When Mayor Adrian Fenty appointed me to his cabinet as chief technology officer for the District of Columbia, I asked a simple question: Why can I find the real-time stock price and performance of any publically traded company with a few keystrokes, but I can’t get solid information on the performance of information technology projects in the government?
My answer was to create a Wall Street model for managing the $950 million-plus District IT portfolio as a portfolio of stocks. In the model, each project is a “company,” its team is company management, its schedule and financial status are captured in market reports, and customer satisfaction is the market reaction. The model allows us to balance riskier strategic IT investments with more conservative ones and rebalance the portfolio whenever necessary. The model also fosters government transparency and accountability — we deliver accurate, real-time performance data to officials using web reports, podcasts and videos.
I built a team of five portfolio managers to run the Wall Street model according to three core principles:
In an environment of shrinking budgets and growing citizen expectations of government, evaluating the performance and promise of IT projects continuously and accurately is critical. With the Wall Street model, we can make fast and sound decisions to “buy,” “hold” or “sell” an IT project — that is, invest more financial resources or change management to improve performance, maintain the current resource level or cancel a failing initiative
The IT stock model incorporates both quantitative and qualitative analysis to provide a holistic picture of the investment. Quantitatively, the portfolio managers analyze vital project statistics, including the schedule, what has been spent against budget, and return on investment. Qualitatively, the portfolio managers evaluate the management team, customer satisfaction and current project-related events to ensure a deep, integrated understanding of the project’s drivers and results.
We define the portfolio managers’ roles as guardians of taxpayer funds. Ultimately, these managers must ensure that all District agencies spend taxpayer dollars wisely on technology investments.
The genius of the American stock market is to put capital to the most efficient use, continuously redirecting funds from low-performing companies to high performers. Our IT stock-market model infuses the same efficiency in government, assuring citizens the highest and best use of the tax dollars they entrust to us.
The District of Columbia turned problem-plagued projects into stars by rebalancing its IT investment portfolio.