Delivering stakeholder centric services: from strategy to execution

MWD Advisors is a specialist IT advisory firm which focuses exclusively on issues concerning IT-

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© MWD Advisors 2011 This paper has been sponsored by IBM

Delivering stakeholder-centric

services: from strategy to

execution Neil Ward-Dutton February 2011

In today‟s world, stakeholders‟ expectations of openness, responsiveness and personalisation are far

more informed and more stringent than they were even just a few years ago. At the same time

governments‟ interest in public-private sector collaborations has become more pronounced, and so

the networks of players required to work together in order to deliver services are more complex. To

cap it all, business and technology are also becoming ever more tightly intertwined.

To be efficient and effective in this environment – to meet stakeholders‟ expectations while at the

same time working with the constraints of tough financial environments – public agencies have to

focus on how they can deliver services from a stakeholder-centric point of view (in some territories

this is known as „citizen-centric‟ service delivery). Agencies have to use this perspective to drive the

end-to-end integration of operations and the sharing of underpinning capabilities across teams,

departments, and sometimes agencies.

This report lays out the challenges that arise during a transformation to stakeholder-centric or

citizen-centric service delivery, and highlights the crucial roles that key business and IT capabilities will

play for any public sector organisation navigating those challenges.

a d v i s o r smwd

Delivering stakeholder-centric services: from strategy to execution 2

© MWD Advisors 2011

Summary

Initial moves to deliver ‘e-

government’ have had mixed

success, and citizens have not

benefited overall

As agencies began to embark on the first „e-Government‟

initiatives in the early 2000s, it soon became apparent that

although taking existing service offerings and creating web

front-ends for those services might in some cases lower

delivery costs, the transparency of the web meant that it also

had the unfortunate side-effect of shining a very strong

torchlight onto the ways in which services were just not

„joined up‟.

A move to stakeholder-centric

service delivery represents a new

phase of e-government which is

truly transformational, and as a

result it requires deep

commitment

The simple transformations that took place in early e-

government implementations were driven by individual

teams, departments and agencies with the very best of

intentions. The poor outcomes that frequently resulted were

a consequence of entirely natural, but “inside-out” thinking.

The delivery of true stakeholder-centric services (in some

territories, these are known as citizen-centric services) can

only come about with a high degree of co-ordination

between agencies to ensure that relevant information is

shared in an effective and timely manner. This level of

entanglement between shared capabilities and front-line

service delivery is a significant step beyond the kinds of back-

office service (such as HR) sharing that we see across many

government agencies.

What‟s happening here is a second, deeper wave of e-

government transformation – service transformation – which

shifts the focus beyond cost avoidance “at the edge” of

government, to fundamental cost restructuring “at the core”

of government by changing the mechanics of how capabilities

are developed and delivered as front-line services.

Some key capabilities are required

to support stakeholder-centric

service transformation: Business

Process Management (BPM),

supported by business analytics;

and Enterprise Architecture and

Business Planning. All need to be

open and collaborative

In making the shift to stakeholder-centric service delivery,

four challenges – legacy systems, existing incentives and

targets, lack of governance over investment in new systems

and processes, and lack of clarity in responsibility for ultimate

delivery of change – can only be overcome with the smart,

connected development and application of two key IT and

business capabilities. The first is the ability to analyse the

performance of work that currently gets done in the delivery

of services to stakeholders; and then analyse how this work

should best be executed and managed. This capability is often

referred to as Business Process Management (BPM), and

relies on effective use of business analytics.

The second is the ability to build a „big picture‟ view of how a

stakeholder-centric service delivery strategy needs to be

supported by particular business and technology capabilities,

how key business processes align with those capabilities, and

how IT should be marshalled to support the capabilities in

different ways. This capability is often referred to Enterprise

Architecture (EA) and Business Planning. It will also help you

set and enforce policies that drive IT project investment to

meet the needs of your transformation strategy.



The changing environment for public sector

agencies

In today‟s world, stakeholders‟ expectations of openness, responsiveness and personalisation are far

more informed and more stringent than they were even just a few years ago. At the same time

governments‟ interest in public-private sector collaborations has become more pronounced, and so

the networks of players required to work together in order to deliver services are more complex. To

cap it all, business and technology are also becoming ever more tightly intertwined.

To be efficient and effective in this environment – to meet stakeholders‟ expectations while at the

same time working with the constraints of tough financial environments – public agencies have to

focus on how they can deliver services from a stakeholder-centric (sometimes called „citizen-centric‟)

point of view, and use this perspective to drive the end-to-end integration of operations and the

sharing of underpinning capabilities across teams, departments, and sometimes agencies. We see

recognition of this time and again in studies of IT trends and investment plans which consistently place

the transition to stakeholder-centric services, enabled by business process transformation and

performance management specifically, as one of the highest priorities of senior public sector

executives in technical and non-technical roles alike.

What‟s really going on – what is it that‟s driving the pressures that we see affecting business and IT

leaders across organisations of all shapes and sizes and differing geographies? There are three large-

scale socio-economic forces in play:

Globalisation. Increasingly global customer bases, partner networks, supplier networks, and

competition, are forcing companies to become leaner and more flexible, focus on what makes

them different, and find new ways to deliver sustainable competitive advantage. Public sector

organisations feel the benefits of globalisation through increased outsourcing options.

The drive for transparency. Regulation is sometimes forced on private sector organisations by

governments, but increasingly industry bodies and individual organisations are voluntarily moving

to provide more information about their processes, the resources they use and the ways in

which they interact with their ecosystems and environments. Public sector organisations feel the

pressure of transparency as stakeholders are starting to demand more openness regarding

governance, the mechanics of democracy, service performance indicators, and so on; and as

regulations (such as those imposed by freedom-of-information legislation) make themselves felt.

Increasingly smart, connected populations. The rapidly evolving and maturing Worldwide

Web is just one outcome of the explosion in always-on, global mass communication connections.

Individuals and organisations are increasingly looking to the online world for solutions to

problems and opportunities before looking to the offline world. In this environment resources

can feasibly be located anywhere: it is possible to consider that “the world is flat” (as New York

Times columnist Thomas Friedman says). Public sector organisations are increasingly finding that

„digital natives‟ have demanding expectations regarding the availability of services, as well as the

ability of service providers to personalise service delivery.



Service-orienting the public sector agency

Reacting to a changing environment

Management teams and consultants to government agencies and other public sector organisations

have been pursuing ways of reacting to this changing operating environment for many years – the

main change under consideration being the rise of the Internet. In particular, initially at least, the focus

has been on looking for ways to lower costs by delivering services to stakeholders over the web. A

number of studies have shown that if a transaction can be carried out via a website rather than face-

to-face with a customer services representative, the cost can be just 2% of the face-to-face cost

(telephone-based transactions are estimated to cost 50% of face-to-face transactions). Clearly this

represents a compelling opportunity to investigate.

However as agencies began to embark on „e-Government‟ initiatives in the early 2000s, it soon

became apparent that although taking existing service offerings and creating web front-ends for those

services might in some cases lower delivery costs, the transparency of the web meant that it also had

the unfortunate side-effect of shining a very strong torchlight onto the ways in which services and

information were just not „joined up‟. When service interactions with stakeholders are enabled by

phone and mail, the complete structure of an overall service portfolio is obscured from the

stakeholder; it‟s either hidden behind the knowledge of stakeholder-facing customer service personnel

or it‟s hidden completely – with knowledge of available services being passed around communities by

word-of-mouth. When the same services are made transparently available via the Web, the issues are

there for all to see. This disconnect is often all the more obvious where existing face-to-face and

phone-based alternatives remain.

The deeper opportunity and challenge facing public agencies following initial forays into the use of the

web – using the transparency of the web as a catalyst for transforming public sector services

fundamentally – has been part of government agendas for some years now. One example of a catalyst

for change was the UK‟s Varney Report1; and in the US, of course, the E-Government Act of 20022

drove a mandate for the creation of offices and programmes to drive stakeholder-centric service

delivery within and across federal, state and local agencies.

Across all these mandates for transformation, there is one common high-level element of change

discussed: the shaping of service definition and delivery so that it is truly stakeholder-centric – we

explore this idea below. Additionally, there are two important implications for stakeholder-centric

service delivery, which we also explore below: firstly, the integration of front-line service delivery

capabilities so they can be shared across agencies and departments; and secondly, increased

collaboration between public agencies and departments and external organisations.

The move to stakeholder-centric services and outside-in

thinking

The simple “web transformations” that took place in early e-goverment implementations were driven

by individual teams, departments and agencies with the very best of intentions. However the outcome

of a lot of this early work wasn‟t just the duplication of services to stakeholders, which could be

confusing for them; it was also the duplication of requests for information from stakeholders – which

typically leads not only to confusion but frustration. This outcome was a consequence of entirely

natural, but “inside-out” thinking: each agency and department, acting on its own initiative, considered

its own needs and capabilities as the foundation scope when analysing how it could present its

services and capabilities to the outside world.

1 Service Transformation: A Better Service for Citizens and Businesses, a Better Deal for Taxpayers – Varney

Report to UK Government, 2007 2 http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:h2458enr.txt.pdf

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=107_cong_bills&docid=f:h2458enr.txt.pdf



The move to re-imagine service delivery, taking the stakeholder‟s perspective and needs as the

starting point for service analysis and design, is the converse of the approach that‟s so often been

taken in the past. Increasingly this approach is referred to as the design and delivery of “stakeholder-

centric services”. Its importance is not tied 100% to the drive to deepen e-government commitments;

making services stakeholder-centric is a way of optimising cost and effort, regardless of the service

delivery channels used.

Co-ordinated service delivery in support of life events

The most commonly-explored aspect of stakeholder-centric service design efforts is perhaps the

definition of groups of services that need to be delivered in a highly co-ordinated way to support “life

events” shared by all citizens (such as birth, death) or most citizens (marriage, relocation). These life

events may lead to requirements for multiple services from government agencies, particularly if the

citizens in question are in receipt of benefit of some kind (unemployment, disability), which may in

many cases need to be delivered by separate agencies or departments. Figure 1 calls out a couple of

examples.

Figure 1: Example life events and their associated services and service owners

An approach to service delivery which is co-ordinated around the needs of stakeholders quickly highlights how

deep integration between agencies – some central, some local – becomes paramount.

Beyond co-ordinated delivery: service personalisation and improvement

Other important tenets of stakeholder-centric service design include:

Service personalisation – presenting services to stakeholders in ways and through channels that

match their communication, accessibility and cultural preferences and needs.

Open service improvement – displaying feedback from stakeholders openly, and aggregating

feedback information to improve services; then openly communicating with stakeholders about

changes and improvements made.

Example life event Service Department

Relocation Local taxes registration

Tax

Change of address Electoral administration

Benefits registration

Benefits (housing, child, etc)

School enrolment Education

Death Notice Tax

Notice Benefits (incapacity, housing, etc)

Notice Electoral administration



Deeper use of shared services as a natural consequence

Stakeholder-centric service delivery sounds like a very attractive proposition, but as we‟ve already

seen yesterday‟s “inside-out” thinking – with each agency and department pursuing its own agenda

based purely on its own scope of operation – will not get us to a stakeholder-centric future. The

delivery of true stakeholder-centric services can only come about with, at the very least, a high

degree of co-ordination between agencies to ensure that relevant information – relating to

stakeholders‟ identities, addresses, entitlements and so on – is shared in an effective and timely

manner.

However where activities and capabilities need to be tightly co-ordinated across agencies and

departments, there are likely to be opportunities to go further than co-ordination – why not examine

these scenarios as opportunities to integrate and consolidate capabilities, creating “shared services”

units that can deliver one set of capabilities to multiple internal customers?

Of course, examples of the shift to back-office shared services delivery abound. However, most

examples so far are focused on sharing of finance, human resources and Information and

Communications Technology (ICT) infrastructure services – generic business support functions, in

other words. What we‟re talking about here is different: it‟s about the sharing of information and

application services that are core to how front-line services are delivered to stakeholders. This level

of intimacy and entanglement between shared capability and front-line service delivery is a significant

step beyond the kinds of back-office service sharing that we see across many governments, where

those services that are shared can be easily considered logically separate, at least, from front-line

service delivery. In the UK at the time of writing, open debate about a proposed “G-Cloud3”

infrastructure and a parallel “app store”, providing shared access to common IT capabilities, is placing

this topic under active consideration – but there is a long way to go.

What‟s happening here is a second, deeper wave of e-government transformation – moving from cost

avoidance “at the edge” of government by changing the basic mechanics of stakeholder interactions,

to fundamental cost restructuring “at the core” of government by changing the much deeper

mechanics of how capabilities are developed and delivered as front-line services.

Figure 2: A second wave of deeper e-goverment transformation

A second wave of e-government transformation is now needed, to shift beyond transformation at the edge and

shared services in the back office (i.e. corporate functions) towards transformation / sharing in the front office.

3 http://groups.google.com/group/cloudforum/msg/dc1b72e787ebeae3?pli=1

Service presentation

Front-line service delivery

Corporate services

Service presentation

Front-line service delivery

Corporate services

First-generation e-government transformation: focus on

service presentation, corporate service sharing

Second-generation e-government transformation: focus on front-line

service delivery sharing, external collaboration

http://groups.google.com/group/cloudforum/msg/dc1b72e787ebeae3?pli=1



Another outcome: readiness for external collaboration

There‟s one other important implication of a shift to stakeholder-centric service-orientation of a

public agency, and that‟s a need to embrace closer and more timely, interactive collaboration with

external organisations, be they from the private sector or the third (voluntary/charity) sector.

Requirements that spring from service personalisation commitments as outlined above mean that it‟s

increasingly likely, particularly in countries where cross-sector partnerships and outsourcing

arrangements are aggressively pursued, that agencies and departments will have to be able to

collaborate with third parties in order to deliver services effectively.

Public sector agencies and departments have to find secure and structured, yet also flexible and

timely, ways to share information and collaborate on service case work and processes across

organisational boundaries.

Outside-in service design should drive vertical organisations to

manage horizontal operation end-to-end

So what does all this – stakeholder-centric service delivery, creation of front-office shared services,

external collaboration with third parties – mean in practical terms? What do public agencies and

departments have to do in order to move from the current state to a future state where these goals

are attained?

There are many changes to be made of course, but at the highest level the key characterisation of the

transformation that must take place is that it involves the creation of a set of practices and policies to

ensure that work is “joined up” horizontally across the organisation – so that end-to-end work is

optimised from the perspective of the stakeholder and the service that is delivered to them, rather

than being optimised from a functional, team or department perspective.

This shift isn‟t about replacing functional (vertical) organisation with horizontal organisation that‟s

100% focused on service-driven, end-to-end process. Rather, it‟s about overlaying a structure that

aims to drive end-to-end thinking on the existing functional organisation, and putting capabilities in

place to enable the two structures to work together in harmony.

Of course, such a fundamental change in the way an agency is directed and managed can‟t simply be a

case of designing the change, and then assuming the organisation will make the necessary adjustments.

The difficulty of transitioning to a „horizontal‟ process-oriented management model is well-

documented. At this point, however, agencies can no longer avoid the decision. This is a

transformation that has to be made.



Taking transformation from strategy to

execution: why is the path so complicated?

It‟s not only public-sector organisations which are embarking on this kind of transformation; as we

outlined in the introduction to this paper, organisations across public and private sectors are

wrestling with the forces of globalisation, the pressure of transparency and the opportunities

associated with smart, connected individuals and markets. Large private sector organisations have for

a few years now been heavily engaged in business transformations that seek to refocus customer

services efforts as well as consolidating capabilities and services at their core – and using this

consolidation to power more business process consistency and effectiveness, and improve customer

service as a result.

No organisation – whether public or private sector – ever finds this kind of transformation easy; it

involves big changes to systems, information and processes, and has big impacts on people. At the

moment, of course, there is a very significantly complicating factor – and that‟s the fact that shrinking

government budgets mean that prioritising transformation efforts can become complicated. Beyond

this, though, there are typically four reasons that organisations struggle to take transformational

programmes and strategies defined at executive level, and make them operational:

Legacy systems.

Existing incentives and targets.

Lack of governance over investment in new systems, processes.

Lack of clarity in responsibility for ultimate delivery of change.

We explain each of these in a little more detail below.

Legacy systems: the weight of history

The most obvious impediment to transforming a public agency to enable stakeholder-centric services

and all the things that go along with it is the inertia created by legacy systems and ways of working. Of

course there‟s the „drag‟ created by long-lived systems that are difficult to change to fit new

requirements – either because the technology isn‟t adaptable enough, or because the skills no longer

exist in the organisation. However, simply „ripping and replacing‟ such systems is likely to be

impractical – you have to find ways to extend and improve them without incurring major costs or

risks.

But there‟s also a challenge that comes from the dependencies that can exist between operational

systems; particularly where those dependencies reflect a functional, inside-out approach. As IT has

become more a “part of the furniture” within organisations, and as IT systems have become

increasingly interconnected and interdependent, making a change to one system can have unintended

consequences for other systems which depend on it in some way. For many organisations the links

between older systems can be as poorly documented as the systems themselves; this is a particular

risk in some parts of the public sector, which has a higher level of reliance on legacy systems than

many industries in the private sector.

Existing incentives: pulling the wrong way

Individual departments in organisations are specialised things. They‟ve got that way because in many

cases, specialisation is vital to success. Business teams have specialised skills in finance, purchasing or

marketing for example, whereas technology teams have specialised skills in systems administration or

software development. But when specialised teams become firm organisational units, they also

become budget holders with their own specialised incentives and targets. Managers become focused

on driving for optimum performance in their own area, often to the exclusion of larger concerns. As

management guru Peter Drucker famously said: what gets measured gets managed.



Of course this isn‟t a problem in itself, but if your organisation is trying to transform itself to consider

end-to-end, horizontal efficiency and effectiveness, individual focuses on area-specific performances

may actually work against the transformation.

Lack of governance over investment in new systems, processes

The problem with a laser focus on operational performance within departments is that one person‟s

„laser focus‟ is another person‟s „tunnel vision‟. Left to their own devices individual departments within

agencies are likely to carry on using their own budgets to achieve their own „local‟ goals rather than

considering any bigger-picture implications of a large-scale transformation.

A stakeholder-centric services transformation and the associated moves towards shared front-office

services and open collaboration require a number of systems and process investments, most of which

are going to need contributions – in terms of money and resources – from multiple teams and

departments. Quite apart from helping to resource collaborative endeavours across an agency, there‟s

also the issue that a stakeholder-centric services transformation will probably also need to spawn a

number of local projects with departmental scope which will need to be prioritised appropriately.

Without a governance framework in place that‟s designed to help realise the goals of such a

horizontally-focused transformation that cuts across departmental boundaries, together with senior

executive sponsorship of that framework, organisations find it very difficult to sustain any kind of

transformation momentum.

In the public sector, the creation of a robust governance framework is particularly important because

the level for ongoing change in requirements (particularly, but not exclusively, concerned with

implementing changing legislation) can be so great. Without governance frameworks that can impose

certain approaches on the procurement and implementation of systems, opportunities for sustainable,

flexible solutions are often missed.

Confusion over responsibility for ultimate delivery of change

Public sector agencies are typically highly dependent on external resources for development and

delivery of IT systems. Outsourcing activities are notoriously complicated to manage even when those

services being outsourced are focused on ongoing operations (such as IT administration, customer

services, payroll, and so on) but in the context of outsourced supply of services to assist with

transformations, the complications are compounded.

For example: although an external provider may be able to develop and deploy new IT systems or

changes to existing systems to meet a set of predefined requirements, it‟s very unlikely they‟ll also

have responsibility for making sure that people in your organisation have the skills and inclination to

work within the changed environment in the right way. Change management associated with IT

investment is something the customer has to be very focused on. Cases abound where public agencies

have employed contractors to implement new systems as foundations for business process

improvements, but where responsibility for managing the organisational change around those

improvements has not been clearly assigned or communicated. These situations always end badly.



Making the shift: key capabilities you must pull

together

In making the transformation to stakeholder-centric service delivery, the four challenges highlighted

above – legacy systems, existing incentives and targets, lack of governance over investment in new

systems and processes, and lack of clarity in responsibility for ultimate delivery of change – can only

be overcome with the smart, connected development and application of some key IT and business

capabilities. They are:

Business process management (BPM), supported by business analytics. These

capabilities will help you analyse the work that currently gets done in the delivery of services to

stakeholders; and then analyse opportunities for improvement – drawing out how this work

should best be executed and managed as part of end-to-end processes. A pair of BPM and

business analytics capabilities will help you plan calculated improvements – to eliminate risk and

cost, speed service delivery and improve stakeholder satisfaction with personalised services.

They‟ll also help you prioritise changes in a world where overall resources are increasingly

constrained – helping you understand where the greatest opportunities for improvement, at the

lowest cost, are located.

Agile, actionable enterprise architecture (EA) and business planning. This capability will

help you build a „big picture‟ view of how a stakeholder-centric service delivery strategy needs to

be supported by particular business and technology capabilities, how key business processes align

with those capabilities, and how IT should be marshalled to support the capabilities in different

ways, within the current operating and financial constraints that exist. This capability will also help

you take the „big picture‟ created by EA work and make it real, by setting and enforcing policies

that drive IT project investment to meet the needs of your transformation strategy – and helping

you clarify responsibilities for managing the delivery and acceptance of transformation projects.

These capabilities are intertwined and interdependent so it‟s a little difficult to discuss them in any

particular order, but below we dig into each of them in turn.

A common theme: building bridges across the IT-business

divide

It‟s perhaps too easy to place the blame for today‟s challenges in translating strategy into execution at

the door of business executives – and sympathising exclusively with the poor, put-upon IT teams

which have to cope with increasingly unreasonable demands from business departments.

But this isn‟t the case. The truth is that both business and IT departments have historically been

complicit in creating the headaches that many organisations are saddled with today. Much of the time,

strategic IT investment mistakes turn out to be masked by what seem at the time to be tactical

successes. And these mistakes are made not as the result of real negligence, but as the result of IT

and business people failing to work together to drive consensus that consideration of a bigger picture

is necessary.

As the IT industry has matured over time, and as IT practice has matured within organisations, we‟ve

seen attitudes and approaches change – slowly. At first, IT organisations were managing IT

investments for their own sake. There was little in the way of a real relationship between those

responsible for managing IT investments, and those making the investments (and receiving the

benefits). Then, eventually, IT organisations began working to manage IT investments for business. The

relationship between investment makers and investment managers was one of customer-supplier.

Truth be told, most organisations are still in this mode of working. But this will not do. Now, the

baseline that we all have to aspire to is managing IT investments within business.



Business Process Management (BPM) and business analytics

An effective Business Process Management (BPM) capability will deliver you the analysis and design

underpinning for your transformation to stakeholder-centric service delivery; it should also help set

the strategic context and mandate for you to re-factor front-office services and drive towards

integration and sharing of capabilities to drive down costs and maximise citizen satisfaction. BPM,

combined with business analytics tools, can also create an IT-based platform for automating and then

monitoring and optimising the integrated business processes that will power your stakeholder-centric

services.

By itself, a BPM initiative supported by business analytics will not deliver you the transformation you

need; but it forms the design core around which Enterprise Architecture, Portfolio Management and

stakeholder engagement need to fit.

BPM: improving the process of process improvement

The practice of business process improvement has been part of the business and IT management

landscape in one form or another since the Industrial Revolution; and BPM specifically as an approach

to process improvement has been with us for over a decade. Against this backdrop, it‟s sensible to

ask how BPM specifically differs from earlier process improvement methods and tools.

One answer is to say that a key differentiator is BPM‟s central focus on enabling continuous change

and improvement. Another and more enlightening answer, though, is that BPM is fundamentally about

“improving the process of process improvement”. For a BPM initiative to really deliver value, it

has to pull together a number of process improvement capabilities and skills that

probably already exist in your organisation in new, more effective ways.

BPM is about more than agile, iterative system development

To really deliver value, BPM requires you to develop and marshal a group of practitioners from

multiple IT and business disciplines, and give them access to some specialised tools and practices.

Because BPM initiatives often involve the development and delivery of specialised „process

applications‟ that coordinate and track work across teams, departments and existing applications and

systems, it can be tempting to think of BPM as simply a flavour of software development or

application integration that encourages agile, iterative delivery of application capabilities; however this

is not the case. There are two main reasons.

The first reason is that in order to improve the process of process improvement, effective BPM

practice embraces the whole lifecycle of process management: from initial discovery and analysis of

business process improvement opportunities, leveraging business analytics insights, through detailed

process design, development of process applications, deployment of those applications, process

monitoring, and optimisation. BPM works at a higher level than simple application development, and

links intimately into issues of business change management. Management of performance and

optimisation – not of a process application, but of the business process that the application helps to

improve – are absolutely central to the practice of BPM, and this has not traditionally been a concern

for those focused on business software development.

The second reason is that looking specifically at the software that‟s developed and deployed as part of

BPM projects, it‟s actually quite different from „traditional‟ application software. Today‟s process

applications aren‟t like the workflow applications of old which were monolithic, hard-coded

interpretations of strict rules; instead, they provide collections of software tools to help process

practitioners (customer service personnel, HR personnel, benefits case workers, service delivery

managers, and so on) with assistance and guidance to complete case and process work. These

applications can be highly flexible and dynamic, and in many implementations their structure and

behaviour can be extensively reconfigured by business analysts or process administrators.



Driving efficiency, supporting service promises and personalisation

Much of the available BPM research literature – driven perhaps by the high visibility of the process

improvement approaches of Six Sigma4 and Lean5 – focuses primarily on process efficiency and quality

as being the sources of BPM‟s value. However there‟s more to BPM‟s value than that.

Of course, effective application of BPM, supported by effective business analytics, does drive

operational efficiency and quality – and thus enables public sector organisations to pull people and

systems together across traditional boundaries to efficiently and effectively deliver services to

stakeholders. By providing tools and techniques to help organisations discover current processes,

measure their performance, analyse opportunities for improvement, prioritise opportunities bearing

in mind cost and resource constraints, and then standardise or even automate processes, BPM

initiatives can reduce waste and improve work efficiency – either increasing the amount of work that

a team can do, or enabling the same amount of work to be done with a smaller team.

BPM can also help public agencies take a step further, though, and enable organisations to make clear

service commitments to stakeholders; and also deliver services with unprecedented levels of

personalisation – „taking the service to the stakeholder‟.

By integrating disparate business systems, improving the way that teams work, reducing latency, and

making it easier to change the way that processes are carried out, BPM initiatives provide great

foundations for agencies looking to improve the speed with which services are created and deployed.

By introducing performance measurement frameworks, BPM initiatives can also create supporting

environments for organisations wanting to drive satisfaction and transparency by offering services that

have guaranteed quality levels – for example, offering (in the case of a hypothetical benefits office) a

guarantee that all enquiries will receive an initial response within one day.

A BPM technology platform will also capture the identity of every stakeholder interacting with a

service and make that an integral part of the context of a business process instance or case. Through

this feature, agencies receive the ability to mix-and-match stakeholder service interactions across

channels (web, call centre, physical branch offices), case work teams, team locations and worker

shifts. This means that individual stakeholders can make much more flexible choices about when,

where and how they interact with public agencies; they experience true customer service.

Critical success factors

Many organisations pursue business process improvement exercises with the tools and approaches

that they‟ve used for years: indeed our own research shows that the majority of organisations are still

in this mode of working. In a recent major market survey carried out by MWD Advisors, for example,

the vast majority of respondents (over 90%) cited tools like Microsoft PowerPoint and Visio as their

primary process modelling tools; and cite „traditional‟ approaches to application development and

delivery as being the principal ways that process improvements are implemented. There‟s no doubt

that you can still get process improvements using these tools and approaches: but you won‟t get the

full value that BPM can offer.

Technology alone won‟t deliver you an effective BPM implementation. However there are things that

the right technology can do which will make delivering business value from your BPM work much

easier:

A collaborative discovery and design space. A shared, easy-to-access and easy-to-use

graphical environment that BPM stakeholders of all skill levels can use to explore process

problems and opportunities, and link them to the organisation‟s strategic context is a valuable

tool for boosting stakeholder engagement and helping to ensure and maintain buy-in. The best

tools place graphical models at the heart of specification work, and as well as providing

requirements documentation, these models also form the foundation for the logic within the

running system that‟s eventually created to manage work.

4 http://asq.org/learn-about-quality/six-sigma/overview/overview.html 5 http://asq.org/learn-about-quality/lean/overview/overview.html

http://asq.org/learn-about-quality/six-sigma/overview/overview.html

http://asq.org/learn-about-quality/lean/overview/overview.html



Role-based, flexible interfaces for participants, administrators and stakeholders. Once

models are taken through design and development and translated into a running software system,

the runtime environment should be flexible enough to deliver any mixture of work management,

administration, monitoring and configuration features to any stakeholder – within a role-based

framework. Flexibility in delivering “content” and functionality to particular people and groups is

vital, because every organisation has unique requirements.

Rapid transferability of models through the process lifecycle. It‟s not enough to have

design tools that allow process analysts to map out business processes in detail if creating a

running process then requires multiple further complicated steps. It‟s also crucial to be able to

take those same design models and use them as the context for operational monitoring tools:

only by showing operational health and performance in the context of business-meaningful

processes is it possible to deliver metrics that can quickly deliver feedback and enable further

improvement.

Well-bounded integration and other technical activities. BPM tools can be great at

translating graphical process models into running process logic, but „finished process applications‟

need more than just process logic – and it‟s unreasonable to expect that any tool will enable

complete software applications to be delivered without someone having to do some technical

work. BPM technology offerings should help you draw clear boundaries around technical work

(such as integrating processes with back-end resources and systems) – clearly separating

configuration work that can be done by non-technical people (possibly business stakeholders, in

the case of business rules and policies) from work that has to be done by technical specialists.

BPM technology that can work seamlessly with integration platforms like Enterprise Service Buses

(ESBs) have a great advantage here.

A foundation for governance and change management. Many BPM tools can enable

customers to build new process applications quickly; but in order to support the value

proposition of BPM over the long term, tools that can manage development assets centrally, with

easy-to-use change management facilities that help co-ordinate the work of teams and highlight

dependencies between components are essential.

Agile, actionable Enterprise Architecture and Business

Planning

An effective Enterprise Architecture (EA) and Business Planning capability is a way to bring IT and

business strategy together, and will help you build a „big picture‟ view of how stakeholder-centric

service delivery needs to be supported by particular business and technology capabilities, how key

business processes align with those capabilities, and how IT should be marshalled to support the

capabilities in different ways. Crucially, an EA and Business Planning capability should provide

important context for the core „engine‟ of your transformation – your BPM initiative – by linking your

BPM work to both business and IT strategy.

These linkages provided by EA and Business Planning are vital because without them, BPM initiatives

that start off with clear objectives and strong executive support can quickly lose momentum. Business

and IT strategies change, and the role of EA and Business Planning in the transformation to

stakeholder-centric service delivery is to make sure that those changes don‟t make transformation

projects that are in-flight irrelevant. It‟s important, though, that the EA and Business Planning practice

you create and leverage has the right kinds of priorities.

A brief overview of Enterprise Architecture

Enterprise Architecture (EA) is a business-IT capability that large organisations have used for decades

to bridge their business and IT strategies, and many large public- and private-sector organisations have

an EA programme in place, staffed by dedicated roles and personnel. Despite that, there‟s still

considerable industry debate about the EA term and what it refers to, its scope, its value and the best

approach to take.



The US National Institutes of Health (NIH) makes one of the clearest attempts at a definition of EA to

be found in the public sector: “Enterprise architecture is a comprehensive framework used to manage and

align an organization's Information Technology (IT) assets, people, operations, and projects with its operational

characteristics. In other words, the enterprise architecture defines how information and technology will support

the business operations and provide benefit for the business. It illustrates the organization’s core mission, each

component critical to performing that mission, and how each of these components is interrelated.”

Most practitioners today agree that EA isn‟t purely an architecture activity focused on the planning of

IT systems, but an activity that seeks to map and connect models of business activities and capabilities

with definitions of essential enterprise information and IT systems and capabilities. Generally speaking,

today‟s EA frameworks (specifications for carrying out modelling work and for classifying and relating

models) have also coalesced around four different types or levels of modelling: business architecture,

information architecture, application architecture and technology architecture. Although different

organisations use different frameworks, and a sizeable portion use some kind of „home-baked‟

framework; however in the public sector we see more and more firm guidance on the use of

particular frameworks (the use of the Federal Enterprise Architecture Framework, FEAF 6, is a good

example).

There is one major area of practical uncertainty that‟s separate from a choice of framework, though,

and simply put it boils down to a short question: with EA, what‟s more important – the deliverable

artefacts (the models) or the process by which you arrive at those deliverables? This is where the idea

of „Agile EA‟ comes in.

The value of an agile approach

At the dawn of EA as a recognised discipline, the vast majority of research and practical activity in the

area was focused on the act of documentation – the creation of static and stand-alone models that

described „as-is‟ states of collections of IT systems, and perhaps models that described „to-be‟ states

based on EA practitioners‟ understanding of transformation programmes. This kind of activity

represents a sizeable portion of the EA work still that‟s done in the public sector today.

This is perhaps not entirely surprising, given that EA as a discipline originally grew from large-scale

software engineering methodologies that were popular in the 1970s and 1980s – when business and

technology change happened at a pace that was glacial compared to that of today. In the last few years

it‟s become clear that the pace of business and IT change means that a documentation-focused EA

effort – where what‟s measured and appreciated is the completeness of the models as descriptions of

enterprise IT estates – is unlikely to add very much value at all. The danger of EA irrelevance is

compounded by the fact that when EA teams focus exclusively on the quality and completeness of

documentation, they can end up working in insular teams, isolated from other groups.

An agile approach to EA turns this documentation-focused approach on its head, and sees the process

of discovering and analysing an organisation‟s structure, strategy, dynamics, priorities and capabilities –

when it‟s done through discussion with internal and external stakeholders, rather than in isolation –

as more important than the completeness of the ultimate record of that understanding. In agile

approaches to EA it‟s conversations with stakeholders that are the focus; Agile EA is first and

foremost a process of learning from and influencing stakeholders to make better decisions about their

planned investments and projects. It‟s particularly critical in the public sector because of the wide

variety and diversity of stakeholders that exist.

Of course models and presentations of those models are a key tool in having those all-important

conversations with stakeholders (every conversation needs a common language, after all), and the

models help provide that important context for BPM and other transformation work; but the models

are a means to an end rather than the end itself.

6 www.cio.gov/documents/fedarch1.pdf

http://www.cio.gov/documents/fedarch1.pdf



The integration of Portfolio Management with EA practice

One of the primary ways that EA work needs to have an impact, as mentioned above, is in highlighting

how “strategy needs to be supported by particular business and technology capabilities ... and how IT should

be marshalled to support the capabilities in different ways”. It‟s all very well to highlight these things, but

how can you take action based on high-level guidance? The answer is to extend EA practice with

aspects of portfolio management, and use the result to guide individual project and operations

investments.

Portfolio management is an approach to investment management that‟s very well established in

general business circles; but its application to IT investment is still comparatively new – particularly in

the public sector.

In general, portfolio management practice seeks to analyse a set of investments and optimise them (by

buying, selling) according to stated goals. In the context of IT projects and services, goals are typically

stated in terms of costs, business value, and risk; optimisations are expressed in terms of accelerating,

refocusing, decelerating, or killing projects. Portfolio management is absolutely crucial here because

the resources available to any organisation are finite (and of course, becoming more constrained);

portfolio management practice helps senior IT decision-makers understand how they can balance and

prioritise business demand to achieve the „best outcome‟.

In the context of a transformation to stakeholder-centric service delivery the combination of EA with

portfolio management practice – to create EA practice which is able to inform and drive business

planning as well as tune the details of IT investments – is crucial. Without links to the processes and

organisational bodies that are tasked with green-lighting projects and maintaining project oversight,

EA may be agile; but it will not be truly actionable.

Critical success factors

There are five factors to consider if you want to build an EA and Business Planning practice that is

agile and actionable, and that will help you create and maintain links between your BPM work and

business and IT strategy efforts:

Make EA a formal practice. It‟s not good enough to have EA as part of your organisation‟s

agenda that you „get around to when you have time‟; you need to have a formal EA practice in

place with established roles and a named leader. It‟s not essential that all or indeed any members

of your EA practice are working on EA full-time; but EA work needs to be a formalised part of

their responsibilities. What‟s more, you can‟t outsource EA work: in fact, when you outsource a

significant proportion of your IT delivery work, having an EA capability becomes even more

important because it helps maintain the business context for that IT outsourcing work and keep

outsourcing providers‟ services aligned with your organisation‟s overall needs.

Use EA to reinforce the value of BPM to business and IT stakeholders. Don‟t set up EA

practice so that it can exist as an isolated, inward-facing activity: specify its mission in the context

of linking your transformation projects to business and IT strategies – and providing the context

for your core BPM initiative.

Measure the performance of your EA practice by asking its customers. You have to

track progress of your EA initiative so you can assess its value and appraise and reward those

people working on EA – but be sure to use externally-facing measures to track progress. Centre

your measurement of the value of EA practice not on documentation created, but on the

opinions of project teams and stakeholders with which the EA team has worked. Do they feel

that the EA team has understood their perspectives, and that it has in turn influenced them to

consider the big-picture implications of certain project approaches and technology choices?



Put governance in place to encourage action from findings. If you‟re going to make an

investment in EA and Business Planning practice then it makes sense to put a structure in place to

ensure that the output of the EA and Business Planning capability will actually be used in practice.

This might not require a significant capital or personnel investment; it‟s more a matter of ensuring

that the effort is visible and has support from senior executives involved in your transformation

programme, and then that there‟s a forum where the outputs of EA and Business Planning work

are used to inform programme investment controls. In practice this might be simply a matter of

ensuring that your EA capability has a „seat‟ on your Programme or Project Review Board.

Enable EA practice with smart tools. Last but not least, in order to practice EA in a way that

fosters shared vision amongst stakeholders and ensures that your process transformation work

remains clearly grounded to your business and IT strategies, it‟s really important to select the

right tools for the job. There are many EA tools available, and most of them provide rich

modelling capabilities and sophisticated repositories to allow you to link and visualise architecture

models across different views and perspectives. What‟s important above this, though, is the ability

for EA tools to enable your EA practice to open up, and become directly actionable. Specifically,

look for tools that can provide links into your portfolio management work (see below), as well as

exchange process models with tools you use for business process analysis and management (see

above). Look for lightweight publishing and collaboration capabilities that make it easy for EA

specialists to share models and analyses with non-specialists, and explain the implications of them.

And look for tools that don‟t just enable EA practitioners to create static models, but models

that have real-world attributes associated with them that can be aggregated and analysed using

business analytics tools – enabling, for example, financial analyses of the impact of a proposed

project to consolidate a set of systems.



Case study: City of Corpus Christi, Texas

Over the past few years, the City of Corpus Christi has used IBM‟s Maximo technology as part of a

foundation for transforming asset and service management processes across a number of its

operations, particularly those associated with water and wastewater provision, utility provision and

public works.

Prior to 2000, the City‟s work orders were all manually processed and there was no IT system to

track work progress, service levels or costs. Then, however, a structural shakeup placed the threat of

potential water utility privatisation at the door of the City‟s administration. To prepare itself to be

able to counter this threat, the City embarked on a programme of work to modernise its utility asset

and work management processes. Over the next three years the City rolled out updated systems

across its water treatment and wastewater plants, and updated the management of other crucial

utility services in 2004. Once the internal management practices were systematised, the City of

Corpus Christi then set about creating a unified „One Call‟ access point for citizens that would allow

it to respond quickly and effectively to any service request. The resulting system assists with the

creation and distribution of work orders to the relevant field staff in response to citizen alerts and

requests, and also tracks the progress of work.

For the first two years of the implementation, the City outsourced the development and operation of

the system – only bringing it in-house once the implementation settled down and internal staff were

sufficiently familiar with the system‟s workings. Crucial to the success of the programme was the

creation of project champions in each department; these champions helped to drive up-front

workshops with the departments to help refine system, process and business information

requirements and gain a degree of up-front buy-in from users. Now, the City‟s administrators can

track work performance against pre-defined SLAs – and this performance information helps to set the

context for ongoing improvements. To date, the City has focused most of its efforts on measuring

and managing responsiveness; now it‟s starting to spend more effort on providing more detailed cost

analyses.

When asked to share insights that would be useful to other organisations undergoing similar

transformations, Steve Klepper, administrative superintendent for the City, highlighted two key items:

Firstly, you must realise that technology can only ever be a tool; you mustn‟t view it as an end in itself.

A corollary of this observation is that it doesn‟t make sense to expect your IT department to be

responsible for the success of an initiative like this – it‟s the business‟ responsibility to ensure

acceptance and embrace of a new system or process.

Secondly, convincing people to embrace a new system or process can take concerted effort over a

long period. Within the City of Corpus Christi, although the City leaders understood the rationale for

change, senior staff were less convinced – and this became more obvious once the initial threat of

privatization receded. Working to ensure that staff avoid falling back into old, comfortable (but

inefficient) ways has been something that‟s required continuous attention.



Case study: Municipal Information Systems

Association, Ontario, Canada

Ontario‟s Municipal Information Systems Association (MISA) is part of a national Canadian not-for-

profit association which brings together regional associations of municipal government representatives

and others engaged in, or interested in, the development and operation of municipal information

systems. MISA has been incorporated in Ontario since the 1970s. MISA runs industry conferences and

negotiates preferential supplier discounts on behalf of its members, as well as facilitating more specific

knowledge sharing.

In the 1990s, MISA members started a collaborative programme of work to develop best practices in

information and business modelling for municipal government agencies, specifically relating to

improving public asset and infrastructure management. After some years of work, the outcome of this

effort evolved into the Municipal Reference Model (MRM) – a comprehensive and sophisticated

catalogue of around 150 services commonly provided by municipalities that models mandates,

programs, outcomes, outputs and their inter-relationships from the perspective of citizens, which

helps municipalities more clearly understand the value that their own services provide.

In the past few years, following its extension to both the provincial and federal levels in Canada, this

work has been given a further boost because of increased pressure on government budgets. Now,

budget pressures are leading agencies to have to think about tradeoffs between services and

associated service levels. Understanding how services contribute to government mandates and

outcomes for citizens makes it much easier to make informed decisions about investment priorities –

or at least to ask informed questions about costs and benefits from the citizen‟s perspective. As a

result, many municipalities are now using the MRM as a foundation model for more rigorous service

planning and service-based budgeting; as well as continuing to use MRM to help provide investment

context for ongoing development and management of IT applications.

With the increased development and use of the MRM by MISA members, so the need for more

sophisticated tool support for MRM use has grown. As well as using MRM as a reference for their

own internal use, municipalities have become very interested in benchmarking their own services and

capabilities against those of other municipalities – from both cost and performance/results

perspectives. MISA members are now piloting the use of IBM Rational‟s System Architect, combined

with Lotus Quickr, as a platform for sharing models, metrics, contextual reports, best practices and

background documents, as well as carrying out and sharing benchmarking analyses. MRM‟s service

catalogue provides a common reference model for all this work. Now the ability to share strategic

and financial insights, based on a common business reference model and benchmarking database,

provides a foundation for advanced planning and evidence-based budgeting options that municipalities

can readily take advantage of.


transformations, Roy Wiseman, CIO for the Region of Peel in Ontario and a champion of MRM for

many years, highlighted two key items:

Firstly, be prepared for a long haul. Developing comprehensive business architecture models that are

going to be shared and used by groups of independent authorities can take a lot of effort over a

considerable timescale. You have to be prepared to „plant the seed‟ of the idea, and take time to

develop good levels of awareness within all stakeholder groups.

Secondly, getting the right people to commit to such a project – and stay committed – means you

have to develop a compelling answer to the question “what‟s in it for me?” When initiatives like this

start they‟re carried by enthusiastic individuals for whom the benefits are self-evident; but for them to

build over the long term and become embedded into an organisation, you need to hone your pitch so

that it‟s attractive to new audiences.



Case study: New York City Health and Human

Services

The Health and Human Services (HHS) Domain of New York City is a group of 8 government

agencies that work together to improve agency co-ordination, maximise service levels and minimise

costs. When Michael Bloomberg first took office as New York City mayor in 2002, reducing service

and organisational overlaps in the HHS area was one of his key priorities. Although many of the HHS

agencies were serving the same clients, agency reorganisations over time had compounded

fragmentation of service delivery, and duplication of effort and information. At the start of his second

term in 2005, Bloomberg appointed a Deputy Mayor, Linda Gibbs, who developed a strategic plan for

the HHS domain and created a programme of change initiatives called the HHS-Connect programme.

The programme has three related missions: first, to improve clients‟ interactions with HHS agencies

through a client-centric approach; second, to improve workers‟ experiences in dealing with clients, by

increasing access to data across agencies; and third, to improve agencies‟ effectiveness and efficiency.

The first part of the programme – the creation of a citizen-facing portal called ACCESS NYC – got

underway in 2006, and is still ongoing. ACCESS NYC brings together client eligibility screening for a

wide variety of benefits and services across multiple agencies, and enrolment for select services, in

one place. The second part of the programme – the creation of the Worker Connect portal – was

built around the creation of a „common client index‟ (CCI) using Master Data Management (MDM)

and Enterprise Service Bus (ESB) technology. The result is a system that provides one shared source

of client data that all relevant agencies can access according to law and regulation. Going forward, the

HHS-Connect programme is now exploring how it can deliver additional value to HHS agencies. One

particular priority is in the area of case management: as individual agencies start to end-of-life their

existing legacy case management systems, the HHS-Connect programme is looking to offer agencies

assistance with deploying a standard platform. The programme is also exploring the idea of

standardised financial processing and claims payment processing platforms.

The City knew that solid evidence would be vital to justify the effort of the initiative, and to assess the

validity of the chosen priorities. It carried out an internal market research project, which clearly

showed that data sharing was a crucial issue for workers „on the ground‟ in individual HHS agencies.

The next challenge was to convince individual agencies that security risks associated with sharing data

could be managed effectively. To this end, the programme dedicated a specific team of people to

working one-to-one with key representatives of the agencies, as well as legal experts, to agree and

implement policies and technology frameworks to ensure that the agencies‟ concerns were adequately

met while at the same time working within the constraints of regulations such as HIPAA.

The HHS-Connect programme has established an Enterprise Architecture and Governance capability

to help it build and maintain „big picture‟ context for operational decision-making. However, this

capability is very lightweight: it‟s not about creating models for the sake of modelling. Instead, the

programme team has created an Executive Steering Committee, chaired by Deputy Mayor Gibbs and

other City of New York executives, to shape demand from individual agencies. It‟s paired this with a

Solution Architecture Review Board, which works with the various agencies‟ systems integration

partners to ensure that all parties involved in creating new technology capabilities for agencies have a

consistent view of key requirements and preferred architecture and technology approaches.


transformations, representatives of HHS-Connect highlighted three items. Firstly, make sure that you

have a strong risk management methodology. You must identify and document risks and identify

remediation plans, assign risks to people so they‟re accountable for their own risks, and track risks.

Risk management has to be proactive, and has to be something everyone takes responsibility for.

Secondly, make sure that you have carried out a proper business justification and that as your

programme unfolds you‟re measuring the benefits that you identified in that business justification.

Thirdly, make sure that you have a strong and engaged senior Executive Steering Committee that has

overall responsibility for the success of the programme, and work hard to make sure they stay

engaged. Without this level of sponsorship, it proves difficult to show success over the long term.


© MWD Advisors 2011 RAL14032-USEN-00

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Control Automation needed to deliver quality services, manage risk and compliance, and accelerate business growth.

Delivering stakeholder centric services: from strategy to execution

Business

delivery of services

citizencentric services

frontline service delivery

early eservice delivery

key capabilities

government agencies

frontline services

business targets