A nod for ROI – Canadian Government Executive

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May 7, 2012

A nod for ROI

CGE Vol.14 No.2 February 2008

Let’s say you’re a senior manager, somewhere in the public sector, with a mandate that includes high technology. You’re not necessarily a CIO, but you know that world well, perhaps more than you like in the wee small hours. What drives you crazy? You could count the ways for what seems like forever, but here’s a salient starting point:

You have no idea what you’re doing.

Overstated? Surely. But that’s the argument that underlies an astute analysis out of the Centre for Technology in Government in Albany, NY. It’s called Advancing Return on Investment Analysis for Government IT: A Public Value Framework. It’s more than a year old now, and it actually caught a soupçon of attention in this country for a drive-by blessing of Service New Brunswick. But there’s more to it than that, much of it worth visiting.

For starters, it’s a step up merely to posit the notion of a return on investment in government IT – and another to insist on a public value framework, “to emphasize the point of view of the public, not the government, as the basis for the assessment.” The Albany study, by researchers Anthony M. Cresswell, G. Brian Burke and Theresa A. Pardo, bluntly reported three “shortcomings” on this front:

·     Incomplete analysis of public value, resulting in too narrow a scope of what can be considered returns to the public.
·     Lack of systematic attention to how government IT investments generate results of value from the point of view of the public.
·     Weak or absent methods for tailoring a public ROI assessment to the specific context and goals of a government IT investment.

The study itself unfolds as an intriguing combination of simple strategic variables and complex connections among them. Along the way, it identifies two distinct types of public value: the delivery of benefits to citizens and enhancements in the value of government itself as a public asset. What emerges is a set of “value-generating mechanisms” worth posting on your nearest bulletin board:

·     Increases in efficiency: Obtaining increased outputs or goal attainment with the same resources, or obtaining the same outputs or goals with lower resource consumption.
·     Increases in effectiveness: Increasing the quality and/or quantity of the “desirable thing.”
·     Enablement: Providing means or allowing otherwise infeasible or prohibited desirable activity, or preventing or reducing undesirable events or outcomes.
·     Intrinsic enhancements: Changing the environment or circumstances of a stakeholder in ways that are valued for their own sake.

It all comes with examples of the kind of management rigor – including the justly famed operation at Service New Brunswick – that can turn a shop focused on day-to-day survival into a place of undeniable value-added strategy.

And why would that be important? Because of what New York consultant Patrick Gray coincidentally calls “breakthrough IT.” Gray, author of Breakthrough IT: Supercharging Organizational Value through Technology, is concerned about many of the same issues that bother the Albany analysts.

“It’s a matter of getting out of that operational mode, and of thinking of IT as a (business) tool in and of itself,” Gray said in a recent interview with John Soat of Information Week.

Gray’s core argument is that CIOs enjoy an advantage denied to most of their management colleagues: “visibility into the whole organization.” Counter-intuitively, he adds, they should build on that by getting out of IT for a while – “get some experience where IT is not your primary focus.”

Journalist Soat wraps all that in a useful bit of practical advice: the way to turn an IT organization from a cost-centric services provider to a business partner is to get “the services piece” right. And that means getting IT to a high service level, and then getting it out of the CIO’s purview.

“That’s something a middle manager should handle,” Soat quotes Gray. “It’s important to get the CIO out of the mode of constantly fighting fires.”

It’s all merely grist for the mill, perhaps. But you can do worse than grist on days when you think the deputy minister’s problems with Excel top your to-do list. Both these works are worth a look; Breakthrough IT is in the business section of bookstores everywhere while the Albany piece is even more accessible, through www.ctg.albany.edu/publications/reports/advancing_roi. Check them out; you’ll be glad you did.

Robert Parkins is editorial director of Canadian Government Executive.

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