State and local governments around the world aspire to use technology to deliver services to citizens and roll out important policies in effective, fair, timely, and cost-efficient ways.
These days, IT in the public sector is no longer just a concern for chief information or technology officers, or data-crunching teams; it is fundamental to the business of government.
And while some governments are getting it right, many others are struggling to achieve their goals consistently and make the most of their IT capabilities.
That is why we stepped back to ask: based on our work with governments around the globe, what can we learn from the successes we have seen? What insights can we share that would help other governments, as well as the businesses that work with them?
To answer these questions, we took a holistic view of public-sector IT capabilities – the platforms governments have used, the enabling processes they have established, the expertise and talent they have developed, and the partnerships they have pursued – and identified a 10-point plan for IT in the public sector.
Chief among the 10 imperatives for success are:
Build and articulate the business case. Most governments struggle to articulate the goals of their IT investments and accurately estimate the costs. In the case of one government, leaders had quantified benefits in less than 15 per cent of their IT projects, fully estimated their costs in fewer than 50 per cent of them, and had not identified the critical business and implementation risks for any of them.
Making the business case matters to outcomes and effectiveness. Our experience and research shows that leaders who identify specific benefits from their projects, and actively manage their projects to achieve them, can reduce costs by 30 per cent and improve the likelihood of success by a factor of three.
Dive deeper into digital. Citizens and businesses already enter into a number of transactions with government agencies online – for instance, paying taxes, renewing licences, managing benefit plans and applying for permits. To extend eservices to more departments, state and local governments must develop a better understanding of constituents’ needs – similar to the way consumer technology companies take a user-experience approach. That often means developing or strengthening capabilities in web usability, web analytics and online marketing.
Public sector leaders also need to engage citizens and businesses in the process of creating new eservices. One US city formed a cross-agency team to study its elicensing process for restaurants.
The team collected input from members of the business community and, based on the responses, re-engineered the entire process to make it much simpler and much more responsive, freeing restaurant owners to spend more time running their businesses.
Rethink the procurement process. When it comes to purchasing IT products and services, public-sector organisations face special challenges – among them complex requirements and regulations mandated at state and local levels; insufficient expertise; and a lack of accountability. By the time a project gets approved and implemented, there has often been such a long delay that the technology is out of date.
To improve and accelerate decision making, we found that successful governments distinguish between complicated/customised and simpler/commoditised IT purchases; hire staff with expertise in strategic IT sourcing; build in-house experienced, cross-functional IT procurement teams; standardise IT contracts; and develop benchmarks and processes for tracking vendor delivery across government agencies.
One large US city strengthened its internal capacity to negotiate contracts and took over important planning and design activities performed by vendors, saving more than $100m a year.
Embrace the cloud and the realities of cybersecurity. A number of public and private-sector organisations are testing out cloud computing, but success has been uneven in the public sector where privacy issues are particularly complex – for example, with health and benefits information.
To capitalise on the cost-savings and service improvements cloud computing can bring, public-sector officials need to assess their technology assets: which applications, workloads, and services are eligible to be moved to a cloud environment? Which will be moved first, over what time period, and how will the organisation charge for access to those data assets?
At the centre of this effort there must be a comprehensive cybersecurity strategy that complements the agency’s mission, is supported by top leadership and focuses on protecting the most important information assets from the most likely threats.
We have written extensively about the full 10-point plan, which also includes launching open-data initiatives so as to share information more easily both internally and with citizens; creating shared services to lower costs and increase quality; addressing the risks inherent in making only incremental updates to legacy IT systems, as well as the risks associated with fully modernising those systems; shoring up the IT talent base to sustain programmes; and pursuing innovative partnerships to create procurement efficiencies and other advantages.
Excellence in government is contingent upon creative, effective uses of IT. But all too often, public-sector leaders cannot execute their IT strategies because of competing commitments, regulatory restrictions, and ever-changing demands from the populations they serve.
The 10-point plan provides a comprehensive road map for navigating these obstacles.
Pedja Arandjelovic is an associate principal in McKinsey’s New Jersey office; Aamer Baig is a director in the Chicago office; and Bassam Chaptini is an associate principal in the New York office.
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