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Transcript of Expressing Information Technology as a Service -...
2012
Prepared by:
Kathy Costello, Business Analyst Manager,
Department of Enterprise Services
Darrell Davenport, Enterprise Architect,
Department of Retirement Services Linda Garland, Information Technology
Operations Manager, Department of
Corrections
Matthew Re, Network Systems Supervisor,
Department of Health
James Sinks, Data Steward, State Investment
Board
Expressing Information
Technology as a Service
2
Table of Contents
Introduction ..................................................................................................................................................................... 3
The Evolution of Information Technology ....................................................................................................................... 3
Expressing IT as a Service ................................................................................................................................................. 5
Why Do We Want To Move To Services? ........................................................................................................................ 7
How Do We Move to Services?........................................................................................................................................ 8
Conclusion ...................................................................................................................................................................... 14
Sources ........................................................................................................................................................................... 15
3
Introduction
Our State government is about PEOPLE. People vote for
representation on what is important to them – what impacts their
lives, their liberty and prosperity. Our representation then moves our
needs and wants into organizations. These organizations, State
Agencies and Boards, are the arms of government that deliver the
outcomes of this process - products and services that assure our well-
being.
So, where does information technology (IT) fit into this? IT partners
with the business by providing economy, efficiency and availability of
products and services to people. Almost every function of
government uses IT to support their business – from renewing
driver’s licenses with the Department of Licensing online, to
automated lean production of furniture by Correctional Industries.
As IT has evolved, so has its application in the world and over time
has become a network of interplaying systems and services rather
than isolated instances of products. This paper will explore the
transition of IT from product to service and a strategy for this
progression in State government.
The Evolution of Information Technology
The evolution of information technology has shown us four basic
periods:
Premechanical
Mechanical
Electromechanical
Electronic
In each era the technologies have proven to be of great importance
although they each met with resistance when first introduced into
the general populace. Each period shows a transition in technology
from product based to service based.
Premechanical: 3000 B.C. - 1450 A.D.
We have come along way from the Premechanical Age in 3500 B.C. In
Mesopotamia (Iraq) the first recorded communication technology
was the Cuniform language used by the Sumerians (see chart).
What is a Product?
Think of a product as a noun, something that can be bought or sold and transfer ownership.
How an organization views a product depends upon its perspective. In the IT world we may think of items such as:
Software Applications
Circuits
Desktops
Print Devices
What is a service?
Think of a service as a verb, something that can be subscribed to, but not owned.
How an organization views a service depends upon its perspective. In the IT world we may think of items such as:
Data Center Services
Internet Service Provider
Leasing of equipment
“A service is a means of delivering value to customers by facilitating
outcomes customers want to achieve, but without the ownership of specific costs and risks.” – ITIL v3
Cuniform 3500 BC
Chart above shows the growth of
the Cunifrom language
4
This product developed through scribes and teachers into a service
utilized by the Sumerians for a standard way of communicating
throughout their society.
Mechanical: 1450 – 1840
The Mechanical Age started by giving us the first calculator, the
Abacus. It was considered the very first information processor. This
age finished by giving us items such as “Punch Card technology” and
“Binary Logic” which contributed to the production of the
manufacturing loom.
The product of a loom (such as a blanket) moved to a manufacturing
service that now includes supplying the resources and knowledge to
build products. The cost of products now includes the service costs as
well as material costs.
Electromechanical: 1840 - 1940
The Electromechanical Age lasted about 100 years, giving us
technologies and devices such as the battery, telegraph, Morse Code,
paper tape storage and the Mark I Computer (a 5 ton, 55 foot long
device with 760,000 parts used for gunnery and ballistic calculations).
The evolution of the telegraph as a product to a service started with
developing a standard for transmitting messages over great distances
to a wide audience and led us to the modern electronic era.
Electronic: 1940 to Present
The Electronic Age has given us remarkable achievements that are
now deeply embedded into our society. This era has been broken
down into four generations of digital computing:
First generation computers used vacuum tubes
Second generation computers used transistors
Third generation computers used microcircuits
Fourth generation personal computer (PCs)
During the fourth and current generation, PCs became readily
available and more affordable creating service capabilities such as
leasing equipment as we do today. Additionally, the introduction of
the Internet brought new service opportunities in the workplace and
the home.
It is an easy assumption that almost every person in our society today
has been impacted by IT systems and services that take care of our
Punch card technology, introduced in 1801 via the loom used parts remarkably similar to
modern day computers.
A History of IT and Systems http://www.tcf.ua.edu/AZ/ITHistor
yOutline.htm
Example of an Early Day IT Project
1943 - Project Whirlwind begins.
During World War II, U.S. Navy
approaches MIT to build a flight
simulator to train bomber crews.
5
needs and wants – from social networking to automated radiology
and others.
Explosion of New Technologies
Systems and services are integrated into the daily lives of almost every
person and business in modern society. Today, individuals have
mobile devices that can do most anything from anywhere at any time.
Technology has transformed from wired Internet to wireless,
providing greater mobility, availability and flexibility. As such, it’s
becoming more critical to use new technologies for providing and
accessing government services like social and health, licensing,
finances, commerce and countless others.
State government is at a pivotal point to go further in managing and
utilizing the advanced technologies of today. With the increasing line
of products in the technology arena, state IT leaders need to start
thinking of how to implement systems and services in order to be
more responsive to ever-changing business needs.
Expressing IT as a Service
What can be learned from the history and advancements in
technology that will help construct a strategy for the future of IT?
State leaders recognize that both new technology and the maturity of
State IT teams have reached a point where we can now move from
product to service.
Services are:
More personalized
Responsive to customer needs
Save customers time, money and effort
More reliable
Service providers build into their approach an understanding with the
customer on how services will be delivered, when they will be
delivered and an expected outcome. With a service, a customer can
expect the provider to support their products. There is a relationship
with provider and customer.
Unlike services, products have predetermined bundled features and
prices and typically are less responsive to business needs.
Skills of a Leader
Inspiring
Courageous
Proactive vs. reactive
Resourceful
6
People
To effectively implement “IT services” in State government we
must understand customer needs and expectations.
State IT leaders need to respond to customer needs and
expectations by retaining and recruiting skilled and motivated
people who provide exceptional IT services.
Process
We recognize the uniqueness of agencies and the services they
provide, however, processes must become standardized and
repeatable across agency lines of business wherever possible in
order to capitalize on common IT services. (For example, reporting
of time and leave for employees.)
In order to successfully transition to IT as a service, processes or
functions should be combined to eliminate redundancies and
inefficiencies.
Technology
Technology is the tool that makes people and process more
efficient. By investing in technology organizations can achieve
their missions more effectively and at a lower cost over time.
A combined business and IT strategy enables informed and often
faster decision making when determining which IT services to
pursue; improving response to the customer’s needs.
Principles for Expressing IT as a Service
The following guiding principles will support the transition from
products to services in Washington State government:
Define technology strategy surrounding people and process
to support goals
Establish partnerships with clients to identify root challenges
Analyze the organization’s mission so it is well understood
and articulated
Review short-term and long-term goals
Assess processes for efficiency and effectiveness toward
achieving the organization’s goals
Streamline and validate the collection and dissemination of
data
Identify stakeholders, champions and potential opposition
Ensure continued stakeholder management, flexibility and
adaptability to changing needs
Products and technology do not
fulfill the promise behind an IT
service — people do.
7
Define the objectives and benefits of the technology initiative
to the organization in quantifiable terms
Define and evaluate metrics to measure process and
technology success criteria
Assess the current technology environment to determine
viable alternatives
Why Do We Want To Move To Services?
There tends to be two parts of a transaction a customer receives - the
product and the service. In the past, the primary focus of government
has been on the product. What features does it have? How much does
it cost? This was fine when there were relatively few known
technological options, but that is not the case now. With the explosion
of the Internet, similar products are found everywhere (for example,
the multitude of social media websites). Basically, the products exist or
are “easily” created, but the service side may be lacking.
So why do we want to move to a service? Service is about the customer
who receives a benefit.
Customer Experience
Customers know service when they experience it. If it is good, the
customer feels good. If it is bad, the customer feels bad. So, when
customers talk about service, they are really talking about expecting
good service. So what is considered good service?
Good customer service incorporates the following. The customer is
treated in a professional way. They receive quick, accurate responses.
They are treated in a friendly, courteous way. The provider is
approachable, anticipates customer needs and pays attention to detail.
The provider only promises things that they can deliver and will honor.
The provider is knowledgeable and well trained.
Quality Product
Another feature of good service is a quality product (technology). The
product meets the customer’s expectations. It is fast and efficient. It is
easy to learn and use. It is flexible; it lives for a long time and becomes
cost effective. The core of the product can be expanded or contracted,
depending on the direction of customer needs. The customer should
be able to get to their service at any time, from nearly anywhere and
from any piece of technology: Smartphone, laptop, tablet computer,
“It takes 20 years to build a
reputation and five minutes to
ruin it. If you think about that, you’ll do things
differently.” Warren Buffett
Interpretation: customer satisfaction is difficult to
build, but easily destroyed
Skills of a Leader
Honest
Consistent
Respectful
A good communicator
8
desktop computer or any other future device. The product needs to be
secure enough to make them feel their data is safe.
Making it Easy for the Customer
The ease of doing business is viewed as good service. The billing
process is clear, pricing is competitive and it is easy to upgrade or add
features. It is easy to submit questions and comments and they are
promptly addressed. At the end of a business transaction, the
customer should feel they received the service they expected, the
product they needed, billed correctly with little hassle and had a voice
to help improve the process.
Well Planned
Planning a project, given the biennial State budgeting cycle, is not
always feasible. Long term strategy plans must take multiple biennium
funding periods into consideration. They should not be interrupted by
budgeting adjustments from cycle to cycle. Starting with the
supporting infrastructure, a project should be planned such that each
biennia cycle produces a functional component. The next phase will
continue from previous functional components.
Many of the above are handled behind the scenes using a strong
governance structure with well-defined policies, procedures and
standards. If the employees are confused about your business, the
customers will feel the same.
Result: Customer Satisfaction and Loyalty
All of these will lead to customer satisfaction. According to University
College of Technology and Innovation (UCTI), “A totally satisfied
customer contributes 17 times as much revenue to a company as a
somewhat dissatisfied customer”, also “The results of our study
supported the contention that there is a positive correlation between
loyal customers and profitability.” A satisfied customer becomes a
loyal customer which leads to profitability (or lower cost to support).
How Do We Move to Services?
Now that we understand the relationship between products and
services and why it is desirable to express IT as a service, we can form
a strategy to make it happen in Washington State government.
Summary of How to Move to a
Service
Establish business mission, goals, values
Establish real metrics to measure achievement of mission and goals.
Set three branches of governance: Technology, Business, and Operational.
Enforce policies and standards to align activities and behaviors within each branch of governance according to mission, goals and values.
Capture feedback from customers. Monitor efficiency and trends.
Measure results with mission and goals.
Adjust governance to improve results and ensure future success according to defined metrics to meet mission and values.
9
Establish the Business Mission, Goals and
Values
Premise: The mission is to serve the public; the goal is their
satisfaction, done according to their values.
It is essential to know the services which are entrusted to the State
and its organizations. Unless the mission, goals and values are clearly
understood, there is a strong risk of failing the fulfillment of needs and
expectations. The mission and goals seldom change; however, the
values may be fluid over time. It is the responsibility of the
organizations to monitor and adjust accordingly. To achieve success
and maintain public trust and respect, governance must be defined
and established.
Establish Strong Governance
Premise: Governance is about stewardship. It protects and preserves
the IT investment and fosters [public] trust.
It is the responsibility of government to provide services which
promote the welfare of the public. Therefore, the government is the
steward of those services defined in the State’s constitution.
Stewardship is established and maintained through governance.
Governance is required in three branches: Business/Executive,
Operations and Technology. Together, these branches of governance
provide a solid foundation from which services can be delivered.
The Business/Executive branch is responsible for the vision, mission,
authority, policies, standards, budget/finance, and direction. Executive
decisions are made from a defined level of acceptance of risk. The risk
levels are “calculated” by estimating the potential consequences and
degree of impact on their ability to deliver quality services and achieve
customer satisfaction. (Customer satisfaction also includes return-on-
investment and trust of stewardship.) Executives rely upon the
knowledge and expertise within the technology and operational
branches to help define, estimate and manage risk.
The Technology branch supports the Business/Executive branch and is
responsible for the technical knowledge, skills, security, devices,
networks, software and hardware.
The Operational branch supports the Business/Executive branch and
the Technology branch and is responsible for the facilities and
procedures necessary to carry out the construction, maintenance,
configuration and delivery of the services.
Skills of a Leader
Intelligent
Quiet Confidence
Enthusiastic
Rewarding
10
These are not physically defined organizational branches, but rather
roles and responsibilities. For example, policies and standards may
be written by the Technical or Operational branches and approved by
Business/Executive branch. Operational activities may reside within
both Business and Technology branches and must follow policies and
standards. All of these branches of governance must work together at
all levels of government, local and state. Each branch of governance
should have strong representation when defining and determining a
sustainable service model.
To succeed, certain basic principles need to be understood and established.
All services must answer a customer need and fit within the mission entrusted to the service provider.
Good stewardship includes security, efficiency and cost control.
Services must be monitored and continually improved/maintained to ensure customer satisfaction and responsible stewardship.
Architecture is central to building sustainable, portable, standardized and responsive services.
Business Analysis is central to understanding the customer’s needs and how decisions impact services.
Project Management is responsible for controlling the development and maintenance of new services and ongoing operations.
Establish a Project Management Office
Premise: Project management delivers better services more
efficiently.
Our State is not exempt from the facts reported in a change
management survey by IBM which found only 40% of projects meet
their objectives.
One can speculate from the survey that a root-cause for the failures
may include an imbalance of sponsorship and control or governance.
Problems arise because either the business side or IT owns and
controls the Project Management Office (PMO). Logically, it should be
an equal partnership between the business and IT, with all being
accountable and responsible for providing the oversight, resources
and sponsorship needed for the best possible IT services.
The PMO should be held responsible for effectively managing project
costs, scope, resources, tasks, roles and responsibilities,
accountability, risks and documentation. The PMO should record
The citizens of Washington
expect state government to
deliver essential services
with innovation, efficiency
and integrity.
GMAP, Lean Program 2012
Successful PMO’s
Only 40% of projects met schedule, budget and quality goals.
Best organizations are 10 times more successful than worst organizations.
Biggest barriers to success listed as people factors:
Changing mindsets and attitudes - 58%
Corporate culture - 49%
Lack of senior management support - 32%
From an IBM Survey of 1,500 Change Management executives (http://calleam.com/WTPF/?page_id=1445)
Executive
Technology
Operations
PoliciesPeople
Business mission, goals & values
Customer
Lead
ers
hip
Man
agem
en
t
Customer needs: monitoring and adjusting business
Disseminating mission, goals, values to all branches & levels
Providing both internal and external services
11
“lessons learned”, review, communicate and incorporate them back
into appropriate policies and procedures in a continual change-
management lifecycle. All branches of governance should have access
to documents managed by the PMO, so that each can better manage
their responsibilities and improve the design, delivery and support of
the services.
It is important to note that projects are not limited to new services,
but also include periodic maintenance, operations and enhancements
to existing services. Since risk is in inherent in change, governance
and accountability for the PMO is necessary to provide quality
controls for all changes to IT services.
The PMO is the hub where the branches of business governance work
together in equal representation to design, build and maintain
services. Project failure is probable where there is an imbalanced
representation or sponsorship; a lack of understanding of the mission
and goals; or an unwillingness to be accountable by any governing
branch of business.
When assigning projects the business should manage priorities via a
combined steering committee using a pre-defined set of values (for
example: cost-control, legal mandate, customer expectation, financial
requirements, security risk, impact to reputation or political clout).
Weighting the values toward accomplishing the mission and summing
them for each project helps maintain perspective on how to set
project priorities.
Planning and Design
Premise: “Luck favors the prepared.” Edna Mode, from the movie
The Incredibles.
How does one prepare for the unknown? By assessing the current
situation; watching trends; evaluating the possibilities, needs, and
expectations; and establishing standards based upon principles which
promote flexibility, innovation and portability. We should prepare by
over-estimating needs, using resources conservatively (optimizing for
efficiency) and reserving capacity.
Below are the activities of architecture, which sets the stage for the
building and implementation phase. Architecture, like any form of
governance, is required in equal measure from business and IT.
Business architecture improves the process flow. Technical
architecture improves the automation.
The “Cloud” represents a
foundational shift in how
information is created, shared,
stored, and protected across
the data center, business,
home, and mobile computing
environments. Some argue
that we have not experienced
such a seismic shift with such
categorical effects on
industries, economies, and
innovation since the advent of
the electric utilities of the early
20th century. “The next sea
change is upon us.” — Bill
Gates
12
The combination of the two will ease the development, maintenance
and future use of services. Some basic architectural principles are:
Use of standards provides portability, predictability,
consistency and a way to integrate business functions
Use of security to protect data, equipment, operational
functions and IT services, ensures confidentiality, integrity and
enhances public trust. By standardizing security, services which
are distributed across vendors and platforms which can be
more easily combined into a consolidated service offering.
Use services which run on multi-platform environments
Strive for efficiency; reduce cost, increase response and good
stewardship
Monitor, assess and improve security, performance, costs and
customer/employee satisfaction
Observe trends; public and private sectors
Challenges and Opportunities
Moving IT from product to service offers a number of challenges and
opportunities.
Standardization
Lack of standardization in State government is a big hurdle to achieving
the desired efficiencies and economies of scale that are necessary in
today’s world. The State needs to take a strategic view of
standardization, driving agencies to integrate processes across lines of
business. However, standardization in an organization as large as the
State of Washington can be complex and should be approached in a
thoughtful and well planned manner. We recommend IT leaders gauge
the level of standardization that is required, clearly understand the
benefits and the risks of standardization and balance the needs of the
organization with staff needs.
Standardization should provide the following opportunities:
Flexibility while maintaining consistency with governance,
processes, policies and tools
Scalability while minimizing IT costs
A common look and feel for customers
Streamlined functions across government lines of business
Common set of data
Elimination of unique solutions in response to a single set of
requirements
“Success is simple. Do what’s right, the right way, at
the right time”
Arnold H. Glasgow
13
IT Culture
The current IT culture in Washington State offers a number of
challenges to overcome. First, IT leaders and staff must move past the
history of how the current IT culture was formed and look forward to a
new future. Agency CIOs are positioned for leadership in this effort
and steps should be taken to increase collaboration and partnerships
across the numerous government and private entities. IT must
consistently demonstrate positive results and adopt modern
technology while realizing cost savings.
IT leaders should collaborate to redesign IT functional activities and
processes. The outcome should reflect the needs of the enterprise
while ensuring agencies have a suite of high-quality services from
which to choose.
It will also be essential to separate perception from reality and educate
legislation, policy holders and others on the challenges to effectively
transform IT services for Washington State. Areas such as:
Budgetary restrictions
Inconsistent cost recovery models
Outdated and ineffective IT policies
Power and ownership struggles that get in the way of progress
IT leaders should take steps to implement critical success factors to move into a new IT culture:
Improve flexibility of agency budgets in order to eliminate the
restrictions created by traditional funding structures
Create visibility for government wide services available to
agencies. This enhances the potential for service integration
across agency lines of business.
Reduce the potential for development and maintenance costs
by using repeatable services
Provide extensibility for other services that agencies need so
services can be scaled up or down based on demand
Ensure location transparency so users may access the services from anywhere
Provide robust and stable services to minimize critical system outages
Look for additional opportunities to transform agency systems
and expertise into centers of excellence
IT leadership must be committed to their strategy, otherwise needed
changes will not happen at the business unit, program and system
levels.
Skills of a Leader
Vision
Sets direction
Personal charisma
Passion
14
Agencies should collaborate toward a paradigm of consuming or
providing services with multiple organizations in mission and support
areas whenever possible.
Governance
There is a lack of consistency in governance across Washington State
IT. A key success factor for moving from product to service will be to
provide a method that can support the changing needs of the
business while serving the citizens of the State. Governance needs to
be scalable allowing the State to move quickly to newly emerging
technology. IT leaders need to identify ways to leverage existing
efforts to develop the next generation of IT services for mission
critical areas. While it is significantly more complex to offer these
types of services, they also have the potential to create far greater
organizational efficiencies.
Given the rapid pace of technological advancements, it’s not enough
to just build technology solutions that meet government’s needs
today, we must continuously architect for the future. Agency IT
investments are so specialized and difficult to integrate with one
another; it is often less expensive to acquire a new proprietary
system than to share existing systems.
Given this, it behooves the State to adopt standard solutions that are
phased in as proprietary systems approach end-of-life or otherwise
require replacement.
By agreeing to and implementing common standards across
government, we will ensure that assets are prepared to share data
and functionality with one another in coming years.
Staff Development
Due to budget constraints and lack of IT funding, training and
development paths for IT staff have been limited.
To be successful in transitioning to a service model, IT leaders need to
acquire and keep funding to provide training of existing staff and to
recruit staff experienced in new technology.
Conclusion
In this paper we explored the evolution of IT. We also explored IT’s
application in State government - currently and what we believe its
future application should be - moving from product to service.
15
Each generation of technological advancement has proven to us that
leadership, standardization, optimization, planning and design,
quality of service and ease of use are of the upmost importance for
success in moving from product to service.
IT needs to be attentive and responsive to customer needs and
expectations, where the customer can feel their needs are being met
and have faith they can on count consistent and reliable delivery. We
must always bear in mind the people, processes and the technologies
which are ever changing.
The roles and responsibilities of each component must be brought to
the table by each branch of government to ensure that the
governance and policies will provide the stability of IT services with a
good working service model.
We have shown the key advantages, challenges and opportunities,
and the necessity and methods needed to move Washington State IT
from product to service. To sustain services the plans, designs,
maintenance, monitoring and constant analysis of the user’s
experience and business needs will be imperative to success.
Sources
University of Alabama, School of Telecommunications and Film, A History of Information Technology and Systems
http://www.tcf.ua.edu/AZ/ITHistoryOutline.htm
Open Cloud Manifesto, Cloud Computing Use Cases Whitepaper 4.0 http://opencloudmanifesto.org/Cloud_Computing_Use_Cases_Whitepaper-4_0.pdf
U.S. CIO and the Federal CIO Council, Federal IT Shared Services Strategy
http://www.cio.gov/sharedservices.pdf Booz, Allen, Hamilton: People, Process, Technology, Strategy for Enterprise 2.0
http://www.boozallen.com/media/file/People-Process-Technology-Enterprise2.pdf
ISO 9000, 9001, AND 9004 Plain English Definitions
http://www.praxiom.com/iso-definition.htm#Product The IT Skeptic, What is a Service?
http://www.itskeptic.org/what-service MPlans.com, Product-bundling Arcticle http://articles.mplans.com/product-bundling/ Computer History Museum
http://www.computerhistory.org/timeline
Skills of a Leader
Transformational
Excitement
Persuasion
Seeks opportunities