Delivering the digital state The State Policy Road Map: Solutions for the Journey Ahead

Customers in the private sector expect a lot from the digital services they use. State governments should also strive to offer the same to their citizens with the view that great service makes lives easier.

What is the issue?

From the Internet of Things to artificial intelligence, no single factor may alter citizens’ experience of state government more than the pure power of digital technologies. Governments worldwide are in the midst of a historic (and frequently wrenching) transformation as they abandon analog operating models and embrace digital.

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At the state level, citizens want outstanding digital service from their government for the same reason they want it from an online clothing retailer, a bank, or a travel booking site: Great service makes their lives easier. The less time people spend searching for information or filling out forms, the more time they can spend getting on with their lives.

So what do state governments need to do to forsake analog, industrial-era models in favor of their digitally enabled counterparts? This article provides a set of strategies that may help in getting from here to there. One thing to understand is that transformation is not just about the technology— it’s a changed mind-set that puts customers and users before organizational interests, can turn human-centered design into a state’s core competency, and improves the way state agencies serve their citizens.

Issue by the numbers: Digital government transformation

  • State and local government IT spending is 56 percent ($108 billion) of total government IT spending in the United States. This is expected to increase up to 58 percent ($117 billion) by 2018. Some of this additional funding will likely be used for transition from legacy to cloud systems.1
  • According to Deloitte’s 2015 digital government transformation survey, 73 percent of state and local government respondents believed that their digital capabilities were behind the private sector.2
  • The NASCIO 2016 State CIO survey findings show that over one-third of CIOs stated that greater than 10 percent of their state’s IT budget is allocated to modernization work.3
  • Nine of ten state CIOs considered at least 20 percent of their systems due for replacement or modernization, while nearly two out of three CIOs saw more than 40 percent of the systems as legacy.4

How can state leadership tackle the issue?

Develop a statewide digital strategy

Our research points to a strong link between an organization’s success and the presence of a digital strategy.5 States with a clear, coherent digital strategy are likely better equipped to respond to opportunities and threats, and are more likely to foster innovation and collaboration. The strategy should consist of a road map that addresses the key elements of digital transformation: culture, leadership, workforce, and procurement. A high-profile strategy can accelerate the digital journey.

Establish a state digital studio

State officials should have a central point for orchestrating the digital vision. Many commercial organizations—and some leaders in the public sector—have put a creative digital studio at the center of their digital transformation. The studio can provide web development, design thinking, and prototyping capability. This operation might be housed within the organization, or it might be co-sourced or even outsourced.

One of the first governments to set up an organization to function as an enterprise-wide design studio was the United Kingdom, which formed its Government Digital Service (GDS) in 2011. The GDS soon evolved into a Cabinet office and seemed to inspire other governments to form organizations based on its practices. These included the United States Digital Service and 18F in the United States, the Digital Transformation Agency in Australia, and the Canadian Digital Service.6 Hong Kong, Singapore, and Thailand have also established organizations of this kind.7

When smart organizations develop digital studios, they usually make those resources available to all departments and agencies with existing contract vehicles and attractive incentives. For example, the city of New York is in the process of creating a master service agreement (MSA) for several digital studios in order to provide design capabilities.

Create an end-to-end digital experience from the citizen/customer’s point of view

Most citizens don’t care about a state’s organizational chart. They certainly don’t want to spend time hopping from one state agency’s website to another, trying to figure out which ones can help them with which concerns. They want to get their questions answered or their transactions completed in a few simple steps.

Like the best e-commerce sites, the most seamless state digital service environments don’t greet you by asking, “Where do you want to go?” Instead, they ask, “What do you want to do?” and then whisk you off to the place where you can accomplish what you need. Want to register to vote? You don’t need to know the name of the agency that handles that. It’s the service’s job to take you to the right place.

Use design thinking principles

Work conducted according to the principles of design thinking can be highly iterative. Practitioners conduct research to understand the real human needs behind the problem they’re trying to solve or the service they’re building. They commonly use brainstorming to generate large numbers of ideas and do a great deal of sketching, prototyping, and testing.8 Whenever you see an organization that excels at digital design, you’ll likely find that it builds a user focus into every step of every project.

Phase out legacy systems gradually

In the second decade of the twenty-first century, an alarming amount of critical state government business depends on IT systems that date back to the age of punch cards and green screens. Reliance on obsolete technology can open government agencies to potentially serious perils.

So how can you move off obsolete systems without risking a major belly flop? Refactoring, especially automated refactoring, can be a promising solution in many cases.

Refactoring is a straightforward approach that replaces old code one module at a time, producing code written in a contemporary language that can use a modern environment. The benefit is limited disruption, as end users shouldn’t detect any difference in the systems they use from day to day. They would continue to use the same interfaces to execute the same business processes. But behind the scenes, refactoring creates an environment based on a modern framework such as .Net or JAVA that can run on newer platforms such as Windows or LINUX, providing a strong foundation for future modernization.

Refactoring is typically a lower-cost, lower-risk strategy that lets an agency conduct business with very limited disruption. It usually takes only about 18 to 24 months to complete a refactoring project. In a typical modernization, it can take that long just to gather requirements.

Build digital capacity

Many government leaders identify workforce issues and technical skills as the most challenging areas for digital evolution.9 Many state government agencies seem to lack the skills needed to take advantage of digital transformation—skills in user research and analysis, agile and iterative project management, financial modeling, and digital supply chain issues, as well as coding and design. They should have a plan that pinpoints the capabilities they need and suggests ways to secure them.

Hiring, retaining, and training the right talent may require new approaches to recruitment, training, and engagement with the wider digital talent ecosystem. It will likely require offering the best candidates something beyond compensation and benefits, and creating a workplace in which they can thrive.

Make agile work for a government environment

Agile development is neither new nor unproven; in fact, agile projects are 350 percent more likely to be successful than waterfall development (600 percent for very large projects).10 Despite this, agile is used relatively sporadically in state government. This means that the moment agile projects interact with parts of state government that have not adopted the methodology, they often meet resistance.

Traditional agile is designed for small teams working on well-defined projects over short periods of time. Scaling agile to large state IT projects involving dozens of teams over multiyear time horizons typically requires adapting the approach. Key modifications often include multiyear road maps, strong governance, coordinating cross-team dependencies, consolidated reporting, and increased testing.

Develop enterprise-wide identity management

Today, many governments rely on a sprawling patchwork of systems to manage information about people, using everything from passwords to smart cards to biometrics. Every department seems to handle the issue differently. The result can be inconvenient to the end user and can limit government’s ability to leverage information it possesses but cannot access. These disconnects can be frustrating at best and crippling at worst.11

Imagine the potential if states could “connect the dots.” Someone seeking benefits wouldn’t have to provide their name, address, and other information to multiple agencies. Citizens would get tax forms with fields pre-populated with data. Agencies could take steps based on actions taken in other agencies, too. For example, someone sent to prison could have his or her unemployment benefits stopped, or someone who applied for nutrition assistance could be told that he or she qualifies for a school lunch program.

Today’s limitations often stem from the way government manages identity: databases that can’t talk with one another, limited information sharing, and complex rules and protocols. To make digital government work and deliver great customer experiences, state governments likely need something simpler: a unique, uniform digital ID that grants agencies access to all of the appropriate data and services, from anywhere and any device.

Transform procurement

Our digital government survey shows the big changes government organizations seem to want in the procurement process: agile development, less restrictive terms and conditions, and a more decentralized procurement model. Any proposed procurement reform should consider these issues.12

Digital-age procurement entails simplifying the procurement process, breaking large projects into smaller parts, and increasing flexibility and agility in procurement approaches.

You don’t need to look too far for inspiration

Access Health CT

Connecticut developed an online health insurance exchange widely viewed as successful. How did the state do it? By focusing on user-centric design and testing to eliminate pain points, address glitches, and prepare for contingencies.

Texas Health and Human Services Commission

How can digital projects improve the customer experience? One way is by working to understand user behavior and focusing on the user perspective while designing the project. That’s exactly what the Texas Health and Human Services Commission (HHSC) did when it integrated eligibility systems for all federal and state programs and launched a mobile app for document verification.


Apart from conventional recruitment criteria, evaluating candidates’ motive for joining the team and testing whether they are a good cultural fit can play a role in hiring the right individuals for the job. The US federal government’s digital studio, called 18F, reengineered, or “hacked,” the government’s hiring process to build a digital dream team.

Michigan’s MILogin

The MILogin identity management system allows users to access state information and applications, including private data, from multiple agencies with a single sign-in. The system uses tools such as credentials verified by a third party, strong passwords, and multifactor authentication to protect the user’s identity, with specific requirements determined by the agency that owns each application. As of September 2017, more than 60,000 state employees and contractors, plus 100,000 Michigan citizens and 700,000 business entities, had registered for a user account to access over 170 state applications from multiple agencies.13