Four steps to innovative service transformation

When David Behen became IT director for Washtenaw County, Mich., the department was little more than an order-taker. And not a very good one. It was like the server who makes you wait, then brings the appetizers with the entree and pours you a glass of Chateau Latour when you asked for the house red.

Fast forward a few years, and that same IT department is implementing a wireless project that delivers on the county’s promise to improve service to its citizens and bridges the digital divide between far-flung residents.

This innovative initiative was born within that same, previously disdained IT department and stands as evidence of the organization’s evolution from a reactive entity to a proactive business partner.

Behen, now Washtenaw County’s deputy county administrator and CIO, says he has reinvented his job, transforming it from enabler to “policy-maker and community engager.”

This kind of change is hard. But when it happens, it elevates the status of IT and brings benefits to the business. Here, Behen and three other CIOs, from DePaul University, Foley & Lardner and Pitt Ohio Express, share the steps they’ve taken to lead IT’s shift from prodigal back-office order-taker to forward-thinking partner in innovation.

1. First, build a foundation

When Doug Caddell became CIO of Chicago-based Foley & Lardner eight years ago, leaders within the 2,600-employee law firm didn’t look to IT for much of anything, let alone business innovation.

Caddell spent the first few years just fixing what was broken. “We provided a basic, solid infrastructure and built back-office technology that actually worked,” Caddell explains.

Then he looked for a way to help his tech-skeptical lawyers understand what IT could do for the business, adopting the credo “Build it and hope to hell they will come.” So, without any formal buy-in, IT developed new Web-based revenue-enhancing systems it knew could benefit the business.

“This was totally against what I learned [about delivering systems] in school,” says Caddell. “But I knew if we didn’t do it, we’d just be running Exchange servers and managing document management systems forever.”

It worked. That suite of Web-based technologies enabled the firm to boost revenue and began to transform IT’s role. When the firm’s executives created a team to develop new ways to increase business with existing clients by cross-selling legal services, the Client Share initiative, IT was invited to the very first meeting.

Lawyers, says Caddell, have always “kept the clients to themselves, even if there were attorneys in other areas, like M&A or bankruptcy, that might have other services the client needed.” It’s the “eat what you kill” mentality, he says. But the Client Share system that came out of that meeting enabled lawyers to share clients.

“After years and years of trying to get IT involved from the inception, we finally succeeded,” says Caddell. And this in turn has made IT more effective.

“For a change, we were able to understand what the objectives were from the very start and make suggestions on ways we could help,” says Charlotte Logullo, an internal IT consultant who’s still involved in all Client Share meetings, setting business strategy and not just IT plans.

For Vince Kellen, who took over as CIO at DePaul University almost five years ago (he is now vice-president of information systems), transforming IT meant setting technology aside for a while.

“IT had just installed an ERP system at a lot of cost,” says Kellen. “It was perceived as a black hole of money.”

The malady, Kellen knew, was the lack of a comprehensive IT strategy and an architecture to support it; the cure would be a service-oriented architecture (SOA). But Kellen needed time to make his case and time to build the SOA.

“Change begins with talking,” says Kellen. “You have to talk. And keep talking. And keep talking.”

Kellen’s biggest problem was the guy who hired him. His method for managing his demanding and results-hungry boss? “I kept my list of goals in one pocket and my resignation letter in the other,” says Kellen.

The SOA took three years to complete, after the first two were spent building a proper organizational structure, assembling a management team and laying the philosophical groundwork for the change.

“You have to carve out that window of time where the executives leave you alone to get this done,” says Kellen.

2. Next, reorganize your department

Kellen also needed time to address his own organization’s concerns. His staff believed it couldn’t do the ERP upgrade without spending millions on external consulting. But after interviewing all 100 employees, Kellen came to a different conclusion.

“We had plenty of people, some managers and some worker bees, with 10-plus years of experience, wickedly sharp minds and passion for pushing the future. We had everyone we needed.”

But they just weren’t where Kellen needed them to be. So he started on the org chart, devoting nearly a year to the effort.

“The biggest element to enable innovation is the organizational design piece,” says Kellen. “We spent 10 months in intense organizational design thought, and most of that was spent coming up with bad ideas.”

Kellen finally organized the department around 14 crafts – “mutually exclusive, knowledge-intensive areas” – and created a rotating team of five managing directors to coach the craft leaders who would serve six-to-nine-month terms.

He also placed IT salespeople within the university, consolidated five IT departmental budgets into one and put a managing director in charge of it all.
Not everyone was pleased. “You had the optimistic types, the young aggressive employees, who were jumping for joy,” explains Kellen. “Then you had the skeptical crowd, saying uh-huh, where have we heard this before?”

The organizational and architecture design was done by the true believers; the skeptics critiqued and honed the plans. “The goal,” Kellen says, “was to give everyone a voice.”

It was a tortuous process, largely because Kellen eschewed cookie-cutter solutions in favour of a more agile organizational design built around idiosyncrasies. “It drove HR nuts,” he says. “But we worked through it.”

Four years in, IT has shifted. “Now we’re very focused on the future,” he says.

Behen of Washtenaw County took an even more drastic approach. When he became IT director, he fired everyone on his staff of 45. Half left for good; the rest applied for 34 jobs with new descriptions.

The idea was to get the most qualified, enthusiastic people on board. Behen attracted outside talent by offering salaries comparable to private-sector ones and selling the value of public service.

By 2004, “it really started clicking. We started expanding services to local units of government,” says Behen. “Because we had a top-notch IT department, I could go out as CIO and start working on big, innovative projects.”

3. Then, look outside

Like most transformative innovation, the idea came from outside. In fact, Washtenaw’s wireless initiative came over a cup of coffee that Behen had with a local software entrepreneur.

Roughly two-thirds of the county did not have broadband access, and telecom companies weren’t likely to cover much more of its 720 square miles. The Ann Arbor area had value for vendors, but there was no ROI for them in the more rural, western area. Behen left convinced the county should offer wireless to all.

He began talking to stakeholders in and outside of government. Within 18 months, he had worked a deal with a local contractor to trade free wireless connectivity for access to municipal and county assets on which to place their broadcast equipment. The county board of commissioners gave its blessing, and the project was under way.

Kellen’s idea to move DePaul to a Web-services environment also came from looking outside; in this case, to vendors.

“Distributed computing historically has been difficult,” Kellen says. “Web services promised to make it much simpler, which would mean IT agility and nimbleness.”

In 2003, there was little movement toward SOA in university environments. But Kellen, a former Internet consultant, knew software vendors were investing in the technology. “If that’s what they’re spending R&D on, that’s what the future is going to look like,” he says. “It was a no-brainer.”

DePaul is now one of the leaders in the use of Web services in higher education. “We’re insisting on it for everything,” says Kellen. SOA itself is opaque to university leaders, but they like the results, he adds. “They want us to get their work done, and we’re doing that faster.”

Looking outside his enterprise also worked for Scott Sullivan, vice-president of information technology and services for Pitt Ohio Express. Sullivan’s boss wanted him to explore mobile computing and figure out how it would fit into Pitt Ohio’s business.

Sullivan looked outside trucking to what was going on in the parcel delivery space. “FedEx and UPS give their customers real-time status of their deliveries,” he says. “We wanted to apply that to our industry.”

The PeopleNet effort, begun within Pitt Ohio’s IT business systems group, didn’t stay there for long. Now, Sullivan says, “We’re breaking down paradigms. We’re one of the few in this industry able to track where a shipment is at any given time within the supply chain.”

4. Finally, share the risk

Innovation carries risk. The bigger the change, the bigger the risk. For Behen, the biggest risk with Washtenaw’s wireless initiative was the very scary one that it just wouldn’t work. The county wanted to lead the effort, but just because it was out front didn’t mean it had to go it alone.

The key was getting others involved, including the University of Michigan, which put its own people on the project. “If you’re going to do something this extensive, with multiple stakeholders, you not only need to get buy-in, you need to get them to put forward some kind of resources,” says Behen.

Washtenaw is on track to cover the county by early 2008. It will help bridge the digital divide that separates big government and small towns in the area, and will result in further business innovation. “We’ve talked to top-seven automakers, hospitals, software companies,” says Behen. “They’ve all got plans spinning off of this.”

Pitt Ohio’s Sullivan is always concerned about the risk of IT-driven initiatives. “I’m leery of innovating from the IT side,” he says. “You have to bring the business along.”

His mobile computing project started out with plans to pilot the systems in the company’s Pittsburgh terminal. Sullivan built a cross-functional business team to get to proof of concept and worked with terminal employees to refine the system.

Within the first year, drivers and dispatchers were so happy with the system that they asked to keep it even if it didn’t go enterprise-wide.

Meanwhile, project leaders discovered that customers wanted the new capabilities … yesterday. And not just in Pittsburgh. Other departments, from safety to vehicle maintenance to finance, indicated more could be gained if the PeopleNet application were integrated with other core systems.

What began as an exploration into how one off-the-shelf product could be applied to existing business processes turned into a transformational integration project. And the timeframe for the mobile implementation shrank from 18 months to less than six.

“There was tremendous risk in that,” says Sullivan. “Logistically, it seemed impossible.” But the project had morphed from IT R&D to business necessity.

“It was more than IT with skin in the game,” says Sullivan. “The business units wanted to make it successful. That’s the key to innovation.”

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