How to Overcome the Challenges of Digitalization in the Public Sector

People have come to expect a certain level of digital interaction with all organizations — even public sector ones. From police protection to building permits, public sector organizations touch the majority of the population in numerous ways. As digital technologies continue to permeate our daily lives, the public sector is being forced to adapt to this trend.

Local, state, and federal agencies are not only tasked with doing more with less money, but they also must meet increasing digital demands from constituents. And the era of digital transformation offers public sector organizations the unique opportunity to implement new technologies, which will deliver greater operating efficiencies and a constituent-driven experience that is more in line with private sector expectations.

Although there are inherent challenges in digital transformation, public sector organizations can begin to make lasting changes by laying the right groundwork.

For example, the City of Los Angeles recently funded a project to create an online police reporting system for lost and stolen property. After filing a report online, the submitter is emailed a copy of the approved report for his or her records. This will improve customer service as well as free up officers for higher-priority calls. This type of service is standard in the private sector, but relatively new in the public sector. There are many similar digitization opportunities for public sector organizations that will ultimately save time and money, while also improving the engagement experience.

What challenges are stifling digital innovation?

Public sector organizations must overcome several challenges before joining the digital revolution. These include:

  1. Funding shortfalls: Finding the necessary funding to start a new project is a challenge. Currently, public sector organizations face a dilemma: They must do more with less while trying to meet new customer demands. When budget allocations are invested in new, more efficient digital technologies, long-term costs are reduced for manual processes. Public sector budgets are challenged by a myriad of valid political pressures, though the opportunity to innovate is game-changing.
  2. Shorter time frames: Public sector budgets are tied with political cycles, which means that new projects must show results quickly for constituents. Gathering political support to invest in digital technologies is a new opportunity for public sector organizations to achieve lasting impact. There isn’t a one-size-fits-all digital solution. Rather, public sector organizations can start with focused digital pilots, learn and adjust, show benefit to key stakeholders to obtain budget support, and scale fast with the ideas that work. This nimble approach is common in Silicon Valley, but is trail-blazing in the public sector.
  3. Systemic issues: Some public sector organizations operate on outdated systems that need replacement. This is directly related to the first two challenges. When a public sector organization is prepared to replace a legacy system, digital capabilities should be included in the system refresh. However, there is not a real framework for setting up digital functions or hiring digital experts.
  4. Treating the taxpayer as a customer: It is currently “the age of the consumer.” Shifting to a customer service mindset for constituents will have a dramatically positive effect on both the users of public sector services and the employees who serve them. What is best for the “customer” (i.e., digital services) may also be best for the career development of the civil service employee in the digital age.

Starting a Digital Program

To tackle these challenges, organizations need to take a systematic approach that starts with internal sponsorship and ends with a long-term outlook.

Step 1: Gain Internal Sponsorship

Digital transformation requires a top-down approach. It starts with the chief executive, be it a governor, mayor, or municipal administrator. The support of these top-tier individuals is needed to gather the political will to enact change. In addition, the support and active involvement of department heads are needed to make the goals of the digital initiative effectively migrate from the legacy system, process, and support organization. Innovative ideas are often started with chief executives, only to be caught up on the reality of running a complicated government unit.  Digital transformation is a journey, not an overnight implementation.

To make it happen, the organization must present a unified front with a clear list of objectives, key milestones, and a proposed timeline that is achievable and transparent for the myriad of stakeholders. Active engagement with the chief executive and legislative branch of the public sector organization may be needed to gain and maintain critical support, depending on the scope of change, which can be a campaign in itself.

 Step 2: Appoint the Appropriate Staff

To successfully implement a digital program, the chief executive should appoint an executive branch leader, such as a chief digital officer, chief data officer, or chief technology officer to drive the program. This appointee should be accountable for the tactical plan to effectively use digital technology to improve services. This executive leader should:

  • Be an advocate. People must be shown what is possible and how it could make their jobs easier as well as streamline and improve interactions with the public.
  • Handle the politics. Because time and money are such challenges, resources need to be properly allocated to digital projects. The allocation of these resources needs to be justified and understandable.
  • Designate the implementation team. This transformation will require specialized knowledge of digital tools and capabilities.  Do not underestimate the desire for the existing workforce to learn new skills, so engage the existing team. However, don’t be afraid to look outside the organization for new required skills to drive the digital transformation.
  • Showcase the digital vision. To garner continued support, a vision of what is possible with technology needs to be presented. Remember, support needs to be maintained throughout the digital effort.

Step 3: Focus on the ‘Digital Team’ Output

This team of experts should start with backend changes and/or digitizing manual processes that will quickly show results and potentially save money. These changes need to show a positive ROI so the digital transformation can gain momentum and internal support, which leads to further funding.

Next, operational effectiveness and transparency should become the next area of focus, so that the ROI can be easily measured, benchmarked and shared via open data tools. Finally, the digital team, with sponsorship of the chief executive, should look to public sector employees involved in daily operations for their ideas for improvement. Remember, public sector employees are on the front lines. Therefore, they often have greater visibility into the manual processes that could be automated for some quick digital wins.

While going through the outlined steps, keep in mind that a few high-value wins that focus on the backend system improvement or manual processes replaced by digital services will deliver a clear and justified ROI. Once a positive ROI is established, a long-term digital service strategy can be justified. The key to digital transformation success is to look where changes need to be made (from both a long-term and immediate standpoint), and lay the groundwork for current and future changes. Through this approach, public sector organizations can gain the continued support needed to affect positive change.

As an example, the City of Los Angeles created an in-house team to develop digital mechanisms for people to use city services that normally require in-person interactions — such as getting permits, making payments, and reserving city facilities. This unit conducts research and looks for ways to replace laborious, high-volume manual tasks with digital experiences. Each project goes through an ROI analysis to justify the effort, resulting in measurable hard and soft savings for the city.

Although numerous challenges can make it difficult to start a digital transformation within the public sector, the opportunity for greater efficiencies and growth justify the journey. Individuals and organizations that require public sector services will benefit from the new focus on enhanced capabilities and experiences.

If public sector organizations can obtain required internal support, gain the needed funding, and showcase a positive ROI, then they will be able to readily make improvements that will yield short-term operating efficiencies and lay the groundwork for long-term success. Achieving a few quick wins early on will help to gain the momentum that is needed for the long-term process of digitally transforming your public sector organization.

To learn more, download our white paper, “Getting From Zero to Digital: How to Future-Proof Your Bottom Line Through Digital Transformation.”

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