Value chain aids business cases

The Labor Department has found a strategy it hopes to use to satisfy two of the Office of Management and Budget’s more complicated requirements.

Through a concept called value chain management, Labor is showing how its technology investments improve business processes and provide better service to customers. Laura Callahan, Labor deputy CIO, said value chain management is helping her agency write more comprehensive business cases and meet the Governmentwide Performance and Results Act.

“We are aligning our investments with our overall mission and goals of our organization,” she said. “Then we are linking our investments with what our customer expects in a way that is measurable. We are really trying to embrace the spirit of e-government.”

Over the past year, OMB has been steadfast about agencies tying IT investments to their missions through business cases and measuring the performance of those investments.
Labor began using value chain management in 2001 and applied it to its fiscal 2002 and 2003 budgets, Callahan said.

“By aligning our investments to our mission, we have the opportunity to see where our most efficient investments exist,” she said. “We also can see where we make the most out of those investments to improve service delivery.”

Labor used the methodology on the GovBenefits e-government project. Callahan said it took about four weeks to put the business case through the process.

“It is easy to explain the approach because we are targeting outcomes from the citizen’s point of view,” she said. “The methodology enabled us to identify the phased approach we used.”

Callahan said the value chain approach can help agencies do four things:
  • Determine a project’s value to customers and how they will interact during a transaction.

  • Simplify processes by making them more intuitive and user-friendly.

  • Establish a list of hardware and software that could improve a process and evaluate technology other agencies use to determine its usefulness.

  • Determine which technology benefits a customer most and how long it will take to reap those gains.

Callahan said the most difficult part of applying value chain management to IT investments is the cultural change it requires from agencies. She said the traditional model usually explained how new investments would improve the IT process instead of how it would improve service to the citizen.

“Value chain management pushes you to work across program and organizational boundaries,” Callahan said. “Once our folks were able to understand the methodology, we were able to implement it quickly.”

She said many technology workers and agency executives find it difficult to redirect their point of view to the customer and away from the agency. Once agency staff can step into the customer’s shoes, applying this tactic becomes easier, Callahan said.

Agencies have shown increased interest in learning how to apply value chain management to their IT portfolios, she said. She has received several phone calls from agencies seeking more information about how to apply the process to their investments.

“Value chain management helps you articulate the benefits of your IT investment through the business case process,” Callahan said. “You can measure the results that improve your mission and ensure you meet the goals to align with customer expectations.”

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