Class 9 – April 27, 2012

Organizational Change and Management – Part 1

IT and Public OrganizationsThe structure of information (Multi-level Integrated

Information System, MIIS, Jane Fountain)

Three interrelated levels Micro level

Individuals share info in small groups within and across organizations

Organizational and interorganizational level Design and use processes and systems to codify and

structure information Routinize repeated behaviors, transactions, and information

processing sequences Institutional level

Formal rule systems, laws, regulations, contracts, property rights

Codified and regularized information flows Largely outside the control of any particular agency

IT and Public OrganizationsInteractions between levels

When information flows change in one level, others are affected

Complex to implementDifficult to predict effects and path of organizational

changeChief challenge for organizations is not the

implementation of new technologies, but the organizational change required to develop more productive information flows.Failure rates are very high, often due to inadequate

conceptualization and management of organizational change.

IT and Public OrganizationsIndividual and small groups

Process Social and professional networks Interpersonal skills, champions, network brokers Trust; social capital Constrained by organizational processes – can stifle

innovation, often a target for modificationEffects

IT will de-territorialize organizations Individuation (customizing to the individual)and

social networking Social media: Blogs, listservs, web conferences,

LinkedIn

IT and Public Organizations

Organizational LevelProcess

Structures and channels Standard operating procedures, routines, learning through

repeated interactions Governance; management Division of labor Overcoming the cognitive limitations of individuals

Effects Centralization and decentralization of structure Shrink middle management (flattening organizations) Disintermediation

IT and Public OrganizationsInstitutional Level

Process Legislative process Budget process Judicial process (laws, rules, and regulations)

Effects Globalization; International financial flows; world

is flat; 24/7 world; borderless world Transnational corporations; International division

of labor National laws vs. global values Linked cities Weak or strong national government

Planning for IT InvestmentsStrategic Planning

Strategic planning is required for IT investments.

Strategic planning builds on environmental scanning to perceive changes.

Strategic planning for IT involves seven steps: Creating a planning structure

Identify stakeholders; secure involvement and commitment of top management; define IT role; mandate focus on outcomes, not outputs

Auditing information systems Review and clarify agency’s mission; inventory

current systems, applications, structures, staffing, and resources.

Planning for IT InvestmentsStrategic planning for IT involves seven steps:

(continued) Defining goals

Strategic vision statement using consensus-building methods; assessment of IT technical and organizational system requirements.

Evaluating proposals Investigation of best practices; prioritization of proposals;

relate options to resources. Composing annual plans

Planning ahead one to five years; implementation of a governance plan; plan training and support functions

Obtaining administrative and political approval Matching specific authorities to proposed goals and

objectives. Implementing the plan, evaluating outcomes, revising the

plan

Strategic Planning example: Enterprise Resource Planning (ERP)

ERP originated in the private sector; Initial efforts often were not successful

A number of states and cities have applied ERP with varied success.

ERP is a single computerized system that supports the common business functions of all agencies within a government unit (e..g federal, state, or local). They offer three central promises That enterprise-wide software systems would be less expensive

than multiple departmental systems. That consolidation of databases would improve management

decision-making. That reliance on large ERP software vendors would assure

critical systems remained state of the art, never obsolete. Common functions include

Accounts payable, assets and inventory, budgeting, financial accounting, grants and projects, human resources, payroll, benefits administration, purchasing, revenues and receipts, and treasury.

Florida became a leader in ERP with its efforts to replace legacy systems. However, salaries were cut to pay the contractor for the new system. It is debatable if there are actual savings.

Planning for IT InvestmentsTwo major issues for planning IT investments

Risk ManagementRecords Management

Risk ManagementAll investments carry risks; risks of IT investments are

particularly problematic Classify IT risk: physical, liability, outsourcing of IT

functions, security, workplace injury, etc. Survey risks in each category, assessing probability and

magnitude Evaluate costs of safeguards for each risk

Risk management is a planning specialty that has increasingly become professionalized during the last two decades. Often, risk analysis is performed by consultants rather than in-house

Risk management is a broad category and is basically a subset of strategic planning.

Planning for IT InvestmentsRecords Management

Records, which are the agency’s memory, must be created, maintained, and preserved.

Records management underlies e-government.The National Archives and Records Administration

(NARA) issues the guiding document Agency Recordkeeping Requirements: A Management Guide. NARA guidelines require agencies to have a records management policy but do not spell out details for retention or discarding.

Digital records management is a major recent issue, as are what constitutes a public record, particularly in regards to email. Digital records have the potential to increase or diminish accountability.

The important point is that records be kept in complete and accurate fashion to support transparency

IT Management: Needs AssessmentNeeds Assessment

The main purpose of needs assessment is to identify organizational problems (internal and external).

A thorough needs assessment can re-energize an organization as quickly as a poor one can damage it

Four stages of Needs Assessment Collecting information:

Interview stakeholders, brainstorming, focus groups, organizational surveys, data and transaction reviews

Present modes of Service delivery of the organization Identifying and prioritizing problems: This identifies

What are the baseline improvements sought in LOBs and Services

Can IT adaptation achieve the improvements? Researching alternative possible solutions: This identifies

alternative technological solutions to improve performance

Seeking consensus on proposed solution: People need to agree to the solution

IT Management: Business Process Analysis (BPA)BPA is not the same as needs assessment and not

necessarily associated with it. Prime focus of BPA is on Workflow analysis

Workflows deal with how tasks are distributed and sequenced between employees in an agency (or between agencies). For example, building permit requires processing by several units, such as planning and zoning, fire, infrastructure, environment, and other departments.

Workflow analysis seeks to increase efficiency of task performed (e.g. reduce building permit process from 30 days to 5 days)

Workflows are categorized into processes (each with its associated process owner)

BPA uses an iterative method to consider how a process might be reengineered and to arrive at consensus on proposed solutions

IT Management: Feasibility studyFeasibility study analyzes a business problem and has

three broad dimensionsOperational feasibilityEconomic feasibilityTechnical feasibility

Feasibility study is needed to indicate what is possible on the above three dimensions; Needs assessment identifies what is required for the organization. Sometime, what is needed may not be feasible, and what is feasible may not be needed.

Needs assessment should be coupled with feasibility studies in order for both to be effective

Feasibility studies do not ensure that projects match agency missions, and do not establish need. They simply bridge strategic planning and needs assessment on the one hand, and practical concerns of the project manager on the other hand.

IT Management: Project Management

A project is a temporary management effort to launch a product, service or process.

Project management is the oversight of this effort

A project plan involves several elements:Mission statementGovernance of the projectAuthority and approval structureBudget and resourcesGeneral management approachEvaluation procedures to be used

IT Management: Project ManagementThe Role of the Project Manager

Managing people is more difficult than managing technology

There are 10 broad tasks of all project managers Setting clear goals for the project Setting clear objectives for the project Establishing specific checkpoints, activities, relationships,

and timelines Scheduling tasks for the project Developing the project team and the individuals in it Motivation of team members Keeping stakeholders informed Managing project tasks creatively Negotiating agreements with all internal and external

groups involved with the project Negotiating enough power for the project manager,

commensurate with responsibility

IT Management: Project ManagementAn important universal skill for project

managers is project scheduling – PMs must have knowledge of critical path scheduling techniques, and address scheduling of all project resources (time, money, human resources, hardware, software) – identification of dependencies is critical

Various certification and training programs are now in place, and are being supported or supplemented by professional associations

How Aspects of IT Management “Fit”

Class 9 – April 27, 2012

Organizational Change and Management – Part 2

Managing IT in the public sectorIn-house development

IT is managed by the public agency itself However, the agency needs the human resources and

technical expertise, which may not be available in-house

Partnerships (Public/ private) Public agency partners with private sector in

developing IT service, bringing strengths of each Joint ventures between the public and private sectors Public sector has its core service objective; private

sector provides technical competenceIs it automatically more efficient to turn IT functions

over to the private sector? Some have an ideological belief that it is always preferable to have market-based solutions.

Business always runs for profit, and most often short-term at the expense of long term. Often inconsistent with the goals of public policy.

Managing IT: PartnershipsKeys to successful partnerships

Agency culture open to learning from the private sectorWillingness to engage in mutual problem solving/goal

seekingHaving a comprehensive partnering agreementHaving an ongoing day-to-day mechanism for feedback Inclusion of performance penalties as well as rewards in

contractAgency must not become dependent on the partnerPrivate partner able to handle changes in services

provided.The degree of accountability of the private partner

What if the partnership is of weaknesses?Private sector could hold the public sector hostagePublic services could be compromised

Managing IT: OutsourcingOutsourcing as an alternative

Outsourcing is a process of contracting with a vendor to provide a service or an activity while the public agency retains the responsibility and accountability for the service or activity

There is a transfer of management responsibility for the delivery of resources and the performance of those resources

Managing IT: OutsourcingOutsourcing Advantages

Contractor may be able to provide state of the art technology

Contractor may be able to provide technology at lower cost

Agencies receive hardware and software updates automatically

Large outsourcers deal better with scalability issuesOutsourcers may be able to obtain better human

resourcesAgencies can shift or shed training and support burdens IT services are provided on fixed budget, no surprisesCompetition between contractors ensures high

quality/low cost (in theory!)

Managing IT: OutsourcingOutsourcing Disadvantages

Loss of agency jobs can leave them with little or no tech ability Agencies lose capacity to get baseline performance data and

contract management is difficult Outsourcing of jobs has been done in the past for no good

economic reason – cost/benefit did not support the actions Outsourcing may involve the loss of local jobs Outsourcing may lower agency morale and cause turnover Outsourcing increases the possibility of favoritism Outsourcing is done mainly through large contractors, making

contract monitoring difficult Costs of monitoring contracts are typically underestimated Possibility of expensive litigation Lowered security levels False claims of savings Questionable accounting procedures to make costs seem lower Outsourcing can adversely affect women and minorities

Managing IT: OutsourcingWhy IT Outsourcing Fails

Complexity – projects are too large and complex

Commitment failure – lack of commitment from stakeholders

Planning failure – poor business plansVision failure – underlying assumptions are

unrealisticInappropriate methods – agency methods may

not match ITShort time horizon – unrealistic schedulesTurbulent environments – rapid rates of

changeFailure to support end users

Managing IT: OutsourcingWhy IT Outsourcing Succeeds

Management support – involvement of top officials

Stakeholder motivation – IT benefitsGoal clarity – project scope must be clearSupport for organization culture with ITParticipatory implementation – employee buy-

inUser friendliness – to increase stakeholder

motivationAdequate budget and time horizonPhased implementation – extension of goal

clarityProcess and software engineering – dealing

with legacy systemsProject management – professional is better

Managing IT: OutsourcingSan Diego Case study

First, San Diego’s outsourcing failed, then it turned around Failure: See

http://www.cio.com/article/31139/GOVERNMENT_OUTSOURCING_You_Can_t_Outsource_City_Hall

Turn around: See http://www.govtech.com/gt/93060 http://www.computerworld.com/action/article.do?

command=viewArticleBasic&articleId=108019

Contract ManagementGood contract management is a key element for

successful outsourcingContract management allows an agency to obtain goods

and services at an advantageous price, delivered on time, meeting functional specifications.

White and Korosec (2005) enumerate many problems with IT contracting: Specification default – if specifications are lacking

vendors take advantageRequirement creep – agency asks for additional featuresLegacy maintenance – vendors are reluctant to integrate

existing legacy systems into new systems Integration risk – vendors propose and government

seeks enterprise software – however one size does not always fit all

Aspects of contract managementPerformance Based Service Contracts

Performance Based Service Contracts Agencies specify only the outcomes they want – the

means and methods are left to the contractor.Difficulties in managing performance-based

contracts have given rise to a new industry Consultants who assist agencies in development

and monitoring of performance-based IT contracts Pitfalls with performance contracting include

achieving artificial cost savings due to reducing services to have a better bottom line and failing to closely monitor results

Aspects of contract managementShare-in-Savings Contracts

Share-in-Savings Contracts (SISC)A contract management strategy for creating vendor

incentives to deliver effective IT systems on time and within budget

Vendors are awarded a portion of the savings brought about by the system

SISC has many critics who say that it uses “shady financing and accounting techniques” and moves federal IT purchases away from “public and congressional” scrutiny

Evidence that SISC is in the public interest is weak as there is very little documentation of actual savings

Organizational ChangeVirtual organizations

Impersonal; rules and regulations Post bureaucratic organization Less tangible vertical hierarchy

Loss of silo structures (departments) Loss of control by layers – more horizontal connections Horizontal networked structure

Geographical aspatiality Face-to-face meetings not required Computer mediated communications; virtual conferences Wireless enabled field work

New Public Management Lean structures for efficiency Blur between public, private, voluntary

Emphasis on e-governance, rather than e-government Contractual relationships Driven by performance indicators of outcomes

Organizational ChangeTelecommuting

Computer-based distant access to company business systems Blurred distinction between office, field, and home

Why? Budgetary limitations Improved customer service Employee needs/family-friendly workplace (quality of life) Energy consumption Traffic congestion and safety

Monitoring issuesManaging for program results

Developing a business case for telecommuting Establishing measureable program goals Establishing systems to collect data for program

evaluation Identifying problems and making appropriate

adjustments