U.S. Navy Capital Planning and Investment Control (CPIC)

1. U.S. NavyCapital Planning and Investment Control (CPIC) Captain Maxie Davis and Mr. Denzil Thies U.S. Navy, Communication Networks Directorate OPNAV N61 July 23, 2008

2. Navy Personnel: Active Duty 333,000 Ready Reserves 127,000 Civilian Employees 180,000 Contractor Support 300,000 940,000 Navy Platforms: Ships ~ 300 Aircraft ~ 4,000 Ships Underway 118 (42%) U.S. NAVY

3. Chief of Naval Operations Mission …to Maintain, Train, and Equip combat-ready Naval forces capable of winning wars, deterring aggression and maintaining freedom of the seas. Admiral Gary Roughead Build the future force Maintain Warfighter Readiness Develop & Support Sailors

4. Chief of Naval Operations Chief of Naval Operations Vice Chief of Naval Operations Director of Naval Nuclear Propulsion Program [NooN] Director, Navy Staff [DNS] DCNO Manpower Personnel Education & Training [N1] DCNO Information Plans & Strategy [N3/N5] DCNO Communication Networks [N6] DCNO Integration of Capabilities & Resources [N8] Director of Naval Intelligence [N2] Director for Material Readiness & Logistic [N4]

5. Navy Capital Planning • Responsibilities for: • Ships, Submarines, Aircraft, Weapons, People • Well – Defines Processes: • Joint Capability (JCIDS) • Defense Acquisition System (DAS) • Programming, Planning, Budget, and Execution (PPBE) • 6 year budget plan to execution year (FYDP) Navy Annual Budget ~ $150 Billion

6. Communication Networks (IT) • Circumstances of IT Evolution and Growth of Information Technology present size and complexity issues • Managing the IT budget has become more difficult • More Effective Governance and Oversight of IT Assets has become a necessity Approximately $10 billion spent annaully on IT

7. Governance Discussion • Strategic Problems • We don’t know how much we spend on IT and cannot accurately characterize our IT assets • Our IT architecture is not creating the adaptability that we need; IT is a friction point for change and not enough of an enabler • Our IT is not secure enough given the threats we see and interpolate We need to better govern, to truly address these problems

8. Strategic IT Intent Clinger-Cohen Act of 1996 – Directs agencies to develop and implement processes for IT capital planning and investment management. OMB Circular A-130 – “Management of Federal Information Resources” Establishes CPIC and Enterprise Architecture policies for the management of Federal information resources. OMB Circular A-11 – “Preparation and Submission of Budget Estimates” Establishes the guidelines for planning, budgeting and acquiring capital assets. Portfolios DODI 8115.02 – “Information Technology Portfolio Management Implementation” Provides DOD requirement and framework for IT portfolio management including an analyze, select, control and evaluate process. SECNAVINST 5230.7P–“Department of the Navy Information Resources Management” Establishes DON policy for management of information resources including requirement for a single Navy CPIC process. GAO-04-394G– “Information Technology Investment Management” Framework provides a five stage model for evaluating the maturity of IT investment management. Analyze Select Control Evaluate

9. CPIC/PfM Tenants Portfolios Analyze Select Control Evaluate Clinger-Cohen DOD PfM Directives Defense Authorization SECNAV Inst. Appropriations Act 5230.7P • Aligns IT Investments to Strategic Vision (scoring) • Prioritize Investments (ranking) • Strategic criteria for investment analysis • Conduct Annual PfM reviews • Recommendation to stop, slow, maintain, accelerate program funding • Identify redundant/inefficient systems by Functional area • Integrate architectures within investments • Ensure compliancy and certification requirements adherence • Interoperability, FISMA, Architecture, DevMod,

10. Key Governance Initiatives • Information Technology Management Council (ITMC) • 3-Star level IT management body recently activated • Gets CIO, acquisition, operators at the same table • Data Strategy • Piloting data strategy for Navy • Key to effectively creating SOA • CPIC • Actual environment to integrate governance contexts

11. Governance Model Financial/Portfolio Design assessment mission value standards • Activity: • Programs • Projects • Initiatives $ Project / Program & Operations results capability good idea Integrate & visualize aspects to make better decisions

12. Progress over Past 3 Years Portfolios Analyze Select Control Evaluate • Spring 2005 -- small CIO staff established (~ 50) • Fall 2005 -- Started Socializing CPIC concept • Spring 2006 – Evaluated CPIC/PfM tools available in market place • Fall 2006 -- Published Navy-wide CPIC Roadmap (Vision) • Started scrounging for “seed” money • Oct 2006 -- Prosight “Pilot” project approved • Funded Spring 2007 • Spring - Summer 2008: • Enterprise Architecture Policy Published • Navy IT Governance structure starting to take shape • Initiated a Depart of Navy Portfolio Management (PfM) Community of Interest

13. CPIC Vision – Macro Level CPIC integrates JCIDS, PPBE, DAS Inputs • President’s Mgmt Agenda • QDR • Guidance for Development of the Force (GDP) • Navy Strategic Plan • CNO Guidance • Enterprise Architecture • FISMA/IA Outputs • Visibility: • Programmatic Health • Strategic Value • Life Cycle Costs Budget Foundation ProSight • Facilitate: • Enterprise initiatives • Legacy reductions • Divesting Legacy Migration Plan IT Capital Plan SOA opportunity Annual PfM Program/System Review DITPR-DON NITE/ STAR STARS PBIS DADMS NTIRA Navy EA SNaP-IT FITS

14. The CPIC Roadmap Vision The U.S. Navy to use the CPIC capability, as an enterprise, to align and integrate IT governance to achieve optimum allocation of IT resources Navy-wide • IT Budget Support • Consistent & Objective decision- making methodology for IT Funding • IT Governance • Supports enforcement of Enterprise Architecture, standards, IA & other CIO responsibilities • Legacy System & Application Reduction • Eliminate duplication and excess • Prepare for transition to NGEN • Lower Costs • Annual PfM Reviews • System Performance Review • IT Systems Compliance checks • IT Approval Process • Modify, Continue, Terminate Recommendations • Review IT Budget submissions • IT Cost Visibility • Reconciliation of IT spending • (planned vs. actual) • Life Cycle Cost • Annual Performance Planning • IT Systems Registration • Improved data quality • IT Asset Inventory • Business System Certification • Reduced costs • Consolidate & Integrate Databases • Decision Integration • Enterprise Governance • Joint interoperability • Align with JCS GIG Process • Capabilities-based planning • Dashboard (Metric) Reporting • Automated reporting using authoritative databases • Investment Management • Decision Quality Data • Cost & Investment Visibility • Manage Multiple Investments & Views • FISMA/IA Compliance • Certification/Accreditation • Improved FISMA score • Enterprise Architecture Compliance • Improved Interoperability • Improve IT Security • Improve IT Reliability

15. Why Start with Budget Process?? Portfolios Analyze Select Control Evaluate • Start with Process contained within the OPNAV N6 Directorate • Budget Process fairly well defined • Budget Process “Near & Dear” to Director’s Heart • Potential for quickest ROI • Better Budget Decisions

16. Prosight Pilot Objectives Portfolios Analyze Select Control Evaluate • Develop a repeatable, sustainable IT budget process • Prioritizes (Rank) IT Investments based on: • Mission Contribution, Performance, Risk, and Strategic Value (alignment Mission) • Standardize IT Investment Selection process across stakeholders • Provide a Justifiable and Defendable Budget proposal to CNO • Analytical Underpinning to support Budget Decisions • Conduct Exercise to: • Evaluate Viability and Usability of Prosight Tool • Capability (Maturity) to support upcoming POM-10 Budget process. • Limit investment till concept proven

17. OPNAV N6 Budget Stakeholders

18. Prosight Pilot Implementation Portfolios Analyze Select Control Evaluate Very Tight Time-Line • 1 June – 14 Sep, 2007 • Executed Communication Plan – Influence Change Management • Identified Stakeholder Requirements and Business Processes • Developed Investment Scoring Model (Leadership participation) • Configured Prosight • User Acceptance • Trained Users • 17-19 Sep, 2007 – Conducted Exercise • Used 15 Investments (10%) • Director to make “Go/No Go” after Exercise

19. Exercise Results Portfolios Analyze Select Control Evaluate • Process was very illuminating for Stakeholders • Majority of Nay-Sayers turned to Advocates • Stakeholders Strongly Supported CPIC process and Prosight Tool Director’s Decision: FULL GO for Budget Process just starting

20. Benefits Realized Analyze Select Control Evaluate • Better Compliance with CPIC Mandates (Clinger – Cohen) • Repeatable, sustainable NNFE Budget Programming process • Single, centralized interface for Investment programmatic data • Standardized IT Investment Selection process across NNFE stakeholder • Leadership Involvement in Investment “Value” determination • Leadership participation in development of Investment Evaluation Model • Prioritized (ranked) N6 Investment Programs (based on score) • Enabled rapid ranking of “New Funding Issues” • Enhanced Decision-making by providing multiple views of Investment Portfolios • Improved audit trail for Budget Programming decisions • Provided analytical underpinning to defend Budget Programming decisions

21. Investment Scoring Model • Strategic Value Criteria based on: • Navy Strategic Plan (draft) • N6/DDCIO(N) Strategy Paper (Feb 07) • PR-09 SPP Story Line • POM-10 Priorities (as currently known) • N6 POM-10 WarnOrd (draft) • N6 Priorities • NNWC, SPAWAR, and PEO C4I input

22. Challenges Portfolios Analyze Select Control Evaluate • Change Management • Hard line resistance to change by old timers • Putting faith into capability not yet proven • Leadership concerns about time to enter data • Disparate Business Practices • Reaching agreement on Investment Scoring Criteria • Training Users in a rapid development environment

23. CPIC Way Ahead Portfolios Analyze Select Control Evaluate • Continued implementation of the CPIC Roadmap • Development of a Navy-wide CPIC Process • Enhance and Refine Budget decision support Processes • Execution Year Cost Visibility • Integration with other Navy PfM efforts • Integration with DON/Navy IT Governance Efforts • Pilot program for: • IT Systems registration process • Legacy systems rationalization • IT Approval Process

24. 2008 CPIC Way Ahead The U.S. Navy to use the CPIC capability, as an enterprise, to align and integrate IT governance to achieve optimum allocation of IT resources Navy-wide • IT Budget Support • Consistent & Objective decision- making methodology for IT Funding • IT Governance • Supports enforcement of Enterprise Architecture, standards, IA & other CIO responsibilities • Legacy System & Application Reduction • Eliminate duplication and excess • Prepare for transition to NGEN • Lower Costs • Annual PfM Reviews • System Performance Review • IT Systems Compliance checks • IT Approval Process • Modify, Continue, Terminate Recommendations • Review IT Budget submissions • IT Cost Visibility • Reconciliation of IT spending • (planned vs. actual) • Life Cycle Cost • Annual Performance Planning • IT Systems Registration • Improved data quality • IT Asset Inventory • Business System Certification • Reduced costs • Consolidate & Integrate Databases • Decision Integration • Enterprise Governance • Joint interoperability • Align with JCS GIG Process • Capabilities-based planning • Dashboard (Metric) Reporting • Automated reporting using authoritative databases • Investment Management • Decision Quality Data • Cost & Investment Visibility • Manage Multiple Investments & Views • FISMA/IA Compliance • Certification/Accreditation • Improved FISMA score • Enterprise Architecture Compliance • Improved Interoperability • Improve IT Security • Improve IT Reliability

25. N6 Navy Investment Management System (NIMS) Portfolios Analyze Select Control Evaluate • Web-Based application accessible on NMCI machines • Currently have ~ 300 Users (licenses for 700) • Plans to be PKI/CAC enabled by FY09 • Hosted at SPAWAR Data Center (Pensacola) • Server Farm Architecture just upgrade • Capacity to handle 50,000 users • Application (Prosight) Navy approved for PfM • NIMS registered in Navy’s IT Systems data base • Hold IATO • Documentation in work for full ATO

26. Program Scoring • Program scores provides ranked list of investments • Based on the weighted investment evaluation model

27. Program Scoring • Scores used to facilitate analytics to support decision-making • Enabled investment prioritization, supports “puts & takes” discussions, and aids in portfolio balancing for strategy support, cost, value and risk

28. Issue Ranking Support • Benefits • Used Decision Lens to Rank (score) Puts. • Rapidly inputted Rank scores into NIMS for comparison with related program score • Score comparisons helped frame discussions • Can easily modify Put $ amount by FY/APPN and quickly roll-up for display

29. Issue Analysis • Benefits • Easy to input new information (e.g. updated financials and view impact) • Visual analysis of Issues binned by Investment Priority, Issue Ranking, and related Program Score. • Framed discussion for “Issue” value gained for available dollars X: DL Issue Ranking Y: Investment Priorities Area Color: Related Program Score Size: FY10 proposed Issue Funding

30. “Takes” Analysis • Benefits • Visual analysis of Takes binned by Investment Priority, Takes Ranking, and Program Score • Enabled discussion for dollars available for set of prioritized takes? • Enabled discussion of “Takes Pain” to get desired “Issues” X: DL Takes Ranking Y: Investment Priorities Area Color: SSP Overall Score Size: FY10 Proposed Take $

31. “Take” Candidates Analysis • Benefits • Identifies all Programs with no Issues, no Takes, not Redlined • Enabled discussion of other areas for possible Takes X: Investment Priorities Area Y: Program Value Score Color: Program Overall Score Size: FY10 Funding (IRAPS)

32. Questions Portfolios Analyze Select Control Evaluate

33. Investment Evaluation Model Analyze Select Control Evaluate Strategic Value Investment Health Risk Avoidance Mission Contribution

34. Federal Agencies Using ProSight • Defense Intelligence Agency • Department of the Army • DHS - CIO • DHS - Customs • DHS - S&T • DoD - Joint Staff - J8/J6/OCIO • DoD – WHS • SOCOM • STRATCOM • CENTCOM • Air Force – PEO’s/CIO • Military Health Service – Tricare • Defense Logistics Agency • Health and Human Services • HHS - FDA • House of Representatives • NASA - CIO • NAVSEA • Nuclear Regulatory Commission • Treasury – CIO/IRS • Veterans Affairs • Defense Threat Reduction Agency