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E – Sample key controls for project approval

The project approval statement, as mentioned on page 81, is intended to help focus the attention of executives on the important high-level elements of a proposal and provide a concise formal record of the decision. As discussed in the Guide, characteristics of effective key controls for a project, from an executive perspective, include:

  • focus on key issues – to avoid information overload on executives;
  • business focus – not technical detail;
  • progressive testing and assurance – to provide early indications of business outcomes;
  • review points and exit options – linked to progressive testing and assurance;
  • coordination issues made visible – to assist executive management of multiple projects; and
  • exception reporting – appropriate thresholds are specified.

The following example is for an illustrative project and demonstrates the above characteristics, as well as elements to provide for clear accountability as discussed on page 79. The extent to which entities adopt this sample format, including the emphasis given to each component, will depend on their individual circumstances.

Approval Statement for Project: Online Approval of Client Services

A. Business outcomes:

(1) Reduce the rate of overpayments to clients, from 6 per cent of payments to 0.5 per cent.

(2) Reduce departmental costs by net $2.5 million per year ($3.2m staff saving in the Overpayments Recovery Section, offset by $0.7m operating costs for the new system).

B. Project product: A computer system to allow contracted service providers to approve the delivery of service to an individual client in real time, including entitlement checking. In particular, this will avoid the delivery of services in excess of entitlements which currently occurs.

C. Contribution to corporate goals (ICT Capability): This project will, among other modules, develop and deliver the new Provider Authentication Module, which will be used in all future provider related systems.

D. Expected flow on benefit: Savings in program funds of $16 million a year (through avoidance of written-off debts).The exact saving depends on client eligibility criteria and entitlement rates. These are not within the control of the project so the saving of program funds is not a business outcome.

E. Key operational targets following implementation (1 July 2012)

Elapsed time for providers to obtain approval
(data entry and system response time)
80% < 30 secs
98% < 60 secs
Time to train a new provider in the system 4 hours or less
System capacity 2 500 providers, nationwide

F. Key targets during implementation (to be reported to Investment Committee)

  JUL 2010 SEP 2010 NOV 2010 FEB 2011 APR 2011
No. of module designs approved 3 10 15 15 15
No. of modules coded and tested 0 0 8 15 15
% providers signed up 0 0 40% 100% 100%
% providers connected 0 0 20% 60% 100%

Go-live date – 1 July 2011 – to coincide with issue of new annual entitlements rates.

G. Review / possible exit points

By 1 October 2010, report on end-to-end proof-of-concept testing, to confirm whether or not it is prudent to commence signing up providers.

By 1 Feb 2011, report on tests of provider-related targets (i.e. approval processing and training times). Given concerns raised by peak bodies that the new system may increase costs for service providers, this is a critical requirement to be settled well before the planned go-live date.

H. Project Financial Schedule ($m)

  2010-11 2011-12 2012-13
Capital (development) 2.2 0.0 0.0
Ongoing system costs 0.0 0.7 0.7
Implementation costs 1.8 0.0 0.0
Gross administrative savings 0.0 -3.2 -3.2
Total – internal funding 4.0 -2.5 -2.5

I. Business Plan impact

The elements of the funding schedule for this project will be shown as separate line items in business plans. Client Services Branch will have an additional $4.0 million in 2010-11 to undertake the project. Development and ongoing funding will be held by Client Services Branch and paid to IT Services Branch on a user-pays basis. From 2011-12 onwards, Client Services Branch will have its ongoing funding reduced by $2.5 million a year (to, in effect, repay the initial project funding from the Investment Reserve, and subsequently in support of broader cost reduction targets).

J. Supporting sign-offs

This project approval has been given based on the following assurances and recommendations related to the above deliverables and targets, based on project plan Online Approval Plan version 1.2:

  • The implementation activities ($1.8m) and system specification in the project plan are necessary and sufficient to achieve the business objective. If the system operates as specified the $3.2m p.a. saving in Overpayments Recovery Section can be achieved. I am confident the project assumptions are realistic, and the risks are manageable within the time and budget. {signed} A.S. Client Service Branch (Project Sponsor, and future Operational Manager)
  • The system specification in the project plan can be developed within 14 months of approval, at a development cost of $2.2 million and ongoing cost for infrastructure and maintenance $0.7 million a year. {signed} A.S. IT Services Branch (Senior Supplier)
  • The design in the project plan conforms to our IT architecture. The Provider Authentication Module must be developed to meet new security guidelines, even if this project is not approved. {signed} Director, IT Architecture
  • The Investment Committee has reviewed this proposal and considers that the indicated costs and timeframe are realistic, that the proposed governance arrangements are appropriate, and in the context of all other proposals in this business planning cycle, recommends the project for funding. {signed} Chair Investment Committee (Reviewing body)

K. Project Approval

The above high-level project parameters and funding are approved. The Project Owner should prepare detailed plans consistent with this approval and in accordance with the department's project management methodology, for detailed approval and monitoring through the branch business plan.

Approved by {signed} Authorised Delegate. (Decision-maker)

Comments on the above sample of key controls for project approval:

Note – the initial letter of each comment below refers to the letters of the section headings above.

A. Business outcomes are the accountable results from using the products of the project.

B. Project products are what the project will deliver.

E. Key requirements of interest to the decision-makers. Additional requirements will be in the business case. Together with business outcomes, and product description, this provides a concise view of what the decision-maker receives for the investment.

F. Implementation targets help provide key control points to allow an executive perspective on progress during implementation. The key issue is choosing the most effective measures of progress.

G. Possible exit points signal points where the decision-maker is informed of progress and has an opportunity to reconsider the project. Identifying these points as part of approval helps ensure that such points are identified and reported on.

I. Including the flow on effects of approving the project to other entity controls, such as unit business plans, helps ensure effective overall management.

J. Obtaining and recording the key sign-offs that support the proposal helps improve the quality of the decision, because it reduces the risk that a critical part of assurance has been missed. It also provides clarity in the accountability of the various areas of advice used as the basis of the decision. Some elements, such as the sign off by the intended operational manager, are important to achieving the planned business outcomes.