Governments can harness digital technology to make public services more efficient and generate significant cost savings.
Whether because of a waved stick to cut costs or the dangle of a carrot to help government engage with citizens, digital technology is transforming public services. By focusing on citizens' needs and adopting an iterative approach, governments can learn as they go and evolve their online services.
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More than 20% of government departments worldwide will appoint a chief digital officer (CDO) to drive their digital strategies by 2014, according to research by Gartner.
In the UK, the government is striving to be "digital by default". The Government Digital Service (GDS), with its key message of making core services faster, easier and simpler for the user, expects to save the taxpayer millions of pounds a year by providing services to the public online.
The beta version of Gov.uk, the government's central web portal, is a key milestone on the digital journey and will eventually become the platform for government online transactions.
Steve Halliday, past president at Socitm (Society of IT Management), GDS Identity Assurance Programme board member and CIO for Solihull Council, says the digital by default message is getting through, but it is not without its challenges.
Digital should liberate people with good ideas and recognise the talents of the maverick
Steve Halliday, Socitm
"There is more talk of digital by default; but it is focused on communities of digital interests or digital tribes – centred on transactions; business process re-engineering or digital in a big data sense. All have different functions and it is up to the CIO or the CDO to take the Kofi Annan role of peacemaker," he says.
Digital is already saving the UK government money – £500m by digitising a number of its services and controlling spending on IT – according to a report by the government's Efficiency and Reform Group (ERG) this summer.
The ERG's promise to "increase digitisation and the use of alternative delivery models" appears to be paying off and Whitehall departments are busy redesigning their services for digital transformation for further savings. The Cabinet Office estimates it could save £1.2bn by 2015.
No silver bullet
With more than a billion government transactions a year through 650 services, this is no mean feat, but the goal of efficiency and saving taxpayers' time and money are business benefits that cannot be ignored.
This headline-grabbing business benefit of cutting costs is good news for economies feeling the pinch in public services when money is tight, but there can be pitfalls, however, if a digital strategy is not thoroughly assessed.
In the US, Obamacare encountered problems with its rollout, but with HealthCare.gov improving, the will is apparent, even if the execution has hit bumps.
"It seems more of an issue of politics and culture," says Halliday, warning that digital technology is not a panacea.
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"Digital is not a silver bullet. Leadership and culture make the big difference, and the old command-and-control style leadership doesn't work. Digital should liberate people with good ideas and recognise the talents of the maverick and channel them into productive directions," he says.
The first person in a company to use Twitter was probably disciplined, but this lockdown attitude is fading, he says.
"Digital is more than a shiny web form. GDS is recruiting mavericks that understand the customer-centred design and create things that work for people rather than an organisation," says Halliday.
Mark Thompson, group strategy director at consultancy Methods, says the GDS vision is a good one, even if it can be difficult to implement.
"Exemplar government departments are trying to change the way things are done with digital technology. The reason why some do less well is because ultimately digitisation is about changing the machinery of government itself," he says.
Digitisation is transformational and government departments have to have an appetite for the changes it brings. Strategies must be carefully considered, but Thompson believes digital works best where there are open standards.
"There is a critical link between open standards and huge volumes of traffic and getting everyone involved," he says.
For digital to take off in government, Thompson says there must be a move away from silos of activity where the same processes are done slightly differently by multiple government organisations. Cutting out repetitive tasks and processes that are common to many government services, such as identity checking, is a major business benefit.
"There is a tonne of good stuff going on, but where it is appropriate it would work better if one thing was done by everyone in a particular way – for example, identity checking. It would trigger massive activity, and there is an enormous opportunity here," says Thompson.
For this to happen, he believes central government has to play a pivotal role. "It is possible to assemble a rainbow of different services, but it needs coaxing by people in the centre, so activity converges together," he says.
Another business benefit of digital technology is its potential to improve the flow of information – the lifeblood of public services.
Digital has led to the evolution of business intelligence by going beyond internal processes
Dave Aron, Gartner
Andrew Horne, a managing director of the CEB CIO Leadership Council, gives the example of a US city where the CIO implemented digital technology to improve the sharing of information between government agencies. For example, when a concert takes place, the city is now able to send details electronically to the police, the fire department and the concert venue simultaneously.
"In the past, information was not shared and each department had their own little responsibilities," says Horne. "Now information flows at the right time and in the right sequence."
Dave Aron, fellow in Gartner's CIO research group, believes digital leadership is a key skill for government departments. There are two flavours of digital leadership favoured by CIOs and CDOs, he adds.
"Some CDOs and CIOs are focused on digital channels, which are really part of marketing; and the other group is focusing on the broader question of how to be successful in a digital world. This strategy-led group is informed by the digital context and they need strategic skills and the ability to interact well," says Aron.
The two groups are currently split, but Aron says the group with the broader role will eventually take over.
"Government agencies and companies have to make specific decisions in a world that is getting more digital and the vanilla IT approach is not appropriate," he says.
Traditionally, IT strategy is a technical answer to a business question, but the evolving digital strategy, which is a business answer to a technical question, is potentially revolutionary.
"The traditional approach led to back-office efficiencies. Now, the tail is wagging the dog," says Aron. "Given all the crazy stuff happening with big data, analytics and consumerisation of IT, the challenge for government agencies and business is how do they respond to that craziness? Digital should not be separate to the business; it should put a lens on any business strategy."
Digital technology lets public service bodies think imaginatively, beyond the efficiencies of shared services. This is when it can be truly innovative.
Aron highlights how the Norwegian National Collection Agency, which initially collected funds only for the Ministry of Justice, developed anomaly spotting in data of tax payments.
"Now it helps other agencies with their collections to spot anomalies of data. Digital has led to the evolution of business intelligence by going beyond internal processes to focus on lots of different parts of the government. Digital technology has changed its mission," says Aron.
Socitm's Halliday believes that although governments are at an early stage, digital services will evolve quickly.
"GDS has set out its vision very clearly: to use digital where it finds high volumes of transactions that are automatable and make them easy and simple to do on the internet, but if you look at a local authority, there are only 100 or so services of that type, such as fixing potholes or collecting bins. Most are more complex, and how digital addresses that through a co-production concept will be a rich vein," he says.
Halliday believes digital will move to a second phase where complex or 'wicked' problems (where there are several interests involved, some of which are conflicting), often found in social care, are addressed by people operating in a digital network. Managed networks of care professionals, for example, will adopt simple, secure, social media-style interactions, he suggests.
"Digital 1.0 is about transactions, but Digital 2.0 will have a substantive role in helping find the best-balanced position for the really tricky stuff," says Halliday.