Citizen-driven public services in an age of austerity
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Budgetary pressures are increasing yet demands on governments are accelerating. Cutting services may seem like the only option. This paper presents an alternative – an approach which can deliver ...

Budgetary pressures are increasing yet demands on governments are accelerating. Cutting services may seem like the only option. This paper presents an alternative – an approach which can deliver better services and drive out real cost savings.

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Citizen-driven public services in an age of austerity Document Transcript

  • 1. A Steria White PaperCitizen-driven public services in  www.steria.coman age of austerity 7 key insights Executive Summary Budgetary pressures are increasing yet demands on governments are accelerating. Cutting services may seem like the only option. This paper presents an alternative – an approach which can deliver better services and drive out real cost savings. Deep cuts in public expenditure are 4. Embed ‘inherent flexibility’ in being called for at a time when the your organisation economic situation is leading to 5. Optimise your use of assets - increased welfare demands, rising consolidate, ‘sweat’, re-use, social unrest and a need to stimulate transfer and rent business growth. Governments are 6. Leverage the supply chain – also facing ‘internal issues’ challenge suppliers to help associated with employee relations, achieve your strategic strikes, service disruption and an outcomes ambitious reform agenda. 7. Sustainable reform - take steps along a change roadmap, not To address these challenges, this jumps paper presents seven ‘key insights’ for leaders in public sector The idea of this paper is not to be organisations:Contents 1. Co-creation of services – put prescriptive but provide a range of approaches that have been proven to customers at the centre of work in leading public sectorExecutive Summary 01 service delivery organisations across Europe. SpecificIntroduction 02 2. Single citizen view - Define recommendations are made for eachThe Market and Market Drivers 02 your data management area to help define tangible actions strategy around citizens that your organisation can take.Challenges 03 3. Empower the ‘frontline’ – tapSeven key insights 04 into the knowledge ofConclusion 11 customer-facing employees© Steria / June 2012 Page 1 of 12
  • 2. Introduction‘More for less’ is now a common mantra heard across governments the world over.No-one would challenge the assertion that there is an urgent case for delivery of publicservices at a substantially reduced cost. However, because of the scale of challenge,the predominant focus needs to move beyond delivering the same services for less cost(efficiency) and also look at ‘doing things differently’. Such a shift in mindset is essentialif breakthrough improvements in productivity, service quality and sustainability are to beachieved. This paper examines the challenges facing public sector organisations todayand proposes a number of key steps that can be implemented to achieve not just moreefficient but also more effective delivery of public services.The Market and Market DriversBudgets down, demands up service with less resource. Governments rose to theBudgetary reduction targets in government used to be efficiency challenge by looking to the ‘backoffice’,presented as time-bound and temporary – today they in particular corporate support functions like HR,are endemic. Reducing budget deficits now calls for Finance and Procurement, for savings. Sharedsustained and radical cost savings to be made. And not services was a key part of the strategy and the aimjust in a three or four year ‘window’: year-on-year cost was to achieve the same levels of operating efficiencyreduction will be a defining feature of government achieved in the corporate support functions of largeexpenditure for the next decade. Simultaneously, the private sector organisations. Some good results weredemand for public services increases unabated – in achieved and efficiency, including through sharedsome cases driven by the very same cuts in public services, remains a key area for attention – indeedspending. Civil unrest and increased crime are putting citizens expect governments to use public moneymore demand on policing and justice services. Calls for carefully.growth-led recoveries are prompting more governmentsupport for small and medium enterprises. Mounting However, efficiency is no longer enough. Efficiencysocial issues and unemployment are testing the alone will not lead to the large-scale, radicalwelfare state to breaking point. Aging populations are improvements required to really ‘square the circle’ andputting more strain on already over-stretched health deliver real spending cuts whilst at the same timeservices and exceeding pension budgets substantially. responding to increased public service demand. It isAlmost universally, public sector organisations are true that some public services can simply stop beingfacing increasing not reducing demands for service delivered but these are the minority. The truth is thatprovision. governments need to do more and better with less. In this paper we show how governments can not onlyEfficiency is not enough drive out real operational cost savings but at the sameTraditionally, the answer was ‘efficiency’. At its most time, deliver higher quality, more effective publicbasic, efficiency is about delivering the same level of services in the process.© Steria Page 2 of 12 steria.com │June 2012
  • 3. ChallengesMajor challenges facing governments todayA number of macro-economic, demographic, social andenvironmental trends are combining to create a ‘perfectstorm’ for public sector organisations across Europe.The exact details of challenges and the way theirimpact is felt locally will of course vary. However, it ispossible to identify a number of common challengesthat all governments are facing across Europe: Immediate need to achieve tangible cuts in expenditure – need to accelerate realisation of savings to in-year where possible. Limited funds for capital expenditure (including technology investment) – no more ‘spend to save’ Increasing demands from ‘customers’ across a range of areas – education, enterprise, environment, health, homeland security, justice, transport, welfare. Citizens and businesses have higher expectations of government in terms of accessibility, availability and channel of engagement (e.g. 24/7 access to services, engagement via social media). Unprecedented changes called for in workforce  Limited capacity to drive organisational – required cuts and changes to terms and change – the enormity of the challenges point conditions is resetting the ‘psychological contract’ towards wide-scale transformation being required between public servants and their government but cuts and increasing external demands mean employers. Industrial action and disengagement of that there is limited leadership capacity or the public servants is a real issue and threatens to ‘bandwidth’ to give attention to designing and have a massive effect on public service provision. delivering such change. In addition, new service demands and reform are calling for new skill-sets among public servants – at All of the above issues are against a backdrop of the a time when, in countries such as Germany, there specific country’s political system and the dynamics are already difficulties in hiring candidates with the and uncertainties that this brings. This added required skills. complexity makes the challenge even more acute and means that plans cannot just be technically sound but  Increasing requirement for compliance and also justifiable to ministers and constituents. leadership on sustainability – governments have a dual role to play. Implementation of All too often, the argument is oversimplified – reducing directives and environmental legislation needs to budget deficits means cost cutting and in turn means be enacted by national governments. However, reduced public services. In the next section of this public sector organisations also need to ‘walk the paper we will show that this is not necessarily the case. talk’ and lead by example on the sustainability A new paradigm is possible that can lead to significant agenda – showing the private sector what can be operational savings and improved, more customer- achieved in terms of waste, energy and emissions centric processes. This approach relies on openness to new business models and sound implementation rather management. than adopting the latest technology fad as single ‘right answer’.© Steria Page 3 of 12 steria.com │June 2012
  • 4. Seven key insightsThe following insights are distilled from direct experience of working with leading public sectororganisations from across Europe – the first four insights relate to organisational ‘effectiveness’and the last three points are efficiency-related. The idea is not to be prescriptive but offer someperspectives around the areas that need to be considered. Specifically, tangible actions aresuggested to help make initial progress1. Co-creation of services – put customers andenterprises at the centre of service delivery DirectGov is the e-portal for citizens to engage with UK Government. It is based on a shared service platform for website hosting and contentThe role of the state is changing. Historically, many management. It provides public sector organisationsadministrations have tended to view citizen, and to across the UK with a framework to engagesome extent businesses, as passive consumers of effectively with citizens by rapidly developing newservices: in reality they are active players and ever web content in a responsive, highly cost effectivemore demanding in terms of availability and quality of and resilient way. One of the most importantservices. Not all public services need to be directly parameters is availability: our SLA is 99.8% whichprovided by ‘the state’ all of the time – there are underlines true 24/7 access for citizens.specific areas where citizens and enterprises can ‘self-serve’. Indeed, we argue that ‘self-service’ should be Danish Customs & Tax (SKAT) implemented a fullyviewed as a viable option as the starting point (by integrated customs and revenues system. Thisdefault). Self service is not simply about passing enables customs declarations to be submitted viaworkload and transactions into the hands of service the internet by enterprises. Updates and informationconsumers. The benefits are far greater than allowing about declarations are provided on-line as well. Thegovernments to channel resources elsewhere. end-result has been faster clearance for goodsProviding citizens, communities and enterprises with which obviously has positive benefits for business:the tools and information to solve their own issues and 9 million import/export and transit declarations areanswer their own queries leads to better, ‘smarter’ now efficient handled every year using the newoutcomes too. system.Practical actions you can take: Map the ‘customer journey’ by starting with the outcomes you are seeking to deliver for citizens & enterprises and work back to understand which processes to align accordingly. Use this ‘citizen insight’ to rethink your delivery processes, in particular the distribution of roles, responsibility and tasks – what services can be ‘co- created’ by citizens or enterprises? Introduce online channels so that citizens and enterprises can ‘self serve’ and undertake key transactions themselves. Focus on better information provision to allow citizens to answer their own queries, thus removing the need for costly and avoidable contact with the state Be prepared to work with other government departments and look for opportunities to share operational ‘middle office’ processes. For example, can different types of appeals (fines, benefits, court judgements) be handled centrally to achieve improvements in efficiency and efficacy?© Steria / June 2012 Page 4 of 12
  • 5. 2. Single citizen view - define your data managementstrategy around citizens The Copernic programme in the French Ministry of Finance has sought to transform the approach to state finances and provide a ‘unique tax-payer view’.The legacy of numerous previous systems More than 100 databases in each region had to beimplementations and programmes means that integrated into a single repository that could showinformation and data relating to citizens typically reside the total tax payable by a citizen. The systemin disparate systems and databases across several accommodates routine use by citizens as well as anagencies and national departments. The cost is interface for professional users (such as Financeimmense. Citizens expect ‘tell us once’ – for the public Controllers in local administrations).sector to use and share data across constituentorganisations. They do not expect to have to provide In the past, Belgian taxpayers filled in a differentthe same personal information on numerous occasions return for each type of tax, with each formto various government agencies. Whilst there are requesting the same core details (name, address,constraints around what data can be freely shared (e.g. telephone number, etc). Belgium’s Finance Publicdue to legislation), fraud and security threats mean that Services transformed its databases into a singleit is more important than ever for agencies to share system so that these core details can be registeredinformation about individual citizens. Furthermore, it is once and for all, then used for all the other taximperative to share the useful information that returns. The new system means that over 70% ofgovernment holds – to make data available to citizens declarations are processed without the need forand communities so they can self-help, answer their human intervention.own queries and be empowered to make the rightchoices based on the available information.Practical actions you can take: Undertake a ‘data audit’ and categorise your data assets into a) data about the operational performance of your delivery organisation (operational management information), b) citizen-related information (personal data, e.g. on income and tax liability) and c) data to be used for improving policies and services. Work with the other relevant public sector organisations to understand what data needs to be shared and how (i.e. which systems need to interface with each other). Focus on creating flexible systems that enable effective data capture, easy sharing and ready access. The over-riding design principle should be to support decision- making by front-line employees and senior management. Consider making data-sets openly available to citizens and enterprises. However, bear in mind that the public good will not always be best served by universally sharing all data-sets. In some cases, commercial development will be encouraged if a degree of exclusivity or proprietary rights are provided© Steria Page 5 of 12 steria.com │June 2012
  • 6. 3. Empower the ‘frontline’ – tap into the knowledge ofcustomer-facing employees Cleveland Police serves a population of around 560,000 citizens in the north east of England. It has transformed its ‘front-office’ by realigning the contactPublic servants are generally motivated by a passion centre and control room function to better serve thefor making a difference by helping citizens and society. needs of citizens. In addition, a hand-held systemHowever, sometimes it can feel like processes and ‘CUPID’ gives 1,400 police officers mobile access tosystems actually disconnect public servants from the operational systems, processes and information,‘value add’ tasks that make the impact: too much such as crime and intelligence reports. CUPID haspaperwork, too much ‘red-tape’ can get in the way for reduced paperwork, duplication and bureaucracy tocaring for patients, managing offenders or policing the keep more officers on street-level policing duties. Instreets. At the same time, there is a real and urgent terms of business benefits, 10% officer time will beneed to tap into their passions and motivations and saved (allowing more time for policing duties) andengage public servants to truly apply their talents most 18% efficiency gains are predicted representing aeffectively. Never has there been a time when it is saving of more than €60m over 10 years. Clevelandmore important for public servants to demonstrate high Police demonstrates very tangibly that bettercommitment and go ‘above and beyond. services really can be delivered at lower cost. The Danish Board of Industrial Injuries has transformed the way it deals with cases. The core processes have been revised around a customer- centric approach which automates more routine activities and allows case workers to spend more time on complex aspects of cases and queries. In addition, citizens can directly view the progress of their case via the web. Overall, these changes have resulted in a more efficient operation and significant improvements in customer satisfaction. The implementation of the new case management system involved the integration of more than 20 internal and external public sector systems. The result is a new system now efficiently processing over 4600 documents and 7200 separate tasks every day: representing over 1m cases processed per year. The annual saving is estimated at around 50 man days per year allowing a focus on higher priority cases.Practical actions you can take: Engage staff at all levels in your organisation in a dialogue around how to improve service delivery on a continuous basis. Use these conversations to identify innovative ideas and areas for improvement Empower frontline operational staff by introducing process automation so that they are freed up from more routine, high volume transactions and can spend more time on complex enquiries and cases Exploit mobile technology solutions, such as hand-held devices and tablets, to enhance the productivity of field- based employees. Ensure that information is presented to operations teams in real-time so that they can respond more rapidly to citizens needs© Steria Page 6 of 12 steria.com │June 2012
  • 7. 4. Embed ‘inherent flexibility’ in your organisation French ministries used to have their own financial systems, which reinforced a diversity of practicesIn ‘tight times’ there is a tendency to reduce resources and made concerted change difficult. The Chorusto a minimum but at the same time governments program has been initiated to provide all publicobviously need to plan for unexpected increases in servants involved in spending, non-fiscal revenuedemand for key public services. For example, an and accounting with a single system. Ultimately,influenza pandemic will put a strain on a range of almost 50,000 users will benefit from this newpublic services: not just health but on transport, information system. Chorus will contribute to thesecurity and welfare. This need for ‘future-proofing’ modernisation and streamlining of the Frenchyour organisation calls for a proactive strategy that government’s budget and accounting processes andensures the overall architecture and design of your provide strong flexibility to respond to futureorganisations, its processes and systems are governmental changes.inherently flexible. Flexibility is not just required interms of increases or decreases in volume of services. National pension reforms meant that the NorwegianNew and revised legislation, directives and regulations State Pension Fund (NSPF) had to make significantnecessitate a frequent and timely amendment to changes to its business processes and procedures.processes and procedures. Furthermore, technology By implementing a new case management system itdevelopments are also an important aspect of retaining was possible to automate many routine transactionsflexibility: systems need to be interoperable and IT and increase the agility of its processes to ensureplatforms need to be resilient enough to support rapidly increased responsiveness to future changes.increasing amounts of data and increasing securityrisks associated with cyber-crime. The new processes at NSPF mean that regulatory changes can be rapidly adopted and procedures amended to ensure that the latest legislation and rules are accurately reflected in calculations and payments.Practical actions you can take: Consider Business Process Management as not just about automating processes (see last insight). Use BPM solutions as a way of building flexibility into operational processes to respond to changes to legislation, regulations and changing customer needs. Select process tools that allow operational staff to ‘rewire’ process flows themselves rather than having to rely on specialist IT teams to recode BPM software. ‘Scalability’ – the ability to accommodate ‘spikes’ in demand can be improved by adopting ‘utility-based’ models. Using cloud models with suppliers, put in place arrangements to access supporting services ‘on command’ rather than approaches based on assets remaining idle (e.g. software licences, hosting capacity, contact centres) Technological flexibility is also critical. Review your technology architecture and sourcing strategy to ensure open source applications are used where appropriate and inter-operability is maintained© Steria Page 7 of 12 steria.com │June 2012
  • 8. 5. Optimise your use of assets - consolidate, ‘sweat’, re-use, transfer and rent The Free and Hanseatic City of Hamburg, one of the 16 states of the federation of Germany, is the second largest city in Germany with its 1.7 millionStrategic assets are those assets that are needed by inhabitants. The municipality decided to implement aan organisation in order for it to maintain its ability to completely new ‘doppik’ financial managementachieve future outcomes – for government system which would be less complex and moreorganisations these assets include human capital, data transparent, understandable and traceable byand real estate. Times of austerity obviously call for a citizens. This system has allowed all resources,reappraisal of what government assets are truly assets and liabilities to be mapped across Hamburgstrategic and how these assets should be deployed. leading to much better utilisation of state assets.Considerable value and economic growth can bederived by ‘commercialisation’, i.e. working with private The French Ministry of Defence has a vast array oforganizations to develop new and improved services strategic assets including a diverse portfolio of realbased on using existing assets in new ways. estate. By developing a real estate technicalFurthermore, substantial savings can be achieved by management system, the Ministry has been able toasset consolidation (to drive economies of scale, e.g. in reduce the cost of ownership and maintenance of 55data centres or shared services) or switching from million square metres of the French defencestraight ownership-based models to ‘leasing’ buildings.arrangements.Practical actions you can take: Compile an inventory of your organisations assets: physical assets (e.g. estates), technology assets (e.g. servers and software applications), data assets (e.g. databases) and human capital. Share this asset register with key stakeholders (partner organisations, supplier community and citizens) and invite ideas around asset exploitation and commercialisation Appraise which assets can be consolidated to achieve economies of scale, environmental and cost savings (e.g. data centres), which assets can be leveraged and re-used more widely (“sweated”) and which can be transferred to the private sector for operational savings or income generation (divestment). Consider ‘utility models’ that allow hosting capacity and business applications to be bought ‘from the cloud’ – with payment based on usage.© Steria Page 8 of 12 steria.com │June 2012
  • 9. 6. Leverage the supply chain – challenge suppliers to helpachieve your strategic outcomes More than €700m per year are traded by Dirección General de Patrimonio in Spain. By transforming its supplier engagement processes and systems, theThe challenges facing the public sector are so DG achieved a robust and secure platform tosignificant that no-one can deny that a new, quite automate the whole process of purchasing.radical approach is required: ‘If you do what you This has led to improvements in the way goods arealways did, you’ll get what you always got’. The procured e.g. easily modified catalogues for buyersdifficulty is that it is extremely hard to come up with and cost savings associated with categorynew ideas in isolation. ‘Open innovation’ is predicated management and improved buying leverage. Theupon tapping into external view-points and new time to process purchase orders used to be up to 18perspectives to generate fresh ideas and achieve months but has now improved radically to aroundbreak-through improvements. Governments have four months.access to an immense ‘ecosystem’ of suppliers andthese commercial organisations represent an excellent In Germany, the process for requesting and allowingsource of ideas, capital and partnership to support the abnormal transportation (e.g. unusually large loadsdevelopment of genuinely innovative solutions. on trucks) used to be a very complex and work- intensive task, which involved literally thousands of authorities and applicants. The process was characterised by time-consuming fax and telephone based communication with the associated problems by using different media. As part of an overall e- government strategy, the responsible authority worked with commercial partners to devise ‘VEMAGS’ - a workflow solution to manage the approval process for abnormal loads across all the 16 federal states. Over 1300 authorities routinely use the new system, representing over 6500 users. Processing time for individual applications is now measured in hours rather than days.Practical actions you can take: Take a collaborative approach and challenge suppliers to assist in the achievement of your organisation’s strategic objectives. Avoid just focusing on specific inputs or outputs (e.g. price of service) and encourage prime suppliers to engage the whole supply chain in the process (including Small & Medium sized enterprises) Be open to engaging with suppliers in new delivery models. Look for opportunities to be more innovative in the commercial arrangements used to contract services. In particular, explore contractual arrangements which reward suppliers based on achievement of your outcomes. In addition, invite suppliers to ‘share the risk’, for example by providing technology investment spread over the life of the contract rather than payable early on, upfront. Reconsider which functions in your organisation absolutely must be delivered by public servants. Identify non- core areas where a private sector partner could provide investment, improve efficiency and enhance the professionalism of ‘back-office’ functions like Finance and HR.© Steria Page 9 of 12 steria.com │June 2012
  • 10. 7. Sustainable reform - take steps along a changeroadmap, not jumps The French Civil Service has embarked upon a major inter-ministry project to modernize Human Resources practices across governmentWith such urgent and wide-reaching changes to make, departments. The decision has been made to buildit is tempting to implement as many reforms as quickly the new HR system around the future payrollas possible. However, this could be a disastrous platform on the Office of National Pay and ultimatelyapproach in terms of impacting service delivery and the 3m public servants will be serviced on the newengagement of employees. As a ‘rule of thumb’ system. The roll-out plan is commencing with a pilotapproximately 30% more management time is required in two ministries and will ultimately be extended to 7to help introduce changes during times of ministries in total (approximately 65,000 users). Thetransformation. This is often forgotten: in the rush to specific needs of each ministry will be understoodimplement change and reform, organisations tend to and addressed via an extensive programme ofheap more change on top of more change. The result engagement and business change. This will ensureis ‘initiative-overload’, disgruntled employees, impacted that the reforms are introduced smoothly and withservice quality and potentially dissatisfied citizens. sustainable benefits.Execution is critically important to ensure no ‘falsestarts’, no wasted effort and no adverse impacts on In 2005, the UK National Health Service formed aoperational services – and, most importantly, to ensure unique partnership (‘Shared Business Services’) toearly realisation of benefits. drive shared services in provision of Finance & Accounting support to NHS Trusts (hospitals, surgeries, local practices etc). A central theme of the initiative has been incremental change – migrating ‘trust-by-trust’ to a shared service finance platform rather than as one all-encompassing transformation programme. The joint venture structure of the partnership has ensured continued investment from the commercial partner and is devised to steadily realize benefits by returning annual savings in the form of dividends to the parent department. The partnership is on-track to deliver around €300m in savings over 10 years.Practical actions you can take: Think of the management capacity available to support implementation of change as a precious resource. Divide the transformation roadmap or ‘change journey’ into manageable steps that are easy to communicate and deliver specific outcomes. Categorise the changes you need to make across five key dimensions: People, Organisation structure, Processes, Infrastructure and Technology. Review whether the work programme to deliver against all of these dimensions is sustainable in terms of effort required. Avoid trying to make wholesale changes in more than one dimension simultaneously, e.g. re-engineering core processes at the same time as altering organisation structures. Pace the rate of transformation in step with your front-line employees. Avoid ‘change overload’ by giving all the layers of your organisation time to absorb and understand each change project before introducing further initiatives.© Steria Page 10 of 12 steria.com │June 2012
  • 11. ConclusionIt is without doubt an extremely testing time for governments across Europe. The economicsituation will drive budgetary constraints for years to come and yet the demand for publicservices is increasing at an accelerating rate. These apparently conflicting forces lead inevitablyto an argument suggesting that public services need to be cut. The argument goes: ‘How can weachieve drastic deficit reduction without cutting back?’ This paper presents an alternativeperspective. By putting citizens at the centre of process design, engaging frontline staff anddeveloping partnerships with key suppliers, it is possible to not only reduce operating costs butimprove the quality and responsiveness of public services as well.© Steria Page 11 of 12 steria.com │June 2012
  • 12. Steria and Government About SteriaHow do today’s governments and public sector Steria delivers IT enabled business services which helpagencies respond to increasing demands for citizen- organisations in the public and private sectors operatecentric public services in the face of stringent more efficiently and profitably. By combining an inbudgetary cuts? At the forefront of government and depth understanding of our clients’ businesses withpublic sector reform for more than four decades Steria expertise in IT and business process outsourcing, wecan help you rise to these challenges. We are a take on our clients’ challenges and develop innovativerecognized as a strategic supplier across key solutions to address them. Through our highlyEuropean geographies, taking a partnership approach collaborative consulting style, we work with ourto creating positive and sustainable change. Our clients to transform their business, enabling them tocomprehensive government and public sector portfolio focus on what they do best.delivers cost savings, total quality of service andagreed outcomes in the core areas of Citizen and Our 20,000 people, working across 16 countries,Enterprise Engagement, Business Process support the systems, services and processes thatTransformation and Corporate Resource Optimisation. make today’s world turn, touching the lives of millions around the globe each day. Founded in 1969, Steria has offices in Europe, India, North Africa and SE Asia and a 2011 revenue of €1.75 billion. 21 percent of Steria’s capital is owned by its employees. Headquartered in Paris, Steria is listed on the Euronext Paris market.  www.steria.com Contact Groupe Steria SCA 43 - 45 Quai du Président Roosevelt F-92130 Issy-les-Moulineaux CEDEX France © Steria BCG&PS001 For further information about our services visit www.steria.com© Steria Page 12 of 12 steria.com │June 2012