Digital first, what’s next: Delivering on digital transformation and beyond
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Looking at what's next when it comes to digital transformation within government organisations. Presented to Connected Government Summit at Connect Expo, Melbourne Victoria on April 20, 2016
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Digital first, what’s next: Delivering on digital transformation and beyond
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- 30. Myth Reality Digital is primarily about the customer experience Huge opportunities exist also in efficiency, productivity and employee leverage Digital transformation approach is different for every industry and company Digital Leaders exhibit a common DNA The Digital Advantage, CapGemini/MIT Sloan
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Editor's Notes
- Who here thinks that digital transformation is easy? If you work in a large organisation like a government department or agency, digital transformation is really hard. Well today we are going to look not only at what it takes to deliver on government digital transformation but also how we prepare for what comes next. But to do that we are going back to the beginning. Back to basics. How basic? Well this basic…
- Sesame Street basic. Most of you probably started learning some of the basics from Sesame Street. And since we are going back to the beginning I’m going to take a page out of Sesame Streets book. Today’s presentation is bought to you by the letters
- E G L O and the number 3.14159 The letters EGL and O are very special when we come to digital transformation and innovation as they can both provide an example on how to move forward with digital transformation but also give us some examples of a successful approach. Now our number is a special number that we aren’t using as a number but we will come to that later. But to go back to the beginning, we need to first understand what going digital is.
- The concept of what digital really means is really important to understand before we can actually understand where we need to get to. Now recently the DTO published a blog post saying that for them digital is about the user experience however I believe both through experience and the research bears it out that digital is a whole lot more that a different user experience and in fact it offers a whole lot more. In fact concentrating on just the changes at the interface level won’t create value it just multiplies the real or intrinsic value that’s already there. So when we think about what the point of what digital transformation is for government agencies and departments we need to know what the outcome is. Now we can get really specific and say its to improve this particular process say registering a business for a particular user group but I think there is a more general objective that was suggested by one of the members of the panel that’s up next
- Recently I had coffee with Chris Balfour from Consumer Affairs Victoria and he coined the phrase maximise the public dividend. I think its an apt way to illustrate the fact that ultimately all of government exists to maximise the benefit to the public – whether that is financial, non-financial, community education, protection or otherwise. All government agencies have a role in making sure the public benefits. Sure that could be through service improvement which could save direct costs and time to users, but it also could be through a range of other ways. So lets have a look at what Digital really means according to McKinsey, but in a government context
- Firstly they suggest being digital is creating value at new frontiers. Most of this is about leveraging new technologies – things that you are going to hear a lot about today things like SMAC or social, mobile, analytics and cloud or internet of things. Its also important to remember here that what is new for government doesn’t mean it has to be new for everyone else, but generally speaking how do we use technology to get ahead of trends that deliver or destroy value. You could say that most of the things that people call digital transformation such as service improvement also fit here. So yes service improvement and leveraging technology is great and can create value but that’s not all of what being digital is.
- Digital is also about creating value in core business. I’ll delve in to this a bit further on, but a lot of the value that can come from being digital actually come from changes to your core business. Things like improved and more usable systems and process automation can make a significant difference. Of course increased efficiency and effectiveness of government departments has a public benefit through the reallocation of resources. The core business of government is not in the political realm but the thousands that work the state and federal public service. Change here however is much harder than change at new frontiers. The new stuff is fun and exciting and the millennials are all over it, whereas with core business change this is the place where legacy and cots systems lie and this is where it is much more boring and also where there have been lots of project issues. This doesn’t mean however that we shouldn’t focus in this area. As government agencies we have to face up to the challenge and get better at it. But there is a third and yet more difficult aspect of being digital but one that provides more sustainable and longer lasting benefits and that is building foundational capabilities
- Establishing foundational capabilities is critical to ensuring that digital transformation is not only delivered today but is sustainable within organisations. Digital transformation often requires cultural change to succeed and sometime significant short term benefits can be made without truly changing the mindset of an organisation and its decisionmakers. Its also more than saying we’re going to go agile or we are going to be more user focussed. Going digital requires a commitment to continuous innovation that is challenging for many especially when sometimes after a big change you just want to sit back and consolidate for a while. Going digital is hard in government - just ask Mike Bracken former head of the UK Government Digital Service or many of his colleagues who left the UK GDS the equivalent of our DTO late last year. Admittedly some of them have joined our DTO, however ultimately what seems to be at the core of the departures is that unfortunately many in the pro-digital space are as hard headed as those how have worked in the public service for many years. Mike Bracken’s view at the moment seems to be hit the reset button in terms of service delivery and force them to be built from the ground up digital first. Whilst this may be possible in Australia, given that we have a pro-digital PM in Malcolm Turnbull ultimately I don’t think anyone wins from this argument and believing that the digirati can force everyone to see their point of view is naïve at best given that ultimately people are going to protect their own nests whether that be politicians, the public services or large vendors.
- However the other aspect of building foundational capabilities is in my opinion more important. System and Data Architecture is at the core becoming digital. Without building flexible foundational system and data architectures then any digital transformation activities become a dead end. This therefore isn’t about the consumer touchpoints at the edge of the onion its about whats at the core. And its not just to support what we want to do now or fast its about
- Establishing a foundation for the unlocking of possibilities. So in order to be digital or succeed at digital transformation we need to create a solid foundation not only for the activities that we know about today but that provide a platform for the activities that we are going to deliver in the future, including those we don’t know about yet.
- So if government needs to create a platform that’s going to unlock the possibilities of digital service improvement and And we want to derive value from other digital activities including those we don’t even know about yet how are we going to do that? Well lets bring back our letters – E G L O
- Well lets go back to out letters E G L O
- One word that is made out of the letters EGLO is Google. Google have a great model that can guide us in how to invest our resources whether that be time, effort or dollars. Rather than hitting the reset button, to be completely honest that isn’t feasible, we need to spend 70% of our resources on today’s business – now that isn’t just on doing it the way we do now but in improving how we deliver services or perform tasks today. 20% needs to be spent on tomorrow’s business. In many cases this is the low hanging fruit – where it makes sense to do things today because you can see the benefit tomorrow. Things like social listening or even predictive analytics might fall into this 20% - they may change the way you operate or engage but you can see the direct benefit fairly quickly if you change to that way of operating. Often these are step changes. They can still have significant impact and the risk can be high but at least there is more confidence in the outcome. 10% is spent on blue sky stuff. The true innovations. Now this might be completely brand new ways of doing tasks or it might be things that if you don’t do them now you won’t have the option to do them in a few years time. So Google can provide an example of how we can plan and distribute our resources to help us to become digital but what about a strategy and how should we implement that strategy. Well lets go back to our letters
- EGLO make another very famous word and brand. And its one that all you who have kids will know very well
- Especially if you have ever stepped on a piece
- That’s Right. Its Lego. Now Lego is a really powerful metaphor for digital transformation, and I’m not talking about LEGO as an organisation, or the pain it gives if you step on a piece, I’m talking about the blocks themselves. Lets start with Strategy
- If we look at a government department its made up of layers of process and bureaucracy. Sometimes for good reason sometimes legacy. Of course there are also lots of systems involved. Eventually they result in an interaction with the user who is trying to do something, which admittedly is often a painful and difficult process. A lot of the current activity by the DTO and the GDS in the UK have focused on this layer. This layer which is really digital channel strategy fits really well with what people like to do – the value at new frontiers stuff. Its sexy and its launchable. Out of it you usually get a brand new website that looks cool. You get to do it in a new way – user centred and using agile. And fingers crossed you will actually get some efficiency improvements and savings but what has it done for your wider organisation, and is it sustainable in terms of continuing to get efficiencies. What about if legislation or regulation changes – does that mean investing in more user research, what is the cost to change etc. I think by just focusing on this layer we are missing a big opportunity. I’m not saying that the rest of the organisation is always overlooked but because its hard and isn’t sexy it often doesnt get the attention it deserves
- McKinsey suggest a lego approach too. Now many would say that definitely points 1 and 2 are definitely ticked off but what about the next four. Number 3 is where people start to get stuck. Its because process automation usually involves dealing with legacy or enterprise wide systems. And that’s hard. People have been failing at projects that have an aim of process automation for years. But if you get it right you can make change happen that is sustainable. But it doesn’t change the fact that these are often big systems, however there are ways to do this that allow you to leverage things like agile to implement projects in a way that mitigates the risk. Organisation is important and we have already spoken about the necessary change in mindset that is required. 5 and 6 we will talk about in a few minutes. HSD have our own Lego approach when it comes to strategy and it goes back to our letters and that special number that I mentioned that we aren’t actually using as a number.
- Our approach to digital transformation strategy is pretty simple. First I’d like to talk to you about pi. For us Pi actually represents the letters P and I which stand for platforms and integration. However they must always be together for digital transformation to succeed, and I like the pi symbol that sort of symbolises that the two elements must be joined together. So getting to whats next it really about the two items in PI and the value that these to create together. So lets start with platforms. And really here we are talking about government as a platform.
- Government as a platform is a move away from independent systems and solutions to a set of common integrated component platforms that can be utilised in different ways to solve different business problems. Traditionally government agencies would go to market for an end to end solution for a problem however government as a platform recognises that lots of the components of a solution are common such as payment gateways or identity management. Government as a platform basically tries to build it once for everyone to use.
- Interestingly despite the UK GDS being around for a few years and understanding that this is the way to go, they haven’t really achieved it so far. The word is that Government as a platform caused them resistance within government. That doesn’t mean that taking a platforms approach is not valid, I do however think that they missed the opportunity by having a philosophy that discounts so much of what has gone before them. By dictating an approach it was going to mean that it was inevitable that there would be resistance – and according to Mike Bracken on his departure from the GDS there was. But the approach is still valid and at HSD we believe it is still achievable however we would suggest a more micro level approach than the macro government wide approach that the GDS attempted and we hope that the DTO isn’t going to simply follow. Interestingly Service NSW is much more of a platform approach and I look forward hearing more about OneGov in their presentations today.
- HSD also suggest a baby steps approach for many agencies just beginning on their digital journey. Leverage Existing Grow Opportunistically is a way for many government departments to move toward digital transformation but in a more transitional way often using their existing technology platforms. It isn’t necessarily going to produce the quantum shift, I but I think it’s a better way than investing in bespoke service improvement without having a focus on platforms and integration.
- So as I mentioned one of the advantages of taking a government as a platform approach is that you can select technologies or components that meet a particular need and reuse or repurpose them to meet different needs whether that be across government or simply across an individual department or organisation. It’s a lot like building with lego – you can take lots of different sized and coloured pieces and connect them together in interchangeable ways. Ultimately the pieces are the same but they can look very different. Which takes us to the other important factor in PI and a piece that doesn’t get sufficient attention when it comes to digital transformation - Integration
- If we look at lego compared to all the other types of building blocks out there, the big difference is that lego bricks are built for integration. They allow any of the component pieces to integrate easily with each other. When you combine this with platforms you start to see the real value that comes from the sum of the parts. Also the advantage of building for integration is that apart from flexibility you can ensure that your platforms can connect multi-generationally. For example a piece of lego from the 70s can connect to a piece of lego from today and work as part of a new outcome. So let me give you an example of an organisation actually taking a Leverage Existing Grow opportunistically approach but doing it in such a way that achieves digital transformation and service improvement without significantly more effort.
- The Victorian Registration and Qualifications Authority is a long term client of HSD. One of their responsibilities is the regulation of Home Schooling in Victoria. Home schooling currently is managed on a Microsoft Dynamics CRM platform which is hosted internally by the Department of Education and Training. Their solution which is running on CRM 2011. Every year they need to send a letter to parents with a form asking them to re-enrol their children for the next year. The process used to take about 3 months running from September to November each year. They then received the hard copy letters back and had to manually re-enter then back into the system and manually process them.
- Now the natural thing most people would think about would be lets make it a smart form and auto process that or lets ask the users what they want. Instead we took a much simpler Leverage Existing Grow Opportunistically approach. In a regulated IT environment to introduce a new forms platform would be a significant event, let alone the design, development and deployment effort involved. Also we thought there would be a much simpler way. Using a simple email with two web links – one to advise that they will be re-enrolling, the other advising that they will not be re-enrolling with the links being unique to the child allowed parents to re-enrol their kids with one click and the process within CRM to be completely automated.
- Compared to a response time from parents of 8-12 weeks. 50% of recipients responded in the first 24 hours and 80% within the first week. Total effort from the VRQA staff changed from 2 staff for four months to about 2 weeks. The additional development required was delivered using available hours under their support agreement. Also because this approach was designed for integration it is tolerant of an upgrade to Dynamics CRM. The simple web application which is just processing the URL and posting data to CRM can be used for other purposes and the users are happy. Also true digital transformation and channel shift has occurred yet the investment was small.
- So Platforms and Integration – our pi – is critical for sustainable digital transformation that meets short, medium and longer term needs. Learn Execute Grow Optimise is an approach that when applied to platforms allows you to take some of the benefits of agile and apply them in a platform sense. Many of the platforms that we utilise are COTS – commercial off the shelf. The great thing about this is that you can think about enterprise or even government wide in architecture and approach but still only implement a narrow slice before growing and optimising as you progress. Another example of this is the Federal Department of Environment. Using a Learn Execute Grow Optimise approach allowed them to scale out an enterprise wide crm system business unit by business unit however critically the overall architecture was always going to be an enterprise wide system. This allows you to apply agile and accommodate digital transformation activities without necessarily trying to reset your culture completely. You can do it more incrementally and importantly bring people along the journey with you rather than simply those who are excited about it at the start.
- But what about things like SMAC – social, mobile, analytics and cloud or Internet of things. Well for me they are just different lego pieces – components or platforms ready to be integrated together to solve business problems. Its great if you can find pieces that easily integrate to the pieces that you already have. Also going back to building foundational capabilities – system and data architecture if you think and design for possibilities rather than what you know now it enables a lot of the risk to be reduced and allows you to progress through many of the arguments against digital transformation because you have the flexibility to add pieces or even replace pieces easily as long as you have taken a platform approach and designed for integration in the first place.
- Before I finish up, I wanted to put up this slide about the Myths and Realities of Digital Transformation. Its from a Cap Gemini and MIT Sloan paper called the digital advantage. The main reason I wanted to put this up is to basically say that just because you work in government, and change in government is hard doesn’t mean that you are special. The way forward is the same for most industries – the first line for example: Digital is not just about customer experience – opportunities exist in efficiency, productivity and employee leverage is a truth and to react to the myth means leaving a lot on the table.
- So what’s next or where should we be heading. Well I think its digital maturity – we need to grow up digitally and focus on the realities as mentioned on the previous slide. So how do we mature digitally. Well it has to start with leadership and strategy and unfortunately employing lots of digital people to do digital things isn’t going to crack it. Digital leadership needs to come from the top and not just be on the periphery. Then as I’ve discussed use a lego approach – whether that’s leverage existing grow opportunistically – the baby steps way or learn, execute, grow, optimise to help you mature in a more comfortable way than all out disruption. And you probably are going to have a longer career and fewer enemies that way too.
- Focus on platforms and integration. Pi as I presented it. It really is the most critical area and is at the core of making digital transformation work whether that is a full government as a platform approach or maybe on a departmental level. Support and ensure intergenerational flexibility – remember the lego block – its point of difference is its famous studs and tubes design. This allows you to lay a foundation now that will still support new technologies as they come online and finally Ensure that everyone benefits – not just those directly benefitting from service improvement because you really need to be looking at the full range of activities that can allow you to obtain the greatest public dividend because of course when
- Everyone benefits then everything is awesome. My name is Keith Don, thanks for your attention. Please connect with me on linkedin or on twitter or visit our website at hsd.com.au