March 2005

Making India globally competitive

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Six sigma e-Governance: Strategy, technology and execution

Recent reports published by the United Nations and the International Institute for Management Development (IMD), indicate that India is 34th among all the nations in the world in terms of competitiveness – far behind USA, Singapore, China, Japan and many Western European countries. In this three part essay, this writer would review why India needs to be globally competitive, why and how e-Governance will contribute to the competitiveness, what are the strategies for architecting and developing e-Governance solutions in India, what technologies are appropriate for e-Governance applications that will render it future proof, and most importantly how does one take care of successful execution of e-Governance projects across a huge country such as India.

Why India needs to be competitive?

Competitiveness at a national level is based on superior productivity performance and the economy’s ability to shift output to high productivity activities that in turn generate high levels of real wages. It is also associated with rising living standards for citizens and expanding employment opportunities. Competitiveness will provide India not only to have sufficient technological leadership and financial strength to invent new products and solutions for the global market, but also will place India as a nation that can be counted among the top three. It will make available financial strength to build a robust defence system to protect against external and internal threats. Most importantly, the economic strength obtained through competitiveness will pave the way for India to be a major contributor, active participant and a thought leader in charting the future course of the world in the 22nd century and beyond, when the whole world is predicted to go from the ‘Age of Materialism’ to an ‘Enlightened Age of Creativity and Consciousness’. India need no more play the second fiddle nor be a sideline spectator to whatever the US or Western Europe or China will do.

Let’s not miss the window of opportunity

A few hundred years ago, India was a leader in global commerce and cornered almost 25 percent of the global market. Indian finished goods and raw materials were prime foreign exchange earners in the 18th century. Invention of steam power around 1750, singularly changed the course of history and brought in England and other European nations as major players in the global economy. Around 1880, Iron and Steel technology catapulted the United States of America past the UK and many European countries and soon USA could enjoy enhanced productivity, increased standards of living and increased military power. Steel was the turning point that gave the US immense superiority over the whole world and they have not looked back since then. The situation today is no different in terms of the basket of ‘leaders’ [Table 1].

Country 1750 1800 1830 1860 1880 1900 1913 1928 1938 1953 1963 1973 1980
West 18.2 23.3 31.1 53.7 68.8 77.4 81.6 84.2 78.6 74.6 65.4 61.2 57.8
China 32.8 33.3 29.8 19.7 12.5 6.2 3.6 3.4 3.1 2.3 3.5 3.9 5.0
Japan 3.8 3.5 2.8 2.6 2.4 2.4 2.7 3.3 5.2 2.9 5.1 8.8 9.1
India/Pak 25.5 19.7 17.6 8.6 2.8 1.7 1.4 1.9 2.4 1.7 1.8 2.1 2.3
Russia/USSR 5.0 5.6 5.6 7.0 7.6 8.8 8.2 5.3 9.0 16.0 20.9 20.1 21.1
Brazil/Mex 0.8 0.6 0.7 0.8 0.8 0.8 0.9 1.2 1.6 2.2
Others 15.7 14.6 13.1 7.6 5.3 2.8 1.7 1.1 0.9 1.6 2.1 2.3 2.5

Today, we see a changing paradigm in the global economy. The old Newtonian Model (Mechanical) based on capital, materials and producers has given way to the new Einstenian model (Natural) based on knowledge, creativity and consumers [Table 2]

 

Category Mechanical Model Natural Model
Scientific leaders Newton Einstein
Economic authority Producers Consumers
Economic constraint Capital Creativity
Strategic objectives Optimum design Adaptation
Central metaphors Machines/ Clocks Organisms / ecologies
Leadership implication Command & control Autonomy & vision
Structure Hierarchies Self-organising teams
Organising principles Division of labour Synthesis of minds
Sources of values Energy & materials Knowledge

Since we are on the threshold of the Knowledge Economy, ICT technologies have the capability to allow many developing economies to leapfrog and become competent players in the global market. Globalisation, deregulation and technical change have induced intensified competition, and there is a fundamental change in that business is conducted with emphasis on innovation, de-verticalisation, outsourcing and intensive use of information technology. Like Britain’s steam power and US steel, India has a window of opportunity to capitalise on ICT and leapfrog to become a highly competent nation, with appropriate utilisation of innovation related intangibles, human resource intangibles, and organisational intangibles. e-Governance is one of the powerful ICT challenges that could catapult India to be a major player in the global knowledge economy.

According to the EU Country Competency Indicator, there are eight major indicators that help us monitor the competitiveness of a nation viz access to Finance, Open Market, Entrepreneurship, ICT Infrastructure, Sustainability, Human Resources, Innovation and Knowledge Diffusion, and the Regulatory and Administrative Environment.

Making the Regulatory and Administrative Environment of Government of India (GOI) efficient and effective using ICT (e-Governance) will certainly be a significant factor in leapfrogging India to be a competitive nation. But this leapfrogging with ICT must be strategically planned and executed with utmost precision with use of appropriate technologies.

If we analyse the Regulatory and Administrative Environment of GOI, it consists of 1000’s of processes both inside government institutions and across institutions. Government being one of the key links in the supply chain of B2C, B2B, G2C and G2B interactions, it is imperative that every process that a government employee or organisation comes in contact with must be executed with flawless precision, for the whole supply chain to be efficient. A weak link or an inefficient process can and will drastically reduce the efficiency of the supply chain and thus impact the overall productivity of the nation. It is imperative therefore that the Indian Government makes every effort to perform each of its tasks (processes) defect free, which in modern enterprise terminology is equivalent to having a Six Sigma Government.

What is Six Sigma?

• A quality standard that is equivalent to generating fewer than 3.4 defects per million process operations.
• A methodology that provides government organisations with the tools to improve the capability of their business processes, increase process performance and decrease process variation.

Six Sigma leads to defect reduction, improvement in cost of service delivery, enhanced government employee morale and improved quality of service to citizens.

What is Six Sigma e-Governance?

Six Sigma is a highly disciplined process that helps any government organisation to focus on developing and delivering near-perfect services. Why ‘Sigma’? The word is a statistical term that measures how far a given process deviates from perfection. The central idea behind Six Sigma is that if you can measure how many ‘defects’ you have in a process, you can systematically figure out how to eliminate them and get as close to ‘zero defects’ as possible. This can be achieved when the Process owner (a Government Employee) has the right tools to monitor a process and the right knowledge to improve it. Six Sigma will impact the DNA of a government organisation — it will change the way a Government organisation works — in everything a government does internally and in every service that government delivers externally, be it the passport office, RTO, electricity supply, or defence.

Need for Six Sigma in Government

Globalisation and instant access to information, products and services have changed the way businesses, governments and citizens conduct business — old business models no longer work. Today’s competitive environment leaves no room for error. Governments must delight their customers, be it citizens, businesses or employees and relentlessly look for new ways to exceed their expectations. This is why Six Sigma must become a part of Government culture. The issue of building quality systems and practices is not just confined to high technology businesses and software services companies (like Intel & Infosys). The Singapore Government is one of the first governments to take the lead in building up quality systems and bring in operational excellence by leveraging various technologies. India must follow this paradigm.

Six Sigma e-Governance will not only enhance the productivity of the government sector, but will also lead to greater transparency and thus increased international investments in the country. Public sector transparency results from policies, institutions and practices that channel information in ways that improve understanding of public policy, enhance the effectiveness of political processes and reduce policy uncertainty. Prof. Amartya Sen has maintained that public sector transparency is an instrument for achieving high general welfare of citizens and promoting efficient and effective governments.

Strategy for executing Six Sigma e-Governance

Today’s scenario

In their recent article, “Hope-Hype-Hope” [egov, Jan-Feb 2005], the authors talked about India’s romantic rendezvous with e-Govern-ance. There is tremendous enthusiasm among many a bureaucrat and politician to show off their encounters with e-Governance. In accordance with the typical Indian trait, bureaucrats, despite their inexperience with technology, strive to please their political masters with a G2C e-Governance project. Each IAS officer is trying out their own methods and strategies and pet projects and more astonishingly, each one thinks that their way is the right way.

It is important for us to recognise that it is not easy to develop a G2C solution because the customers’ (citizen or business) requirements are too diverse. The requirements vary depending on the type of citizen – a city dweller, a villager, educated, uneducated, man, woman, children etc. In addition, the requirements of G2C interaction need to be multilingual, voice activated, PDA- mobile accessible, suitable for visually impaired, hearing impaired, illiterate, etc. Therefore any G2C solution today will only meet part of the many and diverse requirements. There are too many variables that are not under the direct control of the solution developer.

The right strategy

As mentioned earlier, the Regulatory and Administrative Environment of the Indian Government enterprise consists of 1000’s of processes both inside government institutions and across institutions, and government employees and government institutions operate these processes. All these processes are established and are mature.

As Michael Hammer (the father of BPR) recently admitted in his latest book Agenda, Business Process Reengineering of mature processes of an enterprise is not easy and may not be a good strategy. He also recommends that enterprises must stay away from BPR, and rather embrace the new Business Process Management paradigm. In the new paradigm, each existing process is e-enabled, each process has a Process Owner whose responsibility will be to monitor the process, control the process, understand the process mechanism, evaluate the process performance and then optimise the process. All this can be accomplished only when GOI implements a process management tool with a well thought out framework of process centric software technology and solution architecture that are relevant for the Government domain.

A software framework must be developed which is Process Centric. The framework must be capable of simplifying the task of developing, deploying and managing a complex, integrated, and most importantly standards compliant e-Governance solution. The software solution based on process centric framework must be able to seamlessly automate the internal operations of the government and its external interactions with the citizen (G2C) and business (G2B). (Figure 1.0)

Lessons from the private sector

Private sector enterprises have implemented Business Process Management solutions (ERP, SCM, KM and CRM) to enhance their supply chain efficiency and effectiveness. The Indian government (Public Sector) enterprise does not have to reinvent the wheel, but only has to recognise that such BPM, ERP and SCM solutions that are specific to the Government domain would be the right strategy for enhancing the efficiency of government processes.

Government ERP system

What exactly is government ERP or GRP? ‘GRP’ (Government Resource Planning) refers to an enterprise view of the government business — in other words, a view of a government organisation and all its parts as a connected whole, rather than small silos of activity. GRP relates to the software infrastructure that holds the entire government organisation together internally, on the one hand, and supports the external business processes the Government Organisation engages in, on the other. Some key traits in GRP solutions should be:
• GRP applications must address a business process.
• GRP applications must be modular and integrated.
• GRP applications include a Government Organisation’s reach beyond its walls — to its suppliers, customers (Citizens) and partners.

e-enabling government processes with appropriate GRP solutions has been undertaken by many of the advanced countries such as USA, Singapore and Australia. Government organisation ERP and BPM solutions are delivered on established ICT infrastructure including Servers, PC’s, and Network. Besides, the employees working for the government are under direct control, are ‘trainable’, available in one place, mostly educated, and can be motivated through incentives to become proficient in ICT.

In every Indian government institution, whether a Panchayat, a Zilla Parishad, a corporation, a municipality, an RTO office, a CSIR Laboratory, a DRDO laboratory, a department at the state level or a department at the centre, internal operations deal with the following major processes:
• Budget and Expenditure
• Projects and Schemes
• H.R and Admin
• Purchase, Inventory and Stores
• Peripheral processes specific to institutions

 

Fig 1.0:   Process-Centric Framework for GRP

Fig 2.0: Process Collaboration Architecture

Using budget and expenditure processes, each institution manages planned or unplanned budget, and tracks and reports the expenditure. Using projects and schemes processes the project is executed, status is monitored and expenditure is tracked. Using HR and Admin processes Government employees are managed through an HR and Admin system with respect to their payroll, PF, leave, LTC, tour, advances, pension, disciplinary action, and many such processes. Purchase and stores processes are used to buy, track, manage and dispose all materials, services and equipment.

Though the number of activities under each of the above processes may run into 1000s, and developing and implementing such a GRP solution may seem humongous – it is more easily achievable because the basic government infrastructure operations are more or less uniform across India.

Conclusion

In order to achieve global competitiveness, the Government of India must make a conscious decision to implement Six Sigma governance at all the government institutions. The GOI must concentrate on automating all the mature and estab lished internal processes of the government at an accelerated pace, incorporating G2C processes wherever feasible. The primary strategy should be to go inside out rather than outside in. That is G2E first and then G2C. Implementation of BPM and the appropriate primary strategy to eventually achieve successful e-Governance across G2C, G2B and G2G.

Making the Regulatery and Administrative Environment of Government of india (GOI) efficient and effective using ICT (e-Governance) will certainly be a significant factor in leapfrogging india to be a competitive nation 

Automation of internal process operations reduces their cost of ownership and improves their response time. At the same time it
allows government processes to be more flexible and elaborate in order to increase their effectiveness. Automation of external processes (interaction with citizens and businesses) reduces the overload for both the citizen and the government, thus enhancing the overall productivity of the whole nation.

Note : In part II of this article, would address the technical and technological issues of establishing Six Sigma e-Governance.

References : Paul Bairoch, “International Industrialization levels from 1750 to 1980”, Journal of European Economic History, 11, 1982 pp. 269-334.

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