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It’s the business model, stupid – three steps to transform UK public services

The government urgently needs to shift from ‘pipes to platforms’ to realise the benefits of digital disruption

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I have long admired entrepreneur Sangeet Choudhary’s phrase “from pipes to platforms” – it is the key issue confronting almost all organisations in the internet age.

Put simply, the shared plumbing of the internet enables savvy “platform” businesses to bring together ecosystems of producers and consumers in a multi-sided marketplace. Ecosystem players can focus on one part of a value chain, rather than trying to do everything themselves – which makes them much more efficient when they all come together to deliver a service.

That is why in 2013, 14 of the top 30 global brands by market worth were platform companies. In fact, platform organisations are so much more efficient in matching demand with supply, and so different from traditionally organised “pipes” organisations, that we talk about them as disrupting entire industries.

As producers and consumers, we are used to thinking about, and even welcoming, such disruption – most of these new organisations are wildly popular. But when it comes to thinking about how platform organisations will, just as inevitably, disrupt our public services, we behave very inconsistently.

We instinctively realise that no amount of shiny, front-end, accessible tech could ultimately save Blockbuster in the age of YouTube and Netflix; black cabs in the age of Uber; or old department stores in the age of Amazon – because the conversation has moved on.

Services offered by these platform businesses are simply more intelligent, flexible, convenient, innovative, and cost-effective than those we were offered before. Yet how much further to the bone are we prepared to cut our public services in an era of dwindling funding before we confront the “elephant in the room” – that government is a failing, old pipes organisation in an era of platforms?

In ducking their obligation to understand this fundamental distinction, to communicate it loudly, and to acknowledge the task of transitioning from pipes to platforms as their central mission bar none, those who run our public service organisations are failing us all.

Step 1: Understand what platforms mean

So what can we in the IT community do about it? Choudhary suggests three steps that correspond with what some of us have been saying for years. This is my version, adapted for the public sector.  

Step one, to adapt Bill Clinton’s 1992 presidential campaign slogan, is helping our masters to understand that “it’s the business model, stupid”. Government is lost, and looks in the wrong place. Faced with squaring the circle of maintaining public service levels in the face of continuous cuts, cost increases and exponential demand, it flails around for answers, too enchanted with technology quick fixes to recognise that the writing is on the wall for the entire public service structure as constituted. 

No amount of shiny new tech – blockchain, big data, internet of things, or the other memes in the salesbags of the government’s favourite advisers – nor any amount of traditional accessibility measures – website refreshes, social media, mobile apps, or other redesign of the storefront – will entice us into a store that citizens don’t want any more. 

Most of the tech that government builds or buys today is simply strapping computers onto a corpse
Mark Thompson

Public servants dazzled by this stuff are wasting our money. Most of the tech that government builds or buys today is simply strapping computers onto a corpse. Such practice should become as socially toxic as drink-driving, for its social consequences are ultimately just as devastating.

The shift away from Blockbuster to YouTube government – it will happen, eventually – involves moving from “government knows what’s best for citizens” to “government provides an open platform for citizens to create and share”. Understanding that a digital government is inescapably a platform government – not the same old corpse with some strap-on tech – and the magnitude of what that means, is step one along the road to transformation. 

This is basic stuff for 2017: if our Deliveroo courier “gets” platform businesses, why not our politicians? Inconveniently, of course, step one makes a complete nonsense of most of the transformation programmes in operation across government, which – let’s be honest – have no real intention of disrupting anything at all. 

Step 2: Map and standardise

Having understood that digital is all about disrupting the business model, which means moving gradually from pipes to platforms, step two is to make a start on this process by identifying and standardising almost all administrative assets in the public domain, including business rules, metadata, structure, semantics and, equally importantly, cost. 

No more hiding bad deals behind commercial confidentiality. Like drink-driving, if you behave antisocially with public money, your fellow citizens should know about it. 

Same with health, by the way. Set aside anything vaguely clinical (it’s risky, specialised, political, and so on, so don’t touch) and take everything else, brutally standardise it for the basic, commodity administration that it all is, and consume it down a pipe, like electricity. The potential savings are in the tens of billions. 

How many more NHS trusts need to fall to their knees before patients notice that the billions that are supposed to be spent on doctors and nurses are actually being siphoned off to prop up complex administrative activities that are just salami-sliced versions of the same, basic stuff? And for them to feel outraged by this realisation?

By starting to compare apples with apples, we will expose the catastrophic levels of duplication and waste in the corpse. The tens (eventually hundreds) of billions of wasted funds thus exposed will appear in the newspapers, and our politicians and senior public leaders will develop a mysterious new interest in platform businesses.

Sounds important, doesn’t it? An opportunity to reinvigorate our social infrastructure that hasn’t been seen since Bevan, or even Brunel, that uses smart thinking about the internet to reallocate billions away from fruitless public administration to public services, effectively safeguarding these for generations to come.

Yet where is the vision and leadership within government to do this? The Department for Communities and Local Government has failed to do this for local authorities; the Department for Health has failed to do this for the NHS; the Cabinet Office has failed to do this for central government.

As one of those calling loudly for such measures for years, my view is that nobody will risk putting their head above the parapet until we citizens shout louder. The treadmill of Treasury reviews looking for quick fixes to deliver benefits in the current parliamentary cycle seems to squeeze Whitehall of its courage.

Step 3: Expose and publish

If step two will eventually deliver billions in savings, step three will deliver an explosion in citizen-led democracy and social innovation.

Having identified and standardised public assets, the government must publish and expose them so that public servants, citizens and other organisations can recombine them like Lego bricks, at minimum to no cost, into public services we haven’t even thought of yet.

In other words, government must act as a platform innovator, placing itself at the centre of a thriving ecosystem for social and economic exchange. Involving citizens in design and innovation of services themselves is real accessibility – not making existing services more accessible via a website. 

Not everyone has the critical mass to be a platform innovator, but government could do so if it operated socially, like bees in a hive, each aware of what the other is doing, rather than mechanically.

Changing the culture

The technology is already out there – the real challenge lies in education and culture. Take education first. We have a Major Projects Academy, which helps us to spend our money efficiently, but no mandatory Digital Business Academy to help every minister, permanent secretary, director-general and public sector CEO in this country to understand what we should be spending our money on in the first place.

That doesn’t mean more “agile” training, or standardised informatics modules delivered by Civil Service Learning under some outsource agreement. Our leaders desperately need executive-level business education about what the internet really means for the state – and they’re not getting it.

Read more about digital government

Culturally however, we face perhaps an even more daunting challenge. Take data, for example, where we’re equally inconsistent in our attitude. 

On the demand side, as citizens we are happy to share data, largely unthinkingly, with private companies that we would be wary of sharing with the state. While “Zuckerberg’s law” claims that the amount of data we’re happy to share with companies increases exponentially year on year, there is little evidence that the state-citizen “data discussion” has progressed much, if at all.

On the supply side, a legacy of the possible sanctions under existing data protection rules means public servants often have a deep-seated reluctance to share with peers what data they do have – despite being confronted with evidence of the conspicuous social benefits that can accrue (a great example is www.transportapi.com). A fear and culture-based reluctance has already seriously hampered urgent attempts to join up our siloed and digitally inefficient services. 

Urgent public discussion

In a double-bind, many citizens don’t want the state to know much about them, and many public servants don’t want to share. As with the need for a platform discussion, so we must have a similarly urgent public discussion around objectives, definitions, good practice and governance that addresses what people gain, as well as give up, by sharing data.

Otherwise we will be swamped by the need to ensure that new abilities to process unstructured data, such as images and natural language, result in public benefits rather than ruthless commercial exploitation and surveillance.

We in the tech community share an important national task – to help everybody discuss what the shift from pipes to platforms means for our public services; to educate our leaders about their vital role in this process; and to build a public culture that balances increasing openness with a maturity of regulation in which we can all trust. 

There is much work to do. In 2017, let’s talk more about business models, education and culture and less about technology.

This was last published in February 2017
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