Industry voiceThursday 10 August 2017

Delivering the RoI in digital transformation

Industry voice: Local authorities need to accept that the journey to transformation will continue indefinitely as new demands arise, writes Ian Robson, business manager, Pythagoras

Digital transformation is a complex and costly business, in which finding a clear return on investment (RoI) is one of the major challenges. Given the tough financial outlook for the public sector, especially in local government, officials leading the initiatives have to develop effective strategies for making the numbers add up to their organisations’ advantage.

There are no easy approaches, but some valuable lessons emerged from UKAuthority Live's debate on driving the RoI and digital take-up from transformation. Supported by Pythagoras, the discussion's focus was not just on the financial case, but on managing the relationships involved and being realistic about what is needed in the long term.

Underlying the conversation was an acknowledgement that budgets are going to remain tight into the foreseeable future, and digital leaders need to think about how they make intelligent 'best use' of the funds that are available. Rebuilding processes based on new technology comes at a cost, and it is a priority to keep this within realistic limits.

A core component of this is application rationalisation. Most public sector organisations are running dozens of software applications – hundreds in the case of local authorities – and one of the big areas for a more cost-effective approach is to reduce these numbers.

'Fit for purpose' flexibility

The prospects for this are becoming more realistic as some broad ranging digital platforms – such as Microsoft Dynamics 365 – are extending their range and becoming more flexible. Using these with the mindset of ‘fit for purpose’, rather than insisting on ‘best of breed’, is an important early step.

Development of the business plan around transformation is crucial. While the public service ethos should remain the driving factor, it is important to keep financial realities to the fore, and to make the workforce aware of the commercial issues at play.

With this in mind, many councils are well placed to draw on the business expertise of elected members, not just in balancing the finances, but in understanding the value of assets and data and driving the transformation agenda. This is going to be important in the creation of new commercial models for public services; and assessing how this relates to the technology investment will be a key element of the process.

Finding more agile approaches to procurement is also important. There is widespread recognition that public sector procurement can be a lengthy and cumbersome process, partly due to the regulations, but also because of internal bureaucracies, narrow-vision mindsets and internal inertia. I shared with the panel my own experience of a 14-month procurement process, still unfinished, for a project that would only last for 14 weeks!

Authorities have to find a quicker and more agile approach - not by breaking any rules - but by ensuring that their internal reviews move more quickly, using mechanisms such as procurement frameworks whenever possible, and exploring alternative structures such as joint ventures. Reducing the procurement cycle from months to weeks can get the solutions in place and make it possible to show results more quickly, feeding into the reality of a positive RoI.

Supplier relationships

Productive relationships with suppliers are important. Officials have to ensure that their technology providers are not just aware of the objectives of a specific project, but that they can relate to the organisation’s business processes and social objectives and share in its experiences. Wokingham's CIO, Sally Watkins, also said that suppliers should challenge local authorities more - pressing them on why they were using outdated software, or not using the full capabilities of the solutions they had bought. 

Building that trusted relationship, or common purpose, with the supplier does a lot to make an organisation more responsive to shifting demands, and to extend the RoI into the long term.

Another key demand – often forgotten in considering ambitious plans – is the need to simultaneously keep an eye on the basics: the investment in hardware and network equipment that underpin an organisation’s use of digital. These are crucial to internal operations and interactions with citizens, and an organisation needs to find a balance between pushing forward and ensuring that the basic elements of the technology are up to scratch.

There is also an element of communicating effectively with the workforce. Changes will not be successful, and the RoI will not be delivered, if the people using the technology and delivering services become disengaged from the process. It is always necessary to keep up the dialogue with the workforce, ensure they understand the challenges and realise that they can contribute to the change.

Continual change

Along with this, one has to bear in mind that, by their very nature, transformations are never fully complete. It is an iterative process, and the demands which shape the original challenge are always subject to change. Looking to the long term, authorities have to accept that change will continue and prepare themselves to be continually responsive and agile.

This is a demanding outlook in which digital and business leaders need to manage a series of demands at the same time. But if they develop the skill to do so effectively it will equip their organisations to respond to the shifting demands on public services, fulfilling the needs of their communities with new technology solutions and ways of working.

As I said at the end of the debate, transformation is a bit like flying an aircraft. You have to aviate, keep the plane in the air, navigate and communicate with people on the ground. But the beauty of it is that, if necessary, you can change where you’re going.

That capability to accommodate and respond to changing demands can be the most valuable RoI of all.

Watch the UKA Live debate on delivering RoI on Digital now: 

Contact Pythagoras to explore how they can help you with your transformation journey:
info@pythagoras.co.uk