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Deloitte paints worrying picture of government readiness for digital transformation

Derek du Preez Profile picture for user ddpreez July 12, 2015
Research by consultancy firm Deloitte points to culture, skills, funding and procurement as huge barriers to success.

It's easy to get wrapped up in the government's vision for digitally transforming services across the public sector. For years now, the Government Digital Service (GDS) in Whitehall has made it its goal to go about shaking up government departments and getting citizen transactions online – with the user need always being the central focus.

From a new cross-government website in the form of GOV.UK, to being able to register to vote online, to the much anticipated government-as-a-platform (GaaP) strategy, GDS has genuinely been leading the world in its ambitions to transform public services.

And it can't be denied that progress has been made. The G-Cloud framework (despite recent worries over awareness levels) has paved the way for a new approach to procurement, working digital hubs are being formed across central government and millions of pounds has been saved. GaaP, if successful, could be genuinely groundbreaking for governments around the world.

However, despite the visions, rhetoric and success stories to date, it's easy to forget the magnitude of the challenge at hand and the problems that the government is going to have in scaling up its digital ambitions beyond the walls of Whitehall and across local government, schools and the NHS.

The latest report from Deloitte serves as a good reminder that difficulties still lay ahead and that in terms of transformation across the broader public sector, there is still a hell of a lot to do. Deloitte surveyed 400 public service leaders and found that skills, culture, funding and procurement are proving to be huge barriers to digital progress – despite there being the appetite for change.

Joel Bellman, public sector digital partner at Deloitte, said:

In terms of efficiency and money saved, there is a great deal to gain from digital public services. Citizens are accustomed to excellent digital services in other areas of their lives and do not accept that Government is immune from this. Our survey finds a disconnect between those designing digital public service and those that will use them.

The technology is there for the public sector to take advantage, yet they lack the culture, skills, governance and leadership to do so. The public sector needs to ramp up its digital skills, just one quarter saying they have the right skills in place is not a good omen.

Funding is clearly going to be difficult in an age of austerity but digital is a route to long term savings.

Demand vs. Capability

One of the first things highlighted by the Deloitte report is that despite there being strong drivers within public sector organisations to push ahead with digital change – the main two being customer demand and budgetary pressures – its internal design capabilities don't seem to be up to par.

Whilst 89 per cent of respondents said that their organisation aims to use digital to realise efficiencies and 87 per cent said that they aim to improve the customer experience, half of all organisations believe that they lack user experience design capability and just 12 per cent report a high or very high level of citizen involvement in the co-creation of services.

In the same vein, Deloitte pulled out skills across government as a big problem for digital transformation. Both in terms of those on the ground delivering services and those leading the charge.

Some 93 per cent described workforce issues as the most challenging area to manage in their digital transformation.

Those surveyed said that the top three abilities they needed to take advantage of digital were collaborative processes, business acumen and technological savviness, but just a quarter of organisations believe that they have the sufficient skills to execute on their digital strategy.

Just one-third believe that their leadership have the right skills to deliver results. Only 35 per cent believe that their organisation is ready to respond to digital.

The report also rightly notes that whilst most organisations are reducing their reliance on vendors and

Culture sign for travel, the arts, tourism & tradition © EdwardSamuel - Fotolia
bringing this capability back in-house – in a market that is short of digital skills, where does this leave a lot of the public sector?

All of the above paints a worrying picture for how organisations will execute on their digital strategy. Even if there is a desire to do so, without the skills it's not an easy task.

Funding, culture and commercial challenges

Some good news from the report was that whilst 45 per cent of organisation highlighted funding and too many competing priorities as significant barriers to to digital adoption, it also found that levels of investments were going up over the past year. 32 per cent said that they had increased their level of investment and 17 per cent said that it had increased significantly.

Deloitte notes that the main competition for funding comes from the need to 'keep the lights on' and investing in transformation.

However, once again, which shouldn't come as much of a surprise I guess, culture has been highlighted as a big barrier to adoption. The report notes:

We asked survey respondents to rank the areas of digital transition that they thought are the most challenging to manage. Overall, they told us that workforce issues are the most challenging dimension of digital change. Whilst culture came second, responses were weighted towards culture being a particularly difficult area of change.

So while 89 per cent of respondents said that changing culture towards digital was challenging, 34 per cent of those said it was highly challenging. in other words, respondents recognise the level of change needed to ensure a digitally-savvy workforce, but they know that changing culture is a uniquely difficult task.

And finally, the research found that procurement and the ability to access thriving digital marketplaces are proving hard for public sector organisations. Some 83 per cent of those surveyed said that procurement needs to change significantly to accommodate digital transformation.

That's very good news for those promoting the likes of the G-Cloud, which has streamlined procurement processes and made prices transparent. But it also begs the question, why isn't the broader public sector adopting it as an alternative?

When asked to rank the most significant obstacles to better procurement practices, the three most often cited were rules and regulations, lack of flexibility and legacy contracts.When asked in what ways procurement needs to change, the two most significant reasons were to support agile development and to lift restrictions on terms and conditions – something that GDS is trying to tackle right now with the Digital Services Framework.

And it seems that the vendors are still not delivering on what the public sector needs. Whilst 74 per cent of those surveyed said that they needed to use both in-house and contracted resources to deliver services, only 17 per cent said they were satisfied with the vendor community.

My take

It's surprising to me that the challenges being discussed in this research are essentially the same topics that were being highlighted four or five years ago at the beginning of the digital transformation occurring at the centre of Whitehall. It's worrying that the discussion hasn't moved on beyond skills, culture, procurement and funding to other things like innovative business models and the interesting use of data to deliver customised public services – the public sector is still struggling.


And whilst the Cabinet Office is talking about some fascinating things centrally – such as GaaP – these results just remind us that scaling up that capability is going to be incredibly difficult. Looking through Deloitte's research, even the case studies that are cited are case studies that I've been seeing for the past two or three years. Where are the new ones?

It's really quite worrying.

And while I know that GDS isn't keen to get involved with local government or the NHS – these are organisations that deliver a huge chunk of our public services. They need to be spoken about and prodded into driving change.

GDS has done some fantastic work and genuinely is a world leader, but we also need an honest conversation about the challenges still facing the public sector and how they are going to be overcome.

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