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KPMG: Why is digital transformation in government and public sector so difficult to achieve? #techUKSmarterState

This week (26-30 September) the Central Government Programme is running its Building Smarter State Week in the run-up to the eighth edition of our flagship public services conference, Building the Smarter State, which will take place at The Royal Society on Thursday 29 September. All week we'll be featuring guest blogs from members on topics supportive the agenda.

Read the latest blog below:

Digital transformation of the front and back office is not easy at the best of times. The pandemic has only made this more challenging, it has also highlighted that the digital agility and adaptability of governments is a necessity for future success.

Antiquated processes on legacy technology platforms pose as a hinderance, if not actually a threat, to their ability to appropriately respond to changing circumstances.

Government agencies also recognise this and often have numerous initiatives already underway to drive digital transformation. However, it can be said that many of these programs fall short of delivering their desired outcomes.

No organisation embarks on a digital transformation to fall short. But how can this be changed?

Where does it go wrong?

  • The first and arguably the most important barrier, is a lack of knowledge about potential achievements that result from a more strategic approach. Having a vision for transformation is typically informed by understanding the art of the possible. To be transformational, the leadership team should know and understand their end goal so that they can appropriately plan how to get there. Increasingly senior leaders have been modelling their business after the start-up and commercial business playbook, looking back into their organisation with a business to consumer lens.
  • Governments and public sector agencies typically buy technology and supporting services through a stringent procurement-led process that is deep in the weeds of function and technology. Suppliers issue a collective groan as another 2,000-line spreadsheet of ‘capabilities required’ drops into the inbox. When comparing modern cloud platforms, virtually all top quadrant suppliers can tick the ‘fully compliant’ box. All too often it leads to a modern version of what is already there. There is nothing transformational about this approach.
  • Organisations often allocate and measure their budgets and return on investment (ROI) in short-term stints, which ultimately result in lost opportunities to transform. A transformation-focused project is a long-term investment. The payback period will likely extend beyond one accounting or political/election period. Consequently, many face challenges when advocating for the investment necessary to achieve the organisation’s transformation goals. Features and functions are delivered by the top quadrant cloud suppliers at a frightening pace each year. Taking a longer-term transformation view helps to establish an ‘innovation’ led culture with an organizational model that can provide for the continuation of the transformation program year in and year out, changing and flexing as the needs of the organization change.
  • Inter-department capability is often the driver rather than intra-agency convergence.Like any complex organisation, governments are made up of multiple departments and entities, each with their own history, systems, management teams, locations, cultures, and decision-making processes.

In short, digital transformation is not prevented by a lack of technology, it is prevented by failing to identify the ideal outcome upfront.

How can an outcome-led transformation overcome this?

  • It aims to avoid a simple and ineffective modernisation of current capabilities. By taking the opportunity to outline strategic, specific outcomes beforehand, governments can avoid ‘directionless’ technology procurement.
  • A transformation project measured based on value delivered, rather than as just cost, helps address the common barrier associated with ROI in a short term. It enables amortisation of the investment over the life span of the approach, rather than on a fixed short-term period.
  • Business outcome delivery and KPI’s embedded into the procurement cycle can help suppliers bring more creative commercial models to the table. Deliver the core for a fee, then share the expected benefit of the improvements made together.

Moving forward

To conclude, taking an outcome focused approach to digital transformation can significantly help reduce risk, increase the likelihood of success, and increase the value it brings. For government and public sector agencies that are stuck on legacy systems, it can accelerate the move to the cloud, in a way that prioritises sustainable change.

Digital transformation is necessary for governments and the public sector. When done in the right way, it can help provide long-term value and can strengthen the ability of the workforce to deal with some of the many nuances in the government and public sector.

The opportunity for efficient, connected government is there, as is the opportunity for convergence where desired. It should be approached in a mindful and efficient way.

This article was written by KPMG and shared as part of techUK's Building the Smarter State Week. To learn more about KPMG, please visit their LinkedIn and Twitter.

Building The Smarter State Conference - 29 September

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