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The impact of governance approaches on system of-system environments

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Governments worldwide are turning to Information and Communication Technology (ICT) based systems of systems, commonly termed Electronic Government (eGovernment), to enable more timely, efficient and effective interaction with their citizens and with the business community. Citizens and businesses have dynamic and evolving demands related to the complexity of their lives and operational environments, respectively. A major challenge for government is to be able to understand the value derived from investment in eGovernment in order to improve its consequent ability to respond to the variety of demands of its citizens and businesses. To be able to understand the value derived from planned investments in eGovernment, their analysis needs to extend beyond the familiar approaches that address economies of scale and scope to encompass economies of alignment. These economies of alignment arise from being able to reduce the costs of the multiple forms of collaboration needing to be supported by systems of systems in providing greater responsiveness.

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The impact of governance approaches on system of-system environments

  1. 1. The Impact of Governance Approaches on System-of-System Environments Philip Boxer, SEI Pittsburgh Patrick Kirwan & Hans Sassenburg, SEI Europe April 6th, 2010 Copyright © Philip Boxer 2010 1
  2. 2. Outline of Presentation • The Case – Evaluating an investment intended to improve the responsiveness of government to the changing demands of its citizens and businesses • The Approach – Using a governance approach that takes into account not only • the direct effects of an investment in search capability, but also • its indirect effects on the agility of the government’s responses • The Analysis – Modeling the economic impact of architectural changes on the indirect effects • Conclusions – The economic analysis supports the need for a different governance approach supported by collaborative system-of-system architectures Copyright © Philip Boxer 2010 2
  3. 3. THE CASE Copyright © Philip Boxer 2010 3
  4. 4. The Case of e-Government’s Responsiveness • The goal of e-Government: – Enabling the Government to become more responsive to its citizens and businesses, while at the same time reducing its costs. • How can the government become more responsive to the questions asked of it by its citizens and businesses, using on-line search capabilities? • The challenge of this case: – To relate the value of investment in computational systems to governance approaches based on the Government responsiveness. • How is government to value the investment, if Return on Investment (ROI) does not work because there are no direct revenues attributable to these capabilities? • A key issue: – The challenge that systems of systems present to governance within the Government environment. • How is government to sustain the alignment of its systems-of-systems to dynamic and evolving demands arising within its larger environment? Copyright © Philip Boxer 2010 4
  5. 5. Analyzing end-to-end uses of the search platform(s) (architectural trade-offs associated with different search methods) The tempo at which technological systems are developed establishing operational performance of software systems Identifying the risks to collaboration across multiple parts of the SoS (the way particular responses of government departments are coordinated) The tempo at which government re-organizes fitting together multiple perspectives on how particular collaborations supported by socio-technical SoS respond to demands Thinking ‘socio-technical ecosystems’: The modeling and analysis needs to be done of different tempos Delivering responsiveness ‘at the edge’ where the demand is first met (through collaborations across organizations and departments) The tempo at which social demands for value emerge analysis of the ‘multi-sided’ demands of citizens and businesses for greater responsiveness from the government The challenge is consistency across the different tempos The challenge is alignment across the different tempos The challenge is alignment across the different tempos Copyright © Philip Boxer 2010 5
  6. 6. Analyzing Alignment across tempos multi-sided demands departments Platform architecture for supporting multi-sidedness The tempo at which social demands for value emerge The tempo at which government re-organizes The tempo at which technological systems are developed Direct scope Indirect scope Copyright © Philip Boxer 2010 6
  7. 7. THE APPROACH Copyright © Philip Boxer 2010 7
  8. 8. • A multi-sided market for a platform is one in which: – There is value in its direct ‘one-sided’ relationships with each market participant – There is greater value in its indirect ‘multi-sided’ relationships with collaborating market participants Multi-sided markets: counting the value of indirect market relationships Platform Direct ‘one-sided’ relationships 1 2 3 n… 4 Market participants Indirect ‘multi-sided’ relationships Evans, D. S., Hagiu, A., & Schmalensee, R. (2006). Invisible Engines: How Software Platforms Drive Innovation and Transform Industries. Cambridge: MIT. Copyright © Philip Boxer 2010 8
  9. 9. Examples of Multi-sided Markets Platform Complementors* End-users* Indirect Benefits Credit Cards Vendors Card-holders Transaction convenience Smart Phones Applications Users Personal organization Sports Clubs Teams, Services Spectators Family Social Event Hospitals Doctors, Services Patients Treatment for my condition Airports Services, Airlines Travelers Personal travel Cable Networks Content providers Audiences Personal viewing C4ISTAR Network Capabilities Soldiers Agile situational response Microsoft Developers Customers Personal computing direct direct indirect Source: Evans, D. S., Hagiu, A., & Schmalensee, R. (2006). Invisible Engines: How Software Platforms Drive Innovation and Transform Industries. Cambridge: MIT. * Note that both End-users and Complementors are managerially and operationally independent Copyright © Philip Boxer 2010 9
  10. 10. 1 2 3 1 2nc… Complementors: Search Capabilities The Search Platform(s) need to be able to support the variety of ways collaborating departments wanted to use search platforms }, {{ … nu }3 End-users: Departments Demand situation facing citizen The context in which the demand from the citizen arises e.g. what do I do about Swine Flu at my school Multi-sided Platforms: supporting the response to the citizen A collaboration between departments using search capabilities to formulate a response Copyright © Philip Boxer 2010 10
  11. 11. Different types of response by departments: increasingly dependent on the nature of the situation – wholly standardized responses (i.e. frequently asked questions); • Where and when do I get a vaccination? – responses that had to be customized to the particular circumstances (but still only involving one department); • Why is there not enough vaccination available in my hospital? – responses dependent on specialist knowledge from more than one department, • What are the contraindications of the vaccination? – problems needing wholly new kinds of response, frequently requiring collaboration with organizations outside government. • What precautions do we need to take for our school excursion? Copyright © Philip Boxer 2010 11
  12. 12. The Multi-Sided Matrix: was the variety of collaborations closed or open? Indirect interactions School excursion: do we need any prophylaxis considerations? X X X X X X X X X X X Contraindications for the vaccine and illness/drug/other vaccines? … Direct interactions Hotline Services Non-Governmental Organizations CountiesGovernment Departments Vaccination: where and when do I get it? X Why No/Not enough vaccine available from my physician/hospital/county? XXXX The Transient nature of citizens’ and business’ concerns (for example Swine Flu) meant that the variety of collaborations was always open Each collaboration is a system-of-systems Copyright © Philip Boxer 2010 12
  13. 13. Supporting Multi-Sidedness: collaboration was not only within Government Collaboration with its costs of alignment Total cost of response = direct costs + costs of alignment direct benefits with their direct costs internet direct costs creating indirect benefit direct costs creating indirect benefits telephone Departments within and outside Government Citizens and Businesses System Platform(s) direct benefits with their direct costs Web-enabled Search Engine Capability and full text data archives telephone Copyright © Philip Boxer 2010 13
  14. 14. The Governance Challenge: managing dynamic alignment Acknowledged SoS Directed SoS Departments all falling under the Government (single enterprise) Departments not all falling under the Government (multiple enterprises) Collaboration defined independently of the particular question (closed) Collaborative SoS Local solutions Collaboration defined by the particular nature of the question (open) Defined by a centrally agreed authority Delegated to an ‘edge-driven’ process The eGovernment process was having to support open forms of governance. Expensive Copyright © Philip Boxer 2010 14
  15. 15. THE ANALYSIS Copyright © Philip Boxer 2010 15
  16. 16. The Analysis Approach Copyright © Philip Boxer 2010 16
  17. 17. The Analysis Approach Copyright © Philip Boxer 2010 17
  18. 18. The Analysis Approach Based on modeling the alignment processes Copyright © Philip Boxer 2010 18
  19. 19. Modeling and analysis of the alignment processes: establishing the possible economies of alignment Modeling of the socio-technical ecosystem in terms of relationships within and between different levels of detail Direct costs of using the search capability Indirect costs of alignment to the demands of citizens and businesses Demand ModelDemand ModelDemand Model Web-enabledSearch Engine Capabilityand full textdata archives Analysis across layers structure & function of physical and digital systems circular dependencies accountability hierarchies social and data synchronization value demands Copyright © Philip Boxer 2010 19
  20. 20. Results: supporting collaborative forms of governance required investing in collaborative architecture Monte Carlo simulation of variation in Total (direct costs + alignment costs) across full range of questions Investment reduced both the average total cost and the variation (spread) in the costs Using a collaborative architecture reduced the average costs of alignment very significantly The reduction in variation was worth half as much again as the average reduction Copyright © Philip Boxer 2010 20
  21. 21. CONCLUSIONS Copyright © Philip Boxer 2010 21
  22. 22. Conclusions • The importance of supporting collaborative processes became evident to the Government – The multi-sided character of the demands on the government departments created a clear need to take into account the costs of alignment. – The costs of alignment depended on the way the governance processes could dynamically align responses to changing and evolving demands. • This meant considering both – The traditional economies of scale and scope available from any particular supporting department and systems platform, and – A governance approach that assumed variability in the needs of citizens and businesses, demanding economies of alignment in the resultant variation in the collaborations between departments and systems • The imperative to manage the economies of alignment established the imperative for a collaborative architecture capable of supporting multi- sidedness Copyright © Philip Boxer 2010 22

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