Full Cost Accounting

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"You Paid What??!"
A Workshop On Full Cost Accounting Methodology For Information Technology Projects In The Public Sector

10 March 2004
Ottawa, ON Canada

The Ottawa Congress Centre

Plus, 9-11 March 2004:
Pre & Post Optional Workshops
Technology Showcase & ROI "Show & Tell"

Pre Program Focus Sessions, Tuesday March 9/2004

Focus Session A
8:30am - 12:00pm
Some Good Questions For FCA To Answer: Four Case Discussions

Case 1: Associated Management Costs
What is a reasonable way to take account of these costs right up front at the procurement stage, as well as during ongoing financial monitoring and management?

Case 2: Selection Criteria Relating to Intellectual Property Access
Can and should some of the comparative assessment criteria in the procurement process also value costs to the Government associated with the intellectual property and code restrictions of a proprietary solution, compared with the government's 'free/libre' access to use of the the intellectual property and programming code of an open source option? If so, how?

Case 3: Benefits of Cost-Sharing
From the point of view of a Canadian Government agency, how might post-project cost sharing have been anticipated and quantified in an original project plan? How might the benefits of such 'resource amplificiation' be evaluated now?

Case 4: Liability When Things Go Wrong
What are some working rules by which such costs should be formally estimated, and how should these be accounted for in the Government's financial records?

Your Focus Session Facilitator: Mr. Joseph Potvin is a senior economist and IT architect, serving as a member of the management team for the Standards, Architecture and Security Sector, IT Services Branch, in Public Works and Government Services Canada. Prior to joining PWGSC, he worked internationally as a consulting economist in twenty countries, and at several divisions of the World Bank. His primary work for more than a decade has been on full cost accounting technical analysis and application for executives and managers.

Focus Session B
1:00pm - 4:30pm
How To Conduct Effective Cost Estimating For Better Project Management Of Your IT Implementations

  • Almost 33% of IT projects are labeled "impaired".
  • Over 50% of IT projects are considered "challenged".
  • Less than 17% of IT projects are considered "successful".

Most of these statistics point to a common problem early in the project management cycle and that's an inaccurate estimation of costs. Some may say that this is a problem inherent with estimation because you are essentially guessing; how can you possibly be right all the time? And you are right; it's not possible to be 100% accurate. But there are methods you can employ to ensure the cost estimations you make are better, giving you the ability to better manage your IT projects.

In this highly practical and interactive focus session you will learn techniques to effectively estimate the costs of your IT project up-front and methods to determine which technique is better suited for your project.

Join the experts of Deloitte as they ensure you will be better equipped to manage your IT projects more effectively and be able to bring up industry IT project statistics.

About Your Focus Session Facilitator: Mr. Abhay Raman is a Manager in the Ottawa office of Deloitte. He is a senior practitioner with significant experience in IT architecture, strategy and planning. He has helped organizations in North America, Europe & in the Asia Pacific region with IT Architecture planning, CRM, Identity Management, Portals and Information Management. He is a proficient, experienced project manager, well versed in effective project estimation with extensive experience in the full life cycle of application development, requirements definition through package & custom implementations. Mr. Raman has also tenured as a part time professor of Management Information Systems at Carleton University in Ottawa - Canada. He has presented at various events in North America and Asia.

Main Program Agenda, Wednesday March 10/2004

8:30 Chairperson's Opening Address
Michael Tinkler
Society Of Management Accountants

Michael Turner Assistant Deputy Minister, Telecommunications and Informatics Program Branch (TIPB) , Public Works & Government Services Canada (PWGSC)
is responsible for guiding PWGSC's information technology services to the rest of the Federal Government. Mr.Turner will comment on the expected operational impacts of engaging full cost accounting methods for public sector decision-making on information technology.

James (Jim) H. Johnson is Founder and Chairman of The Standish Group
, which has come to be known for its high quality, independent primary research, analysis conducted through focus groups, in-depth surveys and executive interviews. Mr. Johnson will discuss highlights of the latest edition of the CHAOS Chronicles, which condenses nine years of groundbreaking research on project performance of over 40,000 completed IT projects. www.standishgroup.com

10:15 Networking & Refreshment Break

10:35 Developing An Approach For Evaluating Software Quality Prior To The Purchase
One of the biggest problems with software acquisition is that you often don't get what you thought you were buying. However there are simple techniques and checklists that you can employ to ensure that the products you are buying are of the highest quality and will not present additional costs or higher exposure to risk for your department. This work session is dedicated to providing you with a model for measuring software quality, which will also provide you with valuable information you may need in a Full Cost analysis. You will be joined by Dr.Khaled El Emam to learn about:

  • The quality of software you can expect today and budgeting for that
  • Evaluating the internal costs associated with deployment beyond acquisition
  • Checklists, criteria, decision aids and tools for product evaluation

Dr.Khaled El Emam
Ottawa Software Quality Association

11:20 Section Analysis: Utilizing topical experts, or expert facilitators delegates will be guided through an interactive discussion to enhance program connectivity, identify general themes, and apply themes to relevant situations.

12:05 Networking Lunch

1:15 Full Cost Accounting - Principles & Practice A U.S. Government Perspective
As part of President Bush's management agenda the United States is focussing on budget performance integration. In order to accomplish this, you need to understand your costs. One of the methods for accomplishing this feat that the U.S. Government promotes is a full cost accounting methodology. Two organizations that are employing this methodology is NASA and the Small Business Administration, however each approach it differently. One employs a surveying approach of the different business lines, while the other employs an attribution approach. You will learn from Lloyd Blanchard about:

  • Understanding the principles of FCA and the different methods of utilizing it
  • Applying each method at an organizational level
  • Applying each method in an information technology approach

Lloyd Blanchard
Senior Advisor, Financial Management

2:00 Understanding The Implications Of Employing A FCA On The Procurement Process
Have you ever wondered why the procurement process takes so long? At the end of the project, have you ever wondered whether you won or not? More often than not it reflects the difficulties of managing the procurement of an IT solution without fully managing the expectations of the business requirements and objectives . Many times there is a lack of a quantifiable defininion of success. Too often the business case is incomplete or does not provide the answers necessary for gaining contract approval. The Business and IT Solutions group within the Acquisitions Branch of PWGSC is not only dedicated to helping organizations answer the necessary questions, but helping them understand why it is important to answer them. Employing a FCA approach will not only allow you to make better purchasing decisions, it will ultimately improve the purchasing process, making your life a lot simpler. You will learn from Ted Purnell about:

  • Improving accountability and reducing risk with IT purchases
  • Facilitating the purchasing approval process to shorten the amount of time to implemention
  • Improving communication with senior management to increase support for initiatives

Ted Purnell
Manager, Business & IT Solutions

2:45 Networking & Refreshment Break

3:05 Demonstrating The Long-Term Impact Of Employing FCA For IT
In 1996/97 the Administrative Information Systems (AIS) branch of UCLA embarked on an exercise to essentially measure the value of IT as it related to the different business lines it serviced. The purpose was to essentially eliminate the "black box" perception of its services. In doing so AIS was able to ascertain the value of each component of any given project, resulting in a baseline for its current production portfolio. After some inspection AIS realized that this "baseline" could also be used a basis for predicting the full cost of proposed projects, which were not previously accounted for when an organization was in the decision phase of project development. The end result is a full cost accounting approach that has demonstrated benefits far beyond making more responsible IT development decisions. You will learn from Judith Freed about:

  • Predicting all the associated costs with IT development projects
  • Minimizing the impact of organizational cost-cutting
  • Developing better relationships with the business lines you service

Judith Freed
Business Applications Manager

3:50 Section Analysis: Utilizing topical experts, or expert facilitators delegates will be guided through an interactive discussion to enhance program connectivity, identify general themes, and apply themes to relevant situations.

4:35 End Of Day

Post Program Focus Sessions, Thursday March 11/2004

Focus Session C
8:30am - 12:00pm
How To Quantify The Value IT For Your Organization

Organizations like yours have complex IT systems. Merely maintaining them is a huge job. So when your management announces that they now want hard figures on how to control IT costs and projects, it presents huge challenges for your IT department. If this sounds like you...

One of the biggest challenges your It department is facing these days is to undertake an analysis of all your IT systems, procedures, partners, and processes in order to justify and make IT a valued service centre.

In this workshop we will work together to build a value model. Using cases and tools we'll create ways to:

  • Demonstrate IT value and contribution to stakeholder values
  • Encourage management to view IT as an investment and not a cost center
  • Measure and budget IT investment returns

We will also review some proven management strategies and case studies. In an effort to address and discover this 'holy grail' of the IT universe, we will explore a few fast track solutions focused on:

  • Full Cost Accounting
  • Total Cost of Ownership
  • Risk Assessment
  • Return On Investment

Join your colleagues at this exciting workshop that will employ a unique approach, with an eye towards reducing dependence on outside consultants.

About Your Focus Session Facilitator: Mr. James (Jim) H. Johnson is the founder and chairman of The Standish Group. He has been professionally involved in the computer industry for over 30 years and has a long list of published papers, articles and speeches. He has a combination of technical, marketing, and research achievements focused on mission-critical applications and technology. He is best known for his research on transactional middleware, as well as project and system failures. Jim is a pioneer of modern research techniques and continues to advance in the research industry through virtual focus groups and case-based analytical technology.

Focus Session D
1:00pm 4:30pm
How To Evaluate Open Source Software In Order To Accurately Compare It To Alternatives

Open Source Software / Free Software (OSS/FS) has risen to great prominence. Briefly, OSS/FS programs are programs whose licenses give users the freedom to run the program for any purpose, to study and modify the program, and to redistribute copies of either the original or modified program (without having to pay royalties to previous developers). Many quantitative studies have shown that, in many cases, using OSS/FS programs is a reasonable or even superior approach compared to their proprietary competition.

The challenge for you is how do you effectively conduct an analysis that will allow you evaluate and compare all of your options regardless if it is Open Source or proprietary. Well, the basic steps for evaluating all programs, both OSS/FS and proprietary, are essentially the same:

  • Identify what your options are
  • Review existing evaluations
  • Compare attributes of your options to your needs. Important attributes include functionality, cost, market share, support, maintenance, reliability, performance, scalability, usability, security, flexibility, and legal/license issues
  • Analyze the top contenders, examining these attributes in more detail

However, the way that you perform these steps in an evaluation is different for OSS/FS programs than for proprietary programs. A key difference for evaluation is that the information available for OSS/FS programs is usually different than for proprietary programs.

This workshop will provide you the basic tools you need to conduct such an evaluation considering the fundamental differences in the information you collect. Furthermore, utilizing the basic approach outlined above, you will examine the necessary components under each section that will allow you to tailor your evaluation to needs of your organization.

About Your Focus Session Facilitator: David A. Wheeler, is an expert in software development and computer security. He is the author of several books, including "Software Inspection: An Industry Best Practice" (IEEE CS Press) and "Secure Programming for Linux and Unix HOWTO". He has written many articles analyzing open source software/Free Software (OSS/FS), including "Why OSS/FS? Look at the Numbers!", "More than a Gigabuck: Estimating GNU/Linux's Size", and "How to Evaluate OSS/FS Programs".


Copyright © 2002 Verney Conference Management