Category Archives: IM/IT Strategic Planning

Can We Monetizing Government Services?

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On November 7, I attended a session put on by the Canadian Institute called “Government Connects“. All levels of government spoke about digital transformation of their services.  One of the speakers was the boss of all Alberta Public Servants, Marcia Nelson.  Marcia did a great job discussing what the Government of Alberta is doing in moving its services online.  Certainly Digital Government is the nirvana for most governments as they see cyberspace as being a cheaper, faster and more effective way to deliver more services to citizens.

The User as the Product

Marcia, and many of the speakers, talked about the expectations of citizens relative to their other digital experiences.  For example the ease to create a Facebook account, the functionality available via a GMail account or how a LinkedIn profile is now almost as important as a resume or a business card.  The question from Marcia, and others was ‘how can governments compete with these products?‘.

The other side of these services is a profit motive.  Facebook makes it easy to set up a profile so it can target you with advertisements. Gmail wants you as an email client so it can scan your email and target its advertisement.  LinkedIn wants you to buy a premium membership or at least get your eyeballs on its advertisements.  All of the above are examples of monetizing you as a user into becoming their product.  Assuming informed consent, there is nothing wrong with monetization.  It is an economic transaction in which a slice of your privacy is exchanged for some really good services (like watching cat videos on Facebook just saying).

The Digital Government Disadvantage

So where does government fit into this?  Firstly there is the challenge of resources.  A quick scan of the September 2016 quarterly results of Facebook shows they have about $10.6USD Billion in physical and intangible assets*.  Included in this number is $5.1USD Billion of network and computer software assets (physical) in addition to $1.7USD Billion in technologies and patents (intangible).  In other words, Facebook has excellent technical infrastructure to offer a premium product for free to users.  And if they don’t have a good product now, their $30.3USD Billion in current assets (e.g. cash, securities, etc.) can be used to buy that good product.

* Note, for those accounting weenies out there, an interesting item they have on their balance sheet is ‘Acquired users’.  I could not readily find a definition for this term but it appears that the users are really the Product!

Pity someone like the Government of Alberta (GoA).  A $50 billion a year organization in which an estimated 2.5%, over $1 billion, is spent annually on Information Management and Technology (IMT) (adapted from: GoA IMT Plan, 2016 – 2021, p. 4). From the GoA’s most recent financial statements, they have $4.4CAD Billion (about $3USD Billion) of computer assets – hey not bad – of which 78% of is fully depreciated (e.g. over 5 years old) – YIKES! (adapted from GoA 2015-16 Financial Statements, p. 63).

Beyond relying on old technology, the GoA has to do a lot more than Facebook.  While Facebook can focus on social media, the GoA needs to run registry systems (e.g. vital statistics, land titles or drivers licenses), health systems (e.g. immunization, medical records), education (K-12, student finance, apprenticeship certificates), business (collect taxes/royalties/fines) and human social functions (tracking children in foster care, seniors or homelessness).

The above is not a new story but it is worth repeating every now and then that governments do things that no one else wants to with a tiny fraction of the resources of private industry.  Governments must also build and run systems that have almost no tolerance for failure.

Risk and Skin in the Game

To the last point, risk, this is where government is at a further disadvantage.  The original investors in FaceBook backed a winner.  Those who put money in to Myspace, Friendster or DIGG did not fare so well (huh, never heard of some of these, check out the grave yard of failed social media infographic from the Search Engine Journal January 25, 2013).  Nicholas Taleb calls investors (win or lose) people with ‘Skin in the Game‘ from his book Anti-Fragile.  In contrast, public servants never have skin in the game.  We are always spending other people’s money and our fantastically worst case for abject failure is forced retirement or perhaps being fired – maybe.

In other words, governments have both an advantage and disadvantage around risk. The individuals involved do not have personal risk (advantage) but the organizations also lack the mind focusing benefit of the ‘terror of failure’ (disadvantage).

The Monetization Continuum and How Can Governments ‘Compete’

The reality is that Governments can’t and shouldn’t compete with the Facebook’s of the world.  Creating a bleeding edge user experience would be an inexcusable use of public funds and without the terror of failure would not likely be successful anyway.

But because thought exercises can lead to innovation, I am proposing the ‘Monetization Continuum‘ for governments; a government simply needs to pick a point on a line.  At one end (generally status quo) is ‘Mind and Accept the Gap‘ at the other is ‘Full Monetization‘ with other options falling between these two.  Definitions are provided below as well as way points but generally if you are Singapore you may be more comfortable having McDonald’s ads on your obesity website.  If you are at the other extreme – well this is where Minding the Gap comes in.

Monetization Continuum

End PointsDefinitionExamples
Mind and Accept the GapGovernments acknowledge that they will lag and explain why to their citizens. Periodically, governments leap-frog into a stronger position.Status Quo
MonetizeFund digital government through ad, premium memberships or sponsorship revenue.

 

Premium services could even be tax-deductible!

Faster border crossing via Nexus.

On the Subject of Not Likely

The reality is that governments will and should never monetize their services.  There is a slippery slope of what is reasonable and in good taste.  Governments have something that Facebook or Google does not have – the coercive powers of taxation and legislation. Perhaps governments does not need to build systems when they can force organizations operating in its jurisdictions to offer the services.  There is a long tradition of this in the telecommunications world, for example.  This would not be monetizing users as products, this would monetizing providers as servants for the public good.  Just a thought.

90 or 99 – That is the Strategic Question

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Nicolas Taleb would have us believe that strategic planning is ‘superstitious babble’ (see Anti-fragile strategic planning).  In contrast, Kaplan and Norton make strategic planning a cornerstone of the Balanced Scorecard.  The reality is probably in the middle.

This blog however considers the question, how much time should an organization spend on planning?  Successful or not, when do you cut your losses for a year or when do you think that you are not doing enough?

How Much Is Enough?

On the one hand, strategic planning can become its own self-sustaining cottage industry.  Endless meetings are held and navels are closely examined with little to show for it.  On the other hand, the organization is so tied up in operations and ‘crisis du jour‘ that they wake up and discover the world (and even their organization) has completely changed around them.

What rule of thumb or heuristic can be used to know that you are doing enough Strategic Planning without decorating cottages?  My proposed answer is somewhere between the 1.0% and 0.1%. Although a full order of magnitude separates these values, a range is important due to the volatility of an environment an organization finds itself in.  Governments are likely on the low-end (closer to 0.1%) and tech start-ups on the higher end (1.0%).

For more on the basis for these heuristics, take a read of ‘A Ruling on 80, 90 and 99‘ for my thoughts and a review of such things as Vilfredo Pareto’s legacy and internet lurkers. A recap from this blog is as follows:

  • Pareto: 20% of an organization’s actions account for 80% of its results.
  • 90 Rule: 1% of the operational decisions are enacted by 9% of the organization affecting the remaining 90%.
  • 99 Rule: 0.1% of the strategic decisions are enacted by 0.9% of the organization which impacts the remaining 99%.

Thus the 99 Rule provides a minimum amount of time for an organization to consider strategic questions while the 90 rule provides a maximum amount of time.

Who Does What and What to Do with Your Time?

Consider a fictional organization of 1,000 people.  This is a medium sized business, typical government Ministry or employees of a large town or a small city.  Assuming there is about 1,700 productive hours on average per year per employee (e.g. after vacation, training, sick time, etc. see below for my guesstimation on this) this means the organization in total has 1,700,000 hours to allocate.  How much of this precious resource should be spent doing strategic planning?

I am recommending no less than 1,700 hours and no more than 17,000 hours in total.  In total means involving all people in all aspects of the process.  Thus if there is a one hour planning meeting with 20 people in the room, that is 20 hours.  To prepare for this meeting, 3 people may have spent 2 full days each – another 3 x 2 x 8-hours or another 48 hours against the above budget.

Measuring what Matters

The point of completing these measurements is to answer four fundamental questions:

  1. Is the organization doing enough strategic planning relative to the environment?
  2. Is the organization doing too much planning?
  3. Are we getting value for the investment of resources?
  4. How do we get better at the activities to reduce this total?

Is the organization doing enough strategic planning relative to the environment?

What happens if you discover you are not doing enough?  For example your 1,000 person organization is only spending 100 hours per year doing planning.  You may be very good and efficient and if so bravo to you and your planning folks!  On the other hand, you may be missing opportunities, blind sided by challenges and mired in the current day’s crisis – in which case maybe a bit more effort is needed.

Is the organization doing too much planning?

The 1,000 person organization may also be in a Ground Hog Day’esque hell of constantly planning with not much to show for it.  Perhaps you have a full time planning unit of five people who host dozens of senior management sessions and the best they can is produce an anemic planning document that is quickly forgotten.  In this case, measuring the effort of consuming 10 to 20 thousand hours of efforts for nought can lead to better approaches to the effort.

Are we getting value for the investment of resources?

The above two examples demonstrate how a bit of measurement may help you decide that 100 hours is more than sufficient or 20,000 hours was money well spent.  The output of the planning process is… well a plan.  More importantly it is a culture of monitoring, planning and adapting to changing organizational and environmental circumstances.  Thus setting an input target of planning to measure the quality of the output and the impact of the outcomes can answer the question if the planning effort were resources well spent.

How do we get better at the activities to reduce this total?

The advantage of measuring, evaluating and reflecting on the planning efforts is to get better at.  Setting a target (be 1.0% or 0.1%) is the first step of this activity and measuring against this target is the next.

Good luck with your planning efforts and let me know how much time your organization spends on its planning initiatives.

* How much Time Do You Have?

How much time does an organization have per annum to do things?  The answer is … it depends.  Here are two typical organizations.  The first is a medium size enterprise that works an 8-hour day, offers 3-weeks vacation per year, in addition to sick days and training (e.g. for safety, regulatory compliance, etc.).  On the other hand is a Ministry that offers a 7.25-hour day, 5-weeks of vacation plus sick and training days.

Organization Medium Size Company Government Ministry
Hours/day (1) 8 hours 7.25 hours
Work days per year (2) 254  250
Work Hours per year 2,032 1,812.5
Avg Vacation days x work hours (3) 120
(3 weeks)		 181.25
(5 weeks)
Avg Sick Days/year x work hours (4) 60
(7.5 days)		 54
(7.5 days)
Avg Hours of Learning/year (5) 42 29
Total productive hours/employee 1,810 1,548.25
  1. Few professionals work an 8-hour day let alone a 7.25-hour one.  Nevertheless, everyone has non-productive time such as bathroom breaks, filling up on coffee, walking between buildings.  So I am leaving the actual average productive hours at 8 and 7.25 respectively.
  2. For a cool site in adding this calculation, see: www.workingdays.ca.  Note this includes 3 days of Christmas Closure.
  3. 10 days is the minimum number of vacation days required to be given to an employee.  The average is a surprisingly difficult number to find (at least to a casual searcher).  15 days is based on an Expedia 2015 survey.
  4. Reference Statistics Canada: Days lost per worker by reason, by provinces.
  5. Sources vary.  I have chosen the high value for the for-profit organization as they often have stringent regulatory requirements for health and safety training.  For government I have chosen a medium value.  Sources:

Other Thoughts on Strategic Planning

Six PoC Questions for Success

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The article discusses the significance of Proofs of Concept (PoCs) in problem-solving, emphasizing a scientific approach and the “Fail Fast” principle. It presents six essential questions to guide organizations through the PoC process, ensuring clarity in objectives, results, and future applications while fostering innovative solutions.

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Can We Stop and Define Stop?

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This week I will be going into an operational planning meeting.  Like most of the operational planning meetings I have attended, three questions are being asked:

  1. What do we want/need to start doing
  2. What do we need to continue to do or finish and
  3. What should we STOP doing?

The first two questions are relatively easy to answer and there is a plethora of information on How, Why, When, Where and What to plan.  In this blog, I want to focus on the Stop question, specifically:

What does “Stop” Mean in the Context of Operational Planning?

How Many Stops have been Really Stopped?

In my career, I have been in dozens of planning meetings and I cannot really recall something identified as ‘should be Stopped’ that was actually stopped.  At the same time, over my career, I have stopped doing many things that I used to do with out the ‘thing’ being part of a planning meeting.  Why is it so hard to identify a process to stop and then actually stop it?

Stopping to Define A Process

A quick stop for a definition and in this case the word ‘Process’ which is one of these wonderfully loaded terms.  Fortunately the good folks at the International Standards Organization can help: (source: http://www.iso.org, ISO 9000:2015; Terms and Definitions, 3.4.1, accessed 2016-04-02):

3.4.1 process: set of interrelated or interacting activities that use inputs to deliver an intended result (Note 1 to entry: Whether the “intended result” of a process is called output (3.7.5), product (3.7.6) or service (3.7.7) depends on the context of the reference.).

Assuming that an organization wants to stop a process, the challenge of doing so is built into the definition – when you stop something, you must deal with the inputs, the outputs and the impact on the inter-relation between potentially numerous activities.

Starting to Use a Process Focused Way of Stopping

Fortunately the above definition also gives us a methodology to evaluate what processes we can stop, change or that we are stuck with.  The Process Focused Way of Stopping uses a 2 x 2 matrix which asks two simple questions: will Inputs or Outputs Cease or Continue?  Inside the resulting matrix is a gradient between the extremes of fully stopping or continuing to deploy inputs and outputs. The four themed quadrants can help an organization understand the challenges and execution of stopping a process and interrelated impacts on the organization of doing so.

Process View Model

The Four Quadrants of Stopping

Or how to manage the “Law of Unintended Consequences“.

  • Full Stop!:
    • Inputs Stop, Outputs Stop
    • Business Example: Nokia, formerly a pulp and paper company that evolved into an electronics/cell phone company.
    • Organizational thoughts: abandoning or decamping from a process.
    • Risks/challenges: if a downstream process requires the output, a new and not necessarily better process may spring up to fill the void
  • Automation:
    • Inputs Stop, Outputs Continue
    • Business Example: Automation of airline ticketing and reservation systems over the past 40 years.
    • Organizational thoughts: automation is central to productivity enhancements and cost savings.
    • Risks/challenges: over automation can backfire, for example, being able to talk to a human is now seen as premium support for a product instead of simply directing customers to a website or a phone response system.
  • Costs Without Benefits (Yikes!):
    • Inputs Continue, Outputs Stop
    • Business Example: A mining company paying for site remediation long after the mine has been closed.
    • Organizational thoughts: Generally this is the quadrant to avoid unless there is a plan to manage the risks and downside costs (e.g. a sinking fund).
    • Risks/challenges: Organizations may land here as a result of the Law of Unintended Consequences..
  • Status Quo:
    • Inputs Continue, Outputs Continue
    • Business Example: any company that stays the course in their product line; this includes companies that should have changed such as Kodak.
    • Organizational Thoughts: this is a typical reaction when asked to changed processes.  Lack of organizational capacity and willingness to change supports general inertia.
    • Risks/challenges: As Kodak discovered, a lack of willingness to internally cannibalize and prune an organization may lead to external forces doing it for you.

How to Start Using a Process Focused Way of Stopping?

‘So What?’, how can this model be used?  At a minimum I plan to bring it with me to the next planning session and when someone identifies an activity to ‘STOP’ I will point to the quadrant the thing falls into.  This is not to prevent good organizational design, new ideas or planning; but it is to focus on the practicalities of planning and execution.

Limits of the Model

The model has its limits. The first is that is micro-biased. It assumes the organization, processes, outputs, and the like remain relatively constant. If your company is bought and the division shut down, the model is mute. The other limitation is technology. AI is seen as an automation tool but what happens when it becomes a game change at the macro level.

Nevertheless, hopefully you can start using this Stopping Model the next time you begin a planning meeting!

ITM Triangular Conceptual Model

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The following graphic has been kicking around in my head, in various incarnations for a few years. It considers the inter-relationship between Information, Technology and their Management or Governance.

ITM Triangle

ITM Triangle

Definitions: Information, Technology and Management (ITM)

Before looking at the whole model, what are its components?  How do you separate information from technology or from management?  One the one hand you do not; there is a continuum in which very few things are strictly one thing or another and lots of bulging between the triangle points where the business of an IT Department happens.  Nevertheless, there is nothing like a good definition and these are from COBIT.

Triangle Points

  • Information: An asset that, like other important business assets, is essential to an enterprise’s business. It can exist in many forms. It can be printed or written on paper, stored electronically, transmitted by post or by using electronic means, shown on films, or spoken in conversation.
  • (Information) Technology: The hardware, software, communication and other facilities used to input, store, process, transmit and output data in whatever form
  • Management:  Plans, builds, runs and monitors activities in alignment with the direction set by the governance body to achieve the enterprise objectives. and/or
  • Governance: Ensures that stakeholder needs, conditions and options are evaluated to determine balanced, agreed‐on enterprise objectives to be achieved; setting direction through prioritization and decision making; making; and monitoring performance and compliance against agreed‐on direction direction and objectives.

Central Core

There are a lot of things going on inside an IT department but generally they rely on people and the application of knowledge.

  • IT People: individuals either employed by, contracted to or otherwise contribute to the objectives of the organization and its IT goals (note, this is not a COBIT definition).  A central leadership roles found in IT departments is the CIO:
    • Chief Information Officer: The most senior official of the enterprise who is accountable for IT advocacy, aligning IT and business strategies, and planning, resourcing and managing the delivery of IT services, information and the deployment of associated human resources.  For brevity this also includes the potential differentiated functions of a Chief Technology Officer or a Chief Knowledge Officer.
  • Knowledge: The intangible awareness of how to do something (e.g. through user manuals, guides, etc.) or the application of ability and other intangible properties to a problem.  Knowledge is brought to an organization by the people who join it but there is also often a localized set of abilities unique or particular to a well run organization as well. According to Merriam Webster (no COBIT definition), knowledge includes:
    • a (1) : the fact or condition of knowing something with familiarity gained through experience or association (2) : acquaintance with or understanding of a science, art, or technique
    • b (1) : the fact or condition of being aware of something (2) : the range of one’s information or understanding <answered to the best of my knowledge>
    • c : the circumstance or condition of apprehending truth or fact through reasoning : cognition
    • d : the fact or condition of having information or of being learned <a person of unusual knowledge>

Client/Environment Results

Outside of the triangle are the clients and consumers of service who tend to think about ITM in silos.  For example, my computer is not booting (technology), I need a report that will tell me… (information), why is IT so “@Q#!$%*” expensive (management/ governance).  The reality is more subtle and holistic and increasingly all three need to work together to provide quality service to the organization. To this end, how the client interacts with IT can be broken into one of the following four means:

  • Application: what most users think of when they think about IT.  COBIT defines these as: A computer program or set of programs that performs the processing of records for a specific function
  • Information System: what most users manipulate when they are using an application.  COBIT definition: The combination of strategic, managerial and operational activities involved in gathering, processing, storing, distributing and using information and its related technologies.
  • Governance/Management:  How you know how to allocate scarce resources to prioritize business problems.  The actual individuals and committees that perform the management/governance functions described in the above definitions.  For example a corporate IT steering, project or program steering or working committee.
  • Utilities: generally invisible to users, until something goes wrong.  Collectively, the software, hardware and other technologies that perform particular computerized functions and routines that are frequently required during normal processing (adapted from COBIT).

Triangle and Real Life

The benefit of using a triangular model is that each point interacts with the other two.  That is there are gradients rather than a set of discrete locations. Thus an application is an example of technology but generally it consumes, transforms or outputs information. Information in isolation is generally not usable without technology or governance (e.g. It needs a report to deliver it and standards to understand it).
The model can also help IT folks view their craft holistically. ‎ Working in one area or another may create blind spots for the other two. Thus someone working in the app development space may forget the information imperatives or lose sight of the business needs for the application. A business user may over-simplify the role of information management or the challenges of building technology to deliver quality and timely information. Finally, while things such as data science are gaining traction the need a suitable container to produce it and the oversight to apply or use it is not diminished.

The So-What Factor?

Nice triangle, but will it get me funding for a data center upgrade, a new ERP system or better business intelligence (BI) tools?  Yes, in a way.  The Triangle can be used to demystify why expenditures and efforts in all areas are necessary.  As well, the triangle may be used as the basis for things like a heat map of where to invest the next dollar. If past years have seen good efforts in BI tools, have the transactional systems kept pace in feeding these systems?  Is there good oversight on master data records or big data to know who owns what and what do you do with the data when you find it?
What are your thoughts on the ITM Triangle?  Does it cover sufficiently what your IT area does, are their gaps or is too high level?

Write as a Team Sport: Antifragile Strategic Planning

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I have been able to call upon friends and colleagues twice to help me craft articles.  In both cases IAEA Property, Plant and Equipment Framework and LATE the group provided me with excellent advice.

A huge note of thanks (and a libation or coffee on me next time I see you) to the following individuals who provided ‘friendly-peer-review’.  As in the last go round, the result was a much better article.  The article itself can be accessed through my “Antifragile Strategic Planning: director’s cut” or directly from the FMI website: January 2016.

Thank you for the Use of Your Brain

Of course no good deed ever goes unpunished and to that end, the following are the folks who have helped me with the friendly-peer-review.  Hopefully I can return the favor in the future.  Also, if you are on the list and are logging this as professional development, feel free to refer to this post and notice below.

Person

Organization

Anne-Marie A.Alberta Bone and Joint Health Institute 
Pam Q.Athabasca University
Stacey D.Government of Alberta
Shakeeb S.Government of Alberta
Peter N.Retired

To whom it may concern, the above individuals were asked to perform a friendly-peer review of an article intended to be published in the Financial Management Institute of Canada journal, FMI*IGF Journal. The estimated time to perform this review was between 2 to 3 hours completed in early December, 2015. All of the above individuals demonstrated a firm grasp of the subject matter and helped to create-net-new original thought and critique through this peer-review which will be reflected in the final article. 

The above activity meets the definition of Charter Professional Accountant – Alberta’s verifiable continuous professional development.  Evidence for this include this web page attesting to the involvement as well as the emails and responses provided to myself.  I welcome contact if further confirmation is required.

The CIA and You!

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The CIA heuristic stands for Control, Influence, and Affect, guiding individuals to assess what they can manage in their lives. It emphasizes maximizing direct control, wisely influencing situations, and accepting external factors. Applied to child rearing, it highlights shifting dynamics of control and influence. This strategy encourages thoughtful actions for optimal outcomes.

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Strategic Planning: How Not to Waste Your Time 

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Strategic planning can be more effective by focusing on three principles: first, prioritize the planning process over the final document; second, timely execution is crucial, as plans quickly become outdated; third, concise plans of four pages promote clarity and strategic thinking. These methods aim to enhance organizational responsiveness and focus.

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