Every revolution throughout history has been the result of an evolution — evolving thoughts, needs and capabilities. The move to services thinking is no different.
In today’s world, services oriented architecture (SOA) proposes more reusability across enterprises, which decreases development effort, time, and cost. These benefits can help organizations as they face budget shortfalls, are required to implement new systems and policies quickly, undergo more scrutiny, and are pushed to be more efficient. However, this concept is not just for software anymore. The same concept may be applied to business processes within organizations to gain efficiencies, decrease costs, and increase flexibility.
SOA has grown to become part of something much larger, something that encompasses both technology and business. This new overarching concept is services thinking (ST), which is a framework for solving business problems by focusing on the capabilities of each part of the organization; cutting across business processes, organizational charts, and technology solutions. Similar to applications being comprised of multiple components, business processes can be comprised of multiple finer-grained services.
Turning services thinking into reality for organizations requires two components: 1) a framework and 2) a set of practical steps. A framework provides reference and context in categorizing and modeling services. A set of practical steps enables organizations to define and manage the services within the framework.
The services hierarchy framework
To realize the benefits of ST, companies and departments need to think of their business operations as a set of coarse-grained and fine-grained services. The following framework is used to transform an organization’s offerings into a set of reusable services. This particular example, used to provide a concrete illustration, is one for a very process-intensive and complicated organization: a state government Health and Human Services (HHS) agency.
The hierarchy of service layers are a gradual shift from coarse-grained (Levels 0 and 1) to fine-grained services (Levels 3 and 4). Fine-grained services are agnostic to the programs, thus increasing the potential of cross-enterprise enablement through reuse of these building blocks. The figure below shows example services in each level.
Level 0 Services (program area): These are the highest level of coarse-grained services scoped at the program level and include all the essential services. In HHS, this level would include services such as Medicare/Medicaid, disease control and prevention services, and human services for families and children.
Level 1 Services (business area): Level 1 services expand upon the Level 0 services. These services are in the business area. Several business areas may belong to a program area. To continue with the above example, Level 1 services may include child support enforcement, grants, compensation, and criminal justice.
Level 2 Services (business process): These services are based on key business processes that must be deployed to support a business area. Each business area will have one or many business processes to support its goals and objectives. Continuing with the example above, some of these Level 2 services include case intake, interstate referrals, and paternity establishment.
Level 3 Services (entity): Services at Level 3 are based on business entities that are critical to business processes. Entities are similar to business objects and either request a service or provide a service. However, these entities also encapsulate data and operations, and therefore, need to be invoked in order for some other services to make use of data or operations owned by them. Examples of entity services include case, order, and employer.
Level 4 Services (utility): These are the lowest-level, fine-grained services in the hierarchy and help in performing activities that need processing capabilities. These are agnostic to the business process and can be used in any business context. Examples of such fine-grained services include event monitoring, document processing, and notifications.
Many organizations have identified services at Level 0 and Level 1. However, to maximize the benefits of services thinking, they should also define services in Levels 2, 3, and 4. It requires practical steps in identifying, developing and managing reusable, shared services.
Realizing the benefits is not instantaneous. Using the services hierarchy framework as a reference, organizations can begin the journey with some very tangible and practical steps. Fig. 2 below depicts steps that organizations can take immediately. While Step 1 should be the first step, Steps 2 – 4 may occur in parallel depending on the organization and its resources.
Step 1: Identify Vision, Goals, Objectives, and Measures of Success – Organizations must begin with the end in mind. They must understand what it is they wish to achieve. Develop a vision of what the organization will look like when it becomes a services-centric enterprise. The vision will drive the goals and objectives.
Organizations must also identify the measures for success tied to goals and objectives. Defining what constitutes success will allow the leadership and the stakeholder to declare success throughout the life of the process. Table 1 contains a sample vision, goals and measures taken from an organization embarking on a services thinking path.
Step 2: Socialize the Idea – To enable success, the whole organization must believe in the cause. This begins first by obtaining strong and vocal executive support. Along with goals and objectives, executive support is key in overcoming challenges along the way. In addition, begin communicating the services message to the organization. Help it understand and accept the vision, the benefits, and the changes it will be making.
Step 3: Implement a Governance Structure – While the sharing and reuse of services across an enterprise has benefits, it leads to potential conflicts between different organizations due to needs and priorities of the individual organizations. In order to manage the needs of various organizations as it relates to the identification and availability of services, it becomes imperative to create a governance structure and processes to support it.
Step 4: Identify Opportunities – Using the services hierarchy framework, begin by assessing people, processes, and technologies. This assessment accomplishes two distinct and important purposes. First, it creates a baseline to provide a common understanding of the current and future people, process, and technology conditions. The second purpose is to expand the level of participation and buy-in by the staff. The assessment will bring the organization together and enable them to drive towards the new state.
From this assessment an organization will better understand the gaps between where they are and where they want to be. When the assessment exercise is completed for each program, the identified gaps can be categorized and prioritized according to criteria such as cost, benefits, and alignment to vision, goals, and objectives.
It is important to understand that not all opportunities should be pursued.
While becoming a services thinking organization does not occur quickly, the benefits address the demands of today’s business environment: improved efficiency, increased flexibility and exceeding expectations. To achieve this there must be an investment of time, and resources. With the guidance of a framework and some practical steps, every entity can begin its journey today.
Kara Harris is a principal with 10 years of experience in the Public Sector practice with Deloitte Consulting. She practices in the HHS segment with a specialty in the strategy, design, and development of service integration solutions.
China Widener is a senior manager with over 18 years experience in the Public Sector, eight of which was spent leading a variety of statewide HHS programs and operations. She has led business process re-engineering efforts utilizing a services thinking approach for state child support programs and co-developed a public sector service delivery assessment methodology.
Newton Wong is a senior manager with over 16 years of management and business integration consulting experience. Newton has focused 12 of those years serving clients in the public sector. His expertise is in leading teams to deliver large-scale solutions (including technology improvements and the associated organizational and process change) for complex business problems.