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Why government digital transformations fail

We see a lot of digital transformations fail in government sectors. Here's where they go wrong.

Stéphane Recouvreur

Stéphane Recouvreur 22 September 2022

Governments have never been asked to do as much. Not only are they expected to do more, but they have to do it better and do it for less.

That is a tough ask, as over 80% of public sector transformation efforts fail to meet their objective and governments know they have to transform if they are to be able to meet the changing demands of citizens.

Let’s explore why we need public sector transformation, why is the failure rate so high and what do we need to do about it.

Why do we need transformation?

The Australian government deals with over 800m transactions per year across Federal and State.

40% of those transactions were completed through traditional channels. Traditional channels such as phone transactions cost upwards of $6, postal transactions close to $13, and Face-to-face at $17/transaction.

Research has found that if we were able to reduce that to 20%, it would result in a cost saving for the government of close to $18b and if that wasn’t enough, a further $8.7b in benefits to citizens from cost savings in time, convenience and out-of-pocket expenses. All this at a deployment cost of just over $6b.

Apart from the obvious cost benefits, it is also the demand from citizens that are now expecting the same service levels and experiences as they receive from their interactions with brands in the private sector.

Why we need to transform is no longer the pressing question. Those that get into the lead in this transformative journey will be the ones that realize its benefits.

IMD’s 2019 world digital competitiveness index ranks Australia 14th globally and WEF’s 2019 global competitiveness index places Australia’s public sector performance in 28th place. All of this suggests our public sector is well-placed but there is still a lot more to achieve if we are to meet our vision of becoming a top 3 digital government by 2025.

To meet this vision, the Australian public sector will need to focus on improving citizen experience and institution-wide operations.

Why do public sector transformations fail to meet objectives?

As highlighted in the recently launched book “Are we there yet?”, the authors highlight that digital transformation in Australia has stalled and it's because there is a disconnect between those that know governments and those that know technology.

Part of the problem is that despite their best intentions, many governments continue to design and deliver services based on their own requirements and processes instead of the needs of the citizens they serve.

Placing the citizen at the heart of any transformation effort will be key to success. Understanding what citizens want, how they want it, and when they want it will be a top priority.

So what does an Australian citizen want from their interactions with government departments? Accenture research found that:

  • 69% of them want easier interaction when dealing with government digital services
  • 53% want a single portal for multiple services
  • 56% want personalized information from the Government

Interestingly, awareness of digital services and satisfaction rates are still below par. The research also found that:

  • Almost 1 in 4 don’t use any of the digital services
  • Only 1 in 3 Australians use digital services regularly
  • Just over half are satisfied with the experience

So it just isn’t about digital for the sake of being digital - value will only come from understanding what citizens want and designing services to meet those needs.

What do we need to do about it?

Citizens want to interact with Government and not a department. They want to interact on a life event and not a service/benefit. Building services such as NSW’s Life events are great examples of services that focus on human-centred design.

This is the whole-of-government approach, that provides seamless, personalised experiences. Governments are required to move from thinking about digital touchpoints to thinking about digital journeys.

Platform technology is seen as the answer to delivering these experiences but platforms business models are not new. They have been around for a while but many transformative efforts have continued within siloed departments.

The other key factor to highlight is platform technology is also at the stage where capabilities such as security, extensibility, scalability, interoperability are easily configurable and meet the demands of digital governments today.

Finally, to sum it all up, we found that:

  • Digital Transformation has stalled. Governments are going down the digital path but constantly met with complexity challenges.
  • There is a disconnect between the people driving digital and people that understand governments.
  • We are at the tipping point of scaling government services - and Australia is well placed to lead in that journey.
  • We can’t just be looking at Digital Transformation or Business Transformation on its own - we need to focus on Digital Business Transformation by continuing to be customer-obsessed and deliver services on platforms.