On Cost-benefit Evaluation Methods of Government-invested IT Projects

1. On Cost-benefit Evaluation Methods of Government-invested IT Projects CNAO's Wuhan Resident Office Haiyan zhang

2. Characteristics in evaluation of government-invested IT projects I Principle in evaluation index configuration of government-invested IT projects II Construction of government-invested IT projects performance evaluation index system III Agenda

3. e-government platforms …… background performance audit of GI-IT-P : - to supervise legality of the investment process - to offer feedback to the public - to evaluate government-invested decision and investment performance GI-IT-P Golden Finance Project Golden Tax Project Golden Customs Project

4. government investment in IT projects enterprises’ investment in IT Project I. Characteristics in evaluation of GI-IT-P focus on improving the enterprises’ economic performance satisfy public needs and offer public services VS

5. - Complexity invisible benefits continuous improvement process deficiency of rigorous project supervision mechanism I. Characteristics in evaluation of GI-IT-P - Continuity Evaluation is a continuous process, not to be terminated with the completion of a particular project

6. - Integrity covers all the factors of IT projects and the government's public service functions - Service offers consultation to and experience for the government's future IT investment I. Characteristics in evaluation of GI-IT-P

7. II. Principle in evaluation index configuration of GI-IT-P Evaluation focuses upon - the advanced and effective technical support and service capability of the system - the sharing and service capability - potential social benefits develop an evaluation indicator system [EIS]

8. II. Principle in evaluation index configuration of GI-IT-P - Principle of system integrity - Principle of operability - Principle of combination of qualitative and quantitative evaluation - Principle of combination of economic efficiency and social benefits - Dynamic principle The selected evaluation indicators must be systematic and complete, with emphasis not only upon the internal relations of the overall EIS, but also upon the functions and objectives of the entire system

9. II. Principle in evaluation index configuration of GI-IT-P - Principle of system integrity - Principle of operability - Principle of combination of qualitative and quantitative evaluation - Principle of combination of economic efficiency and social benefits - Dynamic principle The EIS must be designed to be operational, with consideration to the feasibility of index value measurement and data collection, hence arises the necessity to solve the contradiction between theoretical importance and practical feasibility.

10. II. Principle in evaluation index configuration of GI-IT-P - Principle of system integrity - Principle of operability - Principle of combination of qualitative and quantitative evaluation - Principle of combination of economic efficiency and social benefits - Dynamic principle Quantitative assessment must be made on the basis of qualitative analysis, since only through quantitative analysis can the nature and essence of any phenomenon be accurately described.

11. II. Principle in evaluation index configuration of GI-IT-P - Principle of system integrity - Principle of operability - Principle of combination of qualitative and quantitative evaluation - Principle of combination of economic efficiency and social benefits - Dynamic principle In order to utilize public finances in line with the principle of “from the people, to the people,” there must be strict harmony and unity between economic efficiency and social benefits.

12. II. Principle in evaluation index configuration of GI-IT-P - Principle of system integrity - Principle of operability - Principle of combination of qualitative and quantitative evaluation - Principle of combination of economic efficiency and social benefits - Dynamic principle Indicators must be dynamically adaptable in parameters in line with the specific situation of an IT project, and also dynamically adjustable in weighing factors in order to describe the dynamic benefits of information technology.

13. III Construction of GI-IT-P performance EIS There are four popular methods in theories and practices currently. - The financial evaluation method - The multi-indicator comprehensive evaluation method - The mathematical method - The computer-based technology approach

14. III Construction of GI-IT-P performance EIS On the basis of the hierarchy analysis method, a desirable GI-IT-P EIS should - combine financial indicators and non-financial indicators - combine the system quality and customer satisfaction - combine internal performance and social impact

15. III Construction of GI-IT-P performance EIS The EIS is divided into four dimensions - IT user satisfaction - IT value and contribution - IT internal process - IT learning and innovation

16. III Construction of GI-IT-P performance EIS Objectives to be achieved in the four dimensions are connected in a cause-effect way the ultimate objective of GI-IT-P IT customer satisfaction IT value and contribution IT internal processes IT learning and innovation

17. III Construction of GI-IT-P performance EIS The EIS is divided into four dimensions - IT user satisfaction - IT value and contribution - IT internal process - IT learning and innovation

19. III Construction of GI-IT-P performance EIS The EIS is divided into four dimensions - IT user satisfaction - IT value and contribution - IT internal process - IT learning and innovation

21. III Construction of GI-IT-P performance EIS The EIS is divided into four dimensions - IT user satisfaction - IT value and contribution - IT internal process - IT learning and innovation

23. III Construction of GI-IT-P performance EIS The EIS is divided into four dimensions IT user satisfaction IT value and contribution IT internal process IT learning and innovation

25. On the basis of the hierarchy analysis method, a desirable GI-IT-P EIS should - combine financial indicators and non-financial indicators - combine the system quality and customer satisfaction - combine internal performance and social impact

26. III Construction of GI-IT-P performance EIS Concerning weighing of the evaluation index, this paper adopts the method —analytic hierarchy process [AHP] the problem under analysis is reduced to a problem of sequencing Establish a hierarchy model the problem under analysis is divided into hierarchies

27. III Construction of GI-IT-P performance EIS AHP can be adopted to make system performance evaluation roughly in four steps: • AHP modeling; (b) determination of comparison structural matrix; (c) calculation of the relative weighing of the factors under comparison; and (d) calculation of the combination weight of factors in each hierarchy finally.

28. What is next? In our viewpoints, - in audit practice, there is necessity to make further in-depth research of EIS, - and combine pre-audit investigation result into the EIS design and specific indicator weighing.

29. Thank youApril 12, 2010