The Flemisch government is generaly accepted to be "the best run" regional government within Belgium. The benchmarking statistics show that the main KPI's like deficit and employment are "better" than the peers. The media (especially the Flemisch ones) highlight the performance and compare Flanders with Wallonia, Brussels, and Federal counterparts.
So The Flemisch Government is "best" run? Or is it just "good" run? Or maybe not even that?
In the corporate world, a company is labelled "best run" when it succeeds is doing 3 things: being efficient in its operations (cost efficient, best in class in operating the business, ...); agile and flexible in a changing business environment (capable of dealing with changes and driving innovations) and last but not least has the complete insight in its business and eco-system (full transparency and ability to link strategy and execution).
Relating this to a public sector organisation like a government is hard to do. But let's give it a try ...
A government that has increased it number of employees by several thousands over the last 3 years and is struggling to improve its operational efficiency by e.g. exploiting the potential of technology. A government that takes a long time to answer future mobility topics and has difficulties to deal with change when it comes e.g. to a choice for a bridge or a tunnel. A government that does not outperform on business analytics and performance management, and has difficulties to create transparancy in operations and linking the "strategy" to the actual operations.
In a corporate world we would not call this "best run". Maybe "good" is a rather high rating, but better is surely possible and "best" is still quite a long way to go ...
Sunday, November 28, 2010
Monday, November 8, 2010
Is TCO a strategic topic?
Multiple studies on ICT main topics have put TCO/cost as a key agenda topic for the CIO. But is TCO actually a key element? Is cost a strategic driver for ICT?
If you talk to the CIO, the cost of delivery of the IT operations is a topic on which he is quite often challenged. I used to ask CIO's I met and who are not members of the executive committee (and by the way most CIO's are not) how often they are asked to talk about ICT on the board level.
It is a reality that most CIO's are called to the board mainly to present there ICT plan (besides the call to come and explain a crisis/escalation/serious problem situation). At that occassion the main topic turns to be cost/budget.
So should we blame CIO's to be concentrated on costs? They are somehow conditioned to always talk about cost of operations and projects (maybe because that way the other boardmembers avoid that too technical subjects, which they can not follow, are put on to the agenda). The fact is that the CIO is often perceived in lots of organisations as a costcenter manager who spend about 2/3 to 3/4 of his/her budget on keeping the shop running (call this operations costs) and is asking always for more money. If that is the situation you are in, than the total cost of your operations will get the necessary attention and will make sure you find ways to optimize, source better, reduce complexity and save money. Cost is than somewhat "strategic" ... for the internal visibility of the CIO.
But what if you are the CEO of the organisation? Is the cost of ICT key?
If you consider that most ICT organisations run a budget at 1-2% of the turnover, saving ICT budget by 10 or 20% (quite an effort) will not fundamentally change the bottom line of your organisation. Efficiency is always important, but costs of ICT are not exactly "strategic" for the company and its leader. Quite some CEO's understand that ICT can add value, and that ICT is key for the operations of the company. Concentrading attention on this is much more important than saving some money left or right. This does not mean that money is not a topic. But ICT value focus brings much more the potential impact of ICT on the strategy and future of the organisation on top of the priority list of the CIO. Saving on TCO will be seen as a way to free up means for more important (=strategic) topic of the company and not as a way to "reduce costs".
Conclusion is : TCO is an important topic, but should never be a strategic topic. The focus on "value adding" of ICT is much more "strategic".
If you talk to the CIO, the cost of delivery of the IT operations is a topic on which he is quite often challenged. I used to ask CIO's I met and who are not members of the executive committee (and by the way most CIO's are not) how often they are asked to talk about ICT on the board level.
It is a reality that most CIO's are called to the board mainly to present there ICT plan (besides the call to come and explain a crisis/escalation/serious problem situation). At that occassion the main topic turns to be cost/budget.
So should we blame CIO's to be concentrated on costs? They are somehow conditioned to always talk about cost of operations and projects (maybe because that way the other boardmembers avoid that too technical subjects, which they can not follow, are put on to the agenda). The fact is that the CIO is often perceived in lots of organisations as a costcenter manager who spend about 2/3 to 3/4 of his/her budget on keeping the shop running (call this operations costs) and is asking always for more money. If that is the situation you are in, than the total cost of your operations will get the necessary attention and will make sure you find ways to optimize, source better, reduce complexity and save money. Cost is than somewhat "strategic" ... for the internal visibility of the CIO.
But what if you are the CEO of the organisation? Is the cost of ICT key?
If you consider that most ICT organisations run a budget at 1-2% of the turnover, saving ICT budget by 10 or 20% (quite an effort) will not fundamentally change the bottom line of your organisation. Efficiency is always important, but costs of ICT are not exactly "strategic" for the company and its leader. Quite some CEO's understand that ICT can add value, and that ICT is key for the operations of the company. Concentrading attention on this is much more important than saving some money left or right. This does not mean that money is not a topic. But ICT value focus brings much more the potential impact of ICT on the strategy and future of the organisation on top of the priority list of the CIO. Saving on TCO will be seen as a way to free up means for more important (=strategic) topic of the company and not as a way to "reduce costs".
Conclusion is : TCO is an important topic, but should never be a strategic topic. The focus on "value adding" of ICT is much more "strategic".
Shared services vs quality ?
When Joep Van 't Hek published his experience with the call center of T-Mobile, lots of people recognized the situation. I personally also had a "yes, I know what he is talking about" kind of feeling (especially when I think about my last call to my telco and about how many buttons I had to press on my phone to get where I wanted to be). Communicating as a "customer" with a big utility or telco company always goes through call centers. Despite the huge investments, these call centers do often fail to meet the customer expectations and leave a general negative impression of "too slow and not adequate". Do these companies realize this?
Quite similar within the corporate world, shared services are also often not perceived as synonym of quality of services. As an individual employee, HR and IT are the most commonly established and contacted shared service centers. And also in the corporate world the experience is quite similar with what Van 't Hek experienced with T-mobile.
Strange if you realize that these call centers/shared services are basically established to create economies of scale (read optimize the service and reduce costs) but equally for professionalisation of service (like standardisation, harmonisation, specialization and increased re-directing towards experts). Isn't "improving" the service level and "meet customer expectations" part of the objectives?
I am quite sure that the cost objective has been met in most cases. The professionalisation on the other hand is much more difficult to measure, and what about the quality of service? Too often quality is measured through quantitative statistics (how many tickets, processing time, waiting time for customer ... ) and seldom through the real perceived quality of the services supplied. Only some more advanced service management system do ask for feedback on the delivered service.
This is according to me a the only good way to really know how the "customer" perceived the service. Imagine what you would say if you first had to wait "25 min before being helped by a telco call center agent" or "when an inexperienced Indian IT help desk person after 3 calls finally understands and solves your PC problem".
It starts with capturing the feedback and listening to your "customer's perception". Necessary ... but not sufficient of course, but surely a first important step for lots of (internal and external) service providers. let's start here and listen to the customer.
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