Throw out the requirement lists, where are your outcomes?

Digital transformation of the front and back office is not easy at the best of times. The pandemic has only made this more challenging, it has also highlighted that the digital agility and adaptability of governments is a necessity for future success.

Antiquated processes on legacy technology platforms pose as a hinderance, if not actually a threat, to their ability to appropriately respond to changing circumstances.

Government agencies also recognize this and often have numerous initiatives already underway to drive digital transformation. However, it can be said that many of these programs fall short of delivering their desired outcomes.

No organization embarks on a digital transformation to fall short. But how can this be changed?

One of the keys is taking an outcome-led approach that focuses on technology as the enabler but not the end goal.

Dedicate time at the beginning of the transformation journey to not only define what you want to achieve but also to help ensure that you have a clear understanding of current capabilities. Combine this with building an operational model in tandem that enables the teams to potentially benefit from the advantages of the technology.

This outcome focus helps to mitigate risk and better manage changes in scope – factors that have caused the downfall of many major technology related government projects around the world.

Setting the vision is too important to get wrong. The opportunity is for senior leaders to be the driving force for this change, and there are great advantages in doing so.

• The first and arguably the most important barrier, is a lack of knowledge about potential achievements that result from a more strategic approach.
  
  Having a vision for transformation is typically informed by understanding the art of the possible. To be transformational, the leadership team should know and understand their end goal so that they can appropriately plan how to get there. Increasingly senior leaders have been modelling their business after the start-up and commercial business playbook, looking back into their organization with a business to consumer lens.

• Governments and public sector agencies typically buy technology and supporting services through a stringent procurement-led process that is deep in the weeds of function and technology. Suppliers issue a collective groan as another 2,000-line spreadsheet of ‘capabilities required’ drops into the inbox. When comparing modern cloud platforms, virtually all top quadrant suppliers can tick the ‘fully compliant’ box.
  
  All too often it leads to a modern version of what is already there. There is nothing transformational about this approach.

• Organizations often allocate and measure their budgets and return on investment (ROI) in short-term stints, which ultimately result in lost opportunities to transform.
  
  A transformation-focused project is a long-term investment. The payback period will likely extend beyond one accounting or political/election period. Consequently, many face challenges when advocating for the investment necessary to achieve the organization’s transformation goals.
  
  Features and functions are delivered by the top quadrant cloud suppliers at a frightening pace each year. Taking a longer-term transformation view helps to establish an ‘innovation’ led culture with an organizational model that can provide for the continuation of the transformation program year in and year out, changing and flexing as the needs of the organization change.

• Inter-department capability is often the driver rather than intra-agency convergence.
  
  Like any complex organization, governments are made up of multiple departments and entities, each with their own history, systems, management teams, locations, cultures, and decision-making processes.
  
  Many of these organizations are looking for technological solutions to their most immediate challenges and overlook the opportunity and critical transformation that will likely propel their services to new heights. Bringing disparate, siloed data and systems together can allow their departments and entities to operate coherently. With scarce people resources across the public sector, deploying people where their skills are needed has been the greatest focus.
  
  Where convergence is not a driver, achieving other objectives such as efficiency, consistency, modernization, and economies of scale across departments is still very difficult.

In short, digital transformation is not prevented by a lack of technology, it is prevented by failing to identify the ideal outcome upfront.

• It aims to avoid a simple and ineffective modernization of current capabilities. By taking the opportunity to outline strategic, specific outcomes beforehand, governments can avoid ‘directionless’ technology procurement.

• A transformation project measured based on value delivered, rather than as just cost, helps address the common barrier associated with ROI in a short term. It enables amortization of the investment over the life span of the approach, rather than on a fixed short-term period.

• Business outcome delivery and KPI’s embedded into the procurement cycle can help suppliers bring more creative commercial models to the table. Deliver the core for a fee, then share the expected benefit of the improvements made together.

• Bringing different departments together becomes easier because the end-state is more visible, thereby ‘tangible’. This helps facilitate economies of scale by aiming to reduce the perception that departments are too different to share information/data or converge. Proper governance also helps convergence when that is a key objective.

• It is simpler for senior managers to lead when there is a clear plan on what the results of the transformation will likely be. A well-defined, outcome-led plan makes it easier for employees to engage in the process. For example, when KPMG in the UK helped the UK Home Office with their digital transformation of HR and workforce performance management, this significantly increased user adoption rates, led to quicker time to value and thus improved the likelihood of future success.

To conclude, taking an outcome focused approach to digital transformation can significantly help reduce risk, increase the likelihood of success, and increase the value it brings. For government and public sector agencies that are stuck on legacy systems, it can accelerate the move to the cloud, in a way that prioritizes sustainable change.

Digital transformation is necessary for governments and the public sector. When done in the right way, it can help provide long-term value and can strengthen the ability of the workforce to deal with some of the many nuances in the government and public sector.

The opportunity for efficient, connected government is there, as is the opportunity for convergence where desired. It should be approached in a mindful and efficient way.

KPMG firms have created a robust approach to help government and public sector organizations transition into cloud technologies. You can find out more about this approach in future blogs.