Digital Transformation in the Public Sector

Digital transformation is a very common phrase in the business world, but it’s also a very acute issue for the public sector and public-facing industries, like the medical sector. Plus, it’s already happening, with public/private partnerships driving digital initiatives in cities all over the world — AI-driven traffic lights, digital voting and ID initiatives, and banking the unbanked are just a few of the countless projects underway right now.

But, the public sector has very unique structural challenges. In a lot of ways, large public institutions are sort of built to resist large-scale, fundamental change — which has benefits when it comes to consistency of services, but transforming large, entrenched bureaucracies is no easy task. It is, however, a necessary one.

Digital Transformation isn’t limited to “private” vs. “public”

In truth, it’s impossible to separate private and public sector digital transformation. The two are symbiotically connected in so many ways that it’s probably more useful to just use something like “societal digital transformation”. Both the fundamental issues that need to be addressed and the structure of the ways they can be achieved are essentially the same in both the public and private sectors.

Paul Whimpenny wrote an excellent piece for CIO Magazine back in December 2018 that captures the challenges of digital transformation in the public sector perfectly. He draws on his experience working the UN:

“The good news is that even in a complex United Nations organization, introducing change does not necessarily require huge technical effort. In one recent and surprisingly simple digital initiative we created a mobile application which brought relevant crop, weather and animal health information directly to family farmers in Rwanda and Senegal. While technically trivial in itself, it broke the traditional model of FAO working through governments, extension workers, and policy makers and spoke directly to the small land holders. In a commercial environment this would of course be considered as opening up a new business channel.”

Whimpenny lays out what he sees as the four main obstacles to digital transformation in the public sector: Complexity of business objectives, multiple business lines, lack of a “single customer”, and culture.

Big ideas, small wins

All of the things Whimpenny mentions as roadblocks to digital transformation are right on — and they’ve been confirmed elsewhere. In 2018, McKinsey commissioned a far-ranging survey of nearly 3,000 public servants and digital transformation leaders, and the results line up almost perfectly with the previously-mentioned obstacles. It’s worth reading the full report to grasp the breadth of the challenge to the public sector, but a couple of stats stand out.

First, the failure rate of transformation programs in the public sector is 80%. 80%! To be fair, it isn’t much better in the private sector (74%), but a 20% success rate does not bode well for future initiatives. The thing is, there are business models to follow when undergoing digital transformation in the public sector. Per the McKinsey report:

What’s interesting to me in this is… that people rate grocery stores so high — who knew? What’s actually interesting is that all of the top results in this customer satisfaction survey is that most of them are some mix of analog and digital — often largely automated or otherwise digitally-accessible, but with a person or team of people there to help along the way and get things across the finish line.

There is a model for public services, but there’s a long way to go and the answer may not always be “fully digital”. The built-in slow pace of public sector transformation lends itself to big ideas and small wins. Using Alexa and other voice tech to remind hospice patients to take medicine; Speeding up response time to simple inquiries with AI and chat-bots; Smart infrastructure like traffic lights — all of these technologies are being used right now to provide public services.

But, as noted in the McKinsey survey, countless think-pieces, and this roundtable hosted by The Guardian (UK), the pace of mass adoption is…essentially non-existent.

What can the private sector do?

Educate, learn from, and cooperate with our public sector colleagues! If you’re building a blockchain-based digital identity application, work with the services on the regulatory side that will need to be able to handle such technology and make it meaningful for the end user. A verified digital identity or medical history is great, but it doesn’t do much if you can’t use it at the bank, the passport office, or the hospital.

Public/private partnerships are driving innovation in the public sector, and that won’t be changing anytime soon. Technology investment and adoption in the private sector is great, and we should do more than simply sell that know-how to the public sector — we need to work hand-in-hand to build the systems of the future. Hold meet-ups, hackathons, whatever, and engage with public sector people however you can.

What can the public sector do?

Change completely overnight! Actually, no. My advice to transformation leaders in the public sector is stick with it. Digital transformation is coming whether you want it or not, and your end users — constituents and taxpayers — are already expecting you to keep up with the times.

Small wins like parking apps, connected public spaces, and more are great and they add up. Team up with colleagues in the private sector and don’t be afraid to give slow-adopters a nudge or two in the right direction.

But, most importantly — educate yourselves. As I noted in a previous post, so much of what passes for “government action” on technology issues ends up being so unserious, and it’s dangerous. If you can’t wrap your head around the idea that a thing that gets more engagement gets seen by more people in a social media news feed, how can you be expected to understand the complex computing (and its inherent biases) behind some of our fundamental societal systems?

AI, blockchain, machine learning — these are technologies that are already having profound effects on our personal and professional lives. And we are still in very very early days of adoption. We need officials who can grasp the consequences of digital transformation and execute it, and a private sector that understands the benefits of our increasingly-digital society.

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