12 minute read 23 Sep 2019
young businessman looking tablet

How to build the digital state

By

Arnauld Bertrand

EY Global Government & Public Sector Advisory Leader

Working with governments to build stronger administrations for impactful public policies. Passionate about leading teams to guide public performance, innovation and service.

Contributors
12 minute read 23 Sep 2019

The digital revolution is generating new opportunities for governments to transform how they work and deliver better outcomes for citizens.

As demand for public services grows, budgets tighten, and citizens become more empowered, “business as usual” is not an option for governments. They need to rethink the way they deliver services to the public and harness new technologies to tackle national, regional and local issues.

New technologies offer tremendous potential for governments to accelerate transformation. When used as a strategic tool, they can provide the missing link to help deliver better outcomes for citizens in a more sustainable way.

But how can governments overcome the “digital disconnect” — the gap between the potential of digital transformation and the poor track record of public sector implementations?

Achieving reform requires many different parties to coordinate their efforts. The center of government must develop the right policies, regulations and infrastructure to enable a thriving digital economy at a national level. Individual government departments, agencies and local governments must drive transformation, both within their own organizations and by collaborating with other agencies. And businesses, entrepreneurs, universities, nonprofits and citizens themselves must be willing to pool their knowledge and resources.

The ultimate goal is not merely government transformation, but a wider societal transformation that produces better outcomes for all.

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Chapter 1

The role of the center of government

How central government can set the right conditions.

Promoting digital inclusion and access to services

The center of government has a key role to play in creating the right conditions for the development of an inclusive digital economy. Governments must engage and incentivize private businesses to help deliver the necessary infrastructure, train a digitally literate workforce, and enable secure access to digital services.

Developing a high-speed, reliable and robust digital infrastructure is key. Advanced telecom networks – including forthcoming 5G networks – and data centers are the foundation of the digital economy and require continuous investment. Infrastructure improvements must address urban-rural and economic divides, and promote digital inclusion across both. Introducing digital user identity and authentication will enable citizens to gain seamless access to services.

Driving transformation and collaboration

The center of government – often through its national digital agency – must formulate a national digital strategy detailing how it plans to deliver efficient and accessible public services while optimizing the citizen experience. Such strategies ensure that individual departments and agencies are focused on government-wide outcomes and that funding is in place for cross-agency programs. Some countries, such as the US, UK, France and Australia, have created a centralized digital service or transformation office to lead their efforts.

The center of government must break down silos and achieve interoperability of different systems, databases and registers to provide one-stop access to public services. Government platforms should be configured to slot into the services of any agency, supporting a range of applications and services such as identity management, payments, messaging and notifications.

Setting policies, regulations and standards

The center of government must set and enforce common standards for interoperability to enable data sharing across organizations. Many governments are strengthening regulations on the use of individuals’ personal data, to protect their privacy and give them more control over the way it is used.

Governments must also continually update regulatory and legal frameworks to take account of rapidly evolving technologies such as artificial intelligence. These frameworks should allow innovation to flourish while managing potential risks.

It is vital to deal effectively with the threat of cyber-attacks, which threaten the democratic process itself. Governments must embed cybersecurity at every stage of their activity, from strategy to design and operations, and collaborate with other actors to create a robust cybersecurity policy framework and secure ecosystem.

Securing the right knowledge and talent

Intergovernmental collaboration and the exchange of knowledge and expertise across national borders is vital. The D9 group of advanced digital nations – the UK, Estonia, South Korea, Israel, New Zealand, Canada, Uruguay, Mexico and Portugal – meets regularly to disseminate best practice and develop solutions to common stumbling blocks.

The public sector must be able to compete with the private sector to recruit, train and retain the best talent. The center of government can help prepare the workforce for the digital age by building core technical skills such as software development and systems architecture, as well as new skills such as data science. As governments gradually build a more dynamic environment, they will attract younger workers in search of roles where they can make a difference to society.

Digital transformation also has wider implications for the future of work in general, and governments must consider the impact of automation on society, equality and employment. They must focus on developing the skills of the wider population to maintain employment opportunities.

  • Building skills for the future in Singapore

    Ensuring that Singaporeans have deep skills for the future and are inspired to learn throughout their lives has emerged as a key nation-building effort in recent times. As digitalization holds the key to unlock much of the productivity and innovation potential of businesses, the local workforce too must evolve to acquire, deepen and accelerate the right digital skillsets and mindsets. 

    EY teams are helping the Singapore government to drive the national skills agenda. They facilitated the development of a National Skills Framework across ten sectors, including public transport, healthcare and social services. And EY teams are working with SkillsFuture to help different industry sectors define their current and emerging skills requirements, and anticipate changing manpower needs.

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Chapter 2

The role of government departments, agencies and local government

Ten key considerations for government agencies and departments embarking on a digital transformation.

Individual government agencies and departments must drive digital transformation within their own organizations. This will involve reforming areas from organizational structure and governance to work processes, culture, skills and technology.

1. Align digital plans with overall vision and purpose

Start by considering the organization’s core purpose. Create a vision of desired outcomes around which all senior stakeholders can align, then assess the role that digital technologies can play. Some organizations start by analyzing their biggest challenges, which enables them to identify and prioritize projects for early digitalization.

Develop a digital strategy and implementation plan to translate the vision into reality. The strategy must permeate the entire organization to break down organizational silos and hierarchies, and promote cross-departmental – and external – collaboration.

2. Create new organizational and governance structures

Be prepared to create entities that are specifically designed for the task in hand. These entities may be responsible for driving the entire digital transformation process, or they may deliver or facilitate particular elements.

Put in place governance frameworks that break down departmental or functional silos to ensure the organization works in harmony throughout the journey. The most effective programs involve senior stakeholders from across the organization who can provide program direction, oversight and shared accountability.

3. Gain support from top leaders

Appoint a senior internal sponsor to give the digital transformation team a strong mandate for change as well as visible support. This sponsor should be a skilled and charismatic individual who understands the transformation benefits and can champion the transition.

4. Design better citizen experiences

Reshape the organization, roles and skills to provide a citizen-centric approach. Use design thinking and customer experience labs to help build services around real user needs, rather than traditional government structures. Identify every technology, process, capability and transition needed to digitize the entire citizen journey and make each touchpoint better, faster and more efficient.

The ultimate goal is to get departments working in unison to deliver a seamless experience. The result: the citizen is served effectively at every point of contact, while duplication and inefficiencies are eliminated.

5. Adapt culture and working practices

Gain employee buy-in by communicating the case for change and the anticipated benefits. Consider using measures such as formal change-management programs, and centers of excellence that help to disseminate digital initiatives.

Ensure decision-making is transparent, and encourage employees’ active involvement in planning, designing solutions and guiding implementation. Allow people sufficient time and space to adapt to new digital ways of working, for instance by rethinking workflows and providing initial and ongoing training in the new digital tools.

6. Optimize IT architecture and processes

Create a more flexible IT infrastructure, based on a service-oriented architecture, incorporating both traditional and contemporary models of infrastructure delivery to facilitate interoperability and information sharing. This approach is both cheaper and more flexible, allowing systems to be reconfigured to meet evolving requirements. 

Integrate disparate legacy systems to provide a single view of the citizen. Use automation technologies, such as software robotics, as a cost-effective bridge between big IT implementations and manual processes.

Assess whether the processes themselves are ready for automation or even if they are needed at all. As processes are automated, consider how they can improve decision-making and resource allocation.

  • Intelligent automation improves services in Odense, Denmark

    The Danish city of Odense has been pioneering the use of automation in the city council. With help from EY teams, the council assessed a number of processes with the potential for robotic process automation (RPA), initially selecting two high-volume, low-complexity processes: the processing of bills, invoices and payments, and the handling of digital and analog forms and data flows. The project was delivered in just two months, from kick-off to implementation.

    The city government had multiple objectives in turning to RPA. It aimed to boost the efficiency and accuracy of its data and processes, and to cut costs. But it also wanted to improve the experiences of its citizens (by increasing the speed at which they can access information and services) and its employees (by reducing the amount of repetitive manual work and giving them the opportunity to work on more creative, value-added tasks).

7. Adopt an agile approach to delivery

An agile approach, combined with continuous delivery, can improve project delivery timeframes and realize value sooner. Divide a multi-year complex program into shorter iterations, enabling adjustments to be made along the way if required.

Launch new solutions by piloting in one particular area to test the concept with a lower level of initial investment.

8. Build specialist digital capabilities

Invest in dedicated teams of skilled digital and technology professionals to deliver the digital strategy. Build capabilities in areas such as emerging technologies, digital marketing, user-centered design, data analytics and information security. Provide well-defined career paths – digital specialists may be a new breed of talent for the organization.

Consider design labs and innovation centers, with a focus on design thinking, citizen journey mapping and idea prototyping, as a nexus for rapid capability development.

9. Encourage innovation and experimentation

Encourage an innovation-oriented and entrepreneurial culture, and empower staff at all levels to challenge the status quo and suggest new ideas. Use incentives such as reward and recognition programs to instill a focus on better outcomes for citizens.

Cultivate an experimental culture with internal hackathons or skunkworks, where small, loosely structured groups work on radical new projects. Consider providing incubation and funding support to operationalize innovative ideas and concepts.

10. Monitor and evaluate progress

Within the digital strategy, set realistic milestones and timelines for the transformation program and develop tangible performance measures to demonstrate both short- and long-term results. Gather performance data on a regular basis to provide insights that can influence further planning and decision-making.

Monitor citizen perceptions and satisfaction by investing in experience-measurement tools. This type of tool will also, in time, help to rebuild public trust.

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Chapter 3

The role of the wider ecosystem

Six key areas of interaction with the wider ecosystem.

In an age of digital disruption, governments can no longer act in isolation. Instead, they must tap into the knowledge and resources of the wider ecosystem – including startups, SMEs, entrepreneurs, universities and research institutions, civil society and citizens themselves – to find innovative solutions to public policy challenges.

1. Delivering a new digital service

In some cases, the launch of new government digital products and services relies on the participation or contribution of partners, end users or other external stakeholders. Successful digital transformation teams carry out genuine consultations to get the buy-in of these partners, which may be vital to the viability of the digital program.

2. Creating or joining innovation networks

Government can foster innovation by building or participating in cross-sector networks that bring together all interested parties. Through effective collaboration, they can co-develop solutions to strengthen competitiveness, improve economic outcomes and raise living standards. This symbiotic relationship benefits the private and third sectors, through public funding, R&D investment and policies that make it easier to operate, while at the same time giving governments access to new technologies, digital talent and innovative cross-sector solutions.

3. Adopting new business models and solutions

Governments are increasingly looking to harness emerging and disruptive technology solutions to improve the efficiency and effectiveness of public services. The fast-growing “GovTech” market provides opportunities for creative new digital solutions across the entire public sector value chain, from policymaking through to service delivery. Government agencies are also partnering or contracting with third parties to harness new technology-enabled business models that provide both the innovation required to transform existing services and the cost savings to make it viable. In some cases, third parties are taking over the running of government services if they can do so more effectively and efficiently.

  • Incubating solutions to social challenges in London

    London Ventures (LV) is a unique collaboration between London Councils, the umbrella body for the UK capital’s 33 local authorities, and EY. The collaboration helps local authorities to adapt and respond to the climate of tightening budgets and rising demand by sourcing and incubating innovative solutions to deep-rooted social challenges. The projected value created for local authorities is around £40 million over the lifetime of the program, through both cash savings and income generation.

    EY teams have also had a significant impact on outcomes for residents through the ventures they have promoted and incubated, predominantly the most vulnerable individuals and families in our society. In one London borough, for example, the practice of sharing data and developing advanced and predictive analytics has identified 1,700 new families that were eligible for additional support before they reached crisis point, to ensure earlier and less costly interventions are made in future.

4. Designing new procurement practices

Some governments are creating digital marketplaces and adopting new procurement practices, which offer several benefits. These new mechanisms diversify the digital supplier base by reducing reliance on larger contractors, enable governments to negotiate better contract terms and improve value for money, and foster innovative solutions from non-traditional suppliers, such as SMEs and startups.

5. Building data-exchange platforms

Governments and public authorities across the world are launching open-data initiatives and setting up data-exchange platforms. The focus is on making data widely available to third parties, including citizens, to help develop new solutions to complex problems, and to become more transparent and accountable. It is also helping to improve service delivery across a range of areas, such as education, health, environment, social protection and finance.

6. Engaging citizens in the co-design of policy and services

Citizens have a major role to play as a source of fresh ideas to build a more efficient and effective public sector. Many governments have created digital platforms for public consultation on government policies and budget priorities, giving citizens more of a say in the day-to-day decisions that affect their lives. The most innovative governments actively engage citizens in the ongoing co-production of policies and services. Policy labs are springing up everywhere, to capture citizens’ contributions to policy-making in areas as diverse as education, health and justice.

The way forward

There is no room to stand still: technology is by nature dynamic, and new capabilities and disruptive business models are constantly emerging. Governments must accept that their transformation journey will be an ongoing one, requiring open minds and evolving perspectives. While the challenges may seem daunting, the rewards are tremendous for government organizations that can effectively plan and manage the journey, and tap into the enormous potential of the ecosystem around them.

Summary

Closing the gap between the potential of digital transformation in government and the poor track record of public sector implementation requires coordinated action from the center of government, individual government departments and agencies, and a wider ecosystem of businesses, universities, nonprofits and citizens themselves.

About this article

By

Arnauld Bertrand

EY Global Government & Public Sector Advisory Leader

Working with governments to build stronger administrations for impactful public policies. Passionate about leading teams to guide public performance, innovation and service.

Contributors