Managing Uncertainty and Risk in Public-sector Investments

Abstract

The Department of Defense (DoD) has an annual budget approaching a half trillion dollars. A significant portion of that budget is either directly or indirectly affected by Information Technology (IT) Infrastructure modernization initiatives. Nationally, investment in IT infrastructure modernization is about $250 Billion a year, spanning approximately 175,000 projects. Unfortunately, various studies indicate that only 28% are completed on time and on budget''with the number dropping to around 9% for larger companies in 1994, including government programs. By 1998, these numbers had improved, with success rates for larger companies, for example, up to 24%. But, only small organizations have managed to implement more than half of their applications into one integrated system (Smith, 2000; Johnson, 1999, December; Keller, 2006, May 29).