Archive for October, 2011

Achieving Value from Digital Technology in the Public Sector

Tuesday, October 11th, 2011

Public authorities and agencies face challenging times. On one hand they face changing citizen and customer needs and wants. On the other they face financial constraint and changing structures. In addition, as in the private sector and personal domains, technology change presents both significant opportunities and challenges, which the public sector has found difficult to engage and employ in ways that can profoundly change what they do, what they produce, and how much it costs.

Customers in all sectors are becoming more demanding about getting what they want, when they want it, and how much for. They care less about a relationship with a council, a public agency or a local NHS institution, and more about their needs and wants being fulfilled. They want the agencies to serve them, not to be the consumables of the public sector service providers, often working disjointedly and so failing to address the individual’s issues in satisfactory ways. The corollary of this is that public agencies spend their budgets in less than coherent ways in not quite dealing with the wants of citizens and customers and often failing to deal with the root causes of long term and seemingly intractable or reoccurring (in the context of the consequences of a weak economy) public policy problems. And in response to this, the watch word at a national policy level is choice, with choice and competition driving improvement.

Some demands are becoming ever more daunting, e.g. the consequences of an ageing population, with profound financial consequences and increased complexity in terms of meeting the individual and interconnected needs of citizens. The sharp impact of public spending cuts amplifies the challenges and creates the need for new ways of ensuring public policy and service outcomes are met and how much these outcomes cost. This is the opportunity for rapid innovation and evolution in public service delivery, but it requires a clear understanding of the opportunities and how to take them. This is enormously challenging for leaderships and managements bogged down in the day job, dealing with the challenge of cutting spending on a significant and painful scale.

Structural change in public service delivery is intrinsically linked to the financial agenda and presents another challenging dimension in the public service domain. But structural change is also intrinsically linked to changed and new business and service models that could achieve more for less. Service models are now about delivering or enabling outcomes, whoever does it (public, private or third sector) and  enabling people to get outcomes for themselves. Issues such as personalisation, mashing up or hybridising services to deliver for personalised wants and needs, and creating value generating pathways across and between the old service silos to fulfil citizens’ needs are core to the new agenda, but they demand clearly and well thought out strategies and implementation programmes. Otherwise they will remain unfulfilled opportunities to do better and will leave painful problems unresolved. The economics are critical, moving from supplier driven economies of scale based monopolies to personalised, flexible and value generating service and outcome provision by a range of service providers from different sectors, with the citizen playing a key consumer style role. It will also be critical to rise to the knowledge and expectations of citizen consumers who in very many cases have already found and used the capabilities of digital technology to fulfil their own needs and wants, and therefore shape the products and services they consume.

Which raises the ‘DT’ issue. Digital technology has had profound impacts in the private sector and in the lives of citizens, but it’s successful and sustainable application in the public sector has been more difficult and perhaps less productive. Digital technology is often talked about as being at the heart of public service transformation, but it’s application has been fraught with unfulfilled aspiration, missed or misguided opportunities and limited returns on investment and effort. Digital technology is essential for achieving substantial change in the public sector, including reforming the economics of service delivery, but the challenge is answering what that means and how it’s achieved so that its impact can be felt and measured, and is worth the effort of money, time and effort. This means focusing on achieving specific value, getting real results and returns, using the consumer power of citizens to drive change, focusing on the economics and using financial environment as a driver, and getting a grip of the pushes and pulls of technology to lever substantial and sustainable change. Making technology work better in the public sector also defines and develops the market for technology and technology enabled services for the private sector.

If the issues (and opportunities) of finance, customer demands and expectations, demand growth, structural change and how to apply digital to technology to have some meaningful impact aren’t enough to be getting on with, the demands of time and timescales add additional bite to the challenges faced by the public sector. The longer the public sector fails to apply digital technology to get real results, the bigger the cliff it will have to climb (or fall off) to be able to deal with the challenging environment it’s in. The world is changing and the public sector needs to catch up, not the least as new technologies like cloud and social media appear rapidly with profound consequences. If it doesn’t, it will cost more, the costs will be lest productive than they should be, and the pain will be greater for citizens, consumers, public agencies and the workforces alike.

It’s not as though there haven’t been attempts to innovate technology enabled services and applications (or at least nod in that direction), or to lever larger scale applications of digital and connectivity technology to prompt transformation. The digital question has featured to some extent in many specific or aspirational programmes focussed on particular policy areas, e.g. health and care and digital inclusion (including the locally focused Digital Challenge and subsequent DC10 programme), on inputs and re-organising services initiatives such as Total Capital and Assets Pathfinder and Community Based Budgets, and in programmes focused on pushing connectivity as a route to achieving a broader range of benefits (not the least being financial) such as Broadband Delivery UK and Public Sector Networks. Plus, there are other programmes out there that are seriously connectable in order to generate value that people want and someone will pay for, e.g. the move to smart metering, although this may drift off into its own application silo and fail to capture transformation opportunities. The point is that these types of initiatives are connectable, and the initiative can be taken at the local level (it may just too hard to do this at a central Government level, although Whitehall can help). And that’s where real technology enabled transformation opportunities lie.

But the question is, is this set of initiatives prompting serious adoption and the consequent transformation of the quality, scope, scale, and productivity of public services, or are they likely to become just another set of of programmes that didn’t quite deliver the change and leverage they were meant to? On the other hand, they offer an opportunity to create energy and focus to do things, but the question is how?

A key issue about making technology enabled change successful is that it isn’t just about applying bits of technology in systems, processes and flows as they work now. Experience shows that a broader set of changes is needed to realise the value of applying technology. This was true in the private sector and is true for the public sector. For example, airlines that failed understand how the Web changed how customers buy flights and ancillaries and banks that took a while to work out that the Internet changed how their businesses operated went through failures and pain.

There needs to be a serious commitment to understanding how technology changes business models and the risks this carries, and how new and changed service and operational models will really work, particularly from the outcome and consumer points of view. This requires a fluid, whole system approach that focuses on the things that matter for achieving sustainable and value generating change. Telehealth is a good example of unfulfilled opportunity. It’s not about applying some technology kit in isolation from other activities fundamental to the experience of users (in health, care or other service domains) and the ability of providers to deliver services that meet the broader spectrum of their and their customers needs. One thing is very likely: services will have to reshape often extensively in terms of what they are, how they’re delivered and by whom, otherwise the the value achieved will be constrained, worthwhile returns limited, effective take up will be low and in the long term, more painful problems (sometimes literally) are maintained.

The public sector no longer works in a world segregated from the private and third sectors (where there’s been some good technology application innovation over the years). They need non public providers and vendors to understand what they need (and might need) and how they can achieve it. On the other hand, technology vendors often see their offer as compelling, but the question is how compelling is it if the buyer doesn’t fully understand what to buy and how to use it? Both sides of the supply and demand equation have a real interest in defining what should be done to develop the market in order that both sides benefit, and most importantly the users of services feel the benefits in in their own real and meaningful terms. A real world approach to achieving concrete and sustainable outcomes that drive adoption and market growth is needed, especially in an environment where need and capability have never been greater, but the delivery components haven’t been developed and put together well enough to make that much of a difference.

The successful application of digital technology in the public sector is intrinsically bound up with transformation of services, business models and communities. It’s about achieving real, specific and sustainable outcomes, focused on the citizens and other clients and customers of public agencies. The consumer perspective is critical, moving from a get what you’re given approach to consumers getting what they want, when they want it and how they want it according to their own personal and individual needs. This is a tough, finance driven world where resource productivity is critical. To achieve this, new, focused, and multiplayer business and service models that organise public, private, third sector and user selected offers in order to deliver effectively and at affordable costs are essential. The key issues are achieving concrete and meaningful value, returns on investment and effort, and liberating the potential of technology to deliver for citizens, commissioners and suppliers. Otherwise the story will continue to be one of unfulfilled aspirations, missed opportunities and unnecessary ongoing pain for citizens and public service providers.