Deloitte - the barriers to government digital transformation

Confidence in digital progress is low and governments worldwide are being disrupted by the challenges of abandoning analog operating models in favour of their digital counterparts

That’s the conclusion of a new report, The Journey to Government’s Digital Transformation, from Deloitte Public Sector Research.

The consultancy surveyed over 1,200 officials within 70 governments and found 96 per cent of them describing the impact of digital technologies as “significant”, and three-quarters of all respondents describing the journey to digital government as “disruptive”.

This much should come as no surprise. But what does make for interesting reading is that only 13% of the governments surveyed are “digitally maturing” (not “mature”) in their use of digital technologies, in Deloitte’s view, with the vast majority – 60% – described as “developing”. The remainder are in the early stages of digital adoption.

Only 37 per cent of respondents said that they are either “very satisfied” (five per cent) or “satisfied” (32 per cent) with their government’s reaction so far to digital trends, while just 36 per cent said that they were either “very confident” (four per cent) or “confident” (32 per cent) in their organisation’s readiness to respond to digital opportunities.

Two main drivers for digital transformation were cited by respondents: cost/budget pressures, and citizen demand. Registering most strongly out of 70 governments on the cost-reduction axis was the UK, where budget concerns are the main impetus for 56 per cent of public sector organisations, while Canada is the most focused on its citizens, with 64 per cent of respondents citing citizen demand as being the main driver for change.

A major cause of concern for the UK’s digital policymakers is the report’s finding that a focus on cost reduction is one of the key signifiers of an early-stage adopter, rather than a developing or maturing organisation. On this specific measure, therefore, the UK is implicitly the least mature government in the survey. The report goes on to say:

It’s clear that citizen needs become more prominent as an agency moves up the maturity curve. Indeed, maturing organizations are nearly twice as likely as early-stage organisations to be driven by customers’/citizens’ demand for digital transformation.

A laser focus on using digital technologies to improve the citizen experience helps maturing organizations improve service delivery. Not surprisingly, maturing organizations also say overwhelmingly that digital trends are improving their citizen/customer service quality.

Ironically, the report quotes the former director of the UK’s Government Digital Service (GDS), Mike Bracken, as saying:

Transformation means more than fixing websites. It goes deeper than that, right into the organisations behind the websites. There’s a logic to it: digital service design means designing the whole service, not just the digital bits. If you’re redesigning a service, you need to think about the organization that runs it.

As diginomica reported in August, Bracken stepped down from the GDS amid rumours of a perceived lack of organisational and political support within a Whitehall that is focused on slashing costs rather than transforming citizen services. He has since joined the Co-Operative Group, where has set about employing several of his former colleagues.

The long-term impact of the UK’s proposed revisions to the Investigatory Powers Bill – aka the Snooper’s Charter v2.0 – on the country’s progress towards being a mature digitally enabled organisation can only be guessed at. It goes without saying that gaining citizens’ trust will be core to the success of digitising public-facing services.

Other signs that organizations are neither maturing nor developing are a lack of awareness or skills, insufficient investment in workforce development, an absent user focus, and a risk-averse or disintegrated culture.

Maturing organizations, meanwhile, are characterised by a strategy to transform fundamental processes, a digitally sophisticated leadership, adequate investment in workforce development, a strong focus on the user/citizen, and a risk-receptive culture that fosters innovation and collaboration.

One of the inherent problems in the public sector can best be described in a single word: bureaucracy. The more pronounced hierarchies and governance structures of the public sector present a constant challenge to digital transformation, as IT leaders may have to make decisions quickly as technologies evolve. This is one reason why many respondents believe that the private sector is leaps and bounds ahead of government in digital transformation programmes.

One thing is clear from the report: to succeed demands a clear strategy aimed at transforming government, coupled with strong leadership and a supportive culture and investment. This is evidenced by the statistical findings, claims Deloitte: only 14% of respondents in organizations defined as early-stage adopters say that they have a clear organizational strategy, while 86% of “maturing” organizations believe that they have coherent strategies. Interesting, although clearly a circular argument.

But who is the leader? Fifty-one percent of respondents said that a single person or group has responsibility for driving digital change within their organization – a troubling 12% couldn’t answer the question.
But who is the leader? Fifty-one percent of respondents said that a single person or group has responsibility for driving digital change within their organisation – a troubling 12 per cent couldn’t answer the question. However, 34% said that leadership comes from “below C-suite” level in their organisations.

This suggests that, in many cases, digital programmes are being managed by non-strategic executives – a sign of tactical manoeuvres rather than strategic transformation.

So what of those 60% of organizations that are in middle of their digital journeys – those governments that gave passed the early stages but have yet to reach maturity? For them, the main barriers to overcome are having competing priorities, insufficient funding to follow through on their ambitions, and a lack of organizational agility, alongside an insufficiently developed strategy.

How to succeed

Which begs the question: how can organizations succeed? The report spells out the five key questions to answer before governments can attain digital maturity:

• Strategy. Do you have a clear and coherent digital strategy that addresses the key elements of digital transformation?
• User focus. How can citizens and service users be part of your digital transformation?
• Culture. What have you done to strengthen your organization’s innovative and collaborative culture?
• Workforce skills. Have you looked at your talent pool and planned where the skills will come from?
• Procurement. Are your organization’s existing procurement processes suitable to procure digital solutions?

However, the cultural dimension is the most challenging aspect of digital transformation, according to 85 per cent of respondents. Digital culture is weaker in the defence, energy, and law and justice sectors, says the report – all areas where there is low tolerance for error, and where small operational mistakes can have damaging long-term impacts.

Meanwhile, workforce digital maturity is weak in sectors that deliver professional services, particularly higher education, healthcare, and social services, say Deloitte. That said, user focus is higher across those sectors that deliver knowledge services to citizens – including education

My take

The report concludes:

Government organizations that achieve success with digital transformation will be more flexible, adapting to the one constant of the new digital age: change itself.

They will re-imagine their services and continually innovate the way they engage with customers.

Continued digital evolution may see some public bodies struggle as the environment changes around them; others, by taking advantage of all that digital transformation can offer, will thrive.

A reasonable summation.