The State of the Digital Nation: Public Sector is the latest piece of research published by Unit4, and conducted by Vanson Bourne. The report is based on a survey of 600 public sector decision-makers across Australia, Belgium, Canada, Sweden, the UK and the USA. At effectively 12 pages in length, it concludes with five key findings around transformation and innovation within the public sector.
Over the last two years, public sector organisations have faced unprecedented challenges. Before the pandemic, many were already considering digitisation strategies to reduce costs. Instead, many have been forced to accelerate digitisation to meet new challenges. Only 1% of respondents did not have a digitisation strategy, while 95% have a digitisation strategy rolled out to some extent.
The survey and report delve into the priorities, challenges, and the progress organisations have had. It concludes with five qualities that the public sector requires from its vendors and some brief examples where Unit4 has delivered transformative digitisation.
Mark Gibbison, Global Director Public Sector, Unit4, commented, “The global public sector is coming through one of the toughest challenges it has ever faced, but in some ways it has demonstrated what is possible in terms of digital transformation.
“However, organizations face an even tougher task in the years ahead to maintain essential public services and continue to invest in innovation to deliver significant improvements. It will require a mindset shift to embrace the change needed to modernize public services and a willingness to be more agile, accepting that disruption will ultimately lead to far better value for citizens.”
Historical issues hinder adaptation
Change was already happening. 99% saw changes to targets and services separate to the needs of COVID over the last two years. The biggest factor outside COVID appears to have been the drive for transparency in public spending (55%). Perhaps surprisingly, budget reductions do not appear to be in the report.
The report highlights some interesting insights into the different challenges faced, with 96% facing some kind of challenge. The issues vary by sector type and by country. For example, 55% of Canadian organisations do not plan well for changes and do not react well. In Australia, 53% believe that leadership resists change.
Digital Transformation is a priority but not completed
According to the survey, 29% of organisations completed their digital transformation strategy. Wisely, Unit4 asked six more questions to ascertain whether they had transformed, digitised and made a difference to their organisations. It identified that only 9% were outperforming others after the transformation.
There is a huge variation on this by size, nationality and sector or organisation. The larger the organisation, the less likely it is to be over-performing. However, the smallest organisations (300-500 employees) has only completed the process 3% of the time, the lowest. Healthcare (17%) and Local Government (16%) have the highest proportion of out-performers.
If the survey had contained a qualitative element, some of the real benefits from digital transformation might have been pulled out. It may also have led to a greater understanding of what had been achieved in reality.
The report highlights the adoption of different technologies by organisations with Cloud at least 50% partially adopted. Surprisingly, 37% have already adopted AI/machine learning, with only 39% adopting SaaS applications, the second-lowest.
What is missing is an understanding of the change management involved in digital transformation. The report focuses on the technology that has been implemented and not the changes to business processes that digitisation should deliver. Have these organisations just implemented technology to digitise their operations, or have they digitally transformed? It is unclear. Again the lack of qualitative answers obfuscates the truth.
What are the barriers to transformation?
The report highlight common issues found across many verticals. In this case, the top five barriers to transformation are:
- Lack of alignment between different departments/functions, 50%
- systems are either too complex or more complex than expected, 49%
- Enforced cost savings, 48%
- Staff do not have the right skills or experience, 32%
- The impact of COVID-19, 30%
The first is peculiar to the public sector. Perhaps some other industries face similar challenges, but it will not stop most commercial businesses from transforming.
Even if transformation is underway, to attain digital maturity remains beyond many, with 86% believing that people lack the right skills and training to adapt to changes. Again, does this mean that change management programmes are woefully missing from transformations?
With 95% of organisations looking to make cost savings, that 48% see this as a barrier to change is not surprising. The report highlights how some organisations are achieving this. Common methods include cuts, pay freezes, shared services and selling buildings.
With many finance teams struggling with statutory reporting (41%) and period ends, a smaller investment in digitizing finance might be an answer. That could free up time for finance to properly investigate digitisation benefits for other areas.
What does success look like?
Later in the report, it highlights three elements that respondents believe demonstrate digital maturity. Based on findings from questions around which back end processes they would redesign, it is perhaps the most inciteful and useful part of the study. The three areas are:
- Real-time data and reporting to ensure reports are up to date and instant
- Predictive analytics for workforce planning and forecasting
- Automation to deploy people with the right skills at the right time to the right location.
How does one achieve these? The authors believe that organisations need to look for solutions and vendors that can provide five things:
- speed up back-office processes to improve efficiency and productivity
- free up staff to focus on delivering citizen or community services
- support greater agility and strategies to cope with unexpected changes
- support visibility of accurate data for budget planning and allocation, forecasting and more
- provide faster access to real-time data and up to date reporting
Enterprise Times: What does this mean
The answers from this survey provide some fascinating insights into the state of public sector organisations and the challenges they face. Not all of these are highlighted within the report or the press releases, which is extensive in itself. It shows that the public sector faces both common and unique challenges to digital transformation.
One should expect more detailed country-specific blogs or even whitepapers to highlight some of the common challenges and progress made by organisations across the globe. For Unit4 internally, it will provide some insights into how to help those organisations transform. One of those is clearly to identify the change management challenges. It can work with its existing and growing partner network to overcome these. These services should help with the mindset shift that Gibbison talks about.
Unit4 also highlights how its technology has already helped organisations such as Southampton City Council and the East of England Ambulance Service NHS Trust. Perhaps other consultancies and SIs will see that ERPx, Unit4’s latest ERP solution, is the right technology for the public sector.