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Compounding organizational learning – the key to digital success

Compounding organizational learning – the key to digital success. Wellington 20 June 2014 Dr Steve Hodgkinson, Chief Analyst Global Public Sector s teve.hodgkinson@ovum.com. How did I get here?. How did I get here?. ‘Smarts’ as a Service. LOL. How did I get here?. Government expectations.

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Compounding organizational learning – the key to digital success

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  1. Compounding organizational learning – the key to digital success Wellington 20 June 2014 Dr Steve Hodgkinson, Chief Analyst Global Public Sector steve.hodgkinson@ovum.com

  2. How did I get here?

  3. How did I get here? ‘Smarts’ as a Service LOL

  4. How did I get here?

  5. Government expectations Digital service innovation New policy options Increased productivity

  6. ICT realities … • Budget constraints • Governance & procurement process • Compliance • Security • Legacy integration • Business continuity $

  7. School reports = FAIL

  8. New curriculum: Technology discontinuities Mobile internet Automation of knowledge work The internet of things Cloud technology Advanced robotics Autonomous and near-autonomous vehicles Next generation genomics Energy storage 3D printing Advanced materials Advanced oil & gas exploration and recovery Renewable energy Biomedical-Hydrogen Revolution Economic Impact ICT Revolution Scientific-TechnicalRevolution TechnicalRevolution 1880 2013 Source: Daniel Smihula, The waves of the technological innovations of the modern age and the present crisis as the end of the wave of the informational technological revolution. • Source: www.mckinsey.com/insights/business_technology/disruptive_technologies

  9. New curriculum: Technology discontinuities Biomedical-Hydrogen Revolution Economic Impact ICT Revolution Scientific-TechnicalRevolution “The future is already here – it's just not evenly distributed” William F. Gibson, quoted in The Economist, December 4, 2003 TechnicalRevolution 1880 2013

  10. The rules are being rewritten • “Leaders pull ahead with superior digital business models, and generate larger profits or surpluses which they then use to consolidate and extend their leads through further investment in elements such as innovation, high-quality staff and better customer service”. • “In this virtuous cycle, small gains in early years compound to become significant differences”. Source: IBM/National Institute of Economic and Industry Research

  11. The rules are being rewritten Compounding Organisational Learning FAIL … or not Insert audit/commission of enquiry report of choice

  12. Compounding organisational learning • Ovum case studies – where the future has already arrived • Vic DSDBI use of Salesforce for engagement and grants management • NSW Trade & Investment use of SAP Business By Design for SaaS ERP • Statistics NZ use of ReveraIaaS for the Census • Disability SA’s use of Salesforce for MySupportAdviser • DHS’s ExpressPlus mobile apps as a service interface “The future is already here – it's just not evenly distributed”

  13. Compounding organisational learning As the pace of technology innovation quickens the MOST important thing is learning how to harness and adapt to changes …. The speed with which the future arrives in our organisations is determined by the choices we make and the skills we learn!

  14. Compounding organisational learning Find out more quickly, and at less cost, what works … and do more of it Learn more quickly, and at less cost, what doesn’t work … and stop doing it

  15. Risk management?

  16. Risk management?

  17. Back to school Big ideas x 3!

  18. Can’t make a silk purse out of a sow’s ear Cloudy is as cloudy does It Takes Two to Tango

  19. 1. “Can’t make a silk purse out of a sow’s ear”Cloud services are shared services that already work Global/National(big) Consolidation OperationalScale Standardization In-house Rationalization Local(small) Resource Specificity Dedicated Customized Shared Standardized

  20. 1. “Can’t make a silk purse out of a sow’s ear”Cloud services are shared services that already work PublicCloud Services Buy off catalogue Global/National(big) Private Cloud Services Transformexisting Out-sourced Services OperationalScale Private Cloud Computing In-houseSharedServices In-house Local(small) Resource Specificity Dedicated Customized Shared Standardized

  21. 2. “Cloudy is as cloudy does”Cloud services are an alternative to playing ‘snakes & ladders’ Higher Cloud innovation edge IaaS SaaS PaaS • operational scale • focused R&D & skills • multi-tenancy • business continuity • iterative evolution • SOA & open APIs • social & mobile • Internet-age security • user self service • usage-based charging • vendor ecosystems Enterprise-grade cloud services Maturity & sophistication of ICT capabilities In-house ICT (‘snakes & ladders’) • legacy complexity • diversity & fragmentation • budget cuts • ageing assets • staff turnover & skill shortages • project failures Lower Time

  22. 3. “It takes two to tango”We need to think in more agile ways about requirements Bespoke software / dedicated ICT infrastructure Packaged software / shared dedicated ICT infrastructure Standardised multi-tenant software / shared ICT platforms Waterfallprojectmethodology Waterfallprojectmethodology Agileprojectmethodology Timeframe: years Timeframe: months & years Timeframe: weeks & months Internal-out requirements External-in requirements ICT procurementtrend “How can I procure a system to exactly match today’s understanding of my functional and technical requirements?” “What is the best way to access ICT functionality to support achievement of my evolving business outcomes?” Specify, buy & build Shop, buy & evolve Software and infrastructure built and customised for, and paid for, by an individual agency Software and infrastructure platforms that are already operating and are shared by, and paid for by, many customers Bespoke/dedicated/on-premise Configured/shared/cloud service

  23. Can’t make a silk purse out of a sow’s ear Cloudy is as cloudy does It Takes Two to Tango

  24. Platform + agile New Shared Cloud Service Platforms New Dancing Skills =

  25. Platform + agile Centralised? ---- ---- New Shared Cloud Service Platforms New Dancing Skills =

  26. Excellent!

  27. But does a cloud service fit your needs & circumstances?

  28. It is usually debatable … and often hotly debated • Latest functionality • Flexibility • Shorter, less risky, projects • Agile/design centric • SOA/API enabled • Decentralized sharing • Platform for consolidation • Scalability • Standardization • Service security and quality • Opex-based costs • Reducing unit costs • Not trustworthy • Loss of direct control • Shared with who? • Data sovereignty • Capex vs. opex • Uncontrollable variable costs • Lack of knowledge and skills • Integration • Catalyst for rogue adoption • Islands of information ? Arguments for cloud services Arguments against cloud services

  29. Pros and cons only make sense when there is context Constraints in the IT status quo • Latest functionality • Flexibility • Shorter, less risky, projects • Agile/design centric • SOA/API enabled • Decentralized sharing • Platform for consolidation • Scalability • Standardization • Service security and quality • Opex-based costs • Reducing unit costs • Not trustworthy • Loss of direct control • Shared with who? • Data sovereignty • Capex vs. opex • Uncontrollable variable costs • Lack of knowledge and skills • Integration • Catalyst for rogue adoption • Islands of information Business Needs Cloud services enablers Arguments for cloud services Arguments against cloud services

  30. The Ovum CloudFit framework Constraints make it easier to see the value in cloud services Constraints in the IT status quo • Budget pressure? • Pace pressure? • Executive frustration? • Infrastructure stress? • People or skill shortages? • Security vulnerabilities? Fit to business needs makes the game worth the candle • Inflexion point? • Generalizability? • Outsider use? • User mobility? • Urgency? • Banality? • Demand volatility? • Functional volatility? Business Needs • Outcomes focus? • Policy support? • Compliance latitude and clarity? • Proof point visibility? • Hands-on experience? • Data classification? • Procurement support? • TCO awareness? • Finance support? Cloud services enablers Enablers create and sustain momentum for cloud services adoption

  31. The CloudFit framework tool

  32. CloudFitscores

  33. In closing … • The quickening of technology change requires a compounding organisational learning approach • Find things that work and do more of them • Learn what doesn’t work and stop doing it! • Ovum’s case studies show that cloud services can provide better, faster, less costly and less risky ICT for government • 3 big ideas shed light on the value of cloud services for agencies • “Can’t make a silk purse out of a sow’s ear” • “Cloudy is as cloudy does” • “It takes two to tango” • It’s not a universal panacea … cloud services need to fit an agency’s needs and circumstances • A good CloudFit is when: • Business needs align well to the cloud services delivery model • Constraints in the IT status quo are high • Enablers for cloud services adoption are in place.

  34. Cloud services + Agile Thinking = Innovation and thus Productivity • Q.E.D

  35. Homework: What if every $ We spent on an IT solution contributed incrementally to the growth of a Service that could be shared and reused by other agencies? Discuss.

  36. Compounding organizational learning – the key to digital success Wellington 20 June 2014 Dr Steve Hodgkinson, Chief Analyst Global Public Sector steve.hodgkinson@ovum.com

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