Andrea Di MaioToday I had a very interesting conversation with a client from a national government department who is trying to make a business case for using web 2.0 technologies and approaches. What the client is particularly interested on is the impact on effectiveness and efficiency of internal government operations, since his agency is responsible for rationalizing cross-government processes.
During the discussion we went through a number of examples that we are aware of in different jurisdictions, and it occurred to me that almost none of those, including the most successful one, had any sort of solid business case behind. In some cases it was just a leap of faith (combined with the authority and clout of a leader to make it happen). In other cases there was just a general sense that greater transparency and collaboration could help, but there was no way to articulate the actual value. In other cases it was a response to the need to be seen as modern and up-to-date. Interestingly, all these can lead to either success or failure, which mostly depend on whether there is a sufficiently compelling purpose for those who are expected to participate.
But a purpose is not a business case. It won’t tell you how much money or time you are going to save, nor by how much you are going to improve in meeting certain quantitative goals. I know, this conflicts with whatever we have been saying about the importance of business cases to align IT to the business. But if there is a sufficiently common purpose, if there are common pain points that might be addressed by just reaching out to people outside (or even inside government, but overcoming organization barriers), then it is worth trying.
One might observe that, given the financial crisis and economy downturn, this is not the right time for experimentation. I would rather say that, as many government organizations are facing unprecedented challenges, the time is exactly now.
Category: web 2.0 in government Tags:
11 responses so far ↓
1 Nick Jones January 28, 2009 at 8:59 am
As a cynical analysts I’d argue that many “business cases” are dubious at best, this isn’t an ailment restricted to government IT. Business cases are all too often an intellectual game to justify something you emotionally feel is a good idea.
IMHO many of the situations for which we try to construct “business cases” are in reality far too complex to analyse meaningfully. I spent yesterday with a large vendor who (among other things) demonstrated a highly sophisticated integrated retail environment with shelf-edge labelling, real time price updates, handheld scanner gadgets with directed shopping etc. etc. So I asked the consultant demonstrating all this: if I’m a large supermarket and I implement all of this in a store, what’s the ROI? WHat %ge increase do I get on the bottom line? And how does it compare with (for example) just lowering prices or doing something simple like printing some discount vouchers in the local newspaper to get more people into the store.
He had no reply. And that’s not surprising when you consider the complexity of the human + technology “system” of which the supermarket is just a part. It seems to me many social + government systems are similar, just too complex to analyse fully. So maybe asking for the business case is the wrong question.
2 Anthony Bradley January 28, 2009 at 11:37 am
What? I don’t buy it.
“But if there is a sufficiently common purpose, if there are common pain points that might be addressed by just reaching out to people outside (or even inside government, but overcoming organization barriers), then it is worth trying.”
If this is the case. If there is a well defined purpose targeting a common pain point then you should be able to build a business case. If you can’t then value to the community doesn’t translate into value to the enterprise. Find a purpose that does.
If the potential social application scenario is too complex for a business case then chances are your purpose is also too complex and must be simplified. Never break John Gall’s Law. http://blogs.gartner.com/anthony_bradley/2008/09/26/evolving-social-applications-to-less/
You don’t have to address all th complexity in the business case. You just have to make a compelling case.
3 Anthony Bradley January 28, 2009 at 2:02 pm
There are literally thousands of potential applications of Web 2.0 in even small local government. How do you distinguish which ones to pursue – Seat of the pants decision making? Or do you “expirament” with all of them?
4 Andrea Di Maio January 28, 2009 at 6:31 pm
Anthony, it is not just a matter of complexity. A purpose does not necessarily translate into a business case. Nobody can know from the outset what exact benefits will accrue from establishing a social network of sort, or from providing more rather than less feeds. A compelling purpose can provide a motivation to proceed, but won’t allow to articulate a business case where benefirts, costs and risks are clearly stated according to whatever value framework governments are using.
Web 2.0 is about reaching out, it is about engaging individuals beyond organizational boundaries: but the way government organizations develop business cases almost inevitably take those boundaries into account.
in this respect , organizations with little maturity in developing business cases could be better off. I am with Nick (Jones) on this: asking for the business case is the wrong question.
5 Anthony Bradley January 28, 2009 at 11:56 pm
In my opinion, asking for a business case is never the wrong question. I agree that a purpose doesn’t necessarily translate into a business case. If it doesn’t then don’t do that one. Choose one that does. Give me an example of a good purpose that people will rally around and form a community where you can’t draw up a business case? If the target community is a worthwhile group then it should not be hard to figure out how the organization can benefit from its formation and activity. I’m not saying you have to figure all the possible benefits or event be exactly right. But you have to go through the exercise of thinking through what benefits will result from the effort. If it is to hard then why do it? Do something else with your time and money. I’ve been a public servant for most of my adult life and I have built many a business case while in governmental roles. Government should not be exempt from building the business case. Better, faster, or cheaper applies to government just as much as industry.
Are you saying that reaching out and engaging people doesn’t lend itself to a business case or that because you are reaching out and engaging people you don’t need a business case? Are you saying, “Go ahead and do it without goals that are meaningful to the organization?” How would you measure success? How will you justify the effort to your superiors and budget authorities?
I strongly disagree with any advice that encourages an investment in Web 2.0 without the effort of a business case. The business case certainly may not need to be a 6 month exhaustive effort drilling down to a dollar figure for each benefit but it needs to be “good enough” to justify the effort with well formulated goals and benefits.
6 Andrea Di Maio January 29, 2009 at 2:04 am
That’s exactly the point. The business cases I see in government are either very weak (i.e. investment decisions are primarily driven by compliance, and the benefit and risk sides of the equation are poorly expressed) or very detailed (in order to support accountability). In our research around the concept of public value of IT we have been advocating for a long time that accuracy is an enemy of simplicity, and that business cases in government should be simple, while putting sufficient emphasis on different aspects of the benefit side (i.e. constituent/customer impact, operational efficiency, political return). Unfortunately this happens too seldom.
Now, those who have these agile, no-nonsense approaches to business case development, can probably find the right way to express some aspects of value of a Web 2.0 intiiative. But those who use very detailed business case templates are going to have a hard time.
Further, the focus now is clearly shifting from the “cosntituent impact” angle to the “operational efficiency” one, and this was indeed the subject of my client conversation: how do we build a business case with a quantifiable impact of whatever web 2.0 initiative we may launch on our KPIs, such as number of transactions per employee, or average time per transaction, and so forth?
I totally agree that web 2.0 must have a purpose. All I’m saying is that a purpose, does not matter how strong and compelling it is, is not a business case, at least not in a government context.
This reminds me of a note I wrote about three years ago about how government organizations should make business cases for infrastructure investments. Such investments rarely have a direct impact on benefits, but they enable applications to deliver benefits: the problem is that when you make a business case for infrastructure you know what the current application portfolio is, you have a view about what applications are going to be deployed as a result of on-going projects, but you do not know the future portfolio. So, you have to make well educated guesses or use some form of scenario planning or worst case analysis to figure out what the potential benefits of that infrastructure would be in a variety of scenarios (i.e. different application portfolios).
Web 2.0 is close to that. You may have a compelling purpose, but you cannot anticipate the exact dynamics of how individuals will ultimately leverage that initiative. Of course one may develop different scenarios, but as most of them need assumptions about behaviors outside the organizational boundaries, I am not sure they would lead to useful conclusions (and -in government – conclusions you want to be held accountable for).
7 Andrea Di Maio January 29, 2009 at 4:53 am
Incidentally, I did publish research about the public value and risk of Web 2.0 (see http://www.gartner.com/DisplayDocument?id=772623) , but – as I stated there – business cases will remain primarily qualitative.
8 Anthony Bradley January 29, 2009 at 11:04 am
I absolutely agree that a purpose is not a business case (but it puts you in a posiion to deliver one). I also very much agree that the business case should not be overcomplex. It should only go so far as needed to justify whatever investment is required. I’ve seen business cases that were powerpoint presentations but they clearly articulated goals and benefits to the organization (some quantitative and some qualitative).
Hopefully a slew of unanticipated benefits will also emerge but some should be planned. If the planned ones don’t materialize but unanticipated ones do then it is still a win. I have seen some standard metrics applied to try to quantify value (e.g., cost per impression, cost per lead, various costs of communication, cost per transaction, etc.) and some can be pretty fuzzy. But even if their estimates are fuzzy(which should be readily disclosed), there is still value in thinking about benefits in those terms. They resonate with leaders that are often measured on those things.
Overkill in a business case is a bad thing. But in my opinion, not doing a business case at all is worse. Doing a business case to the right level is the key.
Shared infrastructure is always a difficult sell. I do see some similarities between building a community and delivering shared infrastructure as they are both “platforms” for future growth. However, it is easier, with social applications at least, becasue you can articulate purpose in terms of value to th user. This is very difficult with shared infrastructure (e.g., ESB, DW, MOM) since you need an application to ride on top that delivers direct impact to users and therefore the organization.
I think we agree here that the organization needs to set goals and measures of success (based on the purpose) to justify the effort. The complexity and formality of the “business case” should be as simple as possible while still delivering a compelling justification on why the effort should move forward.
9 Anthony Bradley January 29, 2009 at 11:15 am
I just re-read your note. I like the value categories of “Constituent Service,” “Operational Efficiency,” and “Political Return.” I think these categories and the table of how Web 2.0 can impact them is a very good framework to get government organizations thinking in terms of value. If they drill one level lower applying this framework to a specific purpose they just might have a business case
10 Anthony Bradley January 29, 2009 at 11:16 am
IMO, you should put a question mark at the end of your title for this post
11 How Important is Having a Business Case for Social Applications? January 29, 2009 at 12:04 pm
[...] my blog readers to an interaction I had (or am having) with Andrea DiMaio on his blog post entitled Forget a Business Case For Web 2.0. I think we have come to some agreement but I’m not sure [...]