Andrew Arcuri: a proper rethink of core government systems could yield big results

Governments are increasingly seeking to transform their core systems. Andrew Arcuri of the Boston Consulting Group considers how they can move from achieving good results, to truly great ones

By Andrew Arcuri

23 Sep 2015

Ever had to file a tax return? Few processes can be as frustrating or as tedious. But that doesn’t make it unnecessary. On the contrary, such systems are pivotal to the business of government. Sexy? No. But important? Yes.

Core systems like these are the IT backbone for government departments. They enable citizens to receive their welfare payments on time, for example, or collect their visa approvals as expected. Unfortunately, it doesn’t always work out like that. Core systems, after all, are hardly straightforward operations. Their typical characteristics include automating complex business rules and heavily integrating with many interfaces to other systems and information sources. Core systems also often process large volumes of transactions and face very high requirements for accuracy, reliability and availability.

With this in mind, it's hardly surprising that policymakers have sought in recent years to modernise and strengthen these systems via huge cash injections – $460bn (around £300bn) was spent in 2012, rising to a projected $487bn in 2018. The level of this spending – particularly at a time when austerity continues to bite deep into many government balance sheets – demands truly transformative results. So, how have they got on?

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Mixed results

It's important to note that large-scale modernisations are quite rare in the public sector, leaving government professionals often lacking the transformational nous that comes from the experience of overseeing these types of projects. And accountabilities change. Timeframes for transformation projects are heavily influenced by budget and election cycles, and implementation can take longer than a politician’s time in office.

These examples explain why many core system modernisations in government fail to deliver a bang for their buck. Even the 20%-30% of projects that deliver something "good", and deliver it broadly within the correct time period and/or on budget, fall short of their full potential. Disappointingly, very few are "great". Huge potential value is left unrealised, and a deeply entrenched culture of risk aversion means that few policymakers truly achieve once-in-a-generation transformational change. But it's by no means all bad news. Achieving a "great" result is no mission impossible.

From 'good' to 'great'

Core system modernisations very often focus on improving the IT systems, driving "IT efficiency" and "IT responsiveness", for example. This is important. But it’s only a small fraction of what could potentially be achieved.

Policymakers and department heads and CIOs need to step back and see this as an opportunity to rethink the way a department works and, more importantly, how services can be delivered to citizens. Imagine, for example, if social services weren’t just about processing welfare payments. Imagine if they were also about solving the underlying causes of unemployment and welfare through advanced analytics and improved linkages to other intra- and inter-departmental information and systems.

Similarly, governments should of course focus on keeping rigorously to plan, but to make a greater leap forward they should also look to deliver value early in short cycles, as well as being able to adapt plans to maximise value when necessary.

The complexity of these projects means that governments will often look for external support. Clear, up-front definition of requirements and outsourcing to transfer risk can both be important steps. But again, to be great, policymakers need to do more. Being willing to relax requirements to reduce complexity and adopt best practices is a key first step. They should also deploy a scenario-based approach to selecting vendor partners, one that involves an increased focus on demonstrations and prototyping. They should then seek to establish the vendor relationship on a basis of collaboration and shared benefits.

Governance, too, is important. Timely reporting of issues to management is one thing, but setting up governance functions to predict potential problems is quite another. Governments should take a proactive approach to stakeholder management. While using the transformation to align business and IT objectives is important, engaging top leaders to fight for the best solution and enlisting "loud and proud" champions such as ministers will help take the transformation to the next level. Much then depends on using the best people and teams – investing heavily in the right people and capabilities from day one is a prerequisite.

Horizon scanning

There’s little doubt that governments are facing increasing pressure to modernise their core systems. But in order to drive a "great" transformation, governments must also have a deep understanding of the opportunity, and take action to ensure their organisation can deliver on that potential.

Such an effort will inevitably come with tough strategic decisions. After all, the goal is not simply to upgrade an IT system, but rather to transform the very operations of government. It's not going to be easy, but government rarely is. The task now is to double down and accelerate this process – the potential prize of improved public services and widespread cost-savings lies ahead.

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