Focus on digital optimisation, not transformation hype

Gartner Australasia Pty Ltd

By Dean Lacheca*
Monday, 04 March, 2019


Focus on digital optimisation, not transformation hype

A long-term approach to digital optimisation of processes and services can produce the capabilities needed for digital transformation.

Transformation sounds exciting, like it’s going to change everything for the better. It must be the correct thing to do, right? Newly elected or appointed public officials often use ‘transformation’ as a slogan to distinguish technology-enabled initiatives from prior efforts with similar intentions. Many government transformation projects serve as the means to address failings rooted in long-term underinvestment in information and technology.

It’s a familiar script… government transformation initiatives are initially launched with great fanfare, only to lose momentum, visibility and executive support over time. These transformation programs eventually devolve into a ‘one and done’ series of discrete point solutions or disappear altogether.

When this happens, the total public value of investments with transformational potential can go unrealised in the shuffle of leadership, shifting budget priorities or the announcement of yet another new ‘transformation’ push.

Achieving real digital government transformation remains a tangible, if distant, goal for a significant majority of government CIOs, even as they make progress in the digital enablement and optimisation of their organisations.

The gap between the digital now and future is substantial. A recent Gartner survey indicated that 67% of government respondents say they’re pursuing digital transformation, but only 5% have scaled, harvested or refined their transformation ambition.

Why is transformation so difficult to achieve?

To successfully transform a single business process in government requires committed executive sponsorship and significant attention to organisational change management. Transformation initiatives that involve an entire department or agency increase the risk of failure whenever leadership underestimates the amount of sustained effort and time required.

Extending transformational ambitions to include multiple agencies or a whole-of-government level jumps up the risk factors by an order of magnitude… that is, if governance, technology and organisational culture aren’t sufficiently mature to achieve those ambitions.

Exercise caution whenever a transformation project is announced or already underway. It’s quite possible the charter and scope calls for a complete reinvention of government operations by exploiting digital data and technologies. Upon closer examination, however, you may determine the actual goal is the optimisation of your organisation’s existing capabilities and value proposition.

So what’s the difference?

What separates optimisation from transformation is the magnitude and the impact of digital technologies and supporting capabilities on an organisation’s operating processes and business models.

Optimisation uses digital data and technology to significantly improve what government organisations already do — existing business models, operating processes, services or outcomes — whereas transformation changes the shape of how government organisations operate. It exploits digital data and technology to reinvent or create new business models, operating processes, services or outcomes.

Digital optimisation is much more likely to meet the cost, risk and time requirements of government administrations and political appointees than transformation. It’s favoured by those not going through disruption in the near-term and can provide significant value without changing the underlying business model.

But don’t think this means optimisation is easy or delivers inferior results. The digital optimisation of a single business process in government still requires committed executive sponsorship and significant attention to organisational change management.

An optimised process can feel like it has been ‘transformed’ to the citizen. The Australian Tax Office, for example, continues to optimise the tax return lodgement process. The Department of Immigration and Border Protection is trialling a biometrics system at Australian airports as a way to optimise the passport control process.

By distinguishing between optimising or transforming government, you can identify high-value opportunities and effectively lobby for IT investments in terms and timeframes that are acceptable to stakeholders.

Optimisation suits inflexible business models

Like any organisation that strives to deliver value at scale, government operates according to a business model that must be sustainable. Knowing how a business model applies to government can help you identify areas where the potential for transformation or optimisation is greatest.

It’s the inability of government to discriminate among customers or alter its financial model that prevents public officials and CIOs from readily transforming the existing business model or creating new ones.

Many government programs are also subject to appropriated funds regulations and cost allocation requirements that direct how and where money is to be spent. These are obstacles to achieving the economies of scale that drive innovation.

To be clear, digital transformation is possible and can happen at scale — with enough vision, time, resources, talent and sustained leadership commitment. Transformation is also necessary to attain the performance, accountability and mission outcomes citizens expect of their public institutions.

However, digitally enabled transformation in government is an outlier at present — the exception and not the rule. Examples of digital government transformation remain scarce beyond those that are already well reported. New Zealand Inland Revenue’s Business Transformation Program is a good example.

Your mission: continuous optimisation

A sustained, long-term approach to digital optimisation of existing processes and services can produce the capabilities needed to enable digital government transformation.

Over time, the steady accumulation of workforce skills, technologies, data and analytics proficiency, and partnerships that emerge from a sustained optimisation strategy, can create synergistic capabilities with transformative potential.

Whether that potential is ever activated depends entirely on executive leadership and the situational dynamics at play.

*Dean Lacheca is a Research Director at Gartner, advising public sector CIOs and technology leaders on the transition to digital government. He covers topics including digital strategy, digital workplace, open data, government case management and citizen engagement.

Image credit: ©stock.adobe.com/au/ra2 studio

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