FINANCE GUIDANCE NOTE 2004/03: DELIVERY OF
ACQUISITION-BASED PROGRAMMES & PROJECTS
Purpose
Finance Guidance Note 2003/03 introduced new procedures
designed to improve the delivery of IT-enabled projects and
programmes. This note extends the procedures to all
acquisition-based programmes and projects, whether
IT-enabled or not. An acquisition-based programme or
project is one which has a significant element dependent on
the supply of goods and/or services by a third party
supplier or suppliers. Whilst it is not essential for the
goods or services to be provided by a single supplier, the
contribution of the third party supplier or suppliers
should be considered significant if a failure to deliver on
their part attracts public criticism.
Action Points
Accountable Officers in organisations subject to the
requirements of the Scottish Public Finance Manual should
satisfy themselves that
mission critical and
high risk acquisition-based programmes and
projects for which they are responsible do not suffer from the
common causes of failure listed in the
Appendix below. The Appendix also provides a list of related
questions that Accountable Officers should ensure are
addressed before such programmes and projects are allowed
to proceed. This should be done and
recorded following an initial programme or
project review.
All staff concerned with the delivery of programmes
and/or projects involving the purchase of goods or services
should familiarise themselves with this note.
Further Advice
The Scottish Executive's Centre of Expertise for
Programme, Policy and Project Delivery provides access to
support and guidance. The Unit also co-ordinates the
Gateway Review service for mission critical and high risk
programmes and projects. Further advice on the content and
application of this guidance note can be obtained from the
Centre of Expertise. Enquiries from sponsored bodies should
be routed through sponsor Departments.
Scottish Executive Finance
May 2004
APPENDIX
Common Cause of Failure
- Lack of a clear link between the project and the
organisation's key strategic priorities, including
agreed measures of success.
- Lack of clear senior management and Ministerial
ownership and leadership.
- Lack of effective engagement with
stakeholders.
- Lack of skills and a proven approach to project and
risk management.
- Too little attention to breaking the development
and implementation into manageable steps.
- Evaluation of proposals driven by initial price
rather than long-term value for money (especially in
securing the delivery of business benefits).
- Lack of understanding of, and contact with, the
supply industry at senior levels in the
organisation.
- Lack of effective project team integration between
clients, the supplier team and the supply chain.
Questions to Ask
If any of the answers to the following questions are
unsatisfactory, an acquisition-based project should not be
allowed to proceed until the appropriate assurances are
obtained.
Lack of a clear link between the project and
the organisation's key strategic priorities, including
agreed measures of success.
Do we know how the priority of this project compares and
aligns with our other delivery and operational activities?
Have we defined the critical success factors (CSFs)
for the project?
Have the CSFs been agreed with suppliers and key
stakeholders?
Do we have a clear project plan that covers the full
period of the planned delivery and all business change
required, and indicates the means of benefits realisation?
Is the project founded upon realistic timescales,
taking account of statutory lead times, and showing
critical dependencies such that any delays can be handled?
Are the lessons learnt from relevant projects being
applied?
Has an analysis been undertaken of the effects of any
slippage in time, cost, scope or quality? (In the event of
a problem/conflict at least one must be sacrificed.)
Lack of clear senior management and Ministerial
ownership and leadership.
Does the project management team have a clear view of
the interdependencies between projects, the benefits, and
the criteria against which success will be judged?
If the project traverses organisational boundaries,
are there clear governance arrangements to ensure
sustainable alignment with the business objectives of all
organisations involved?
Are all proposed commitments and announcements first
checked for delivery implications?
Are decisions taken early, decisively, and adhered
to, in order to facilitate successful delivery?
Does the project have the necessary approval to
proceed from its nominated Minister either directly or
through delegated authority to a designated SRO?
Does the Senior Responsible Owner (SRO) have the
ability, responsibility and authority to ensure that the
business change and business benefits are delivered?
Does the SRO have a suitable track record of
delivery? Where necessary, is this being optimised through
training?
Lack of effective engagement with
stakeholders.
Have we identified the right stakeholders?
In so doing, have we as intelligent customers,
identified the rationale for doing so (e.g. the why, the
what, the who, the where, the when and the how)?
Have we secured a common understanding and agreement
of stakeholder requirements?
Does the business case take account of the views of
all stakeholders including users?
Do we understand how we will manage stakeholders e.g.
ensure buy-in, overcome resistance to change, allocate risk
to the party best able to manage it?
Has sufficient account been taken of the subsisting
organisational culture?
Whilst ensuring that there is clear accountability,
how can we resolve any conflicting priorities?
Lack of skills and proven approach to project
management and risk management.
Is there a skilled and experienced project team with
clearly defined roles and responsibilities? If not, is
there access to expertise, which can benefit those
fulfilling the requisite roles?
Are the major risks identified, weighted and treated
by the SRO, the Director, and Project Manager and/or
project team?
Has sufficient resourcing, financial and otherwise,
been allocated to the project, including an allowance for
risk?
Do we have adequate approaches for estimating,
monitoring and controlling the total expenditure on
projects?
Do we have effective systems for measuring and
tracking the realisation of benefits in the business case?
Are the governance arrangements robust enough to
ensure that "bad news" is not filtered out of progress
reports to senior managers?
If external consultants are used, are they
accountable and committed to help ensure successful and
timely delivery?
Too little attention to breaking development
and implementation into manageable steps.
Has the approach been tested to ensure it is not
'big-bang' for example in IT- enabled projects?
Has sufficient time been built in to allow for
planning applications in Property & Construction
projects for example?
Have we done our best to keep delivery timescales
short so that change during development is avoided?
Have enough review points been built in so that the
project can be stopped, if changing circumstances mean that
the business benefits are no longer achievable or no longer
represent value for money?
Is there a business continuity plan in the event of
the project delivering late or failing to deliver at
all?
Evaluation of proposals driven by initial price
rather than long-term value for money (especially
securing delivery of business benefits).
Is the evaluation based on whole-life value for money,
taking account of capital, maintenance and service costs?
Do we have a proposed evaluation approach that allows
us to balance financial factors against quality and
security of delivery?
Does the evaluation approach take account of business
criticality and affordability?
Is the evaluation approach business driven?
Lack of understanding of, and contact with, the
supply industry at senior levels in the
organisation.
Have we tested that the supply industry understands our
approach and agrees that it is achievable?
Have we asked suppliers to state any assumptions they
are making against their proposals?
Have we checked that the project will attract
sufficient competitive interest?
Are senior management sufficiently engaged with the
industry to be able assess supply-side risks?
Do we have a clear strategy for engaging with the
industry or are we making sourcing decisions on a piecemeal
basis?
Are the processes in place to ensure that all parties
have a clear understanding of their roles and
responsibilities, and a shared understanding of desired
outcomes, key terms and deadlines?
Do we understand the dynamics of industry to
determine whether our acquisition requirements can be met
given potentially competing pressures in other sectors of
the economy?
Lack of effective project team integration
between clients, the supplier team and the supply
chain.
Has a market evaluation been undertaken to test market
responsiveness to the requirements being sought?
Are the procurement routes that allow integration of
the project team being used?
Is there early supplier involvement to help determine
and validate what outputs and outcomes are sought for the
project?
Has a shared risk register been established?
Have arrangements for sharing efficiency gains
throughout the supply team been established?
Scottish Executive Finance
May 2004
Explanatory Notes
A mission critical programme or
project
A mission critical programme or project in the context
of this note is one that, regardless of size, value or
complexity, delivers:
- outputs that directly support the delivery of a
major policy outcome (typically those that are
prioritised in the Partnership Agreement), or
- an internal business change that supports the
administration of the Scottish Executive or a major
public sector organisation e.g. an Agency or major
funded body.
A high risk programme or project
A high risk programme or project in the context of this
note is one that typically displays some or all of the
following characteristics:
- a novel or untested approach to delivery,
- lack of experience of similar project
delivery,
- a complex matrix of project interdependencies,
- a significant impact on the public and other
organisations,
- business criticality and/or political sensitivity,
or
- a significant resource commitment.
Projects
A project is defined as a unique set of co-ordinated
activities with a finite duration, defined cost and
performance parameters and clear outputs to support
specific business objectives.
Scottish Executive Finance
May 2004