IT has been a major productivity tool for business and government over the past few decades. Indeed, the day to day working of the global economy has become dependent on a myriad of computer systems.
However, a fundamental discontinuity in IT needs to be bridged to maximise its benefit in the future. Bridging the discontinuity delivers radical transformation, particularly in public service delivery and finance.
The objectives of this paper are to illustrate the discontinuity, explain why bridging it is essential and overview how to start going about it. This will be done using the example of healthcare in the UK.
2. The fundamental discontinuity
The discontinuity is straightforward and is explained using the three major components of IT:
- The Computer – a general purpose technology
- The Internet – a general purpose technology
- Application Software – the value-adding component
Today’s business applications were designed to operate on a computer to support processes within an organisation, e.g. patient administration in a hospital, as per the bottom-left of figure 1.
New applications can now be designed to operate over the Internet to support end-to-end processes for all members of a virtual community, e.g. healthcare, as per the top-right of figure 1.
The discontinuity is the replacement of today’s myriad organisation-based applications with a few community-based applications, discarding decades of legacy solutions.
3. An example of the discontinuity in application design
In this familiar healthcare process a patient books a GP appointment, the GP diagnoses the patient and may prescribe medication, in which case a pharmacist will subsequently dispense, and the GP may also refer the patient to a specialist. In this simplified example the specialist diagnoses and may perform a procedure. The process design is illustrated in figure 2 below. It captures the time ordering of the events from top-left to bottom-right.
Figure 3 illustrates the designs of today’s applications that capture the data for the process, e.g. a GP recording which medication he is prescribing, using the same design notation.
There are two key points to note from figure 3. The single process is supported by tens of thousands of applications in the UK for the various types of healthcare provider, and the patient is not included in the application design.
The reason for this is that the applications were designed before the Internet, and hence only dealt with a subset of the overall process on local computers. Although IT has undoubtedly improved productivity the cost of operating today’s myriad IT solutions is considerable.
Today we live in a globally connected world and so it is possible to design a new application to operate over the Internet that supports the end-to-end process as per figure 4 below.
Figures 3 and 4 illustrate the fundamental discontinuity in IT. Tens of thousands of organisation-based healthcare applications can be replaced by a single application serving ALL the participants, including patients, in the healthcare community. This is estimated to save over 95% of IT costs in healthcare. Similar savings are achievable in other public services such as Education, Justice and Taxes and Benefits.
4. The associated process redesign opportunity
Even more significantly, it is a unique opportunity to redesign processes around the individual rather than the supplying organisations. The healthcare example in figure 4 above shows the citizen, in his role as a patient, choosing secondary care provision with the ability to base his decision on feedback from peers, a key trust mechanism in the Internet era.
To maximise the benefit of the Internet of Things the above process can be radically redesigned with remote sensors contacting GP, nurse or A&E department directly depending on the patient’s condition. It is easy to modify the new design to accommodate that change, but very difficult to see how that requirement could be supported with today’s solutions.
Revolutionary new solutions can be designed for virtual communities in public finance management and unified taxes and benefits that could not be delivered with today’s design.
This is a unique, once-off redesign opportunity and it is vital that the benefits are maximised.
5. Visualising the new solutions and estimating the savings
A prototype has been developed for the healthcare episode, and also a unified taxes and benefits system, using a virtual community process/application prototyping tool.
In the first instance these prototypes can be used to help visualise the scope, and citizen-centric nature, of the new solutions and also enable a first-cut estimate of savings.
The material to do this can be found here. It should be noted that the prototyping tool is not designed to mimic the production user interface but to demonstrate the application business rules for the underlying community processes.
HISL’s first-cut estimate of savings in healthcare is £800m per annum, as per figure 5 below.
The unified taxes and benefits prototype, part of a revolutionary new public finance management system, delivers large savings in business operations, as well as IT savings, due to an automated, citizen-centric solution that can only be delivered through the new design.
HISL estimates the UK savings to be greater than £10Billion per annum across all services.
6. Why bridging the discontinuity is essential
There are currently two other approaches to IT as illustrated in figure 1.
Systems integration (SI) has been used since the 1980s to move data between applications. This is clearly not the answer going forward. The UK Government is estimated to have spent £5.2B on the Connecting for Health programme and little has been seen for the money.
One of the problems with SI was the lack of standards for data messaging. This takes us to Agile Development based on Open Standards, which is the favoured approach at the moment.
If all the existing applications in healthcare were replaced by Open Systems equivalents, connected by Open Standards interfaces, the solution could still NEVER be as economic as community-based applications as they are based on today’s organisation-centric design.
In addition to the economic argument there is also the fact that the new solutions are designed around the citizen. The democratisation of public services is even more significant in terms of societal benefit than the economics.
This still leaves the question of whether the agile development approach is appropriate to develop the new applications for virtual communities. That is covered in the next section.
7. How to bridge the discontinuity
There are two very different tasks required to bridge the fundamental discontinuity in IT.
7.1 Community-based process/application design
The first is to design the new processes and application business rules. This needs to be carried out by domain experts and citizen groups, supported by business analysts, in an iterative, collaborative design process as illustrated in figure 6 below. The evolving design can, of course, be made available for review, and comment, by all citizens. It uses the prototyping tool mentioned in section 4. Economic models for savings are refined in parallel.
This is most effective if sponsored by a pan-government design authority as a citizen plays several roles across the many services provided. It should also include private provision.
7.2 Application development
The second task is the development of the new community-based application software.
An engineering approach is required for the new applications, similar to civil engineering or aeronautic engineering, i.e. the use of graphical abstraction backed by mathematical proof at the design and engineering stages. HISL has devised such an approach and created a toolset. The engineering toolset enables the automatic generation of application software from abstract specifications. The approach and toolset have been proven over many years across several domains, including an ERP product and large-scale solutions in Capital Markets and Life and Pensions. They produce highly robust solutions with no manual programming effort.
The design and engineering are covered here.
Neither the waterfall approach, at 14% successful, nor agile development, at 42% successful, is suitable for the development of the new applications. These figures, taken from the Standish Group in their Chaos Manifesto, are an indictment on the IT industry.
The quality and economics of the engineering approach make its adoption essential.
8. Another major opportunity
The next major opportunity is the democratisation of personal finance, replacing today’s supplier-push, product-based model with a demand-pull equivalent.
9. Existing virtual community solutions
Virtual community solutions have been around since the dawn of the Web, with Uber and airbnb being recent examples. These simple niche trading platforms have established huge market valuations but can hardly be said to be of major economic or societal benefit. Addressing the fundamental IT discontinuity enables the democratisation of public services and personal finance, surely two of the most important virtual communities.
10. Where to start
HISL would advocate building out the prototypes for healthcare and taxes and benefits first as these are the most complex relationships between most individuals and the State.
When it comes to production software build and roll-out then less critical, but generic, functionality in government should be first, e.g. licensing and permits.
The democratisation of public finance and other communities would build on that platform.
Bridging the fundamental discontinuity in IT is essential. The transformation of public services is the start point. It is easy and inexpensive to start the process and quantify savings.
The sooner those charged with delivering radical transformation in government understand this, and act on it, the better. This will democratise public services, dramatically reduce the cost of IT across government and open up the opportunity for further radical redesign elsewhere.
John Alexander, HISL Limited
Any comments to: [email protected]
A PDF version of the above is available here.
© HISL 2014