ProjectsPosted by Marcel van Oosterhout Monday, December 04 2006 11:33:46
One June 1 2006 the BeinGRid Research project has started. This EU project will undertake a series of targeted business experiment pilots designed to implement and deploy Grid solutions in a broad spectrum of European business sectors. Nineteen business experiments are planned in the initial stage of the project with a second call for proposals in the latter stage. Secondly, a toolset repository of Grid service components and best practice will be created to support European businesses who wish to take-up this important new technology. Coupled with these two main activities are cross work package technical support and development, dissemination, demonstration and training activities. To minimise redevelopment of components, BEinGRID will deploy innovative Grid solutions using existing Grid components from across the European Union and beyond.
RSM Erasmus University will bring in its expertise on Business and IT agility, adoption and diffucion of Innovations and e-business models in one of the business experiments which is focused on the design and validation of a financial grid-enabled e-service. Other partners in this subproject are Rabobank, LogicaCMG and AlmereGrid.
ProjectsPosted by Marcel van Oosterhout Monday, December 04 2006 11:27:16
In 2005 an explorative, multi-disciplinary study on business agility was conducted by a research team from the Rotterdam School of Management (RSM), Erasmus University Rotterdam. Business Agility is the ability to swiftly change businesses and business processes beyond the normal level of flexibility in order to effectively deal with unpredictable external and internal changes. The study was conducted among managers in the Dutch Public Sector (73 questionnaires and 18 face-to-face interviews with high level executives and sector experts) in the period April to August 2005. In our data gathering we used a database of 3000 persons active in the public sector. We have analyzed three sub-samples:
1. Central government (Ministries, Policy makers)
2. Higher Education (Universities, Higher Education and a few ROCs [Regional Educational Centres])
3. Other (Public Institutes with an operational task, like implementation authorities (ZBOs) (e.g. Belastingdienst [Tax Authority], Kadaster [Land Registry]), some hospitals and local government)
The majority of the respondents have a function related to IT (68.1%), while active at central level (83.6%) in their organization.
Overall level of agility
Respondents in the Public sector state that the overall level of business agility of their organizations is slightly below neutral (average 2.96 score on a 5-point scale). This is a fairly low score, compared to managers in the business community, who rated themselves as a bit more agile (average score 3.2 on a 5-point scale)
Change factors requiring agility
The most important external change factors requiring agility in the public sector are related to the increasingly demanding customers, who require on-line multi-channel and customized communication and transactions. Furthermore, accountability and financial transparency requires many changes in the way work processes and supporting systems are organized. Since more and more processes are executed in a network of interrelated organizations and units, this requires the sharing of information on a structured basis. An important change factor that creates turbulence is the large volume of new legislation. New regulations require a lot of change, especially within Higher Education and our sub-sample Other. An important bottleneck is the short time span between the moment of publishing new regulations and the required moment of implementation.
When we look at the internal change factors requiring agility, there are three categories of change. Respondents expect most internally driven change to result from the digitalization of documents and signatures. This requires a fundamental redesign of processes and supporting systems. Internal performance requirements to IT services are increasing. Therefore, most respondents are involved in a restructuring of the internal IT systems and IT support function. This involves restructuring, increased integration, transforming legacy systems to open flexible platforms, consolidation and standardization. A third type of internal change factor that requires fundamental change is the need to increase levels of expertise of employees.
Agility gaps
Change factors with a high probability of change (score 4 or 5) and which are quite difficult to cope with (score 4 or 5) create an agility gap. When we analyze the agility gaps for the overall sample, a majority of the gaps (8 out of top 15) are internal change factors/changes requiring agility – most of them as a result of external change factors/changes. The gaps are found in the increased complexity of the network interdependencies and the need to share information with other organizations in the network, the need to increase (or change) expertise and productivity of employees and the restructuring of IT systems and support (consolidation, centralization, integration and digitalization).
The major agility gap within Higher Education is the need to restructure and reposition organizations, due to the shrinkage in public financing on the one hand (which is entrenched in new legislations), the increased expectations of more demanding customers, and the changing marketplace with new competition from international players, substitution from e-learning and blended learning initiatives and new compensation schemes (due to BaMa). Education is regarded as a political and hype-sensitive area. This leads to many changing demands via new legislation. Respondents find it difficult to respond to these changes, since these on the one hand require sometimes fundamental changes (e.g. BaMa), whilst on the other hand the exact requirements resulting from new legislation are not quite clear or keep changing. Furthermore there is no tradition of storing certain data in a structured way (e.g. student profiles that might be used in various levels of education). New security measures, e.g. to safeguard the privacy of student information, pose an agility gap. As more and more information becomes available in electronic formats and databases, staff members need to be aware of the risks of misuse and the privacy of certain data. There is a continuous trade-off between security and flexibility: the more systems are secured, the less flexible they become. The increased need for accountability (quality control and accreditation) poses an agility gap, since the organization and supporting systems have not been developed to comply with this need. Due to the increased usage of information technology, (inter)dependencies between different units within and between organizations is increasing. All these developments require, on the one hand, more productivity from the employees and on the other hand it also requires new levels of expertise. As these organizations have direct customer contact, there is a high pressure to solve the agility gap issues.
The major agility gaps within our sub-sample Other are found in the increased complexity of the network interdependencies and the need to share information with other organizations in the network, re-organization of the internal processes (including via outsourcing of supporting activities), and the need to serve customers quicker, via multiple channels and increasingly on-line - given the increasingly adoption and usage of the Internet as the channel for personalized communications and transactions.
Perspective on the network and demand-driven processes
Respondents in the public sector see the importance (and challenges) of the network perspective in terms of the need to be more agile, given the increasing interdependencies between departments and different governmental organizations and the increased need for sharing of information in the network (agility gaps 1 and 3 in our overall sample). This focus on the network perspective can be explained by the increased consolidation in shared service centres on the one hand (to cut costs, increase efficiency and improve quality of supporting services), while there is an increased attention for the end customer and a process orientation on the other hand. This supersedes the boundaries of functional organized departments. The network perspective creates an urgent need and also many opportunities to redefine the way the Dutch public sector is organized.
Enablers and hindrances to agility
The main agility enabling factor as indicated by the respondents of our survey are the skills and motivation of the staff, followed by partnerships with the private sector, vision and leadership of top management and the degree to which manual processes have been automated.
The main barriers to achieving more agility are internal politics, the way organizations and departments are structured and decisions are made (the Dutch Polder Model). The media plays an important role in the public sector. Whilst this increases the need to be agile - if something happen the media is on top of it in most cases, requiring public sector organizations to react quickly - the influence of the media also reduces the level of agility. Policy makers are afraid to make the wrong policy decisions. A result is long lead-times before decisions are made, extensive detailed risk analyses, before a decision is eventually implemented. In general, culture & values in the public sector need to adapt to a new more dynamic society, which requires agility from the operational side and the policy makers. Since a lot of expertise is hired externally on a temporary basis, much expertise leaves the organization. Due to recent regulations, the possibility to quickly acquire external expertise has become more difficult, given the increased level of bureaucracy introduced. This knowledge problem is exacerbated by the aging staff, who retire or are insufficiently open to change. There is a high need to secure knowledge within Public sector organizations, for instance via knowledge management methods & tools and a change in culture. The inflexible compensation and reward structures in the public sector make it difficult to attract or retain the expertise sought. Of course, there are alternative ways of motivating staff, but this still poses a problem. Furthermore, more attention to stronger project management is needed with respect to how programs and projects are implemented.
Business Agility implications for IT
Respondents expressed an increased need for central authority to enforce required standards, which are seen as an important basis for an agile Information System. Some organizations have implemented this central coordination; others are still struggling with IT. In general, respondents indicated that technology is no longer the problem. It is the way you organise your processes around the available IT. In particular, the implementation of IT takes a very long time
Overall we found large differences between the key IT issues and importance of specific applications between the three sub domains. The central government (consisting of policy making organizations) is characterized by rather simple IT architectures, with office automation as one of the main applications. Access is important - independent of time and place. In order to become more agile, increasingly project collaboration tools are being used. To comply with the speed of communication by the media, increased speed of (mobile) communication is important. Finally, document management & authorization is very important, given the need for knowledge management and quick access to previous documents, for instance in case of emergencies.
Within Higher Education, IT is used especially for interaction with students as part of blended learning concepts, for information and personalized communication and transactions via the web. Most problems are found in the administration of student data and information architectures. In particular, faculties have a rather autonomous position within universities, which makes it difficult to enforce central standards and usage of applications. On a network level, there is an increased need for sharing of data, for instance student registration data via Studielink. Furthermore, due to a number of mergers, education institutes are being confronted with heterogeneous infrastructures that need to be consolidated and centralized.
Within the sub-sample Other most organizations have direct customer contact. There is an increased need for a web interface to customers as part of a multi-channel architecture for communications and transactions. Some organizations in this category are characterized by large-scale processing of data, like the Belastingdienst and Kadaster. In contrast to automated processing of data from standard interactions, these organizations increasingly need tools for data mining and support of exemption handling. Given the increasing interdependence of these organizations and decisions to make additional use of authentic data from different organizations, this will lead to increased levels of data sharing and connections to other organizations. Operating in such a network setting – given the sensitivity and privacy of certain data – creates an increased need for proper authentication and authorization tools & IDs. Aligning and synchronizing the different channels in a multi-channel setting also poses a lot of challenges.
Challenges facing the Dutch Public Sector and especially central government require new methods of organization. Actual themes of interest that require a change or new policy often supersede the boundaries and structures of the Ministries. IT can play an important role in overcoming these boundaries and responding in an agile manner.
ProjectsPosted by Marcel van Oosterhout Monday, December 04 2006 11:22:18
The 21st century marketplace is characterised by an increasing number of changes, which are often unpredictable. This increasingly forces organisations to be agile. Business agility can be described as the ability of enterprises to cope with unpredictable changes, to survive unprecedented threats from the business environment, and to take advantage of changes as opportunities. Several Consultancies and ICT vendors have made it their key strategy to help organisations to achieve agility. They provide a variety of organisational and technical solutions that should help to achieve the proper level of agility to handle unexpected waves of change. However, there is by far no consensus as to what exactly agility is, nor on how one could achieve agility. Very few studies have attempted to empirically study the need for agility.
This is a summary of the results of a research project, initiated on the request of Hewlett-Packard Netherlands, and executed by a research team of the Rotterdam School of Management, Erasmus University Rotterdam in the period January - August 2004. The main goals of this research were to explore the concept of business agility in general, to analyse four business sectors in the Netherlands in more detail and to understand what the enablers and barriers for companies and business networks are to become more agile and achieve high performance levels in increasingly competitive and changing environments.
The following conclusions can be drawn from this study, which involved 37 extensive surveys, 181 shorter surveys and 47 face to face interviews with high level executives and sector experts operating in four sectors: Finance, Logistics, Mobile Telecom and Utilities.
Dutch executives state that the current level of business agility of their organisations is in many aspects insufficient to easily cope with the key drivers of future change. There is a clear gap between the current level of agility and the level of agility that is needed. The business community conceives itself as moderately agile.
The emerging price war and the need for lower priced products & services combined with fast changing customer requests is dramatically influencing all sectors analysed. Companies feel severe difficulties in coping with the required changes. In many cases it requires a totally different way of organising the company and its business network.
Companies are very worried about the pace at which solutions can be implemented. To a large degree this can be explained by the existing organisational structures, cultures and legacy infrastructures.
The results also indicate that the need for agility is not just created by unpredictable changes in the outside world (e.g. price wars, quicker consumer response, new IT technologies). Many times internal changes (like mergers and acquisitions and changes in systems and procedures) cause organisations to become more agile as well.
Since perceived agility needs are substantially different across the sectors, a sector specific approach is needed in order to achieve the necessary level of business agility within sector companies.
Executives in all researched sectors feel the unpredictability of government regulation and government measures forcing them to make their processes and systems more agile. Especially the lack of implementation details and timing makes it necessary to implement the required changes in a short time-frame.
Companies state that an agile ICT infrastructure is an important basis for business agility. Due to the current legacy systems and a lack of standards ICT is still felt as a main disabler for business agility in larger organisations. Escalating IT costs of systems maintenance & support and the fact that changing requirements take too long to implement, cause many companies to feel worried about their current ICT infrastructure.
In line with the above, companies address the need for a centrally orchestrated structure, based on simplification of processes and components, standardisation and interoperability, scalable architectures, reusability of components, shared service centres and flexible reconfigurable architectures.
A key enabler for business agility is formed by the company culture (i.e. change oriented, customer oriented) and human resources (i.e. flexible employability, job rotation, cross-functional teams). Agility can be stimulated by changing reward systems, giving people room for innovation and out-of-the box thinking and the ongoing focus on innovation and renewal.
Many companies see outsourcing and off-shoring as one of the measures to become more agile. But, this only relates to processes which are seen as non-core, where the contract party has the size, flexibility and knowledge to quickly react to (unpredictable) changes. It is believed that in the long run outsourcing & off-shoring can increase the level of agility of organisations, but migrating from the current way of working to the new way of working is not easily done. Outsourcing contracts should not be purely focused on cost reduction only; the opportunity to increase the level of business agility should be included as well.
Executives indicate it is extremely difficult to make large product- and function-oriented bureaucratic organisations more agile. In practice, agility is often based on the ‘tricks’ of individuals to overcome the rigid procedures to quickly react to unforeseen changes. In board room terminology ‘business agility’ is not a well known term. However, when confronted with the drivers and gaps as described in this report, executives surely recognize the need to become more agile.
Being agile is not enough to be successful. Even a very agile company can do nothing without a certain level of clout in the market. The management challenge for the coming years is to become more agile, while obtaining and preserving clout.
