©CopyrightJASSS

SunghoLee(2010)

SimulationoftheLong-TermEffectsofDecentralizedandAdaptiveInvestmentsinCross-AgencyInteroperableandStandardITSystems

JournalofArtificialSocietiesandSocialSimulation13(2)3<http://jasss.soc.surrey.ac.uk/13/2/3.html>

Received:29-Dec-2008Accepted:15-Jul-2009Published:31-Mar-2010

Keywords:

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Abstract

Governmentshavecomeunderincreasingpressuretopromotehorizontalflowsofinformationacrossagencies,butinvestmentincross-agencyinteroperableandstandardsystemshavebeenminimallymadesinceitseemstorequiregovernmentagenciestogiveuptheautonomiesinmanagingownsystemsanditsoutcomesmaybesubjecttomanyexternalandinteractionrisks.Byproducinganagent-basedmodelusing'Blanche'software,thisstudyprovidespolicy-makerswithasimulation-baseddemonstrationillustratinghowgovernmentagenciescanautonomouslyandinteractivelybuild,standardize,andoperateinteroperableITsystemsinadecentralizedenvironment.Thissimulationdesignsanillustrativebodyof20federalagenciesandtheirmissions.Amultiplicativeproductionfunctionisadoptedtomodeltheinterdependenteffectsofheterogeneoussystemsonjointmissioncapabilities,andsixsocialnetworkdrivers(similarity,reciprocity,centrality,missionpriority,interdependencies,andtransitivity)areassumedtojointlydetermineinter-agencysystemutilization.Thisexercisesimulatesfivepolicyalternativesderivedfromjointimplementationofthreepolicylevers(ITinvestmentportfolio,standardization,andinter-agencyoperation).Thesimulationresultsshowthatmodestinvestmentsinstandardsystemsimproveinteroperabilityremarkably,butthatawiderangeofuntargetedinteroperabilitywithlaggingoperationalcapabilitiesimprovesmissioncapabilitylessremarkably.Nonetheless,exploratorymodelingagainstthevaryingparametersfortechnology,interdependency,andsocialcapitaldemonstratesthatthewiderangeofuntargetedinteroperabilityrespondsbettertouncertainfuturestatesandhencereducesthevariancesofjointmissioncapabilities.Insum,decentralizedandadaptiveinvestmentsininteroperableandstandardsystemscanenhancejointmissioncapabilitiessubstantiallyandrobustlywithoutrequiringradicalchangestowardcentralizedITmanagement.

PublicITInvestment,Interoperability,Standardization,SocialNetwork,Agent-BasedModeling,ExploratoryModeling

Introduction

Thedominantstructuralformsinallthegovernmentshavebeenstovepipeorganizationalunits,soinformationsystemshavebeenoptimizedtoformagency-centricverticallyintegratedsystems.Asmanycontemporarypolicychallengesspanmultiplepolicydomains,publicorganizationshavecomeunderincreasingpressuretopromotehorizontalflowsofinformation,workanddecision-makingacrossfunctionalboundaries(Agranoff2003;Kohtamakietal.2008).However,studiesofnetworkingacrossjurisdictionalboundariesfoundlittletosupportanyillusionthatgovernmentcouldbeinstantlyoreasilytransformed(Fountain2001;GoldsmithandEggers2004;LazerandBinz-Scharf2004 ).Networkinggovernmentsrequirestwostepsoftransformationalefforts:1)effortstoidentifycomplementarysystemsacrossagenciesandimprovetheirinteroperabilityorreusability,and2)inter-organizationaloperationoftheinteroperablesystemstoachievemissionseffectively.

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Hypothesis1:

Hypothesis2:

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Informationsystemscanbecomeinteroperablebycouplingthemeitherbilaterally(i.e.point-to-point)ormulti-laterally(i.e.throughastandardmiddleware).Comparedwithpoint-to-pointcouplings,integrationthroughstandardsystemscanachieveawiderangeofinteroperability.Centralizedmanagementofgovernment-wideinformationsystemscanpromotecross-agencyconsolidationofpotentiallyredundantsystemsintosharedservicesandimprovetheinteroperabilityofinformationsystemsthroughstandardmiddleware.However,centralizedmanagementisdisadvantageoustodecentralizedmanagement(i.e.localcontrolofinformationsystems)inregardstoencouragingfieldofficestounderstandtheiruniqueinformationneedsandallocatescarceresourcesresponsibly,andfacilitatinguseradaptationandinnovation(Libicki2000).Inaddition,althoughstandardizationcanachieveawiderangeofinteroperability,theshort-termreturnoninvestmentmaybesmaller(i.e.lesscost-effective)thanthatoftargetedpoint-to-pointcouplingsthatcanachieveperformancegainsimmediately(Kaye2003).

Aftersystemsbecomemadeinteroperable,ittakestimeforpotentialuserstoappreciatethecomplementaryvaluesofinteroperablesystemsofotheragenciesandutilizethesesystems.Fountain(2002)claimsthatobjectivetechnologyandenactedtechnologyneedtobedistinguishedsincemanyintergovernmentalinformationsystemshavenotbeenproductivelyutilizedbygovernmentworkers.Ifinvestmentintechnologicalinteroperabilityisnotmatchedwithinter-organizationaloperationalcapability,interoperablesystemcapacitieswillbeleftunder-utilized.Althoughsystemintegrationmaybemanagedfromatop-downperspective,inter-agencysystemoperationsaresteeredonlybyavarietyofincentivesandsanctionsbecausetheyarecarriedoutbyself-governingagencies.Overall,thevaluegainedfrominvestmentinstandardsystemsissubjecttointernaluncertainties(withregardstosystemintegration),externaluncertainties(withregardstosocialdemandsandtechnologychanges),andparticularlyinteractionrisk(withregardstonetworkeffects,evolvinginter-agencycollaborativecapabilityandunderlyingsocialnetworks).

Wehaveidentifiedtwoobstaclestocross-agencystandardization.First,standardizationseemstorequireindividualagenciestogiveuptheautonomiesinmanagingtheirownsystemstoallowacentralcommandertomanagethemonbehalfofthem.Second,manyuncertainfactorsaffectthevaluesofstandardsystems,makinginvestmentinstandardsystemsahighlyriskybusiness.Duetothesetwobarriers,investmentsincross-agencystandardsystemsandeffortstobuildcollaborativeoperationalcapabilitieshavebeenminimallymadeinmostnations.

Toreducethedilemmabetweenempoweringthecentralmanagerstoassurethecross-agencyinteroperabilityandempoweringthelocalmanagerstoresponsiblyaccomplishtheiruniquemissions,itisnecessarytostandardizecommonsystemsandinterfaces,andtoletindividualagenciesbuildspecializedapplicationstailoredtotheirownmissionsontopofthesestandardsystems.Malone(2004)notesthat"Rigidstandardsintherightpartsofasystemcanenablemuchmoreflexibilityanddecentralizationinotherpartsofthesystem".Onlythosepartsthatareidentifiedasinvolvingimportanteconomiesofscalewithoutunderminingthequalitiesofservicesneedtobestandardized,andeverythingelsecanbedecentralizedtosuituniqueserviceneeds.

Therisksassociatedwithinvestmentinstandardsystemscanbealsomitigatedbyselectiveandadaptivestandardization.TheNationalTaskForceonInteroperability(2003)emphasizestheimportanceofstrategicexperimentationandadaptiveimplementation.

Improvinginteroperabilityisacomplexendeavor.Thereareno"onesizefitsall"solutions.Itmayrequireagenciesandjurisdictionstodevelopnewandimprovedworkingrelationshipsandcouldinvolvesubstantialchangesinhowindividualagenciesoperateintermsofcommunication.Expecttomakeprogress,butallowadequatetimefortheprogresstobesubstantial.Sometimesthemostprogressismadethroughsmallstepsthatteststrategiesandapproaches.(NationalTaskForceonInteroperability2003)

Thisresearchattemptstotesttwohypotheses.

Decentralizedinvestmentsininteroperableandstandardsystemsbyautonomousagenciescansubstantiallyimprovejointmissioncapabilities.

Althoughthevaluesofstandardsystemsaresubjecttovariousuncertainties,thevariancesofoutcomesgeneratedfromstandardsystemswillnotincreasesignificantlyifinvestmentinstandardsystemsaremademodestlyandadaptively.

Insum,decentralizedandadaptiveITinvestmentsalongwithmodeststandardization—withoutrequiringradicalchangestowardcentralizedITmanagement—canimprovejointmissioncapabilitiessubstantiallyandrobustly.

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KaplanandNorton(2001)listthedifficultiesofestimatingthecontributionofinformationsystemstovaluecreation:1)Improvementininformationsystemsdoesnotdirectlyaffectfinaloutcomesbutonlythroughchainsofcause-and-effectinvolvingtwoorthreeintermediatestages.2)Informationsystemshaveonlypotentialvalue(i.e.systemdevelopmentcostisapoorapproximationofanyrealizablevalue),andorganizationprocessarerequiredtotransformthispotentialvaluetorealizedvalue.3)Thevalueofasystemisinterdependentwiththatofthesystemswithwhichitisnetworked.Thesedifficultiesareespeciallyevidentwithstandardsystemsthatindirectlyaffectawiderangeofsystemsandinter-organizationalprocesses.DespitemanymanualsforITinvestment,investmentsinimprovinginteroperabilityandbuildingstandardsystemshaverarelybenefitedfromthesimulationofadaptivepolicyimplementation.

Thisresearchattemptstovalidatethelong-termdynamiceffectsofdecentralizedandadaptiveinvestmentsininteroperableandstandardsystems,usinganagent-basedmodelingmethodologythatsimulatestheuncontrolleddynamicsthatindependentactorsinanetworkmayinteractivelycreate.AsshowninTable1,theultimateoutcomeofITinvestmentis'jointmissioncapability',butnotinteroperablesystemcapacitythatisjustintermediateoutput.Althoughaproductionfunctionforjointmissioncapabilitiesisgivenasanexogenouslyimposedsystemofequations,eachagencyisdesignedtoautonomouslyandinteractivelydetermineitsownITportfolio,standardizationpolicy,andsystemoperation(nocentralcommandercontrolsinformationsystemsofindividualagencies).Theproductivityofinteroperablesystemswillbeexplicitlymodeledasanendogenoussocialnetworkfunctioninsteadofbeingleftasexogenouslygivenparameters.Exploratorymodeling—byvaryingthehighlyuncertainparametersfortechnologyprogress,interdependencies,andinter-agencysystemutilization—willtesttherobustnessofeachpolicyalternativeintermsofthevariancesofoutcomes.

Table1:StrategicHypothesesofKeyMeasures,PolicyLeversandUnderlyingUncertainty

UltimateOutcomes

IntermediateOutputs Long-termDrivers

Measures JointMissioncapabilities

Interoperablecapacities(informationcapital)Productivities(socialcapital)

Standardcapacities

Systemutilizationrates

ExogenousUncertainty

Citizens'prioritiesofmissioncapabilities

Interdependenciesamongsystemsformissions

Technologyadvance,Socialnetworkdensity

Relationships Productionfunction,Systemutilizationfunction

Technologydiffusion,Socialnetworkdrivers

PolicyLevers ITinvestmentportfolioStandardization,Organizationalincentives

AssumptionsforNetworkEconomics

OverviewandRelationships

Thisstudyimplementsanagent-basedcomputationalsimulationusing'Blanche'software(version4.6.5) [1].Theobjectsthatmakeupamodelarenodes,attributes,andrelations.Anoderepresentsagovernmentagency,and

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anattributeisanumericalvaluethatdefinesapropertyofanode.Eachnodehasheterogeneousattributes.ArelationisasetofnumericalvaluesthatdefineinteractionsamongNnodesusinganNbyNmatrix.Eachrelationhasanequationthatdescribeshowitsinteractionswithotherautonomousagentsmutuallyandendogenouslychangeovertime.Forinstance,agenciesoftendonotsufficientlyinvestincouplingcomplementarybuthighlydisparatesystemsofotheragenciesduetolimitedawarenessanddifficultyinintegratingincongruentsystems.Evenaftersystemsofotheragenciesbecometechnicallyinteroperable,thelimitedunderstandingabouthowdataarecreatedandusedmaystillconstraintheirutilization.Hence,thedegreeofsimilaritybetweenagenciescanaffectnotonlytheinvestmentinimprovinginteroperabilitybutalsothereadinesstoutilizeinteroperablesystemsacrossagencies.

ByreferringtotheBusinessReferenceModeloftheU.S.FederalEnterpriseArchitecture( OMB2005),thismodelingexercisedefines20agenciesasanillustrativebodyofthefederalgovernment.Eachof20agenciesbuildsitsownsystemtoserveitsdistinctmission[2].Thesystemofthe i-thagencywillbehereaftercalledthe i-thsystem,andthemissionofthej-thagencywillbehereaftercalledthe j-thmission({i∈N:1≤ i≤20}and{ j∈N:1≤j≤20}).

Thisstudywillmodelheterogeneousrelations(includingnetworkbenefitsandcouplingcosts)amongsystemsthathaveheterogeneousserviceattributesandlevels.Networkbenefitsandcouplingcostsamong20systemswillbeunevenlyandasymmetricallydistributed,anddescribedusingdiscreteandnon-parametric20by20matrices.

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Figure1.MatrixofInterdependenciesamongSystemsandMissionsof20Agencies(TheDepartmentofInteriorhasidentifiedcomplexinterdependenciesamongmultipleagenciesandmultiple

missionsasthematrixofbinaryvalues.Byreferringtothismatrix,thecontributionsofcomplementarysystemstomissionsarescoredbetween0and5,andthecontributionsoftheownsystems(diagonalcells)arescoredas20.Then,thesescoresarenormalizedtotherelativecontributionofthei-thsystemtothej-thmission(wi.j).)

Figure1illustratesthematrixofinterdependentnetworkbenefits—i.e.therelativecontributionsofthe i-thsystemtothej-thmission(denotedaswi.j).Couplingcostsarederivedfromdisparitybetweensystems(denotedasdi.q).Thesophisticationlevelsforthe i-thsystem(denotedasPi.q)areassessedalong11serviceattributes(e.g.citizenservices,e-Business,multimediadata,andtechnologylevel),anddisparitiesbetweenthei-thandthej-thsystemarecalculatedas:dij=Σq=111(Max(Pi.q—Pj.q,0)).

NetworkValues:ProductionFunctionofMissionCapabilities

Wenowintroducetheconceptofacoresystemwhichisdefinedastheuniquesystemofanagencytoserveitsownprincipalmission.Theservicelevelofthecoresystemwillbecalled'core(system)capacity',andthecoresystemcapacityofthei-thagencywillbedenotedas xi.Acoresystemcanalsogeneratecomplementary

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valuestootheragenciesservingdifferentmissions.However,heterogeneouscoresystemsareincompatiblewitheachother,somiddlewareorinterfacesareneededtomakeacoresysteminteroperablewithanothercoresystem.'Interoperablecapacity'ofthei-thsystemforthej-thmission(denotedasxi,ji≠j)isaportionofthecoresystemcapacityofthei-thagencythatisinteroperablewiththecoresystemofthe j-thagency(i≠j )andhencecontributabletothej-thmission(seeFigure3).

Themissioncapability(Uj)inthisexerciseisjointlyproducedfromacoresystemandnineteeninteroperablesystemsthatareoperatedthroughinter-agencyinteractions.Amultiplicative(asopposedtoadditive)functionalformisadoptedtomodeltheinterdependenteffectsamongheterogeneoussystems.Therelativecontributionsofthei-thsystemtothe j-thmission(denotedaswi.j)areassumedtobeexogenouslygiven.Thisproduction

functionisassumedtoexhibitconstantreturnstoscale(i.e.Σi=120wij=1).Themissioncapabilityequationforthej-thmission,denotedas Uj,isgivenby:

Uj=Ajx1.jw1.jx2.jw2.jx3.jw3.j…x20.jw20.j (1)

Ajrepresentsthetotalfactorproductivity,thatis,thejointproductivityofthetwentyinterdependentsystems.Todefinethetotalfactorproductivity,theconceptofan'enacted(oractivated)interoperablecapacity'(denotedasexi,j)isintroduced.Technicallyinteroperablecapacity( xij.t)canbetransformedtoenactedinteroperablecapacitythroughorganizationaleffortstoutilizeinteroperablesystemsacrossagencies.Thatis,thegapbetweenthecurrenttechnicallyinteroperablecapacity(xij.t)andthepreviousenactedinteroperablecapacity(exij.(t-1))isfilledbyaddingtheutilizationrate(denotedas φij;0≤φij≤1)timesthegapateachtimestep.Asadynamicmodel,timestepisindexedusingsubscript"t".

exij.t=φij.t(xij.t-exij.(t-1))+exij.(t-1)=φij.txij.t+(1-φij.t)exij.(t-1) (2)

Thisutilizationratewillbedefinedusingsocialnetworkparametersasshowninequation(10).Productivityofagivenagencywillbehigherwhentheagencyismoreinnovative(measuredbytechnologylevel)andmoreactivelyutilizinginteroperablecapacities.Hence,thisexercisedefinesproductivityasafunctionoftechnologylevelsandenactedinteroperablecapacities.Theproductivityequationforthej-thmissionisgivenby(0≤Aj≤1):

Aj=w1.j(ex1.j/x1.j)+…+wj.j(Techj/Techmax)+…+w20.j

(ex20.j/x20.j)(3)

CostFunctionsforInvestmentAlternatives

AtotalfederalITbudget(denotedas Mt)isallocatedtocoresystemcapacities(Mi.t),interoperablecapacities(Mi.j.ti≠j),mission-centricstandardcapacities(Mall.j.t)andgovernment-widestandardcapacities( Mall.all.t).Acostfunctionconvertsbudgets(money)intosystemcapacities.Thisexerciseassumesthatsystemcapacitiesincrementallyexpandassequentialmodulesovertime(i.e.xi.j.t=C-1(Mi.j.t)+x i.j.t-1).

Thisexerciseassumesthatthecostofdevelopingcoresystemcapacityisaconvexfunctionwithaninverseofevolvingtechnologylevel(whichwillbedefinedinequation11).

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Coresystemsofotheragenciescanbereusedviabilateralpoint-to-pointinterfaces.Developinganinterfacetocoupleandreuseanexistingsystemisassumedtobescale-independent,sothecouplingcostisdefinedasalinearfunctionofinteroperablecapacityanddistancewithaninverseofevolvingtechnologylevel.

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Inordertofullycouple20systemswithbilateralpoint-to-pointinterfaces,380(=20×19)interfacesareneeded.Alternatively,mission-centricorgovernment-widestandardsystemsmaybebuilt.Thecostofdevelopingastandardsystemisassumedtobeproportionaltotheneededscopetocoverthegivenheterogeneity.Theneededstandardscopeforamission-centricinteroperability,Sj,isdefinedasthesumofthedistancesbetweenthej-thagencyandallotheragencies.Theneededstandardscopeforagovernment-widecommonstandard,Sall,isthesumofdistancesbetweenthemaximum( Pmax.q)andtheminimum(Pmin.q)across11servicecategories.

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(δ:therateofcostsavingduetostandardization(0<δ<1)[3])

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Whilebuildingastandardsystemisatleast SiorSalltimesascostlyasbuildingnon-standardizedincompatiblesystems,doingsosavesadditionalinvestmentsinnumerouspoint-to-pointinterfacessinceitisdesignedtobeinteroperablewithallothersystems.Themission-centricstandardcapacityisaddedtoallof19interoperablecapacitiesforagivenmission(xi,alli≠j),andthegovernment-widestandardcapacityisaddedtoallof380interoperablecapacities(xall,alli≠j).

Insum,coresystemcapacityandinteroperablecapacitybuildupovertimeasfollows:

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Agent-basedModelingofNetworkDynamics

Network-centricpublicservicesarerealizedthroughinvestmentinandoperationofcross-agencyinteroperablecapacities.Usinganagent-basedmodelingframeworkthatcombinesnetworkeconomicsandsocialnetworkanalysis,thisexercisewillsimulatenotonlytheeffectsofinter-agencyITinvestmentpolicyleversbutalsotheeffectsofinter-agencysystemoperationpolicyleverstobetterunderstandtheco-evolutionbetweentechnologyandorganization.Particularly,socialnetworkanalysismethodologywillbeappliedtomodelinter-agencycollaborativeoperation,i.e.theuncontrolleddynamicsthatindependentactorsinanetworkmayinteractivelycreate.

SocialNetworkDrivers

Becausetheorganizationalmechanismofintergovernmentaloperationsiscomplexandmanyfactorsinfluenceit,thisexercisesadoptsthemulti-theoretical,multi-levelsocialnetworkmodelingapproach(MongeandNoshir2003).Varioussocialnetworktheorieshaveattendedtoawiderangeofvariablessuchassocialinfluence,power,diffusion,economicexchange,socialcohesion,knowledgemanagementandsocialcapital(KatzandLazer2002).Multipletheoriescanjointlyimproveanexplanationofnetworkevolution.Multiplelevelsofanalysisarealsoneededbecausenetworkpropertiesexistattheindividual,dyad,triad,andglobalnetworklevels(e.g.reciprocityatthedyadlevelandtransitivityatthetriadlevel).

Intheabsenceofempiricaldataoninter-organizationaloperationofastandardsystem,thisexercisewillsimulatethehypotheticaleffectsofsixsocialnetworkdrivers(similarity,reciprocity,centrality,missionpriority,interdependencies,andtransitivity)toillustratehowautonomousagentsoperatetheminadecentralizedenvironmentovertime.

Inthecaseofthefirstcharacteristic,socialnetworkscanbebiasedtowardsimilarity(e.g.technicalandsemanticsimilarity)sincesimilaritymayeasecommunicationandincreasethepredictabilityofbehavior.Inthe

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caseofthesecond,reciprocityoftenplaysanimportantroleinbuildingtrustinnon-hierarchicalrelationships.Inthecaseofthethird,centralityinrelationsisimportant.BarabasiandBonabeau(2003)assertthatpreferentialattachment(orthe"richgetricher"process)explainsthegrowthofhubs.Thatis,newnodestendtoconnecttopopularnodes,sothehubsacquireevenmorelinksovertimethanthelessconnectednodes.Inthecaseofthefourth,agenciesmaytendtobuildmoresociallinkswithotheragenciesinchargeofmoresociallydemandedmissions.Inthecaseofthefifth,anagencymaybuildmoresociallinkswithotheragenciesthatoperatehighlycomplementarysystems.Finally,anagencymaydeveloprelationshipswithanotheragencythroughother(intermediary)agenciesthathaveclosetieswiththatagency.Thisindirectrelationshipiscalled'transitivity',andthismayhelpextendsocialnetworkswithotheragencies.

Thisexercisedefinestheutilizationrate(denotedas φij)oftheinteroperablecapacity xi,jasafunctionofthesesixsocialnetworkdriversbetweenthei-thagencyandthe j-thagency:

φij=(φ1.ijκ1φ2.ijκ2φ3.ijκ3φ4.ijκ4φ5.ijκ5φ6.ijκ6)τ(0≤φij≤1) (10)

(τ:scalefactor;κk:weightofthe k-thfactor)

Thesesixfactorsarepoweredbyweights(denotedas κ1~κ6)andmultipliedtogethertoconstructtheinter-agencysystemutilizationratefunction.Inter-agencysystemoperationpolicyisassumedtoaffecttheseweightstosixfactors.Themultipliedvalueofthesixfactorsisbetween0and1,sowhenthescalefactor(denotedasτ)intheexponentislessthanone,theutilizationratiobecomesmagnified.

TechnologyInnovationsandDiffusions

Thetechnologyequationconsistsofaninnovationequationandanimitationequationinacontinuousscale.Technologylevelforthei-thagency(Techi.t)isdefinedas:

Techi.t=TechInovi.t-1×Techgri+Σj=120((exji/Σexji)×φij×Max(Techj(t-1)-TechInovi.t,0))

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Thetechnologyinnovationequation(denotedas TechInovi.t)assumesthatagenciesbuilduptechnologylevelwithheterogeneoustechnologygrowthrates(denotedasTechgri;1.05≤Techgri≤1.105).Whileagencieswithhighertechnologygrowthratesbuilduptheirtechnologylevelsontheirown,otheragenciescatchupwiththemthroughimitation.Socialnetworkplaysanimportantroleintechnologydiffusion,sothetechnologyimitationequationincludestheutilizationrateφij.Thetechnologyimitationfunctionistheweightedaverageofthe

technologygapsmultipliedbytheutilizationrates(weightedbyexji/Σ j=120exji).Whiledifferentinnovationcapacitieswidentechnologicaldistanceovertime,technologyimitationsreducetechnologicaldistance.

DefiningPolicyAlternatives

Thismodelingexerciseaimstosimulatethejointeffectsofthreepolicylevers(ITinvestmentportfolio,standardization,andinter-agencyoperation).ForITinvestmentportfolioleverandinter-agencyoperationpolicylever,thisstudywillcompare'agency-centric(orsupplier-centric)'and'mission-centric(orcitizen-centric)'approaches.

Agency-centricvs.Mission-centricITinvestmentportfolio:Individualagenciesallocateagivenbudgettothedevelopmentofnotonlytheirownsystemsbutalsointerfacesandmiddlewarethatcouplecomplementarysystemsofotheragencies.Theinvestmentportfolioisoftenbiasedtowardtheirownsystemsandlinkageswithsimilarsystems,andthisstudywillcallsuchabiasedportfolio'agency-centric'.Whentheinvestmentportfolioisalignedwiththeoptimalinterdependencieswithoutbias,suchportfoliowillbecalled'mission-centric'.Agency-centricvs.Mission-centricoperationofinteroperablesystems:Thisstudyassumesthatsixsocialnetworkdriversjointlydetermineinter-agencysystemoperation.Whensimilarityandreciprocityaredominantdrivers,thisstudywillcallsuchoperations'agency-centric'.Whencross-agencyinterdependenciesandtransitivityaredominantdrivers,suchoperationswillbecalled'mission-centric'.Bilateralcouplingvs.Multi-lateralstandardization:Withbilateralcouplingalternatives,complementary

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systemsareintegratedviapoint-to-pointinterfaces.Standardizationcanbemadeforspecificmissions(e.g.publicsafety,andhealthcare)orforgovernment-widesharedservicesandprotocols(e.g.next-generationInternetprotocol,authentication,andinformationsecurity).Standardizinggovernment-widesharedservicesrequiresahighlevelofcross-agencycoordination.

Thisexercisederivesfivealternatives(Alt0-Alt4)asjointimplementationofthreepolicylevers.Alt0isabusiness-as-usual('do-nothing')policythatmaintains'agency-centricITinvestmentportfoliowithnoinvestmentinstandardsystemandagency-centricoperationofinteroperablesystems'.Sinceitprovidesabaselineforevaluationofthejointeffectsofthreepolicylevers,itwillbecalled'baselinepolicy'.Alt1,Alt2andAlt3are'do-something'alternativesthatimplementoneortwopolicylevers.Alt4isacomprehensive('do-everything')policythatimplementsmission-centricITportfolioandoperationwithmodestinvestmentinnotonlymission-centricstandardsystemsbutalsogovernment-widestandardsystems.

AllthefivepolicyalternativesareimplementedusingthesameamountoffederalITbudget( Mt),andthefederal

budgetisallocatedtothej-thagencyaccordingtoitsmissionweight(i.e. Mj.t=w j.tMt)[4].Decisionvariablesforeachagencytoimplementthreepolicyleversare:1)Mi.j.t,2)Mall.j.t,Mall.tand3) κ1~κ6inφij.

Thebaselinepolicy(Alt0)allocatesthebudgetsproportionallytoeachsystem'scontributionweightsandtheinverseofdistance(Mi.j.t∝wi.j.t/dijt).Ontheotherhand,theotheralternativesimplementthemission-centricIT

portfoliopolicybyallocatingthebudgetsproportionallytothesystem'scontributionweights(Mi.j.t∝wi.j.t)[5].Ontopofthemission-centricITportfoliopolicylever,fouralternatives(Alt1-4)aregeneratedasthecombinationsofthetwolonger-termdrivers:standardizationpolicyandinter-agencyoperationalpolicy(seeTable2).

Table2:CharacteristicsofFourAlternativeMission-centricITInvestmentPortfolioPolicies

OperationIntegration WithinBoundary

(reinforcingfragmentation)

AcrossBoundary(promotingcross-

agencycollaboration)NoStandardization Alternative1:

•Nostandardsystem•Inflexiblebudgetreallocation•Homophily,Reciprocity,Inequalityinrelations

Alternative3:•Nostandardsystem•Flexiblebudgetreallocation•Promotingsocialnetworkanddemand-drivensystemoperation

ModestStandardization(reallocatesmodestportionofbudgetstothedevelopmentofstandardsystems)

Alternative2:•Mission-centricstandardsystems•Inflexiblebudgetreallocation•Homophily,Reciprocity,Inequalityinrelations

Alternative4:•Government-widestandardsystems•Flexiblebudgetreallocation•Promotingsocialnetworkanddemand-drivensystemoperation

Standardizationpolicies(Alt2andAlt4)allocateasmallportion(fivepercent [6])ofITbudgetstothedevelopmentofstandardsystems.WhileAlt2(agency-centricoperation)buildsonlydecentralizedmission-centricstandardsystems(Mall.j.t=.05M j.t),Alt4(mission-centricoperation)isassumedtobuildcoordinatedgovernment-widestandardsystems(Mall.t=.02M t)aswellasdecentralizedmission-centricstandardsystems( Mall.j.t=.03M j.t).

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Theinter-agencyoperationalpolicyleverissimulatedusingtwosetsofweightsassignedtothesixsocialnetworkdriversinthesystemutilizationequation(κ1~κ6inφij)asshowninTable3.

Table3:SocialNetworkDriversandtheirContributionWeightstoUtilizationRates

SocialNetworkDrivers κ1~κ6inφijAgency-centric

systemoperation(Alt0,1&2)

Mission-centricsystemoperation

(Alt3&4)RelativeDistancebetweenthei-thandj-thagency(=dmin/dij)

0.3 0.1

RelativeReciprocityinrelationswithj-thagency(=exji/exmax)

0.2 0.1

RelativeDegreeCentrality*ofj-thagency(=centj/centmax)

0.2 0.2

RelativePriorityofthej-thmission(=wj/wmax)

0.1 0.1

RelativeContributionofthei-thsystemxij(=wij/wmax)

0.1 0.3

RelativeTransitivityinrelations(i-k-j)**

0.1 0.2

*Degreecentralitymeasuresthenumberofincomingand/oroutgoingconnectionswithothers.**Thetransitiverelationsofthei-thagencywithj-thagencyviaallother(intermediary k-th)nodesarecomputedastrij=.05Σ k=120(exik+exkj)/2.Theyareaveragedacross k(weightedbythevalueoflinkswithintermediarynodek).Relativetransitiverelationsarecomputedas( trij/ex ij).

ResultsofAgent-basedModelingofNetworkDynamics

Thisexerciseadoptsacost-effectivenessanalysisframeworkthatsearchesforthemaximumeffectivenesssubjecttoagivenbudget.Thekeymeasureofeffectivenessisjointmissioncapabilityatthefinalperiod.Eachmissioncapability(Uj)isdefinedasanindependentbuilding-block,andthejointvalueofmissioncapabilitiesis

definedastheweightedaverage:Σj20wjUj.Themissionweights(i.e.therelativeimportanceofmissionj;denotedaswj)areassumedtobeexogenous [7]andnormalized( Σ j20wj=1).Eachtimesteprepresentsoneyear,andthisexerciserunsfor20timestepstosimulatelong-termeffects.Figure2showstheevolutionoftheaveragesystemcapacities,productivities,andmissioncapabilitiesgeneratedfromthissimulation.Themission-centricITportfoliowithmission-centricstandards(Alt2)buildsmuchlargerinteroperablecapacitiesthanbilateralcouplingpolicies(Alt0,1&3),andthemission-centricITportfolioincludingbothmission-centricandgovernment-widestandards(Alt4)achievesbyfarthelargestinteroperablecapacities.Productivitiesrapidlydropwiththeupsurgeofinteroperablecapacitiesgeneratedfromstandardization(Alt2&4)intheearlyperiods,butproductivitysoonreboundswiththemission-centricoperationpolicy(Alt4).

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5.2

5.3

Figure2.EvolutionofSystemCapacity,Productivity,andMissionCapability

Aremarkableenhancementofthejointmissioncapabilitiesbeyondthebaselinelevel(Alt0)comesfromtheadoptionofmission-centricITportfoliopolicy(Alt1)throughitsbetteralignmentwiththeoptimallydiversifiedsystemportfolio.Oncethemission-centricITinvestmentportfoliopolicyisimplemented,eitherstandardization(Alt2)ormission-centricoperation(Alt3)increasesthemissioncapabilityfurther.Wheninvestmentinstandardsystemsandmission-centricoperationaresimultaneouslyimplemented(Alt4),theirjointeffectsonjointmissioncapabilitiesaresubstantiallyimprovedthroughpositivefeedbackloopsbetweeninteroperablecapacitiesandproductivitiesovertime.Thegainofalternative2overalternative1is26%,thegainofalternative3overalternative1is20%,andthegainofalternative4overalternative1is71%(farexceedingthesumofthegainsfromalternative2and3).Nonetheless,thisgainofmissioncapabilities(71%)isnotasdramaticasthegainofinteroperablesystemcapacities(152%)duetotheuntargetedexpansionofinteroperablecapacitiesbystandardization.

ThegraphsandmatricesinFigure3presentthetechnicallyinteroperablecapacities( xi,j)andenacted(activated)interoperablecapacities(exi,j)generatedfromthesimulationexercise.Whilethesumofactivatedinteroperablecapacities(1340)bytheDODwithallotheragenciesisjustfourtimesitscoresystemcapacity(381),thesumofactivatedinteroperablecapacities(484)bytheGSAfarexceedstentimesitscoresystemcapacity(36).Thisshowsthatagenciesinchargeofgovernment-widecommonmanagementandsupportfunctionscancreatemorevaluesfromexpandingandactivatinginter-agencyinteroperablesystemsratherthan

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6.1

6.2

6.3

frombuildingitsowncoresystemcapacities.

Figure3.InteroperableSystemNetworkandActivatedSystemNetwork(Alternative4attime=20;presentedusingtheUCINETsoftware)

Intheabovematrixandgraph,thediagonalcellsandthenodesizesrepresentthecoresystemcapacities,andthenon-diagonalcellsandthethicknessesofarcsrepresenttheinteroperablecapacities.Likewise,inthe

belowmatrixandgraph,thediagonalcellsandthenodesizesrepresentthedegreecentrality(i.e.thesumofallthelinks)ofeachagency,andthenon-diagonalcellsandthethicknessesofarcsrepresentthe

activated(enacted)interoperablecapacities.

ExploratoryModelingforAssessingtheRobustness

IdentifyingCriticalUncertaintiesandGeneratingScenarios

Someofparametervaluesadoptedintheprevioussimulationexerciseareinfacthighlyuncertain.Theprioritiescitizensassigntovariousmissionsmaychangeaseconomicandsocialenvironmentsevolve.Technologyprogressishardtopredictprecisely.Theinterdependenciesamongcomplementarysystemsformissioncapabilitiesalsocontinuetochange.Theinter-governmentalrelationssuchastechnologydiffusionandsocialnetworkingamongfederalagenciesareverycomplex.Alltheseuncertainparametersjointlyaffecttherobustnessoffinaloutcomes.

Sincepolicy-makersandcitizensareoftenrisk-averse,reducingthesensitivityofoutcomesagainstvaryingparametersareasimportantasincreasingthelevelsofthemostlikelyoutcomesforeachalternative.Thisexercisehypothesizesthattechnologydevelopment,missionpriority,system-missioninterdependency,andsystemutilizationratearethemostuncertainfactors.

Thebaselineparametersvaluesusedintheprevioussectionare:thescalefactor( τ)intheutilizationrateequation=1,theaveragetechnologygrowthrate=7.5%,andtheincreasingweightstocomplementarysystems(wi,ji≠j)[8].Bytakingadvantageofbothparametricandprobabilisticexploratorymodelinginacomplementaryway(asshowninTable4),thisstudywilltesttherobustnessofpolicyalternatives.Parametricexploratoryanalysiswillgenerate18scenariosasthecombinationofmultiplevaluesforthreeuncertainparameters.Probabilisticexploratoryanalysiswillgenerate100simulationsasthecombinationofparameter

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6.4

6.5

6.6

valuesrandomlydrawnfromtheprobabilisticdistributionfunctions.

Table4:ValuesforUncertainParameters

Parametricmodeling

Probabilisticmodeling

Weightsofthei-thsystemsforthej-thmission(wi,ji≠j)

Constant,andIncreasing(1%annualgrowth)

N(1.01,0.03):normaldistribution

Technologygrowth(Techgri) 4%,7.5%and11%onaverage

Poissondistribution*(μ=σ=7.5%)

Thescalefactor(τ)oftheutilizationratefunction**

0.5,1,and1.5 N(1,0.05)

Weightsofmissions(wj) N(1,0.03)

*Giventhelock-ineffectsarisingfromnetworkstandards,informationtechnologiesaremorelikelydisruptivelyleapingthanincrementallyimproving.Hence,theprobabilisticmodelingoftechnologyinnovationequationwilladoptaPoissondistributionfunction.**Sincetheutilizationrateliesbetween0and1,ahigherexponentmeansalowerutilizationscenario.Highscalefactoroftheutilizationratefunctionmaymeanthatsocialcapitalacrossagenciesishigh.

ParametricExploratoryModeling

Figure4showstheweighedaverageofmissioncapabilities.Therobustnessofeachalternativecanbemeasuredintermsofthecoefficientsofvariation(=standarddeviation/mean).Thecoefficientsofvariationacross18scenariosforfivealternativesare:28.3%(Alt0),33.6%(Alt1),29.9%(Alt2),30.7%(Alt3),and25.6%(Alt4).Theoutcomesofmostmission-centricITinvestmentportfolioalternatives(Alt1-Alt3)turnouttobemoresensitivetovariousuncertaintyfactorsthanthebaselinescenario.However,thecomprehensivepolicyincludingmodestinvestmentingovernment-widestandardsystems(Alt4)minimizesthecoefficientofvariationwhilemaximizingtheexpectedvalues.

ProbabilisticExploratoryModeling

Theprobabilisticexploratorymodelinghasgeneratedstochastically-evolvingmissionpriorityweights( wj)andsystem'srelativecontributionweights(wi.j)overtime.Torespondtochangingmissionweightsovertime,budgetallocationhasbeenadaptivelymadeproportionaltothemagnitudeofgapsbetweenthedesirableportfolioandthecurrentportfolio.

Standardizationpolicies(Alt2&4)mitigatethecoefficientsofvariationoftheinteroperablecapacities,andthemission-centricoperationpolicies(Alt3&4)mitigatethecoefficientsofvariationoftheproductivities.Again,asshowninFigure5,thecomprehensivepolicyincludingmodestinvestmentingovernment-widestandardsystems(Alt4)minimizesthecoefficientofvariationofthemissioncapabilitieswhilemaximizingtheirexpectedoutcome.

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Figure4.JointMissionCapabilitiesfromtheParametricExploratoryModeling

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7.1

7.2

Figure5.JointMissionCapabilitiesGeneratedfromProbabilisticExploratoryModeling

SummaryofModelingandPolicyImplications

Whilethesemodelingexercisesarehighlyabstract,speculativeandmerelysuggestive,theresultsdemonstratethatwhenautonomousagenciesbuildmoremission-centric(ratherthanagency-centric)ITportfolios,investinstandardsystemsmodestly,andbuildmoremission-centric(ratherthanagency-centric)relationshipswithotheragencies,anencouragingevolutionarytrajectorycanbeproducedwithoutanycentralcommander.

Standardizationimprovesinteroperabilityamongabroadrangeofsystemswhilepoint-to-pointinterfacesselectivelycoupleonlyhighlycomplementarysystems.Buildingoperationalcapabilitiesthatactivateawiderangeofinteroperablecapacitiestakestime.Hence,smallinvestmentsinstandardsystemsimproveawiderangeofinteroperabilityremarkably(by152%),butsuchuntargetedinteroperablecapacitieswithlaggingoperationalcapabilitiesimprovejointmissioncapabilitylessremarkably(by71%).Nonetheless,suchuntargetedinteroperablecapacitiesmayimprovetherobustnessofmissioncapabilitiesfacedwithhighlyuncertainfuturestates.Boththeparametricandtheprobabilisticexploratorymodelingconfirmthatmodest

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7.3

7.4

investmentinstandardsystemsjointlywithmission-centricoperationnotonlyenhancestheexpectedoutcomebutalsoreducesthevariancesofoutcomesagainstvaryingparametersfortechnologyprogress,interdependency,andinter-agencyoperation.

Thesefindingsconfirmourtwohypotheses,demonstratingthatdecentralizedandadaptiveinvestmentsininteroperableandstandardsystems—aslongasindividualagenciesadoptmission-centricITinvestmentandoperationapproaches—canimprovejointmissioncapabilitiessubstantiallyandrobustlywithoutrequiringradicalchangestowardcentralizedITmanagement.

Identifyingappropriatescaleorscopeofstandardsystemremainstobeadifficulttaskforfurtherresearch.Thissimulationexerciseillustratesthatanumberofcross-agencysocialnetworkdriverscansignificantlyandsubstantiallyaffectinter-agencyoperationalreadiness,andconsequentlytheaddedvaluesofstandardsystems.Empiricalresearchoninter-agencysocialnetworkmechanismscanhelpbetterestimatetheproductivitiesofcross-agencyinteroperableandstandardsystems,andhenceprovideusefulinformationfordecidingappropriatescaleandscopeofcross-agencystandardsystems.

Notes

1Blancheisaprogramdesignedtoevaluateahypothesisbysimulatingcomputationalmodelsofevolutionarynetworkdynamics.BlancheisdevelopedunderthedirectionofN.ContractorattheUniversityofIllinoisatUrbana-Champaign.

2Thetwentydistinctmissionsinclude16citizenservicemissions(Communityandsocialservices,Defense,Economicdevelopment,Education,Energy,Environmentalmanagement,Generalscience,Health,Homelandsecurity,Incomesecurity,Internationalaffairs,Lawenforcement,Naturalresources,Transportation,Workforcemanagement,andRevenuecollectionandFinance)andfourmanagementfunctions(HRmanagement,Publicassetmanagement,Publicrecordsmanagement,andBudgetplanning).

3Inthissimulation,δisassumedtobe0.3.

4TheinitialvalueofthetotalITbudget( M0)andmissionweights(wj)arederivedfromtheactualU.S.ITbudget

inFY2003.Thissimulationassumes7percentannualgrowthofthefederalITbudget(Mt=1.07t-1M0).

5Ifthebudgetforapoint-to-pointinterfaceisallocatedmorethanneededtoexploitthefullcapacityoftheoriginalsystem,theagencyisassumedtoeitherexpendthesurplusbudgetwithinitsorganizationalboundarythroughbuildingitsownnon-coresystemredundantly(theagency-centricsystemoperationpolicies:Alt0,1&2)ortransferthesurplusbudgetstotheagencyinchargeoftheoriginalsystemtoconsolidatethesystemdevelopment(themission-centricsystemoperationpolicies:Alt3&4).

6The'e-Governmentfund'authorizedduringtheBushadministrationtosupportthePresidentiale-Governmentinitiativesisanexampleofinvestmentinstandardsystems.TheE-Govfund($345millionoverfouryears)islessthan0.2percentofthefederalITbudget.Fivepercentseemstobeanambitiousyetrealistictarget.

7Theinitialmissionweights(att=0)areassumedtobeproportionaltotheactualfederalITbudgetsinFY2003.8Theweightstothecomplementarysystemsgrowby1percenteachtimestep( wi,j.t=1.01wi,j.t-1;i≠j ),andthenalltheweightsarenormalized.

Consequently,theaverageweighttoowncoresystems(wi.i.t)graduallydiminishesfrom0.484attime=1to0.435att=20.

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