November 24, 1998
To: Director, U.S. Fish and Wildlife Service
From: Owen Ambur
Subject: Our Agency's Supply Chain as a Traditional Versus Networked Organization
Ashkenas et al. (1995) distinguish traditional versus "healthy" hierarchies along four dimensions:
On the other hand, Davenport (1997) notes that data in and of itself is not enough. Specifically, he argues that "better computers and communications networks do not necessarily lead to better information environments." Decrying disproportionate focus on technology, he posits the concept of an "information ecology [that] puts how people create, distribute, understand, and use information at its center." Recognizing that changing an organization's status quo is never easy, Davenport highlights the need for "new management frameworks, incentives, and attitudes toward organizational hierarchy, complexity, and division of resources."(8) (pp. 5 & 6) In fact, his research shows that virtually no one believes their organization has a well-managed information environment. (p. 8) Finally, he notes the truism that business organizations must achieve some degree of congruence with their external environments, a truism that applies particularly to the organization's information environment. (p. 193) In other words, Davenport makes the case for networked organizations that comport with the ways in which people actually use information, not only internally but also in cooperation with external stakeholders and partners.(9)
Organizations with information systems well attuned to their stakeholders are demonstrating customer focus in action and are, thereby, enhancing their likelihood of engendering customer loyalty.(10) Highlighting the importance of customer loyalty to the bottom line profitability of firms, Reichheld (1996) says loyalty leaders enjoy certain critical advantages. The first of those is "a steady and unchanging reference point for navigation ... [which] can take a wide variety of forms, but [always] come[s] down to the same underlying principle: the creation of maximum value for customers." (p. 280) The second advantage is the "ability to align the objectives of different members of the business system."(11) The secret to alignment, he says, is partnership and the secret to partnership is compensating each partner with a shared interest in the values they help to create. (p. 286 & 287) Reichheld concludes:
Reporting on deliberations concerning whether to list the lynx as endangered, Matthews (1998) highlights an even more fundamental problem that is endemic to the performance of our mission with respect to the protection of many species: "There's not a lot of information to base management programs on."(14) He quotes a Forest Service biologist as saying: "The risk factor for the lynx includes everything at this point because we're trying to systematically find out what the problems may be... There is no silver-bullet solution. Right now, everybody's rushing for answers and we don't have them." Reinforcing the point, a State natural resources official notes: "There is nothing we can do for the lynx in Minnesota ... aside from creating programs that can't address the animal's problems."
Uncertainty and controversy are in the nature of business, particularly for those whose business is nature. When in doubt, the response of politicians has often been to throw more of the taxpayers' money at problems. However, the fact remains that we will never have sufficient money or information to eliminate all doubts, much less to pacify or pulverize the opponents of our actions. However, we can and we should do a much better job of stewarding the information, knowledge, and expertise that is at our command. And that is far from a new problem in the Internet age. Indeed, nearly a decade ago the process by which documents are reviewed and approved in our agency was formally analyzed and recommendations were made. Subsequently, in 1994 a task force was commissioned by our late Director Mollie Beattie to carry out an analysis with the following objectives:
Since neither our stakeholders nor our employees, most particularly including our leaders, are culturally ready to conduct business routinely via electronic commerce in a technologically networked environment, the issues of costs and benefits are not yet ripe for consideration in any specificity.(17) However, there is little doubt that a "Government that costs less and works better" will indeed be networked via technology. In that respect, the action/inaction of our leaders will speak for itself. If and when the cultural issues are effectively addressed, the costs will become a non-issue and the benefits will be apparent ... at least until such time as they become embedded in our supply chains, are taken for granted, and thus fade into the "wordwork" by which we add value in carrying out the important responsibilities with which we are entrusted.
Ambur, O. (1995, August 3). "Functional, Technical, and Resource Requirements for the Servicewide Document Management System: Findings of the Requirements Analysis Team, Together with Recommendations and Alternatives." U.S. Fish and Wildlife Service.
Ambur, O. (1996, May 9). "Critical Success Factors for a Collaborative Database in a Large, Geographically Dispersed Organization." University of Maryland University College. Available at: http://www.erols.com/ambur/Discuss.html
Ambur, O. (1996, November). "Needles in Haystacks: Getting to the Point of Federal Records with Document Metadata and Electronic Document Management Systems." University of Maryland University College. Available at: http://www.erols.com/ambur/Needles.html
Ambur, O. (1997, September). "Metadata or Malfeasance: Which Will It Be?" Proceedings of the IEEE Metadata Conference. Available at: http://computer.org/conferen/proceed/meta97/papers/oambur/malfea1.html
Ambur, O. (1998, July 8). "Persistence, Parallelism, and RISC: What Smart, Enterprising People and Organizations Can Learn from the Architecture of Dumb Machines." University of Maryland University College. Available at: http://www.erols.com/ambur/Persist.html
Ambur, O. (1998, October 11). "External Audit of Factors Affecting the Demand for Electronic Commerce." University of Maryland University College. Available at: http://www.erols.com/ambur/ECaudit.htm
Andel, T. (1998, June). "Chains That Set You Free: Material Handling Industry of America's Proposed Service Supply Chain." Material Handling Engineering. No. 6, Vol. 53. p. SCF3.
Ashkenas, R., Ulrich, D., Jick, T., and Herr, S. (1995). The Boundaryless Organization: Breaking the Chains of Organizational Structure. San Francisco, CA: Jossey-Bass Publishers.
Bender, K., Maruca, M., Ambur, O., Bauer, T., and Killcullen, K. (1994, November 30). "Reinventing Controlled Correspondence: A Report by the Task Force on Controlled Correspondence and the Document Surnaming Process." U.S. Fish and Wildlife Service.
Chandrasekaran, R. (1998, November 10). "Gates Made Blunt Threat to Intel, Executive Testifies." The Washington Post. p. A1
Christensen, J., Mullins, G., Danter, K., Norland, E., and Griest, D. (1998, January). "Ecosystem Approach to Fish and Wildlife Conservation." Ecological Communications Lab, School of Natural Resources, The Ohio State University. Available at: http://www.fws.gov/ecoreport/
Davenport, T. (1997). Information Ecology: Mastering the Information and Knowledge Environment. New York, NY: Oxford University Press.
Fung, V. (1998, September/October). "Fast, Global, and Entrepreneurial: Supply Chain Management, Hong Kong Style." Harvard Business Review. p. 103.
Hammer, M. (1996). Beyond Reengineering: How Process-Centered Organization is Changing Our Work and Our Lives. New York, NY: HarperCollins.
Hoffman, C. (1998, February 17). "Agencies Focus on `No Surprises' and 5-point Policy Initiative to Strengthen Endangered Species Conservation Partnerships." Joint press release by U.S. Fish and Wildlife Service and National Marine Fisheries Service. Available at: http://www.fws.gov/r9extaff/nosurp2.html
Houlder, V. (1998, November 10). "Spreading the Message Inside the Organization: IT Has Shaken Up Company Structures Just As Much As External Markets." Financial Times (London). Digital Business. p. 14.
Kehoe, L. (1998, October 29). "Agents who sift the information overload: The wealth of Data on the Internet Has Created a Role for 'Infomediaries' Able to Package It for Clients." Financial Times (London). Digital Business. p. 13.
Kenworthy, T. (1998, November 17). "Released Wolves Struggle to Survive Their Usual Predator: Man." The Washington Post. p. A3.
Matthews, M. (1998, November 16). "Case of the Missing Lynx Sparks Studies, Debate." The Washington Post. p. A3.
Moore, J. (1996). The Death of Competition: Leadership & Strategy in the Age of Business Ecosystems. New York, NY: HarperCollins. p. 82.
Osborn, C. (1998, July). "Systems for Sustainable Organizations: Emergent Strategies, Interactive Controls and Semi-formal Information." Journal of Management Studies. No. 4, Vol. 35. p. 35.
Reichheld, F. (1996) The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value. Boston, MA: Harvard Business School Press.
Sarkar, M., Butler, B., and Steinfield, C. (1998, March). "Cybermediaries in Electronic Marketspace: Toward Theory Building." Journal of Business Research. Vol. 41, No. 3.
United States Fish and Wildlife Service. Web site search page available at: http://www.fws.gov/search/index.html
1. Houlder (1998) highlights some of the contributions that information technology has made to the profound changes in the way business is conducted through such metaphors as the "virtual company" or "networked organisation"as follows:
Thus, the underlying problem is not truly lack of time; it is lack of understanding and will to implement and use the necessary IT to capture and share knowledge throughout its full life cycle. (For additional discussion of records management issues, see Ambur, 1996, November.) In terms not only of time but also service, it should be noted that "pull" technology is customer-oriented, while "push" technology is supplier-oriented. Push technology places a premium on saving time for suppliers, while the focus of pull technology is to save the customer's time.
2. While cybermediaries are capable of providing various personalized services, Sarkar et al. (1998) note:
3. Moore suggests that the networks of competencies and relationships established by management should meet four tests:
5. In theorizing about process-centered organizations, Hammer (1996) envisions "... independent process teams operating largely on their own, but with guidance of a process owner and the support of coaches." (p. 125) However, he notes that matrix management schemes - designed to achieve a multidimensional, somewhat "networked" perspective - have often created organizational chaos. (p. 128) Hammer says:
Of course, too, it should be noted that the issues with which we must deal are myriad, complex, and often highly controversial. In many cases, the requisite knowledge and expertise is quite thin, if not entirely lacking. In such circumstances it is unrealistic to think that the required values might best be added by networked generalists, as opposed to subject matter specialists directed by leaders empowered with regulatory authority.
6. Additional findings by Christensen et al. that are germane include the following:
... the third leadership lesson ... is that boundaryless mechanisms themselves are pathways to the boundarylesss organization... the best way to design [an organization] with more permeable boundaries is not for senior executives to sit at a head office and redraw organizational charts but for those same executives to pull together people from different boundary constituencies and let them loose to reshape their own destiny. (p. 337)
Kehoe (1998) reports that an important objective of a new protocol for the exchange of information between Web sites, called Information & Content Exchange (ICE), is "Internet relationship marketing". ICE proponents believe the Internet has "put customers in control by enabling buyers to access information about products, prices, vendors, and their competitors." The advocates of ICE believe the challenge for vendors is to "design a strategy that reverses these trends and injects a sustainable competitive differentiation." While that sounds like an attempt to "pull the wool over the eyes" of consumers, in fact relationships are valuable - particularly when the product is information. A proponent of ICE notes, "Instead of merely promoting products, online sellers must provide added value." Establishing the pertinent relationships between units of information is perhaps the first and foremost value to be added.
Kehoe notes that the common characteristic of "infomediaries" is that they take full advantage of information technology to gather, analyze, and redistribute information, and in the process, they create new value.
Fung (1998) says the essence of the old business model was to manage a few relationships, but now his company is managing large, complex systems - effectively customizing the value chain to meet each customer's needs. As the number of supply chain options expands, his company adds value for its customers by using information, technology, and relationships to manage the network. The company's leaders now make a "large number of small decisions instead of a small number of big ones." (With reference to large versus small decisions, see the discussion of RISC in Ambur, 1998, July 8.) However, at the same time that they are granting discretion to managers and designing an organization to maximize flexibility in responding to the whims of their customers, the corporate center runs a very tight ship with respect to financial controls and operating procedures. Fung emphasizes that in those respects they do not want "creativity or entrepreneurial behavior". The company has a standardized and fully computerized system for executing and tracking orders, and everyone uses the very same system.
8. Osborn (1998) analyzes how interactive controls and semi-formal information systems combine to increase the agility of a distributed organization to employ emergent strategies in a competitive environment. He notes that:
9. For further discussion of the use of technology to facilitate organizational communications, see Ambur (1996, May 9). For information on the current state of our organization's external environment with reference to readiness for electronic commerce, see Ambur (1998, October 11).
10. The Federal Records Act requires agencies to make and preserve records of their activities and the valuable information they possess, and the Electronic Freedom of Information Act (E-FOIA) requires agencies to make records available in electronic form. The Government Performance and Results Act (GPRA) requires Federal agencies to consult with their stakeholders in establishing goals and objectives. However, few if any agencies have addressed records management or E-FOIA requirements in their GPRA plans, much less consulted explicitly with their stakeholders concerning those requirements.
Addressing the issue of Supply Chain Flow, Andel (1998) quotes the CEO of a material handling association as saying, "Our customers are the people who consume." That is, in contemporary value chains nothing should be done simply for purposes of commerce between suppliers. Regardless of whether the product is physical or informational, suppliers are all in the business of channeling flows to the ultimate consumer. What is being sold and what suppliers are being compensated for is service. Andel cites Commerce Department reports showing that the service sector is the largest and most rapidly growing segment of the U.S. economy. In the decade from 1984 to 1994, it grew by nearly half (46%) while other industries grew only a tenth as much (4.6%). Moreover, even in non-service industries, more than 75 percent of the employees are engaged in service activities, much of which is related to information technology. Finally, Andel references information from the National Institutes of Standards and Technology that shows a return of $1.96 per year on a dollar invested, while the same dollar invested in non-IT capital yields only eleven cents ($0.11).
In light of their statutory responsibilities to the American public, these are facts and principles the leaders of Federal agencies would do well to keep in mind.
11. Excessive, monopolistic pressure for "alignment" has been alleged by a high ranking official of Intel in the Government's anti-trust litigation against Microsoft. (Chandrasekaran)
12. Sarkar et al. point out that transaction cost models characterize two types of costs - production costs and governance costs. Production costs are defined as those necessary to complete the desired activity, while governance costs are those necessary to coordinate the activity and control the entity performing it. Organizations should choose structures and processes to minimize the sum of those two costs. That principle also applies when the activity itself is governance (e.g., the functions of governmental agencies) and value to be added in the supply chain in information.
13. Kenworthy (1998) reports a fairly clear-cut example of the tragedy of the commons with respect to our efforts to reintroduce Mexican wolves into the Apache-Sitgreaves National Forest in eastern Arizona. Although the wolves have done well adjusting to release from captivity, only three remain among the 11 originally introduced. As many as five have been shot in "a concerted, clandestine effort to wipe out the first population of Mexican wolves to live outside of zoos in the United States since 1970." Public acceptance has been difficult to achieve since the wolves were released in an active ranching community. Ranchers are already resentful of reductions in Federal grazing permits in order to protect endangered species, and the Apache-Sitgreaves National Forest is teaming with hunters at this time of year.
Secretary of the Interior Babbitt noted the underlying problem: "a century-long conflict between ranchers who believe they have an entitlement to Federal land and the fact the public lands are owned by the American people with other priorities..." In such circumstances, short of compensating the ranchers for entitlements they do not possess, the potential near-term benefits of improved communication and networking of the "supply chain" must be kept in realistic perspective. In the meantime, until local attitudes can be changed, the agency is offering rewards of up to $10,000 for information leading to conviction of the perpetrators, and the killings of the wolves carry penalties of up to a year in prison and a fine of $100,000 for violation of the Endangered Species Act. If there is a better alternative, it is not apparent.
14. Samuelson (1998) observes that oversupplies of raw materials and commodities have led to falling prices and crisis conditions in exporting countries. He counsels that the next big pitfall for the world economy is a glut of basic industrial goods, and that the problem is moving up the supply chain as growing numbers of industries face overcapacity. Contrast that with the dearth of raw and more highly processed information needed in the value chain for protection of the lynx as well as myriad other species threatened with extinction by the acts of mankind. Indeed, the untapped potential demand for information on the natural world is unlimited, constrained only by our imagination as well as by time and the resolve to pursue our wishes and dreams. As the shift to information-based economies accelerates, perhaps the most important missing ingredient in the human value chain is knowledge of the new paradigm(s) needed to allocate wealth among people, particularly those who have yet to share in the glut of physical resources.
15. The surnaming task force's recommendation parallels one of the several theorems postulated by Sarkar et al., as follows:
16. The importance of documents is often ignored or even belittled - as if they were merely nettlesome artifacts of, or even impediments to, more productive outputs and outcomes. However, whether they are called "pages" (as on the Web) or "views" (as in the display of subsets of the data in databases), documents nevertheless remain both the primary repository as well as the universal human interface to knowledge. Of course, to a large degree, this is a matter of semantics. To most people, the word "document" means text and perhaps images on paper. Computer programmers may be more comfortable with the term "object" - as in data or information object.
However, if we're serious about paying more than lip service to a customer-focused approach to service and the supply chain, it is the suppliers who should orient themselves toward service to the customers, rather than expecting the average person to accommodate a more technically oriented view of his or her world. In that world, documents still reign. And regardless of what they may or may not be called in the cultures of the future, the underlying functional requirement will forevermore remain the same - to establish an unalterable and relatively unambiguous snapshot of the state of someone's view of a segment of the totality of the knowledge of mankind at a particular moment.
How long each document should be retained, who should have access to it, and by what means are the subjects of records management, and the means are the focus of current consternation in light of the rapid advances in technology and use of electronic means to generate and process information. Paper just doesn't cut it anymore, and E-mail is a stage of immaturity through which organizations must pass in order to begin to manage important, business-quality information effectively and efficiently.
17. The cost of implementing a Servicewide electronic document management system (FWS EDMS) was estimated in 1995 at about $2.3 million, with annually recurring costs of about $200,000. The projected benefits and thus the benefit/cost ratio were not estimated. However, the amount of time the system would need to save the average employee in order to justify its cost was estimated to be less than 1 percent (.008) of their working hours. For senior executives, the required time savings was estimated at as little as three-tenths of a percent (.003). Those estimates address only the savings resulting from the needless waste of time that might be avoided while looking for and sharing information. They do not include any estimate of the positive benefits to be gained in terms of improved output, timeliness, and effectiveness.
At present the agency has a wide-area network, an intranet, and a plethora of Web servers. Various versions of cc:Mail are being upgraded to Lotus Notes Mail (FWS Mail). In many respects, our organization is already "networked" and the incremental cost of additional applications may be relatively small. However, with the exception of FWS Mail and fledgling efforts to better coordinate our Web offerings, there are presently no technology applications that are commonly recognized, much less regularly and routinely used to network our employees and stakeholders. Most particularly, we are lacking: a) an EDMS in which to manage and share our important business-quality information records, and b) an electronic forms (E-forms) application whereby employees and stakeholders can supply any and all highly structured data needed or requested of them.
To be sure, charismatic leaders (as well as employees who are neither charismatic nor leaders) are pursuing myriad stovepipe applications in efforts to address various facets of the underlying requirements within their own spheres of influence. Moreover, the Service Information Technology Architecture (SITA) is beginning to bring some sense of focus on the need for interoperability among the various IT projects that are being planned, developed, and/or implemented. However, few would argue that we have yet come anywhere close either to:
18. This is one of six signs that Ashkenas et al. identify as warning of an unhealthy hierarchy, as follows: