Industry voiceWednesday 31 May 2017

Fix foundations first for digital transformation

The theme of ‘fixing the IT’ to enable transformation emerged strongly from the Digital Transformation events; along with the need for some lateral thinking in making the business case

There is no textbook for planning and managing a digital transformation strategy, and nobody would argue for a ‘one size fits all approach’, even if it was amended for sectors such as local government, emergency services or healthcare.

But a theme emerged from the recent Digital Transformation events – staged by UKAuthority in association with Microsoft in Cardiff and Glasgow – that could well provide a degree of assurance to many organisations.

A recurring factor emerged in a handful of reports on individual programmes, that of getting a robust IT estate in place before launching the more ambitious transformation of services.  

As Nicola Graham, head of ICT at Aberdeenshire Council pointed out: “Digital transformation is not about technology, but it does assume that the technology works.”

Aberdeenshire’s initial priority has been to ensure that the technology works, with a programme of strengthening its communications infrastructure with a radio network, moving to a Microsoft platform and restructuring its IT team to build up the internal capability.

She described the process as “fixing things”: it is not transformational in the sense of changing how the council manages business and delivers services, but it provides a foundation that makes any plans a lot more realistic than with its previous IT estate.

Restructuring

Tim Kidd, formerly head of digital delivery at Enfield Council, talked of its restructuring using Microsoft Dynamics. This has supported a major savings programme and provided a platform for building applications.

Sally Watkins, head of IT at Wokingham Borough Council, and its chief executive Andy Couldrick, outlined how the council had been using Office 365, Dynamics and Azure as the basis for transformation, with 70% of its application estate now moved from legacy systems to the cloud platform.

“It’s not about IT making the organisation change, but about the organisation recognising that it needs to change, and IT enabling that,” Watkins said.

Martin Britton, now chief information officer of the Welsh Government and previously of Natural Resources Wales, described how the latter organisation brought together the IT systems of three legacy organisations with a suite of Microsoft products, giving it a flexible cloud capability and the means to simplify its business applications.

But this begs a question, raised in the Glasgow panel debate, around how to manage the finances. Fixing the IT before embarking on the transformation effectively pushes the returns on spend further into the future - and with authorities increasingly strapped for cash this is one of the stiffest challenges they face.

Speakers highlighted the view that shifting as much as possible away from capital to operational expenditure can make a difference. This is especially the case as the growing confidence in cloud systems makes it possible to quickly develop new applications and to switch expenditure into a ‘pay as you go’ model.

Finance friends

Another important lesson is to ‘make friends with the finance chiefs’. At Aberdeenshire they were able to identify elements of the capital programme that had implications for revenue council-wide, that could be used to justify the case for spending. It was therefore possible to charge some costs of its unified communications project to different business areas, avoiding centralisation of the budget and ensuring the spread of benefits.

William Ellison, customer experience business group manager at Scottish Water, emphasised the importance of making sure that the benefits case stacks up strongly, and suggesting that there is an argument in favour of a central transformation budget.

Tim Kidd, meanwhile, highlighted the importance of establishing metrics up front.

“Finance are part and parcel of the whole piece, and building up business cases and being aligned to the savings metrics that come out of it is part of our responsibility within IT transformation,” he said. “We have to build the business case and put the numbers into it, but it’s the responsibility of finance to take the money out, and I’m happy to let them have that.

“Organisations are struggling to come to terms with IT being a much more revenue based approach than in the past. But equally times are changing in terms of the way budgets are built up, profiled and what you have to spend. It stands to reason that you invest, save, take some money out, but in some cases there might be a delta where it is ploughed back into the running cost.”

As with the details of a transformation, there is no golden rule for how to approach the case for spending, but the speakers made clear that with a little imagination, and good relationships with the senior finance team, it is always possible.

“There are a lot of ways you can tackle it, there is not one silver bullet,” said Nicola Graham. “You need to come up with different mechanisms.”

For videos and presentations from the digital transformation event click here.