Reason
for republishing
I wrote
this article in May 2014. The recent problems at the UWV (Employee Insurance
Agency) with the WIA (Work and Income Act) made me decide to look up the text
again after ten years. After rereading, there seems to be sufficient reason to
republish the article, although some examples may be somewhat dated. But: Has
much changed in reality?
Introduction
We live in
a knowledge economy—or so it is widely claimed. But why don’t we notice it? Old
economy habits still dominate our actions. Power positions based on
information—or more precisely, the concealment of information from end
users—are desperately maintained, even when it leads to disasters like the
recent credit crisis.
Disturbing
symptoms
Some time
ago, I heard a radio interview with an entrepreneur who mentioned that his
local government believed he needed 24 permits for a new project. It turned out
that more than 100 were required. I don’t even want to think about how many
forms this entrepreneur ultimately had to fill out, or how often he had to
submit the same data. It was probably a lot.
Suppose
this entrepreneur encounters a problem while searching online for the necessary
permits and decides to call an internet helpdesk. In the best case, after
repeatedly calling and hours of waiting, he might be lucky enough to get
transferred to the right department and eventually receive the correct answer.
Why can’t that happen the first time? Apparently, the required knowledge
existed within the provider, just not in the right place.
Or try
booking a trip online, looking for a holiday destination that accommodates both
a disabled child and a pet. Chances are that the necessary information is
somewhere within the travel company’s systems or staff, but they fail to offer
it in a user-friendly manner. The same can be said for insurance providers and
many other service companies.
Effects
on businesses If
we, as customers, are served so poorly, it’s almost certain that the employees
of these businesses face similar challenges. There are countless examples of
people leaving their jobs because they were stuck with routine tasks below
their capabilities, as well as examples of employees being given tasks that
exceeded their skills, with little support but full responsibility. And what
about companies where the marketing department or product manager wants to
quickly launch a new product but has to wait for the next release of the IT
system?
Is this
really an economy where knowledge is the driving factor? It certainly doesn’t
seem like it.
What is
the Knowledge Economy?
In a
knowledge economy, knowledge is the driving factor. But purists might argue
that the knowledge economy is limited to the domain of research and
development, where innovation takes place, benefiting the whole country. Is
that really the case? What about the application of knowledge? Isn’t there
knowledge application in nearly all interactions between service providers and
consumers? And wouldn’t there be significant improvements in almost every
situation where services currently fail? Not just in customer and employee
satisfaction but also in productivity and product innovation. Wouldn’t our
country benefit from that? Shouldn't we be investing in these areas, especially
during this economic crisis?
Everyone
Is expected to apply the law
And what
about the government? Isn’t its domain also highly knowledge-intensive? The
legal principle that "everyone is expected to know the law"
doesn’t just apply to citizens like you and me but also to civil servants.
Given the continuous changes in laws and regulations, it would be better to
adjust this rule to "everyone is expected to be able to apply the law,
and every legislator must make this possible." That would be a real
challenge for the knowledge economy! If the government could take on this challenge,
it would not only give the economy a significant boost but also greatly improve
its relationship with the public.
The same
applies to companies that deal with many regulations and often add their own
rules on top of that.
This
brings us to the inevitable question: Why do we make so little use of knowledge
and its application?
Is IT to
blame?
It’s
tempting to blame IT, and partly, that’s justified. IT professionals initially
automated routine tasks and activities, which worked well with the available
technology. Almost all valuable information has been digitized. Now, we’re
automating more knowledge-intensive tasks and activities, and that’s where
things go wrong.
Knowledge-intensive
tasks are often complex, involving many variations, combinations, and decision
points, and are subject to frequent changes. Take the automation at the tax
authorities, for instance. New tasks lead to new processes, system adjustments,
and new systems. Known rules, such as the definition of "liable
employer" suddenly mean something else in a different domain. And to make
matters worse, the rules these systems must follow can be changed at any moment
by the legislature. Traditional IT approaches simply can’t keep up with this.
Causes
of IT project failures
We argue
that many large IT project failures, especially in government, are partly due
to attempts to automate knowledge-intensive processes. The approaches and
solutions used in the early days of our information society are simply
inadequate for these more complex processes. Strikingly, this aspect is almost
always overlooked in discussions on the topic.
For
example, in the recent problems with the WIA (Work and Income Act) at the UWV
(Employee Insurance Agency), the following was reported in Computable:
According
to the UWV, legislative changes are the cause of the WIA debacle. "To
handle these changes properly, we need very complex IT systems that must also
be adapted quickly," said the organization in a written statement.
"Everything that The Hague decides, we have to translate into IT
changes," says the UWV spokesperson. One example mentioned is the
political decision to increase the WIA benefit from 70% to 75%. "This
leads to enormous changes in the system. As a result, many people may no longer
qualify for various allowances."
This is a
classic example of attempting to encode knowledge into software. When the rules
suddenly changed, the UWV was in trouble.
For
automating tasks in a complex and dynamic environment that is
knowledge-intensive and subject to frequent changes, we need different
solutions and approaches. IT will still play a role, but more as a tool to
facilitate change, rather than a way to freeze the status quo in systems.
Do we realize
that we’re living in a knowledge economy? If so, we clearly haven’t fully
grasped its impact.
The battle
for attention
From
personal experience, we know that we have become increasingly critical of the
quality of services provided to us. We’ve grown alongside the information
society, becoming more vocal and demanding. We expect personalized information
and services, at the moment we need them, in the format that suits us. We make
providers compete for our time and attention. If we don’t quickly find the
right product or answer, we simply move on to the next provider. The era of the
empowered user has arrived, and the provider must follow suit.
Loss of control
This
situation puts the provider in a tough spot. They need to retain their
employees, as knowledge has become "mobile," walking out the door
with the knowledge worker. Managers can no longer rely on the old
command-and-control structures. Knowledge workers have become assertive and
mobile, collaborating in teams with changing compositions. Naturally, they want
to be well-supported in their work.
At the same
time, providers must comply with more rules and conditions and be accountable
for them, leading to the introduction of numerous internal procedures and
agreements that, in turn, often demotivate employees. The same applies to their
partners and customers.
The world
around us is becoming more complex and changing faster. Providers increasingly
feel like victims of these changes. They are losing control. Maintaining
insight and oversight has become nearly a full-time job. Adapting to change has
become reactive, rather than a deliberate proactive effort. This is disastrous
for long-term competitiveness and innovation.
Are there
solutions?
Yes, there
certainly are solutions. However, they require us to look at our environment
through a different lens—through the lens of knowledge. By doing so, we can
identify those tasks, activities, and processes that are knowledge-intensive
and where the knowledge itself often changes. These are where we should focus
our attention and actions.
What should
we aim to achieve?
Learning
from Others
Let’s take
a look at the automotive industry as an example. Initially, the production
process was a series of sequential steps with many specialized functions.
Everything was rigidly coded into rules, sometimes physically represented by
molds or standard options, such as the available colors ("we offer all
colors as long as they’re black").
The
introduction of robots brought a fundamental change. A robot can be used at
multiple points in the process and can perform several functions (e.g.,
assembly, painting, etc.). The rules can be adjusted relatively easily.
Variants, such as different wheels, upholstery, and even different car brands
and types, can be handled simultaneously according to the planning and customer
preferences. The customer has increasingly become part of the process, able to
configure their own model and have it custom-made.
Rule management
What we see
in this example is a balance between standardization and customization and the
decoupling of processes, functions, and content (rules). Now, let’s translate
this to knowledge-intensive applications. What happens when we extract the key
rules governing a process? Take the process of issuing permits, for example.
Everything in that process revolves around rules: what requires a permit, how
the application should be made, how it’s assessed, how decisions are
communicated, and how control is exercised.
If we
manage these rules separately, what remains is a simple process consisting of a
few steps: receive → gather information → assess → decide → announce → issue.
This process is unlikely to change often. What does change frequently are the
rules. Therefore, we need an environment where these rules can be managed and
controlled, where we can adjust them and know the impact of those changes.
These changes should be made by the knowledge owners themselves.
You might
say, "That’s fine, but how do I know when a rule needs to change, and how
do I apply it to my service?" The answer to the first question is obvious:
a rule changes when the law changes or when the organization decides to alter
it. It’s wise to establish a link between the source of the change and the
implemented changes, so you can always trace which decision led to a particular
adjustment and know what will be affected if another change occurs. However,
applying rules in processes is a more complicated matter.
Context
of the user
Earlier, we
complained about poor service delivery. There is a gap between what the
provider delivers and what we, as customers, expect. It boils down to the fact
that we expect a provider to offer services in terms we understand, and
tailored to our specific situation and needs.
For
example, we don’t want to be bombarded with difficult legal or business jargon.
It’s fine if the provider uses that jargon within their domain, but in their
communication with us, it should be translated into understandable terms. If
we’re proud new parents, we expect to receive insurance products suitable for a
family with a baby and not be bothered with irrelevant offers. The same applies
to the permit example: based on our postal code, the municipality should be
able to tell us which regulations apply to our building if we want to renovate.
We don't need to see the rules that don’t apply to us.
The
conclusion is clear: providers must expand their rule domain with the context
of the user. They need to be able to bridge the gap between the rules governing
their services and the rules that describe the customer’s situation.
How do you
achieve this in a way that is practical, without creating unnecessary overhead
or adding dependency on the IT organization? This can be done by using what is
called ‘semantic technology’. Due to the focus on Web 2.0 in the literature,
many people are unaware of the possibilities that already exist thanks to
semantic technology. Beneath the surface, this Web 3.0 wave is growing in power
and volume. The Semantic Wave report by Mills Davis
(http://www.project10x.com/) provides striking examples of this.
Standardization
of functions
It sounds
tempting, right? Simple processes that change little and control over the rules
that make things difficult for us, as well as control over the customer's
context. But how do you apply those rules in a process? After all, that’s what
it’s all about in the end, isn’t it?
Indeed, and
that brings us to the second gap in companies’ and organizations’ knowledge
infrastructure. It’s not enough to just describe the customer’s situation and
your own rules.
Let’s
return to our automotive industry example, where functions were also separated.
But what are the functions in a process where knowledge is applied?
Essentially, these are the activities you perform to make a choice or decision.
So, comparing two products, choosing between different options, calculating
something, checking whether all necessary steps have been completed,
determining to which category something belongs, filling out a form, scheduling
an activity, etc.
Does it
strike you that these are all standard functions that can be applied to many
different processes? Whether it’s about applying for and granting a permit in
government or offering and buying insurance, these activities are universal.
Instrumentalizing
knowledge
The last
link we need is the development of standard tools for these functions. For
example, a decision tree tool for choosing between options, or a dynamic form
that only asks for what is necessary based on rules and pre-fills information
already known. Naturally, this should be connected to administrative systems,
so we’re no longer burdened with providing data the provider already has.
Advantages
Both you
and I, as customers, can use these tools to decide whether to submit an
application or order a product. Employees of the provider can also use the
tools to perform their tasks. This means that new employees can be deployed
more quickly, and existing employees can handle a wider variety of tasks. Since
we, as customers, have already made many decisions ourselves, the entire
process will proceed more quickly. Everyone benefits from this. Moreover, the
choices we all make are based on the same rules, giving the provider the
opportunity to demonstrate afterward which rule was used to make a decision.
This allows for accountability.
A toolkit
for applying knowledge
Given all
these advantages, doesn’t this mean that, in a knowledge economy, we should not
only divide and manage our rules into components but also the functions,
supporting tools, and processes? This would give us a kind of toolkit, enabling
us to create new combinations at any time. That offers interesting
possibilities for managing and applying knowledge.
Technically,
all of this is already possible. There is even a Dutch company called ‘Be
Informed’ (www.beinformed.nl) that successfully offers such a toolkit. Major IT
service providers, such as Ordina and Accenture, are already using it in their
projects.
Do we really
want it?
The crucial
question is whether we’re ready to accept that we live in a knowledge economy
and that we must start looking at our environment through the knowledge lens.
Only when I no longer have to be frustrated when selecting a product, calling a
helpdesk, or applying for a permit will I know that we’re truly on the right
path.
Thei Geurts
This
article was written in a personal capacity
