The journey to government’s digital transformation

New research by Deloitte identifies the key features of digitally mature organisations

By Deloitte

16 Feb 2016

The dawn of the digital era is upon us and as governments across the world begin to embrace digital technology, the way in which public services are delivered is changing dramatically.  Recent research has found that progress varies not only between countries but also between domains within the public sector.  Factors such as skills, leadership, culture and strategy all impact on digital maturity and can help, or prevent, governments accelerate the rate of their progress.

Deloitte’s global research provides a digital maturity model, measuring the extent to which digital technologies have transformed an organisation’s processes, talent engagement, and service models.  The research identified that digitally mature organisations have key things in common.

Clear strategy aimed at fundamental transformation

An organisation’s digital maturity is influenced, to a great degree, by its digital strategy. Among respondents from government agencies at the early stages of maturity, only 14% say that they have a clear and coherent digital strategy. In case of more digitally mature organizations, the number grows six fold, to 86%.

Digitally savvy leadership

The changes behind digital transformation challenge established models of leadership and governance. Before the ascent of digital technologies, new projects could be assessed through exhaustive analysis, investment decisions could be based on cost-benefit guidance, and the end destination of most plans was a fixed point. In the new digital era, leaders are required to make decisions more quickly in the face of a constant evolution in the art of the possible. In this challenging environment, just 38% of survey respondents believe their leadership has sufficient skills for digitally transforming public services.

For public bodies across the globe, the hierarchies and governance structures are often more pronounced than in the private sector.  More than half of the respondents say a single person or group leads their organisation’s digital agenda. Nearly 80% of these leaders are heads of various departments or agencies in governments, C-suite equivalents, or executives just below the C-suite level.

Greater user focus

Maturing organisations are nearly twice as likely as early-stage ones to be driven by customers/citizens’ demand for digital transformation.

A laser focus on using digital technologies to improve the citizen experience helps maturing organisations improve service delivery. Respondents from maturing organisations almost unanimously report that digital technologies and capabilities enable their employees to work better with customers or citizens; in early-stage agencies, only a little over half the respondents say so. Additionally, 94% of maturing organisations have a digital strategy aimed at improving customer/citizen experience and engagement, compared to only 55% of early-stage ones.

Deeply embedded skills and culture

We asked survey respondents to rank the areas of digital transition that they deemed the most challenging to manage.  Overall, workforce skills are the most challenging dimension of digital change. While culture comes second, responses are weighted toward culture being a particularly difficult area of change.  So while 34% of respondents say that changing culture toward digital transformation was challenging, a high proportion of those characterise it as highly challenging. In other words, respondents recognise the level of change needed to ensure a digitally savvy workforce, but they understand that changing culture is a uniquely difficult task.

Procurement processes are muzzled by regulations and lack of flexibility

To deliver digital transformation, public bodies need to access a robust and innovative technology marketplace, but our survey suggests that procurement’s capabilities fall well short of what’s necessary to make that happen.

Seventy-six percent of respondents insist that procurement needs to change significantly or very significantly to accommodate digital transformation. When asked to rank the most significant obstacles to better procurement practices, they predominantly cite rules and regulations, lack of flexibility, and a lack of procurement skillsets.

In Conclusion

Across the globe the expectation of citizens and businesses has started to rise.  We see the ease with which we can now bank, shop and travel and do not accept backward public services – especially with tax burdens rising in the wake of the credit crunch.

At the same time, change is being forced on Government by falling budgets.  The truth is inescapable:  digital government can deliver the same outcomes for less money.  Citizens demand digital services, and Government can’t afford to maintain the status quo anyway.

The opportunity of digital transformation is to deliver a solution to both citizen expectations and the cost challenge in a unified way.  Many people have thought that the technology to achieve this is hard, but our survey has shown that the hardest aspects of change are not the technologies at all.  Rather they are to change culture, skills, governance regimes and commercial approaches.  Leading public bodies have made great headway and are now achieving results that are examples for others to follow. 

Read the report.

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