Investment Strategies -- Projects

Adapting Private Sector Virtualization Strategies to Federal Agencies

Applying ROI Analysis to the Full Investment Management Process

Aviation Demand and Performance Analysis

Contract Investment Strategies

Enterprise Modernization Best Practices

Information Technology Investment Management

Jet:Wise

Research Topics in Enterprise Modernization Technologies

Investment Strategies

Investment Strategies is concerned with understanding the benefits and direction of planned and future technology investments by the government. Responsibilities include capturing information on trends in technology investments, understanding the challenges associated with investment decisions, and improving MITRE's abilities to support technology investment studies. The latter includes methods and tools for investment analysis, as well as supporting databases. At present, the technical area team is researching the following broad areas: information technology investments, militarily critical technology investments, and aviation technology investments.

Adapting Private Sector Virtualization Strategies to Federal Agencies

Robert Marshall, Principal Investigator

Washington only

Problem
Our goal is to offer MITRE's government clients an approach for understanding and analyzing investment choices that "virtualize" government business.

Objectives
The project seeks to produce a guide for managers considering virtualization. At the very least, the guide will contain a set of heuristics which managers should consider before acting and some way to measure project risk.

Activities
A major task of this phase has been simply to draw a boundary around a very nebulous concept and then develop a methodology for clients to measure the risk and return on investments in virtualization. We also developed a process model for virtualization projects. We developed a set of contacts in government with experience or interest in virtualization.

Impacts
We will present our clients with a balanced view of virtualization and tools for assessing it. These resources will help government organizations achieve cost reduction and better service (quality, quantity, time), and will provide new capabilities and the ability to reallocate money to fulfill unmet needs.

Applying ROI Analysis to the Full Investment Management Process

Kevin Buck, Principal Investigator

Bedford and Washington

Problem
The absence of concrete, standard definitions, processes, and other methods for performing and applying return on investment (ROI) analysis throughout the investment management lifecycle creates considerable confusion for government.

Objectives
Key objectives include differentiating between ROI calculation/analysis regulations and other required investment analyses. An approach for quantifying investment value creation and intangible costs/benefits within the ROI analysis will be recommended. An ROI calculation/analysis will be recommended that most effectively manages investments over the entire lifecycle. The ROI guideline developed in FY01 will also be validated via case study.

Activities
Investment selection/evaluation regulations will be compared and overlaps will be identified. Key attributes for selecting methods to measure investment benefit will be identified. The applicability of decision analysis methods for typical government ROI needs will be evaluated. A case study will be conducted to validate the extensibility of the ROI analysis guideline. An ROI maintenance program will be developed.

Impacts
This research will increase MITRE's knowledge of the latest strategic, financial, and investment theory and of best practices in commercial industry and government investment decision-making. Continued investigation of multi-criteria decision analysis methods will supplement MITRE's extensive knowledge in this area. Development of ROI calculation and analysis recommendations will be communicated to standards bodies.

Aviation Demand and Performance Analysis

Stephen K. Welman, Principal Investigator

Washington only

Problem
With the increasing tension between capacity and demand, the economics of air transportation is increasingly important to understanding the likely operational impacts of changes in the National Airspace System (NAS).

Objective
We will expand our understanding of the economic factors that impact NAS operations. We are focused on three items: passenger demand for air transportation, changes in demand management, and economic trends that affect air transportation.

Activities
We are performing an assessment of current literature and building a database of regional economic and passenger ticket information. We are constructing an econometric model of passenger demand by origin-destination pair and a model to estimate the likely impacts of changes to current demand management procedures. Finally, we are developing processes to collect and synthesize data on economic trends affecting air transportation.

Impacts
By expanding our economic analysis capabilities, we expect to produce better estimates of the operational impacts of possible changes in NAS policies and procedures. This is increasingly important as the persistent imbalance between capacity and demand in the NAS pressures policy makers to examine a wider range of possible changes.

Contract Investment Strategies

James L. Vann, Principal Investigator

Washington only

Problem
Recent federal agency modernization efforts are conducted within a complex environment of rapidly changing commercial technology and resulting drives for organizational change. Civil agencies have had to resort to traditional contractual approaches, but such techniques, which have evolved from the defense and aerospace program environment, are not always appropriate for civil agency modernization. Furthermore, civilian agencies usually do not have staff who are highly trained in large-scale acquisitions.

Objectives
This research project will examine and compare different federal agency modernization programs and identify the risks and challenges in developing effective contracting strategies. Factors such as maintaining competition as a performance incentive and the effectiveness of contract types (e.g., firm-fixed price, cost reimbursable incentive fees and award fees, performance-based incentives, etc.) will be examined in the context of the complex enterprise modernization environment.

Activities
MITRE will conduct research and compile lessons learned from the IRS, Customs, and other modernization programs. The Economic and Decision Analysis Center, MITRE research library and government Web resources will be consulted. Attendance at seminars will enhance current issue awareness. The final products are expected to be (1) an article published in Contract Management Magazine, and (2) a white paper and briefing for sponsors and potential customers.

Impacts
This research seeks to establish a new framework for assessing optimal effectiveness of contract strategies for large federal agency modernization programs. It will identify risks and challenges, lessons learned and best practices from both government and civilian contracting practices. The output from the research effort could be applied to current agency sponsors as well as potential sponsors contemplating major modernization programs.

Enterprise Modernization Best Practices

Anne Cady, Principal Investigator

Washington only

Problem
U.S. government agencies are launching major enterprise modernization programs to improve service efficiency and effectiveness, and to reduce the cost of operating and maintaining complex legacy systems. The interrelated dynamics of governance processes associated with enterprise modernization are not yet understood, and best practices are yet to be developed, leading to high failure rates and excessive cost.

Objectives
We plan to develop a better understanding of the dynamics associated with enterprise modernization, including integrated engineering of systems, processes, organizations, and personnel. We will determine how internal and external drivers impact enterprise modernization, identify and characterize the multiple interacting change processes that comprise the enterprise life cycle, and define a research agenda for analyzing current enterprise governance practices and defining better practices.

Activities
We will describe the enterprise life cycle processes associated with enterprise modernization, or, more accurately, ongoing enterprise evolution. We will compare and contrast these processes in U.S. government agencies, commercial companies, and DOD. We will also identify areas for further investigation, such as differences in enterprise and system life cycles, development and use of enterprise modernization roadmaps and architectures, investment strategies based on performance measures, an enterprise modernization capability maturity model, etc. In addition, we will generate proposals for research in enterprise evolution governance.

Impacts
A better understanding of the complex interrelated dynamics of the enterprise life cycle should guide simplification and management of these processes so they can be executed in a repeatable, predictable fashion. Such improvements would allow enterprises to evolve continuously in response to change drivers and new technologies. MITRE could take a lead role in developing best practices that are tailored to an agency's mission and strategic goals, rather than being based on immature vendor solutions.

Information Technology Investment Management

Richard Manley, Principal Investigator

Washington only

Problem
Information technology accounts for a significant segment of the federal budget. Historically, much of the money spent has resulted in failed or under-performing projects. Investment management is a significant component of the overall management process. While current practices and techniques are improving, the "state of the art" is still not mature enough to help prevent monetary waste.

Objectives
MITRE will engage with the federal IT investment communities to identify and/or develop IT investment management practices and techniques (for application at an enterprise level) that will deliver better mission-oriented results with more efficient and effective use of government resources.

Activities
MITRE will work with the GAO to complete their ITIM framework with emphasis on stage 5 of the associated maturity model. Future activities will support investigating IT management factors and contributing to the Federal CIO Council's new "First Practices in Portfolio Management" guide. Additional activities will include disseminating the results of the previous two activities throughout the MITRE community working on related issues.

Impacts
MITRE will provide credible and cutting edge support to our sponsors, helping them become more efficient and effective in managing IT investment resources. We will assist our sponsors in meeting and exceeding standards being imposed by federal oversight entities in our effort to deliver greater mission success.

Jet:Wise

Thomas P. Berry, Principal Investigator

Washington only

Problem
Airlines react to changes in their environment (such as increased delay or reduced passenger demand) by varying certain elements of their business (such as modifying fares, adjusting schedules, etc.). Those decisions take into account the reactions of their competitors to these same factors. With over 50,000 flights in the U.S. daily, modeling the number of possible interactions is not feasible using traditional methods.

Objectives
Using agent-based modeling, Jet:Wise seeks to model these interactions using individual agents that seek to fulfill a specific objective function. In doing so, Jet:Wise should simulate the complex interactions of the real world.

Activities
The major focus of the research this year is to examine the output of Jet:Wise and characterize its usefulness in analysis by comparison to real-world data. This will be done by comparing both the individual components and the behavior of the overall model against known data. Major milestones are the design-build-test phase through the end of May 2002 and code freeze and final test in June.

Impacts
This work will yield better estimation of likely airline uses for capacity increases, and the capability to estimate likely effects of these changes on passengers in the form of possible changes in fares, trip length, and service patterns.

Research Topics in Enterprise Modernization Technologies

Anne Cady, Principal Investigator

Washington only

Problem
Excessive vendor hype and "consultant speak" cloud implementation and integration issues associated with new and emerging technologies for enterprise modernization and lead to high risk of program failures. In addition, there is a strong need for some technologies not yet developed or adapted to CEM client needs, such as enterprise architecture metamodels and repositories for all our clients, and detection/tracking tools for Customs.

Objectives
We plan to develop a better understanding of new and emerging technologies that enable legacy system modernization, e-government, and specific Customs functions, gain experience in successful technology insertion strategies, and define a research agenda for investigating specific new and emerging technologies that are relevant to our clients' enterprise modernization programs.

Activities
We will identify new and emerging IT technologies for further investigation in areas of e-business, enterprise application integration, enterprise architecture, knowledge management, etc. We will also identify and investigate detection and tracking technologies that could be adapted to support Customs, define needs for an integrated CEM lab that could support evaluation of enterprise modernization technologies, and generate proposals for research on enterprise modernization technologies.

Impacts
A better understanding of new and emerging technologies associated with enterprise modernization and specific Customs missions would enable MITRE to provide objective advice to clients on their legacy system modernization and ongoing enterprise evolution programs. Resolving the technology gap in transitioning from architecture frameworks to useful architecture representations would benefit all MITRE customers.