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  1. 1. strategy+businessissue 70 SPRING 2013The Digital GovernmentHow government agencies can use information and communicationstechnology to increase efficiency—and better people’s DAVID HOVENDEN AND CHRIS BARTLETTreprint 00155
  2. 2. leading ideasleading ideas The Digital creases for them to be more trans- tance to change is high. The leaders parent in their policy and invest- of many agencies don’t want too Government ment decisions. much interconnection; they are con- Digitization can help govern- cerned, often with good reason, ments meet this challenge. Just as it about the loss of autonomy. has transformed business enterpris- The result is excessive govern- How government es, digitization can enable govern- ment investment, often spread across agencies can use ments to aggregate their capabilities or duplicated within a large number information and across agency boundaries and or- of diverse capabilities in different communications chestrate the most cost-effective so- areas, and a support system that technology to increase lutions, whether public or private, to fluctuates in response to changing efficiency—and better meet their citizens’ needs. Admit- political pressure and policies. As tedly, however, enabling a digital with companies whose strategies are people’s lives. 1 government presents obstacles that poorly aligned with the capabilities companies don’t typically face. For needed for success, this leads to a by David Hovenden and example, most chief executives have lack of focus on the true mission of Chris Bartlett much greater authority to make the government or agency, and an F strategic decisions and build the inability to carry it out successfully. or the last decade, advocates capabilities needed to carry them of government reform out than do government officials. Government as a Digital Broker around the world have bet And governments must operate Digitization can provide a catalyst on the promise of information and within the constraints of the current for moving away from this en- communications technology (ICT). political agenda, and their time trenched agency-based model. The The availability of new digital tools frame for implementing transforma- new role of government in a fast- and strategies would strengthen tional change is limited by the elec- digitizing world is to act as a “bro- connections among various govern- tion cycle. ker,” orchestrating the construction ment agencies and, it was hoped, en- Typically, each individual gov- and supply of services through pub- able governments to improve their ernment agency—whether it be lic and private operations, linked by services, increase efficiency, boost treasury, defense, education, or hu- information systems and chosen economic growth, and eliminate red tape. But then came the Great Re- The new role of government in a fast-digitizing cession, and policymakers were forced to focus their attention on world is to act as a “broker,” orchestrating the managing the financial crisis. supply of services linked by information systems As a result, too few governments to meet the different needs of citizens. have reaped the full benefits of digi- tization. Yet in the not-too-distant man services—plans, buys, and to ensure the most cost-effective future, integrated ICT will not just manages its own ICT systems. The service and to meet the different be “nice to have” in the public sec- agency builds the full set of end-to- needs of citizens. By providing tor; it will be a prerequisite for keep- end services that it needs, and criti- greater flexibility, this model allows ing the promises that governments cal investments are often deployed the government to be more respon- have made. National, state, and lo- redundantly throughout branches of sive to future challenges and chang- cal governments alike face a true the government. Attempts to inte- es. And it does so at lower cost, be- challenge: They must maintain and grate updates across the board usu- cause agencies will no longer need to strategy+business issue 70 improve opportunities for their citi- ally stagnate—or worse, they are build and maintain their own indi- zens and business interests as fiscal actively stifled. The list of stakehold- vidual infrastructure, but rather can pressures mount, demographic shifts ers, constituents, and entrenched in- concentrate their investments on the place greater burdens on traditional terests at most government agencies specific capabilities they need to ful- services, and public sentiment in- is long, and the potential for resis- fill their mission.
  3. 3. leading ideas leading ideas 4. Strategic sourcing and part- nerships. Governments should drive strategic private-sector partnerships, license cloud-based applications, and leverage collaborative or open source software development. A prime example is the VistA (Veter- ans Health Information Systems and Technology Architecture) elec- tronic health record (EHR) system developed by the Veterans Health Administration in the United States. The key to this broker model applications should be consolidated It is commonly recognized as one for government lies in coordina- across agencies wherever possible. of the most successful platforms of 2 tion—maximizing the use of assets Governments can now use the its kind worldwide, and has sub- by building interoperable ICT sys- cloud-based systems known as soft- sequently been adopted in countries tems to support, typically, the peo- ware-as-a-service (SaaS), allowing such as Egypt, Finland, Germany, ple who work for the public and both the software and supporting Mexico, and Nigeria. Recent exper- NGO sector. Some governments data to be hosted by the vendor ience in the U.S. shows that it can around the world are already mov- in exchange for a fee. The U.S. gov- be deployed in public hospitals for ing in this direction. They are mak- ernment successfully implemented a cost and time savings of about ing smart investments in ICT, fo- Gmail and Google Apps for 38,000 30 percent over proprietary EHR cusing on the following five enablers employees, reducing its license, ser- products. of a successful digital strategy. vice, and infrastructure costs relat- 5. A flexible workplace. Govern- 1. Common, sustainable ICT ing to proprietary software packages ments must prepare for generational platforms. Central to the new infra- while also improving business conti- change, as many of their current em- structure is a group of ICT hard- nuity in the event of a disaster. ployees begin to retire and are re- ware and data centers consolidated 3. Telecommunications infra- placed by millennials. Members of throughout the government. Con- structure. Governments should this tech-savvy and mobile genera- solidation makes it easier to design make use of their shared telecom- tion want greater flexibility, and the technology to be used in a cost- munications infrastructure, from governments can meet their needs effective and environmentally re- where it exists in both the public and by using mechanisms such as knowl- sponsible manner. ICT infrastruc- private sectors, across all govern- edge management, teleworking, and ture becomes a pooled resource ment agencies, eliminating duplica- e-learning. For example, the U.S. available to both the public and pri- tion and maximizing its value. In Office of Personnel Management vate sectors; its use reduces cost and Australia, a national broadband net- provides an online platform where minimizes asset duplication, while work is being rolled out in a form employees can be assigned telework increasing scalability and flexibility that all government entities in the from a variety of government agen- to support government activities. country can use, thus avoiding cies and departments. The U.K. government’s Data Centre agency-specific investments in de- Strategy, for example, is working to veloping or maintaining obsolete Embracing Digital ShiftsIllustration by Mario Wagner consolidate government data cen- communications capabilities. Mo- Governments can leverage these en- ters; as a result, their cooling and bile networks based on LTE tech- ablers to help create a more personal- power consumption is expected to nology currently being deployed are ized and secure experience when be reduced by as much as 75 percent expected to mature to the point constituents interact with various per year and infrastructure costs where they can substitute for legacy agencies—improving the availabili- lowered by as much as £300 million radio networks in emergency and ty, consistency, and quality of gov- (US$480 million) per year. transport applications, freeing up ernment services. To accomplish 2. Shared software. Computer limited radio spectrum. this, governments must continue to
  4. 4. leading ideasleading ideas develop a consumer-oriented service identification and authentication approach, enabling citizens to com- system to ensure secure access. But municate with them more elegantly, ID cards can make the delivery of both in person and online. Singa- services significantly more efficient. pore’s eCitizen portal, for example, The Italian region of Lombardy is provides citizens with the option of considered by many to have the receiving SMS notifications from most advanced regional identifica- the government on matters as varied tion program; 95 percent of its pop- as passport renewal and overdue li- ulation uses a single card to gain ac- brary books. cess to a range of government and Elsewhere, government agencies private services and functions such are already providing citizens, busi- as healthcare, loyalty programs, fuel nesses, and employees access to per- purchases, electronic payments, and 3 sonalized content based on their digital television services. A private specific circumstances, needs, and consortium developed the service preferences. For instance, Den- for a periodic license fee per citizen. mark’s MyPage ( In some parts of the world, pol- provides Danes with a clear view of icymakers are realizing that digital all the information about them that government is not focused on spend- is held by public authorities in one ing for the sake of spending or to personal “online drawer” and en- simply make ICT departments big- ables them to perform transactions ger. Digital government can maxi- in a secure environment. mize the efficiency and effectiveness Some governments have taken of future ICT spending, and boost this a step further. Australia’s social the growth of the industry overall. welfare agency, Centrelink, has ad- The challenge policymakers face is opted self-service practices for its to bring the benefits to scale while customers via both the Internet and maintaining a strong line against phone, allowing them to use self- abuse of privacy; to engage more service as a first resort for a range of effectively as collaborators with in- activities, including applying for ad- dustry while maintaining the regu- vance payments, updating personal lator’s responsibility to provide safe- details, and reporting income. Giv- guards and a level playing field; and ing citizens 24-hour access to select- to move rapidly to fulfill pragmatic ed services that they can perform on goals while still addressing the needs their own can save money and free of a broad range of constituents. up agency staff to provide greater Digitization has made this shift nec- value-added services. essary, and it is also providing the Inevitably, these digital shifts tools that will make it feasible. + will call into question long-standing Reprint No. 00155 views about the rule of law, the David Hovenden proper role of government, and the is a partner with Booz & Company, and is consent of the governed. One perti- based in Kuala Lumpur. He leads the firm’s nent example is citizen ID cards. Southeast Asian business and its global markets information technology practice. Many governments have resisted them because of privacy concerns, Chris Bartlett and because building a platform for is a principal in Booz & Company’s them is a huge and expensive under- communications, media, and technology taking; it requires an authoritative practice, and is based in Sydney.
  5. 5. strategy+business magazineis published by Booz & Company Inc.To subscribe, visit strategy-business.comor call 1-855-869-4862.For more information about Booz & Company,visit••• Park Ave., 18th Floor, New York, NY 10178© 2013 Booz & Company Inc.