Why cloud services will kill big bad whole-of-government IT projects Momentum for cloud services adoption in government grew solidly in 2013 and looks certain to accelerate in 2014. We believe that growth in cloud services adoption by agencies will drive a change in the core logic of whole-of-government IT strategy. Cloud services offer a less risky win-win-win path towards IT modernization and intra-agency collaboration. Big bad experimental whole-of-government IT projects are dead. Long live the new logic of cloud services: find solutions that work well in individual agencies and then adopt them more broadly across multiple agencies. Simple. Stop the horror story of whole-of-government IT strategy experiments IT strategy in government too often resembles a horror story because of a passion for big projects which become mad experiments that go bad. Under pressure to cut costs, whole-of-government CIOs pursued adventurous and experimental shared services and common application and infrastructure strategies. While the business cases may have looked compelling, the results were often disappointing. The core problem with many such projects is that they were high cost and high risk with uncertain outcomes. The whole-of-government CIO started with ingredients that were past their use-by date. Organizational dynamics were complicated. Agency CIOs value their autonomy and resented being compelled to wait years for an experimental solution which may never arrive or may not suit their needs. Cloud services are shared services that (a) work and (b) scale The real value of cloud services for government is to provide an alternative to such experimental whole-of-government IT projects. A cloud service can be deployed quickly in an individual agency to prove its relevance and usefulness. Once a service is operational and the agency is confident that it performs, then it can be adopted by other agencies on an opt-in basis. While the initial implementation may be experimental, it is at least relatively quick and inexpensive. The subsequent adoption of an operational cloud service by other agencies is an incremental, low-risk process compared to mandated whole-of-government shared service projects. Agencies simply choose to become a consumer of a cloud service that is already known to work. This more incremental approach is possible because established enterprise-grade cloud services are arm’s-length shared services. The cloud provider is in the business of offering sustainably standardized and scalable services to a large and diverse customer base. If a cloud service works well for one agency then the exact same service can be seamlessly consumed by many other agencies – as long as they are prepared to make some pragmatic demand-versus-supply and benefit/cost/risk trade-offs. Cloud services have changed the logic of whole-of-government IT strategy Traditional whole-of-government IT projects were often unavoidably experimental because they set out to create services which either did not yet exist or were unproven shared services. Governments believed that they commanded material economies of scale and scope within their jurisdiction and that consolidation, standardization, and rationalization of existing IT assets would realize significant benefits. The high cost of these projects meant that agencies had to be mandated to use the solution in a win-lose dynamic. For whole-of-government to win, some or all agencies must lose – or at least that was the way it felt to agencies and also too often the way it turned out in practice. Cloud services have changed the logic of whole-of-government IT strategy in two important ways. First, material economies of scale and scope are now extra-jurisdictional – at global or multinational levels of scale. Consolidation, standardization, and rationalization of existing IT assets is no longer necessarily a useful strategy. These “assets” may well be legacy liabilities – millstones best discarded as quickly as possible. Second, the fact that cloud services are externally provided as shared services reduces the need for adoption to be mandated across agencies. Cloud services enable incremental voluntary adoption behaviors that also reduce costs and risks compared to big whole-of-government IT approaches. The pace of innovation is accelerated and risks are reduced when agencies are empowered to choose robust shared services that meet their individual business needs and priorities. Cloud services create an imperative for CIOs to focus on promoting pragmatic win-win-win collaboration behaviours One of the biggest impacts of cloud services on whole-of-government IT strategy is to tip the balance of power back in favor of agencies – from both cost-cutting and innovation perspectives. The challenge for the whole-of-government CIO is to ensure that this doesn’t result in a chaos of overly decentralized decision-making, fragmentation, and duplication. However, we believe that the fact that cloud services are provided to many customers as flexibly configurable arms-length shared services can encourage agencies to collaborate as peers to share experiences and lessons learned. A win-win-win dynamic is created when agencies share insights about cloud services that work. Agencies benefit because they can reuse the procurement and implementation knowledge capital of their peers, which cuts costs and helps them more quickly find solutions that are known to be effective. Overall costs and risks on a whole-of-government basis are reduced when proven solutions are more widely adopted and become commonly used platforms by a process of natural selection. As demand grows, cloud services providers are able to invest more in government-specific functionality and local facilities. It is a win-win-win dynamic. Whole-of-government CIOs should abandon big bad consolidation, standardization, and rationalization experiments. The focus for 2014 should be on the promotion of cloud services adoption and intra-agency collaboration via knowledge sharing platforms and pragmatic approaches to standards and information interoperability.
Posted on: Tue, 28 Jan 2014 07:40:39 +0000
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