Designing Delivery: Rethinking IT in the Digital Service Economy

Book Preface

In 1912, Teddy Roosevelt included a proposal for national health care as part of his presidential campaign platform. Nearly 100 years later, in 2010, Congress passed the Affordable Care Act. The legislative process was highly acrimonious. After the law’s passage, the Republican majority in the House of Representatives spent the next three years trying to repeal it. Even now, the law continues to face ongoing legal challenges. The Supreme Court has ruled on its constitutionality once, and likely will be called on to do so again.

The law included two key provisions: citizens could purchase health insurance through state or federal marketplaces, and they would need to buy insurance by the end of 2013 in order to avoid financial penalties. Late in 2013, the government rolled out a website through which people could access the federal marketplace. Its initial release was an unmitigated disaster. The site suffered from pervasive performance and usability problems, security issues, and outages.

Critics immediately blamed a lack of testing. Further exploration, however, uncovered more fundamental issues. Some of those issues were inherent in the nature of government IT procurement. Siloed project management made it difficult for anyone to understand the overall goals or requirements. Various parts of the project were contracted to different vendors. Each vendor worried about its own deliverables. No one took responsibility for integrating the pieces into a working whole. To make matters worse, the Democrats had spread chunks of the project across unrelated budgets in order to hide them from Republican defunding efforts.

No one realized just how critical a website would be to one of the most ambitious and contentious government programs of the past 100 years. The IT vendors involved in the project assumed it would just be another anonymous, behind-the-scenes effort. Government IT projects failed all the time; generally speaking, no one knew or cared about these failures. As a result, no one made the connection between the project’s structural problems and the potential severity of their repercussions.

The spectacular fashion in which this failure became public reflects HealthCare.gov’s position as the most high-profile example of a defining trend in twenty-first-century society. We are entering the age of the digital service economy. Fewer and fewer of our daily activities happen without some kind of digital component. We interact with these components through services that companies and governments operate on our behalf. Software-as-a-Service is becoming an indispensable part of ordinary life.

This trend shines a very bright spotlight on IT’s purpose and its role within the organizations it serves. No longer can we treat IT as an invisible, isolated activity, hidden in the back corner. The quality of the digital systems we build, and the way in which we build and operate them, ascome critical to organizations’ ability to function and to serve their customers. When every business becomes a digital business, IT becomes inseparable from the rest of the organization. It becomes the very essence of how businesses operate, and how they interact with customers.

In the post-industrial service economy, customers engage with brands through digital conversations. Brand quality becomes inseparable from operational quality. People’s experiences with HealthCare.gov, for example, have tainted their opinions about the Affordable Care Act as a whole. IT thus needs to transform itself from a tool for operational efficiency to a medium that enables high-quality conversations between companies and customers.

The HealthCare.gov fiasco illustrates the need to broaden and deepen our definition of IT quality. That definition, and the techniques we use to achieve it, must reach further than just software functionality. They need to become an integral part of design, development, and operations. They need to concern themselves with service, not just software. Ultimately, our understanding of digital service quality must transcend the confines of IT, and become a mirror that helps the entire service organization empathize with its customers in order to help them solve the problems they face in their daily lives.

Customers judge service quality based on the entirety of their experience. They view usability, functionality, and operability as inseparable dimensions of service. They expect to be able to engage with services coherently over time, across multiple touchpoints. They expect digital brands to deliver services that:

• Address the customer’s entire journey across all its touchpoints
• Are available whenever and wherever users need them
• Adapt over time to meet users’ changing needs
• Improve over time by learning from failure

HealthCare.gov’s initial release didn’t fail just because it didn’t function well. It failed because it broke its promise to its users. That promise wasn’t just to let people find and purchase health insurance. It was to help them navigate a situation of urgency, stress, and confusion. Given the contentious environment in which the website was launched, combined with the deep impact of health insurance on people’s lives, the site’s implicit brief included the need to educate, calm, and reassure. Its design, functional, and operational problems all contributed to its failure to keep that promise.

Users don’t care about websites or IT systems. They care about their own goals. They hire services to co-create value by helping them accomplish those goals. People don’t log on to HealthCare.gov or complain when it doesn’t work because they want to sign up for health insurance. They do it because they want to be able to run a small business without worrying about being able to afford medical care if they get sick. Or perhaps they just want to minimize their costs and avoid federal penalties. In either case, their goals involve important, emotionally loaded personal needs such as health and finance.

The true definition of quality isn’t how well the software works but rather how well the service helps its customers accomplish their practical goals and satisfy their emotional needs. Service providers must address quality across all dimensions of service delivery, including the internal processes by which that delivery happens. The entire organization must align itself with users’ goals. Only when it has a holistic understanding of itself and its relationship with its customers can an organization successfully co-create value with them. The government’s fractured approach to HealthCare.gov illustrates what happens in the absence of shared understanding and cross-functional collaboration.

Twenty-first-century service providers face a conundrum in the quest to help customers satisfy essential personal needs. On the one hand, they make promises to their customers about providing continuous quality. On the other hand, the human and technical systems they use to deliver these promises are increasingly complex, uncertain, and failure-prone. Digital service organizations must understand how to deliver certainty on top of uncertainty. Quality becomes a matter of resilience rather than stability. Ensuring quality becomes a process of managing the relationship between certainty and uncertainty. It requires the ability to continually achieve success in the face of failure.