction data entry point and alignment of data

structures +*e)el KG<ptimised !rocess#

Figure . illustrates the alignment of the roadmap &ith the three models forpreparing cost and personnel data#

ET"igure $ Cost and Personnel -ata Preparation Models ET




Table . pro)ides a summary of the key features of each of the three models# These models together represent an incremental approach to achie)ing bestpractice +i#e# they build progressi)ely on each other to achie)e the goal of bestpractice#

ETTable $ .lternatie Models (or Preparing Cost and Personnel -ata

Base Mo%el$ene% (rocess

,ten%e% Mo%eManage% (rocess

A%vance% Mo%elOptimise% (rocess

• @nd of year attribution

process to attribute input

costs and personnel data to

9er)ice To&ers and other

outputs

• $ell dened and

documented business rulesfor the preparation of the

benchmarking data

• Fully functional cost model

using spreadsheet tools

based on dened business

rules to prepare the cost

and personnel data

•

alidation process toensure the correctness of

the benchmarking data

• 9tructured data collection

process using standard

templates

• Migh le)el of reliance on

management estimates

• @)idence based cost dri)er

data using sta eort data

sourced from a time

recording system for

internal and e%ternal

personnel +replace

management estimates

&here appropriate

• 9tandard process for

maintaining e%ternal

personnel FT@ data +hourly

rates, startend dates, cost

centre and contribution

areas

• Depreciation costs are

captured by asset class andmapped to 9er)ice To&ers

• Billing data from ma(or

suppliers identies the split

by 9er)ice To&er

• /se of an F;I9 costing

module to undertake the

cost attribution to 9er)ice

To&ers

• 'lign internal systems &ith

the benchmarking data

structures +e#g# 9er)ice

To&ers, ICT cost elements,

and contribution areas

• 'll ICT supplier transactions

are captured at thetransaction data entry point

by 9er)ice To&er in all

nancial applications in the

F;I9 +e#g# payables,

purchasing and assets

• Centralised procurement

and use of purchase orders

to code all ICT supplier

transactions to 9er)ice To&ers

• Costs coded to a !ro(ect

*edger &ith a multiple le)el

$B9 data structure &hich

includes 9er)ice To&ers

+centrally managed data

structure

• ;onthly attribution of

internal and e%ternal

personnel to 9er)ice To&ers

based on time sheet data

• Classify internal and

e%ternal personnel against

Contribution 'reas

• Consistent data entry

process for actual and

budget data

ICT Benchmarking: Better Practice Roadmap | 1*



Base Mo%el$ene% (rocess

,ten%e% Mo%eManage% (rocess

A%vance% Mo%elOptimise% (rocess

• "esource planning at the

indi)idual resource le)el to

determine the le)el of eort

for each acti)ity performed

using the $B9 hierarchy

• Financial, personnel and

operational )olume data is

a)ailable at the 9er)ice

To&er le)el at any time

during the nancial year

and is included in standard

management reports

1.!.2 Investment

The base model re5uires a modest le)el of in)estment and represents aneecti)e solution for agencies to prepare benchmarking data and impro)e ICTcost management# The e%tended model represents a step impro)ement fromthe base model to impro)e the le)el of data integrity# The ad)anced modelre5uires a signicant in)estment and could be considered by for large agencies&ith a considerable le)el of ICT e%penditure#

's agencies may be is at a dierent stage of de)elopment, the e%tent of change,and le)el of in)estment, &hen implementing any of the models &ould bee%pected to )ary across agencies#

"etailed guidance on developing the #ase$ %xtended and Advanced odels for cost and personnel data is available in the

Attachments.

ICT Benchmarking: Better Practice Roadmap | 1+



1.% Vo'me In4ormation

1.4.1 Co''ectin o'ume -ata

For many agencies the collection of )olume information +&ith the e%ception ofsimple data sets such as the number of personal computers +!Cs is notsupported by established processes and systems for data capture# There is anopportunity to impro)e the le)el of data integrity through establishing standardprocesses and business rules#

' key issue is the costbenet ad)antage of the le)el of in)estment re5uired toestablish a more structured en)ironment for the collection of this data, especially&here the data is only used for e%ternal compliance# This section pro)ides betterpractice data collection methods for each )olume metric re5uired to be reportedas part of the ICT benchmarking process +*e)el H G ;anaged !rocess# It alsosuggests )alue added uses of the data for agencies#

Table H pro)ides a summary of the )olume information re5uired for the ICTbenchmarking process# Further detail is pro)ided in the 'ttachments#

ETTable / $ 0olume In(ormation

*ervice +o/er Benchmarking $ata Metho%

Applications -ot applicable

Mainframe Capacity and utilisation ;ainframe managementsystems

Mi%range olumes, operatingsystem +<9 instances,physical ser)ers, centralprocessing units +C!/ and

utilisation data

Conguration ;anagementData Base andor soft&areasset managementsystems and net&ork

monitoring soft&are

*torage 9torage capacity 9torage managementsystems

0A $ide area -et&ork +$'-link capacity

-et&ork managementsystems

2ate/ays /pload and do&nload)olume information

;anagement systems

LA an% !A* -umber of acti)e and used*ocal 'rea -et&ork +*'-

;anagement systems

ICT Benchmarking: Better Practice Roadmap | 1,



*ervice +o/er Benchmarking $ata Metho%

ports

,n% User Infrastructure -umber of standard

operating en)ironments+9<@s and users

-umber of items

')erage time to replaceitems

Conguration ;anagement

Data Base or assetmanagement system

3oice *ervices -umber of de)ices Conguration ;anagementData Base or assetmanagement system

4elp $esk -umber of calls andincidents

9er)ice desk managementsystem

5acilities olume +s5uare meters

Future planning for thedata centre and po&erre5uirements

Facilities managementreporting

Infrastructuremanagement planning

"etailed guidance on developing volume data is available in the

Attachments

ict benchmarking better practice roadmap guide

Documents