PASB Information Technology Strategy Information Technology Services (ITS) January 2015

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1 PASB Information Technology Strategy Information Technology Services (ITS) January 2015

2 Table of Contents Executive Summary The Need for a New IT Strategy Vision for IT in PAHO Vision Statement Relationship to the PAHO Strategic Plan Guiding Principles IT Strategy Framework Organization of Activities Using Benchmark 1: Total IT Spending Using Benchmark 2: Run-Grow-Transform Ratios Role of Technical Programs in the Strategy Framework Role of the PMIS in the Strategy Framework Project Life Cycle Making the IT Strategy Work Major Themes and Goals ( ) Tangible Steps for Change Technical Program Support Country Office Support PMIS Continuing IT Innovation Maintaining Stable IT Operations Risk Analysis i

3 Executive Summary Information Technology as a Key Enabler of PAHO s Technical Programs Strategic Context: Information technology (IT) is an enabling function supporting the mission of the Pan American Health Organization (PAHO). It provides the tools and infrastructure to facilitate collaboration; accounting and financial management, planning, monitoring, and assessment; resultsbased management; and knowledge sharing. Current Focus: Information technology in the Pan American Sanitary Bureau (PASB) currently focuses on basic enabling functions throughout the Bureau such as systems for administration (e.g., finance, procurement, human resources) and general office services for both countries and Headquarters. Examples include telecommunications ( , telephones, Internet), infrastructure (servers, desktop computers), and software tools (e.g., Microsoft Word and Excel). In the current biennium, the PASB Management Information System (PMIS) is replacing most administrative information systems, and substantial resources are needed to deploy and stabilize the new systems. Opportunities: Significant opportunities exist to expand IT services in direct support of technical programs. However, additional resources (especially human resources) will have to be allocated to information technology beyond the minimum necessary to sustain basic enabling services. Failure to provide these additional resources will restrict PASB s ability to respond to the expectations of Member States to continuously provide additional value added in support of technical cooperation. A Framework for IT Management: Mindful of the limited resources available, this Information Technology Strategy outlines a mechanism to determine how much should be spent on IT in various categories and to balance available resources across the entire IT portfolio. Balance requires prioritizing IT activities across two major dimensions: key subject matter areas and categories of work. IT Funding: As a context for assessing how much PASB should spend on IT, this strategy references a benchmark of total IT spending. A PASB IT assessment completed in June 2014 recommended that the Bureau spend 5.5% of its total budget (about $31 million 1 per biennium) on IT. In recent biennia, PASB has spent approximately 3.7% (about $21 million). This level of IT funding has limited the output of IT resources to sustaining basic enabling products and services. In the biennium, PASB is allocating an additional $22.5 million in one-time project costs to fund development and implementation of the PMIS in order to replace obsolete core administrative systems. In future biennia, sustainment of the new PMIS will require a net increment in funding for basic enabling IT services. IT Human Resources: Nearly two-thirds of the new activities needed to achieve the goals of this strategy require increments in human resource services rather than purchases of goods and services. Shifting the level of IT service delivery in PASB from a predominantly enabling function to one that can deliver more direct added value to technical cooperation will therefore require a revised IT human resources plan. 1 All monetary figures are expressed in United States dollars. 1

4 The Need for a New IT Strategy. The development of this new PASB IT Strategy is based on several major internal and external developments, including (1) the results of the IT assessment completed in June 2014, (2) the impending introduction of the PMIS, (3) anticipation of an unusually high turnover of IT personnel (at least 60% in the next five years) in the Information Technology Services (ITS) Department, (4) growing demands from technical programs for improvements in the current state of information technology in the Bureau, (5) a proliferation of cloud-based services, (6) information security, and (7) expansion of social media into the workplace. This document outlines overall strategic goals and the tangible steps necessary to meet those goals. It also describes a framework for viewing and evaluating the resource levels PASB devotes to IT, how to determine those levels, and what services PASB should expect to obtain from that investment. Internal Factors Introduction of the PMIS (Phase 1 in 2015, Phase 2 in 2016) Growth in demand for information-processing needs and capacity Need to support the big data efforts of technical programs Need to strengthen and modernize IT in PASB Security vulnerabilities Expected high level of personnel turnover in the IT unit Need for improved coordination between technical cooperation and enabling functions Internal Factors External Factors PASB IT Strategy External Factors Proliferation of cloud-based applications and mobile devices Evolving information security environment Growing demand for analysis and integration of data Rising expectations for systems availability Permeation of social media into the work environment PASB IT Environment Figure1: Contributions of Internal and External Factors to the New PASB IT Strategy 2

5 Vision for IT in PAHO Vision statement: The Information Technology Strategy should provide optimal support for the IT requirements of technical programs and country offices. Also, it should continuously improve the reliability, quality, and financial value of IT services supporting PAHO and guarantee a strong, sustainable, and continuously updated IT infrastructure. Relationship to the PAHO Strategic Plan Information technology support is essential to achievement of regional health objectives. PAHO Strategic Plan Information Technology Support PASB Technical Cooperation Functions Horizontal Collaboration Results-Based Management Knowledge Sharing Planning Instruments Monitoring and Assessment Cross-Cutting Teams Enabling Functions Human Resources Finance Procurement Program Planning Information technology enhances delivery of technical cooperation, simplifies processes, and improves organizational efficiency. Regional Health Objectives Figure 2: How IT Supports PAHO 3

6 Guiding Principles The following principles guide this strategy and its implementation and help ensure the delivery of the IT vision. Serve the Mission of PAHO All IT services and infrastructure will be designed and made available to support PAHO s mission. Maintain a Strong IT Foundation A strong information technology foundation of reliable services and infrastructure will be available to enable the achievement of PAHO s goals. Optimize the Use of IT Resources Processes will be created to identify benefits and prioritize activities to ensure that all IT expenditures fit within funding constraints. Cost-benefit analyses will be conducted for all major IT investments. Plan for Incremental Results Larger projects will be broken down into smaller elements during implementation to facilitate measurement of progress and ensure delivery of results. Balance Allocation of IT Resources through IT Governance The IT governance structure will help prioritize major IT tasks and activities to ensure an appropriate balancing of resources. 4

7 IT Strategy Framework Gartner, a major independent IT industry research firm, has defined a framework that provides executive management with an effective way to place IT spending into an overall context and that facilitates understanding of the interrelationships among IT investments. It serves as a general investment framework for allocating resources within the IT portfolio. IT Governance Major Themes, Goals, and Tasks Making IT Work What Work Will Be Done Organization of Categories Balance of Investments How Much to Invest Spending Categories: Run-Grow-Transform Benchmarks to Balance Run-Grow-Transform Benchmarks for Total IT Spending Figure 3: The IT Strategy Framework Using this framework involves: Organizing IT activities and spending into three major categories (Run, Grow, and Transform). Comparing IT spending against two benchmarks: (1) total IT spending and (2) Run-Grow-Transform ratios. Defining the work to be performed and assigning budget estimates. Relying on IT governance to recommend ways in which work should be prioritized. 5

8 IT Strategy Framework Organization of Activities Three categories Run, Grow, and Transform are used to organize and balance IT activities, spending, and investments. Organizations should not spend all of their IT resources on maintaining the status quo, nor should they sacrifice a solid IT foundation in the pursuit of transformational activities, no matter how great the promise. Gartner recommends a ratio of resources that should be devoted to each of the three categories. RUN GROW Run represents regular IT operations, including basic infrastructure, software licenses, and business rule changes. Most Run expenses are considered mandatory, and these recurring costs often increase over time as a result of inflation. Gartner recommends that an organization devote 65% of its IT budget to this category. Grow refers to increasing an organization s capacity to accommodate its growing needs. This category includes improvements in efficiencies and maturation of IT management, such as support for an effective IT governance mechanism. Gartner recommends that an organization devote 20% of its IT budget to this category. TRANSFORM Transform represents innovations that can substantially improve the way PASB delivers technical cooperation and conducts its business. An example is enabling the PASB staff to work from anywhere, at any time, and from any device. Gartner recommends that an organization devote 15% of its IT budget to this category. Run Grow Transform Description IT enabling functions Expansion of IT capacity, improvements in efficiencies Efforts how the organization functions Characteristic(s) Mandatory operations, Enhancements New projects ongoing operations Evaluation Cost reduction Cost-benefit Investment/promise Criterion Funding 65% 20% 15% Table: Summary of the Run, Grow, and Transform Categories 6

9 IT Strategy Framework Using Benchmark 1: Total IT Spending Organizations typically spend between 4% and 7% of their total operating budgets on IT, including staff costs (according to Gartner). Most UN Organizations Recommendation of IT Assessment PAHO Actual (based on operating budget only) 4% 7% 5.5% 3.7% IT Budgets as a Percent of Total Organization Budget Figure 4: Total IT Spending Benchmark The 2014 IT assessment recommendation of 5.5% represents $31 million per biennium considerably more than what typically has been budgeted for IT in the past Figure 5 shows the actual ITS budget since 2006 and the amount dedicated to PMIS in The recommended spending level also is shown. (Note that the column for ITS reflects only what was budgeted through December 2014). USD Million Recommended spending per biennia PMIS ITS Staff ITS Non Staff Rec. Figure 5: ITS and PMIS Historical Spending 7

10 Using Benchmark 2: Run-Grow-Transform Ratios IT Strategy Framework As noted, an appropriate balance of resources is 65% Run, 20% Grow, and 15% Transform (according to Gartner). This ensures that PASB satisfies its mandatory requirements, supports a solid foundation, and allocates an appropriate proportion of resources to those Grow and Transform activities that move PASB forward. 15 % Transform 20 % Grow 65 % Run Figure 6 a. Recommended R - G - T Ratios This assumes that 65% of total spending is sufficient to meet all mandatory IT Run requirements. One can determine what total IT spending should be by adding 35% (for Grow and Transform) to total mandatory Run spending. Conversely, a Transform project itself will engender some Grow and Run components into the future. Note that Transform projects incorporate Grow and Run components. A Transform project to introduce new capabilities might also be improving existing functionality (Grow) and require some license fees (Run). These usually occur in inverse proportion to the recommended allocation for an overall IT operation. Figure 6b. Typical Project Ratios Transform Grow Run Achieving a balance among the Run, Grow, and Transform categories is vital if information technology is to fulfill its role in PASB. Each of the three categories is important in its own right. For example, while Transform initiatives offer the promise of significant, long-term value to the organization, they require a strong foundation of IT operations, represented by the Run category. However, Run, which is an essential prerequisite for achieving all other IT goals and benefits, consumes the most IT resources. 8

11 Role of Technical Programs in the Strategy Framework IT Strategy Framework In the past, information technology enabled improvements in how technical cooperation is delivered in the Region. New opportunities now exist, including support for improving data analysis capabilities and developing information systems in technical programs, as well as direct support to the Public Health Information Platform. The strategy framework ensures that appropriate information technology resources are assigned to this critical area. Role of the PMIS in the Strategy Framework The PMIS is expected to have a major impact on IT spending in PASB, both currently and into the near future. Annual spending on the PMIS during its two-year project period is roughly equal to each of the total IT budgets of recent biennia. The diagram below shows the combined PMIS and ITS budget for As can be seen, while most of the PMIS budget is in the Transform category, there also is substantial spending in the Grow (enhancements of existing functionality) and Run (license fees) categories. This is typical of a transformational project. Over the next two years ( ), the PMIS likely will dominate the commitment of IT resources in PASB. USD million Recommended PMIS (Actual) ITS (Actual) 0 Run Grow Transform Figure 7: Recommended R-G-T Budget Distribution ( ) 9

12 Project Life Cycle IT Strategy Framework Many initiatives begin as Transform projects and evolve over time. Once deployed, such systems and investments enter a stabilization or maturation phase, and the resources spent are no longer considered as falling in the Transform category; rather, they are incorporated into the Grow category. As items mature further, expenses shift to the Run category. Ultimately, new technologies or systems replace earlier systems. In some cases, systems initially supported with in-house human resources can be outsourced when outsourcing is cost-effective. Products and Services ITS Is REPLACING Mainframe services and operations Support of the legacy system replaced by the PMIS Fax hardware (both purchase and support) BlackBerry support Local installation of Microsoft Office on desktops Products and Services Identified for OUTSOURCING Printer hardware and support Telephone operator services management Firewall management Data center business continuity 10

13 IT Strategy Framework Making the IT Strategy Work IT governance plays a key role in helping to achieve the balance between the Run-Grow-Transform categories and available funding. The IT Governance Committee is composed of members from a broad cross section of the Organization. It is chaired by the Director of Administration and ITS serves as the Secretary. The IT Governance Committee reviews the complete portfolio of IT activities and guides the balance of resource allocations along two dimensions: (1) the five major themes of the IT Strategy and (2) the Run-Transform-Grow categories. The committee s primary tool is prioritization of themes and activities. In Figure 8, the bubbles represent where products and services fall across these dimensions, as well as the size of the investment in each area. Technical Programs Country Offices Figure 8: Dimensions of the Strategy Framework Transform Sustainability is an important aspect of IT operations to ensure that appropriate services and service quality are in place when needed. This has a major impact on how IT is funded. As historically structured in PASB, information technology has required large, periodic purchases of equipment that has a finite life in accordance with a capital expenditure model (CAPEX). While this provides flexibility when a modernization purchase is needed, it obscures the necessity of planning or reserving resources in advance of that need. An alternate operational expense model (OPEX) would distribute IT spending across regular, predictable recurring payments. This type of model can be implemented by increasing the level of outsourcing of IT equipment and services. The IT Governance Committee will monitor the appropriate CAPEX-OPEX mix based on comparative cost-benefit analyses of the full cost of systems ownership under the two models. The IT Strategy framework described here can be summarized as a method for placing all IT activities into an overall context and developing a logical way to prioritize and budget for those activities. In the process, the framework can show how much is currently spent on IT and what that investment yields. It also guides decision making about how much should be spent, what PAHO obtains from those expenditures, and how that will impact the Organization as a whole. This IT Strategy conforms to the IT management principles outlined in the COBIT 5.0 (Control Objectives for Information and Related Technology) industry standards, published by the Information Systems Audit and Control Association. PMIS Continuing Innovation Stable Operations Run Grow 11

14 Major Themes and Goals ( ) 1. Technical Program Support An integrated framework for developing and supporting health technical systems such as the global Public Health Information Platform is needed to support health data analyses, facilitate information sharing and dissemination, share development efforts and reduce duplication, and capitalize on synergies among systems. 2. Country Office Support 3. PMIS 4. Continuing IT Innovation At least one IT system administrator must be funded and supported in each country office. The PMIS and the strategic goal of minimizing the technology footprint in country offices will drive changes in the workloads and skills of these staff members. The staffing model must remain agile enough to support the ongoing changes. The PMIS, beginning with the Phase 1 deployment in 2015, will introduce new business processes and workflows for the technical and country entities as well as regular vendor-driven software updates. ITS will need new skills and resources to analyze and resolve problems, manage updates, and create the enhancements necessary to achieve the full promise of the PMIS. PASB s IT products and services must accommodate continued advances in technology while striking a balance in resource allocations among the Run-Grow-Transform categories. 5. Maintaining Stable IT Operations Stability and reliability of IT operations and services will remain the foundation of IT s contribution to enabling the mission of PAHO. 12

15 Tangible Steps for Change 1. Technical Program Support Improvements are needed to the framework for developing and supporting health technical information. Efforts will be focused on integrating health information platforms, improving ease of use, and reducing overall costs for the Organization. Goals Tasks Up-to-date IT skills in place Culture of collaboration between ITS and technical areas Minimal duplication among information platforms Consistent technology standards across all IT platforms Monitor staff skills and continuously update training plan Institutionalize coordination between ITS and technical areas Improve collaboration tools Establish clearinghouse for systems, platforms, and enhancement proposals Centralize and consolidate technology platforms 13

16 Tangible Steps for Change 2. Country Office Support The IT Strategy will improve centralized service delivery to country offices, reduce the local technology footprint, and simplify management of IT services at the country office level. Goals Consistent system development standards and methodology across the Organization Improved collaboration between Headquarters and country offices Adequate, stable support for systems administration in country offices Tasks Formalize coordination among ITS and country focus programs Standardize common platforms for Headquarters and country offices Improve virtual collaboration tools (videoconference and associated tools) Standardize employment contracts for country office system administrators 14

17 Tangible Steps for Change 3. PMIS The principal expected benefit of the PMIS is simplification and streamlining of administrative processes. After delivery of the new PMIS in 2016, the system s activities will be categorized as Grow (regular updates and ad hoc enhancements of existing processes) or Run (support and software licensing). Stabilized PMIS Goals Continuously updated software in response to evolving business needs Adaptation of business processes to best practices embedded in PMIS Business process ownership enabled by IT Tasks Support version upgrades and manage interactions with PMIS vendors Manage PMIS technical support and system security Ensure adequate infrastructure support for PMIS Support business owner adjustments and reconfiguration of business rules Maintain smooth integration of PMIS components PMIS goals are detailed in the PAHO Strategic Plan and are a high priority for PASB. The PMIS will permit administrative decision making to occur closer to where technical programs are implemented, and it will result in simplification of and improvements in: Administrative processes Performance controls and indicators Managerial capacity Support for decentralization Efficiency Transparency Accountability 15

18 Tangible Steps for Change 4. Continuing IT Innovation PASB s IT capability must continue to improve and accommodate changes in the technology landscape and meet evolving technology needs. Goals Continuously updated IT staff skills Increasingly knowledgeable IT users Optimally integrated technology Continuously modernized system security Reliable mobile access for users Increased agility through appropriate sourcing of IT services and products Tasks Adapt IT staffing plan to evolving technology needs Manage convergence of technology platforms Enhance information and infrastructure security Improve access among users of mobile devices Determine and publish appropriate service levels Improve virtual collaboration tools and assistance Maximize opportunities for outsourcing/migration to cloud services An IT human resources plan must support IT innovation in PASB. As noted, at least 60% of IT fixedterm staff members are expected to turn over in the next five years. This is an opportunity to use the development of a new human resources plan to renew and modernize the IT staff s skill set. The distinguishing characteristics between this theme and the next, maintaining stable IT operations, is that operations largely represent the current steady state, whereas continuing IT innovation represents the improvements necessary to raise the level of IT performance. Once projects in this theme are completed, they become part of operations. 16

19 Tangible Steps for Change 5. Maintaining Stable IT Operations Stable IT operations and services are integral to enabling PAHO s mission. This theme represents the mandatory IT activities that account for a large percentage of the funding devoted to IT. The costs of these activities must be minimized while ensuring adequate performance and service levels. Secure, reliable user access to software, networks, information systems, and infrastructure Reliable network, system, and service performance Appropriate user access to IT equipment, tools, and services Adequate IT resources Goals Tasks Provide applications services Manage and pay software licenses Analyze, develop, and maintain administrative applications Provide database administration and business intelligence services for all users Provide services for IT users Support Appropriate staff training Provide ongoing infrastructure services Computing platforms (e.g., servers) Security (e.g., firewalls) Telecommunications hardware and services Software (e.g., Microsoft Office, ) Manage ongoing IT services Provide advisory services to IT users Guide technology change Manage IT staff and finances Evaluate charge-back mechanisms to control demand for services Manage contracts and vendors 17

20 Risk Analysis Risk Factors Potential Impact Lack of clarity in strategic direction Lack of effective governance Lack of adequate staff Lack of appropriate IT skills profile Degradation of services within PASB Increased costs of providing IT services Decreased efficiencies of staff in enabling functions Decreased effectiveness of technical program staff Decreased transparency Lack of appropriate funding Risk Management Actions Involve management and IT governance in the preparation and execution of this strategy. Adopt a realistic view of funding and a framework for organizing and prioritizing work. Avoid exceeding organizational capacity. Develop a human resources plan for ITS

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