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FEDERAL
SECTOR REPORT
March 2006
IN THIS ISSUE
Value of Design
Link of the Month: Design Museum
Consulting Services
Home Page
(c) 2006 by the P2C2 Group, Inc.
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THE ECONOMIC VALUE OF DESIGN
IN FEDERAL INFORMATION TECHNOLOGY
Design and innovation need
more attention in the U.S. Government's approach
to information technology (IT). Guidance documents about the
Federal Enterprise Architecture and IT investment management largely
ignore design. This is a serious oversight, because
the quality of design impacts the Return on Investment of the
Federal investment in IT, which has a requested budget level of $64
billion in Fiscal Year 2007.
Imagine building a baseball
stadium in Washington for the Nationals without a discussion of
design! Yet design is seldom a defined priority in
Federal spending for IT. Not only does this make life more difficult
for users (and IT support personnel) of many government systems,
but ignoring design also misses out on the business
opportunity to leverage fully the billions of dollars of potential
value.
Design
Success in the Private Sector
Design is a crucial source
of value in the private sector. No one needs to look further than the
ubiquitous iPod. Apple Computer Corporation estimates 2006 profits of
approximately $2.15 billion, in large part because of the brilliantly
designed iPoD and other innovative products. The $56.2 billion of
market capitalization value (3/15/2006) enjoyed by Apple's shareholders
is due largely to the fact that this is--and always has been--a design
and innovation company.
The value of design is more
than slick consumer products. Amazon.com has extended good design to
supply chain management, along with sophisticated search, database, and
customer relationship management tools. The combination has so far
enabled the company to grow to $8.4 billion in sales on paper-thin
margins. It has become the 21st century version of an
encyclopedic department store, where customers can shop for pet flea
medication, lighting, and kitchen knives in addition to books and DVDs.
Good design is hard to
define, but you know it when you experience it. Design establishes an
emotional bond. It is pleasing to the user and often astoundingly
simple. Take the Google web interface for example. The basic design is
starkly plain and utilitarian. The sophisticated technology powering
the search engine is invisible to users. It simply produces results
quickly, efficiently, and happily.
What should good design do
in Federal IT? I'd love to hear your thoughts, and readers are
invited to comment. But here's my starter list:
- Accomplishes something
valuable with minimal fuss or bother
- Is pleasing or fun to
experience
- Provides benefits
and rewards for users right away
- Fits easily into work
styles or lifestyles
- Is affordable and worth the
cost/effort
- Becomes essential and often
addictive
- Provides a positive return
on investment for those paying for it.
Economic Value
Does design have value?
Consider the Research In Motion's BlackBerry settlement of $612.5
million for patent issues. Other designs are worth far more, though the
innovator does not always reap the benefits. Xerox PARC pioneered the
graphical users interface and mouse back during the 1970s, but it took
Apple and eventually Microsoft to reap the billions of dollars in
economic value.
The Defense Advanced
Research Projects Agency (DARPA) was the grandfather of the Internet,
and could we arguably conjecture that this innovation may have an
ultimate global economic value of a trillion dollars?
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Cost Benefits
Analysis
So how do you justify excellence in design and
innovation in Federal IT capital investment budgets? You need to
justify it using alternatives analysis and cost benefits analysis, or
another value measuring methodology. Here are examples of the types of
thinking that might help when seeking to demonstrate the financial
value of investments in design:
- Speed the change management
process by making the replacement system more pleasing to use
- Save citizen time during
required, OMB-sanctioned Information Collections
- Increase the speed of
federal response to natural disasters, potentially reducing damage and
economic dislocation by billions of dollars
- Reduce error rates in
Medicare/Medicaid payments
- Increase the number of
taxpayers filing electronic returns
- Reduce the cost of Help
Desk operations by improving the design of automated solutions
- Eliminate unnecessary
inventories and warehousing through well designed supply chain
management.
The Essence of
Innovation
"Genius hits a target no
one else can see," according to philosopher Arthur Schopenhauer. Design
requires a leap of faith, which may be a disquieting notion to
organizations that are risk averse. You won't find innovation simply by
surveying stakeholders or conducting a requirements analysis. People
simply don't know they need blockbuster change until they experience
the invention.
- Who could guess we would
want or need transistors or digital photography or voice over IP
telephony?
- Who a century ago would
guess the impact of Frank Lloyd Wright on architecture?
Only a few innovative ideas
thrive and succeed. Others wither and fade, or they are choked out by
alternatives. That is the risk, and the only way to grow a few
blockbuster designs is to manage (and weed) an entire hothouse of
budding ideas, much the way DARPA did historically. In other words, you
need a portfolio management process for overseeing your investments in
design and innovation.
Valuing Innovators
and Designers
Good design is based on
talent and a touch of genius. It can't be manufactured by directives,
position descriptions, certifications, CMM and ISO processes, or
Federal compliance paperwork.
If you want to achieve
excellence and gain the economic value of design, you will need
talented individuals who have the time and latitude to invent. They
will need to work with managers who are focused on the business issues
and return on investment--but they need the freedom to work outside the
box, to challenge assumptions, and to redefine.
Much of the talent already exists within the Federal Sector.
I recently observed a group of Federal employees and contractors
toiling into the wee hours, preparing a demo of a breakthrough
solution. But these heroic efforts need to be acknowledged, organized,
supported, and rewarded on a Federal-wide basis.
The United States spends
approximately 2.7% of its gross domestic product in Research and
Development, according to a recent report by the United Nations
Conference on Trade and Development. This perhaps would a realistic
target for innovation, design, and other R&D in Federal IT. That
would yield $1.7 billion for FY 2007. While only some of the investment
will yield blockbuster innovations, the potential return on investment
to agencies, government employees, contractors, and taxpayers is huge.
Bottom Line
Federal Enterprise
Architecture and IT capital investments will be lackluster and miss out
on significant economic value unless more emphasis is placed on
excellence in design and innovation.
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LINK OF THE MONTH: DESIGN MUSEUM
One of the online joys is the Design Museum, which can be accessed at http://www.designmuseum.org/. Its home base is London,
where it is "concerned as much with the future as the past." The museum
seeks to capture "the excitement of design's evolution, ingenuity and
inspiration through the twentieth and twenty-first centuries." It
includes a FlashTM based presentation and provides examples
of digital design.
The Design Museum's first
Designer of the Year prize went to Jonathan Ive, senior vice president
of design at Apple Computer Corporation. According to the Design
Museum, Jonathan combines "fanatical care beyond the obvious stuff"
with relentless experiments into tools, materials and production
processes. He and his design team have developed the iMac, iBook, Cube,
Powerbook G4, and iPod. He previously worked for a London-based
consulting firm where he designed a wide range of products including
power tools and wash basins.
CONTRACT VEHICLES
The P2C2 Group, Inc. is a
leading independent management consulting firm serving the federal
sector. It is widely accessible through world-class prime contractors,
GSA schedules and other multiple-award contracts, and 8(a) firms. Call
Jim Kendrick at 301-942-7985 to discuss vehicles appropriate to your
agency.
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HOME PAGE
One of our great pleasures
over the past few months has been supporting a comprehensive technology
modernization solution for a Federal enterprise. It has encompassed
strategic planning, the complete system development cycle, capital
planning documentation, information security, acquisition planning, and
the Exhibit 300. We've had an opportunity to work with a cross-section
of stakeholders and enterprise leadership, and the potential for
leveraging mission results for the organization is outstanding.
Elsewhere, we have been busy with alternatives analysis and financial
modeling, CPIC training, IV&V of Exhibit 300 business cases, and
collaboration about case management systems. In my "free time," I'm
preparing a presentation on agency-wide implementation of EVMS policy.
Today's business and work environment is a pleasure. The P2C2 Group is
able to operate as a network, combining its core consulting activities
with additional independent consultants and teaming partners with
specialized capabilities. Telecommunications keeps us in ongoing
contact with our customers, including those located hundreds or
thousands of miles away, and we're thinking about adding collaboration
tools and video conferencing to leverage this environment even more.
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The P2C2 Group, Inc.
4101 Denfeld Avenue | Kensington, MD 20895
Point of Contact: Jim Kendrick, President
e-mail: kendrick@p2c2group.com
phone: 301-942-7985 | fax: 301-942-7986 |
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