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Key ingredients of digital service delivery? Part 2

In the first part of this blog I outlined many capabilities of the reference model that must be followed to vet out any digital project. In this second part I will now outline the remaining but a critical capability of this reference model.

Accountability – 

A digital project will not be successful unless appropriate accountability is assigned to make decisions and clear hurdles. You must identify one or few individuals and assign them accountability for making the project successful. This should include authority to:

  1. Define requirements : 

Accountable for defining requirements of various processes and procedures to be implemented by the digital service. 

  1. Facilitate adoption : 

Accountable for adoption of the delivered digital service across the organization. 

  1. Manage operations : 

Accountable for managing day-to-day operations of the digital service after it is deployed. This role is also accountable for ensuring that the digital service is following your organization’s digital asset operations strategy. If such a strategy does not exist then one should be created as the first step. This strategy at minimum should address following areas –

 Infrastructure Operations – 

Where should the needed hardware reside? The main choices are – 

(a) Cloud : You can choose between cloud services offered by private organizations such as Google, Amazon or Microsoft; or government organizations such as cloud services offered by NIC or other branches of the government. NIC or government cloud options are relatively slower and increase project timelines. Financially this would impact your operational budget (opex) as these services are subscription based resulting in monthly charges. 

(b) In-House : This option is suitable if you have an internal organization with hardware, networking and security engineering talent that can manage a data center of your own. Financially this would impact your capital budget (capex) as new hardware purchases will be accounted as capitalized assets resulting in depreciation expense in future years. 

Recommendation : Private cloud providers are recommended as they not only employ latest enhancements but also are easy and quick to deploy reducing project delivery times. Also, this option is suitable if you don’t have experienced staff to manage infrastructure and network operations.

Software Licensing 

What should be the licensing terms for the digital service software being purchased? Here the main choices are – 

(a) Perpetual License with Annual maintenance – Under this option you get a license from the vendor to use its software, executables only without source code, for a one time fee and annual maintenance to be paid annually every year. The annual maintenance requires the vendor to fix any issues in their software. However new features and enhancements desired by you are to be paid separately. If you stop paying annual maintenance then you still have the rights to continue to use the software however the vendor will not fix any issues that you encounter while continuing to use the software. License cost is accounted under your capital (capex) budget while maintenance charges are booked as operating expenses (opex).

(b) Subscription – Under this option you get to use vendor’s software, executables only without source code, for a monthly subscription fee that is made contingent on value drivers that this software is enabling for your organization. For example the passport service can be subscribed by number of passports processed. Similarly the driving license service can be subscribed by number of issued driver licenses. You should keep in mind that the moment you stop paying subscription fees you lose the rights to use the software as well. Therefore, you should always include a clause for the vendor to deliver your data that is being managed in a subscription back to you in case you decide to stop subscription. Subscription costs are accounted for in the operational (opex) budget.

Recommendation

– No matter which licensing option you choose, you should always include a clause to get the source code from the vendor in case the vendor decides to unjustly increase AMC costs, stops support or it goes out of business.

– Subscription based licensing is recommended because you incur low startup costs that saves you from investing huge amounts of money while you are still assessing viability of ideas. You should include a clause to convert subscription based licensing to perpetual license later if you decide to do that. This option is also preferable if you don’t have experienced software operation staff in your organization.

 Software as a Service (SaaS) 

Under this option the vendor provides both infrastructure and software as a bundle. Vendor software is deployed on infrastructure in a cloud of the vendor’s choosing. SaaS services are only available on subscription basis and affect your operational (opex) budget. 

Recommendation : If this option is available then this is the best option to choose if you don’t have experienced staff to manage infrastructure and software operations.

 Scalability

In general you will never be sure of exactly how much load your digital service has to bear in the future. If your digital service is wildly successful then the load might be huge. This creates uncertainty in terms of how much infrastructure must be deployed to adequately handle the workload. Therefore it is absolutely critical and you must demand that your digital service is able to scale as the number of users and requests handled by the digital service changes, both increase and decrease. There are many scaling options available 

(a) On-Demand 

The digital service should be designed in such a way that infrastructure should adjust itself, either increase or decrease, according to the load on the system. This is the most cost effective option as you will only pay for infrastructure that is needed. However, this is also most expensive to build as well. 

(b) Self-Managed 

Under this option the digital service starts with a baseline infrastructure and as more load is experienced by the service, additional infrastructure is added manually to accommodate the load. This means that the digital service is designed in scalable fashion and will scale as more infrastructure is added. However this increase is not automatic and must be initiated manually by the administrator by adding or removing infrastructure.

Recommendation : Self-Managed is the recommended option because this allows for scaling without higher costs. On-demand scaling options should be avoided unless your hardware footprint is large enough to realize significant savings. 

 Operational Support 

Once the software is installed and ready to use, a core team from your organization trained in the use of the software must be in place to support the daily operations of digital service. The scope of this team should include training of users in the organization, system administration like adding and removing user’s access, granting roles to users etc. This aspect of planning is almost always forgotten in digital projects resulting in problems during the adoption phase. 

Recommendation : You should plan to include operational support related responsibilities for some period (3-6 months) in the vendor scope as part of the agreement with them. 

In the end, I would like to acknowledge the fact that reading and understanding this model might have been a bit overwhelming. And if it is then don’t panic or give up. After all I have spent more than 25 years in this field and it still eludes me sometimes. My recommendation is that you should use it as a cheatsheet to consult when examining viability of digital proposals in front of you. This will help you to not only come across as knowledgeable but also prevent scrupulous service providers from handing you a rough deal. 

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Disclaimer

Views expressed above are the author’s own.



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