The public sector can achieve massive savings through digitisation, but this will require organisational transformation, which governments will find hard to implement.
Digital transformations require changes, to both processes and IT systems, that are more challenging to implement in the public sector than in the private sector, a paper by McKinsey has reported.
A joint study by McKinsey and Oxford University found that public-sector IT projects requiring business change were six times more likely to experience cost overruns and 20% more likely to run over schedule than such projects in the private sector.
According to McKinsey, most governments are far from capturing the full benefits of digitisation. While there are examples of successful e-government initiatives like the UK government portal, Gov.uk, the paper stated that governments need to take their digital transformations deeper, beyond the provision of online services through e-government portals and into the broader business of government itself.
The paper’s authors urged governments to look for opportunities to improve productivity, collaboration, scale, process efficiency and innovation.
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McKinsey warned that fragmented IT and business processes were barriers to digitisation. “Silos, fragmentation and the absence of a central owner for nationwide IT infrastructure and common components can make it hard to connect the internal ‘plumbing’ to create a seamless experience for the user, be it a government worker, a business user, an average citizen, or another intergovernmental office,” the paper’s authors noted.
One example of inter-department collaboration is the Dutch government digital transformation programme. McKinsey said the Dutch launched a comprehensive digital-infrastructure project led by the national digital-governance agency, Logius. The project steering group included central and local governments and public IT agencies.
Together, using world-class standards, they defined the technical specifications for the 13 central databases involved and their interconnections. They also created a government-wide dashboard to highlight project status and risks and used conferences and social media to disseminate and refine key lessons with public-sector IT managers around the country.
In the UK, the Government Digital Service (GDS) was set up by the coalition government to digitise public service transactions across Whitehall. It has almost completed its two-year project to digitise 25 exemplar services.
In December 2014, the UK hosted the first D5 digital government summit. Speaking at the event, minister for the Cabinet Office Francis Maude said: “As part of this government's long-term economic plan we will do even more – moving to a government-as-a-platform model and ensuring that, by 2020, everyone who can go online is online.”