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The Ascent of Digital

Understanding and accelerating the Public Sector’s evolution

In recent years, the public sector began adopting digital processes and operating models, heralding the dawn of a new digital era. This new era has been made possible by rapid changes in technology. At the same time, unprecedented cost pressures and rising public expectation have converged to create pressure for change.

Government’s digital era

This decade, the public sector entered a new phase in its evolution; government’s digital era.

To assess the public sector’s stage of digital evolution, Deloitte surveyed a range of leaders who are involved in digital transformation between January and March 2015. More than 400 responded, from all nations of the UK and from a wide range of organisations spanning local and central government, the NHS, police, further education and higher education.

The ascent of digital

Accelerating the Public Sector’s evolution

The report identifies the common barriers that are slowing government’s digital evolution and highlights some successful interventions that have helped ambitious public sector organisations accelerate their transformation. Our research suggests a wide spectrum of digital maturity in the UK public sector, but with a common set of issues and a shared series of barriers that are hampering change: culture, procurement, workforce and leadership.

Some of the key findings:

  • Cost pressures, customer demand and central government directives are the top three drivers for digital transformation
  • Collaborative processes, business acumen and technological savviness are the three most highly-prized capabilities for public sector digital transformation
  • Insufficient funding and competing priorities are the most significant barriers impeding digital transformation
  • Regulations, lack of flexibility and legacy contracts were identified as the most significant obstacles to digital-friendly procurement.

Culture

Our survey of public sector leaders finds that:

  • Insufficient funding and competing priorities are the most significant barriers impeding digital transformation
  • Changing an organisation’s workforce and skills is seen as the most challenging area to manage overall, and changing culture is particularly hard
  • 48 per cent say their organisation’s investment in digital initiatives has increased this year.

Our survey respondents consistently saw that some of the most critical barriers to digital adoption are nothing to do with technology. Rather they are about people – specifically the skills and attitudes of staff and customers, and the culture within their organisations. Our research found a number of interventions which have a big impact on cultural inertia and illustrate some ways of overcoming cultural barriers to change:

  • Changing the working environment to shock the system
  • Putting user research at the heart of transformation
  • Appointing agitators into key posts.

Procurement

Our survey of public sector leaders finds that:

  • Regulations, lack of flexibility and legacy contracts were identified as the most significant obstacles to digital-friendly procurement
  • 83 per cent say that procurement needs to change to accommodate digital transformation, especially to allow for agile development and de-restrict terms and conditions
  • 74 per cent of organisations blend in-house and contracted resources to develop digital services while just 10 per cent rely on in-house capability alone.

There was widespread recognition in our research that procurement and commercial strategies need to change to accommodate digital transformation. Public sector approaches to procurement are rightly designed to make sure that public money is well-spent. This must continue, but our research found evidence that the risks of poor public spending are different in the digital age to those that went before. Within individual public bodies, our research suggests that interventions with the most impact include:

  • Shifting onto open standards for data and interfaces
  • Breaking larger contracts into smaller parts.

 

Workforce and skills

Our survey of public sector leaders finds that:

  • Collaborative processes, business acumen and technological savviness are the three most highly-prized capabilities for public sector digital transformation
  • 26 per cent say their organisation has sufficient skills to execute their digital strategy 
  • 28 per cent think their organisation has the right resources or opportunities to obtain the digital skills they need
  • 93 per cent say that workforce and skills is the most difficult area to manage in their organisation’s digital transformation
  • 35 per cent say that they are confident in their organisation’s readiness to respond to digital.

Our research identified workforce and skills as the most challenging area for digital evolution. Achieving the potential of digital transformation requires public bodies to have new skills. These are not simply existing people with new awareness, but genuinely new skills including user research and analysis, technology skills, agile and iterative project management, user experience skills , financial modelling for digital business models and commercial skills for a digital supply chain. With relatively constrained levels of public sector pay, alongside a private sector economy that is rebounding strongly, it is difficult for public bodies to attract the talent they need. The solution is a blend of investment, external support and innovative approaches:

  • Partnerships with universities, employers and suppliers
  • In-house academies
  • Accessing skills in the community through open data, transparency and co-creation.
     

Leadership

Just 32 per cent of survey respondents believe their leadership has sufficient skills for meeting the challenge of digitally transforming public services. Our research illustrates that leader need to manage competing priorities and buy into user-centred design if digital transformation is to be achieved.

In the new digital era, leaders are required to make decisions with less information, and constant evolution in the art of the possible. Governance of change across the public sector is under similar pressure. Public bodies which expect all change to be slow-moving, subject to rigorous gateways and managed to timescales set in stone will increasingly find that their governance regime itself is a barrier to digital transformation. Some of the successful ways of working and interventions that our research encountered are:

  • Funding services that improve rather than isolated projects
  • Setting benchmark and baseline data to inform decision-making.

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