The Value-for-Money Principle

Decisions will be made to provide optimal benefit to the government as a whole.

The Value-for-money principle introduces a whole-of-government perspective when multiple parties seek cost-effective business solutions; with money acting as a proxy for efficiency and effectiveness. The parties must strike a balance between their own costs and benefits, and those for the multiplicity and the whole-of-government.

Rationale

• In the context of Federated Enterprise Architecture: federated is defined as “a way that balances the interests of the Whole (of government) with the autonomy of agencies.” ⁱ
• One such interest is the Value-for-Money State Services Development Goal: “Use resources and powers in an efficient, appropriate and effective way.” ⁱⁱ
• Agencies will adopt a whole-of-government perspective when designing and implementing services. ⁱⁱⁱ
• The Expenditure Review: Government ICT Spending concluded that “there is opportunity to achieve productivity improvements from government expenditure in ICT, through … facilitation of ICT investment on a system-wide basis.”
• Decisions made from an enterprise-wide perspective have greater long-term value than decisions made from any particular organisational perspective. Maximum return on investment requires management decisions to adhere to enterprise-wide drivers and priorities.^iv

Implications

• Achieving maximum enterprise-wide benefit will require changes in the way we plan and manage information. Technology alone will not bring about this change.^v
• No agency will detract from the benefit of the whole. However, this principle will not preclude any agency from getting its job done. ^vi
• Resources should be able to be shared across organisational boundaries.^vii
• As needs arise, priorities must be adjusted. A forum with comprehensive enterprise representation should make these decisions.^viii

Footnotes

[i. e-GIF Management Committee October meeting 2007]

[ii. Development Goals for the State Services, SSC, November 2007]

[iii. Executive Summary, The Digital Strategy, http://www.digitalstrategy.govt.nz/templates/Page____210.aspx, 2007 October 25]

[iv. http://www.opengroup.org/architecture/togaf8-doc/arch/chap29.html, 2007 October ]

[v. http://www.opengroup.org/architecture/togaf8-doc/arch/chap29.html, 2007 October ]

[vi. http://www.opengroup.org/architecture/togaf8-doc/arch/chap29.html, 2007 October ]

[vii. http://www.opengroup.org/architecture/togaf8-doc/arch/chap29.html, 2007 October ]

[viii. http://www.opengroup.org/architecture/togaf8-doc/arch/chap29.html, 2007 October ]