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Adaptive complex enterprises

It-Enabled Sense-and-Respond Strategies in Complex Public Organizations


City governments face difficult challenges in serving their increasingly Net-connected constituencies in an environment of change, uncertain demand, and reduced budgets. These conditions require their IT departments to enable governments to adapt to citizen requests in a sense-and-respond (S-R) manner. In this article, the application of S-R concepts is demonstrated by the approaches used in developing an IT strategic plan for Columbus, Ohio. The fractal-based, request-focused strategy used here creates a unified organizational and IT context for connecting the Department of Technology and city government departments to their customers by utilizing an incremental, lean portfolio-management-based action plan and architecture.

City government in Columbus is a complex organization operating in a complex environment.1It is organized into a departmental hierarchy with varying degrees of coupling and autonomous coordination linking units across that hierarchy. The city government has a diverse range of customers and is subject to diverse outside influences. Demand for services beyond the basics appears to be large but the specific needs and the cause-and-effect relationships between city government initiatives and results are not always completely understood.

Within this complex organization, the recently consolidated Department of Technology (DoT) is responsible by mayoral mandate (see tech.ci.columbus.oh.us) for providing technology enablement of the city's operations as well as technology leadership. The DoT's direct interaction with citizens is minimal because its customers are the other city departments. Economic downturns and the fallout from a partially unsuccessful technology initiative have resulted in reduced budgets and personnel attrition in DoT. For both the city and DoT the path to success is not evident, and in the current economic and political climate, the consequences of failure are significant. Given these factors, the DoT has commissioned a strategic plan to serve as a roadmap to define its value proposition to the city.

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The Strategic Plan

The major goal of IT and systems strategic planning is a detailed alignment of IT with business strategy [7]. Traditional approaches [2] for doing this have been called into question [5], stating that business strategy is itself usually emergent, that the strategic fit of IT is unclear, as is the benefit of long-term IT planning in a changing environment.

It is also important to understand that this successful alignment includes not only consideration of process rationalities to achieve efficiency and effectiveness. Important political and legal rationalities also impose particular demands on process. These other rationalities must be addressed before departures from the well-known hierarchical response to problems can be perceived as legitimate. If these rationalities are not honored, civil servants, various stakeholder groups, and political appointees will veto or slow innovation.

In order to improve the planning and execution in complex environments, several tactical approaches have been recommended—such as using short and interleaved planning and delivery cycles that deliver value to the customer quickly and then use customer feedback and new requirements to plan the next cycle. The conceptual underpinning of these tactical approaches is S-R [4], which calls for: systematic intelligence gathering on potential customer demand; a rapid response to fulfill that demand; measured metrics on how well the demand was satisfied; and the development of modular competencies and capabilities that can be combined to service new demands.

In keeping with lean methods [10], we began our analysis with citizen requests. These showed a growth in citizen demand in unique, nonroutine, situational requests for services. A similar trend was observed for IT services requested from DoT. Also observed was that value of these nonroutine requests as perceived by the customer was higher than that for routine, institutional requests (terms "situational" and "institutional" derived from [9]). These two trends motivated the need to develop a city-wide strategy around S-R.

Developing this city-wide S-R strategy required the DoT to establish a strategic connection with other city departments. The credibility needed to achieve this depended on sensing the numerous situational citizen requests through customer-facing IT support and then responding to the requests in a way that provided a unified front across all of the city departments. Accomplishing this required a S-R [4] mind-set and the underlying adaptable and modular capability within DoT itself.

The IT strategic plan makes organizational as well as IT recommendations to create the strong communications context necessary for successful S-R operations within DoT (see Table 1). The table has four sections, one each for organization considerations for enabling "sense" and "respond," and the IT considerations for enabling "sense" and "respond." Each section describes goals, requirements to achieve the goals, and implementation recommendations to satisfy the requirements. The status of these recommendations is also shown for completeness and for the discussion of future work later in this article. The strategic plan also defines a process for implementing the delivery of IT-enabled S-R capability to the city (see the figure here).

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Business Information, Operations, and Strategy (BIOS) Form

The BIOS form (derived from [10]) provides a structured, high-bandwidth communication medium for DoT customer account managers to connect with their customer departments and sense their strategic requirements. Four dimensions of information are collected for each department. The first three dimensions comprise the (usual) high-level information needed to understand the context in which an organization operates:

  • Environmental: External forces, regulatory compliance requirements, competition, trends, external and internal customer profiles. This dimension also captures the response to the environment: goals, products, services, and channels.
  • Business: Revenue, budget, resources, and performance measures that determine its success at the interface to the customer.
  • Infrastructure: Internal and external suppliers and assets.

Information about the fourth (and Operating) dimension is the key in executing the plan within this context. By treating the city, city government, and the DoT as fractal organizations [9] we can identify instances of the four adaptive complex enterprise (ACE) patterns of operation (namely, RED, Triage, Agent assistance, and Infrastructure use) within the city.

RED Pattern. The RED (Requirements, Execution, Delivery) transactions [9] are primarily where the value-add2 due to each citizen request is realized in an ACE. Civil servants use the RED transaction pattern (in one, or a series of nested RED transactions) to respond to complex requests for services through discovered information and emergent process structures. These transactions are the fundamental unit of analysis in the development of the strategic plan, because they identify where resources are bound to roles, where effort is expended, and costs are incurred.

In order to begin to identify the mix of requests made to the city as well as to identify the IT and organizational requirements, an inventory of city transactions was conducted. The RED transactions of each department, along with the manual resources and applications3 used in the steps of the transaction were collected and documented by the account managers for that department.

An example of the type of information collected for a nonroutine, situational request type from the Department of Development (responsible for economic development initiatives) is shown in Table 2a. The initial columns of the table identify the request type, the value and related characteristics of the request, the number of requests handled in a month, and the full-time resources dedicated to the processing of the request. The remaining columns identify the manner in which transaction requirements are captured, how execution is enabled, and finally how the delivery is accomplished. A more complete example of RED transaction information collection is shown in Table 2b for the Department of Public Utilities (which supplies water, natural gas, and electricity to the city).

RED Analysis. In the public sector context, the RED approach as described in [9] corresponds well with other literature concerning improving public management. The New Public Management (NPM) [11] movement argues that entrepreneurial public managers can more efficiently accomplish tasks and increase service quality levels. In particular, the RED approach maps well with the NPM prescription that public managers should be given specific goals to achieve instead of following legally required processes, thus enabling entrepreneurial managers to discover and create the means to reach specific goals. The RED pattern also explicitly calls for the development of competencies in an IT context in the same way that the resource-based view of the firm literature generally advocates the identification and development of strategic organizational competencies [8].

Finally, the increasing importance of coordinating interorganizational activities has led to an effort to understand the specific competencies required for managing across silos. Anecdotally, we are already seeing that the implementation of the 311 system in Columbus, as we will describe, confirms the importance of many new management skills, including:

  • Activation: enlisting participation in networks;
  • Framing: influencing the operating rules, prevailing values, and norms while altering the perceptions of the participants;
  • Mobilizing: developing a view of the strategic whole and an ability to develop and achieve a set of common objectives based on this whole; and
  • Synthesizing: creating the environment for interaction among network participants by blending perceptions [1]. Instead of legal authority as the factor that binds actors, managers now rely on trust when managing across silos.

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IT Portfolio Consolidation and Prioritization

An analysis of RED transactions of a department yielded missing applications and application features (see Table 2b for Public Utilities). By analyzing and consolidating the BIOS across departments, a portfolio of desired applications and application features was developed along with the REDs that required them. The BIOS committee, made up of the departmental directors and account managers, now had objective information with which to prioritize the portfolio. That is, by looking across all the departments and the REDs, high-impact features that yield high business value (either through improved response or increased efficiency) could be prioritized.

The identified application portfolio (see Table 3) forms the first layer of the city's e-government technology architecture. Applications identified as missing from the portfolio are prioritized by the BIOS committee. Note that the identification of the missing applications is the first step in a gap analysis [2]. Note also the incremental, lean nature of the gap analysis: first the applications, then the unified application architecture for the prioritized applications, then the gaps in the application architecture for these applications and so on.


Principles of fractal architectures and patterns were essential in developing the IT strategic plan and process for the DoT.


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Prioritization of 311

The first priority was a city initiative known as 311, which established a single point of citizen contact with the city through one telephone number: 311. This was also identified as central to the incremental development of the enterprise architecture for the city, as described in the next section. The 311 requests are routed into a central location from which they are "triaged" to the appropriate city department. Certain requests result in a response coordinated across multiple departments. Integration of departmental and city IT systems and applications with 311 will be necessary over time as the scope of 311 expands—thus driving the enterprisewide technology integration architecture, as well as in the organizational and business process reengineering of the city.

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Enterprise Architecture

The final step in S-R is the development of modular competencies and capabilities that can be combined to service new demands to form a modular enterprise architecture. A modular IT architecture [12] positions the city to deliver new e-government services with scalable responsiveness, reduced cost, and reduced risk. This is a requirement for an environment characterized by uncertain but growing demand and lower budgets. The presence of an architecture (or an explicit architecture step in application development) also allows local IT initiatives by departments with discretionary funding to proceed without creating silos again.

After an application is prioritized for consolidation, development, or enhancement, its software development life cycle (SDL) is initiated. The strategic plan process recommends that this SDL include an explicit and well-defined IT architecture development step with the following essential elements:

  • For applications to be consolidated, the differences and commonalities are identified in the existing architectures and resolved in the consolidation process.
  • For new applications, the architecture is defined so it is compatible with one of the authorized application architectures used by the city.
  • For applications to be enhanced, the architecture of the new features must be compatible with the existing architecture.

Development of the application portfolio and expansion of 311 to connect the front- and back-end systems will result in the evolution of a unified IT architecture. The incorporation of additional departments into 311 will necessarily result in the evolution of a unified organizational architecture.

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Conclusion

Our research caused us to conclude that a S-R strategy for both the city and its Department of Technology is more viable than long-term strategic planning. Principles of fractal architectures and patterns were essential in developing the IT strategic plan and process for the DoT. Table 1 showed the current execution status of the strategic plan; our next steps include the evolution of the enterprise architecture and guiding the successful implementation of the ongoing IT initiatives. In addition to refining the process rationalities, we also seek to deal with implementation questions. We hope to minimize resistance to change by showing city employees and the public how SR is designed to achieve the same goals as a hierarchical bureaucracy (such as responsiveness, traceability, and accountability) as we generate and pursue areas for future research.

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References

1. Agranoff, R. and McGuire, M. Big questions in public network management research. J. Public Administration Theory and Research 11, 3 (2001), 295—326.

2. Cassidy, A. A Practical Guide to Information Systems Strategic Planning. CRC Press, 1998.

3. Hackney, R., Burn, J., Cowan, E. and Dhillon, G. Challenging assumptions for strategic information systems planning: Theoretical perspectives. Commun. AIS 3, 9 (2000).

4. Haeckel, S.H. Adaptive Enterprise: Creating and Leading Sense-And-Respond Organizations. Harvard Business School Press, Boston, MA, 1999.

5. Haeckel, S.H. From make-and-sell to sense-and-respond. Member's Spotlight, Management Review (Oct. 1992).

6. Kaplan, R.S. and Norton, D.P. The Balanced Scorecard. Harvard Business School Press, Boston, MA, 1996.

7. Lee, J.W. Managing technological change through strategic planning. Technology Management: The New International Language, 1991.

8. Nelson, R.R. and Winter, S.G. An Evolutionary Theory of Economic Change. The Belknap Press of the Harvard University Press, Cambridge, MA, 1982.

9. Ramanathan, J. Fractal architecture for the adaptive complex enterprise. Commun. ACM 48, 5 (May 2005).

10. Ramnath, R. and Ramanathan, J. IT architecture and the case for lean ebusiness process management. In Proceedings of the MKWI 2004 Multiconference, 2004.

11. Reschenthalter, G.B. and Thompson, F. The information revolution and the new public management. J. Public Administration Research and Theory 6, 1 (1996), 125—143.

12. Zachman, J.A. A framework for information systems architecture. IBM Systems Journal 26, 3 (1987), 276—295.

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Authors

Rajiv Ramnath (ramnath@cis.ohio-state.edu) is Director of Practice for the Collaborative for Applied Software Technology (CAST) project in the Department of Computer Science and Engineering at The Ohio State University.

David Landsbergen (landsbergen.1@osu.edu) is the John Glenn Institute Scholar in the School of Public Policy and Management at The Ohio State University.

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Footnotes

1See www.columbus.gov, mayor.ci.columbus.oh.us/covenant.htm, and columbus.gov/2005budget for information on Columbus city government, its structure, as well as the budget and performance metrics for each city department.

2The term "value" is used (rather than "business value") in order to reflect value other than financial.

3Application names have been generalized based on the service provided by the application.

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Figures

UF1Figure. Strategic plan and execution process.

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Tables

T1Table 1. The DoT strategic plan overview.

T2AT2BTable 2. (a) The BIOS form operating dimension (Department of Development). (b) Operating dimension (Public Utilities).

T3Table 3. Application portfolio consolidation: Missing applications and infrastructure.

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