The perennial call for public sector reform has not slackened. The pain of austerity measures and the pressures for increased efficiency heighten that call. And, the hype around “smart cities” amps up the pressure for municipal leaders faced with decisions about which problems to attack first, and which tools are most appropriate. But most organizations are not starting from a clean slate. That’s exactly the issue. In most cases we’re talking about reform, about doing things differently, not starting from scratch.
When we asked government leaders what their top priorities are, improving the customer experience comes in on top: 68% report the customer experience is either a high or critical priority. But reducing costs is right up there with it. That’s the age-old do-more-with-less mantra. And, from a technology perspective their top priority is to upgrade or replace legacy systems, which might not sound like the wiz bang “smart” technology we’ve been hearing so much about. But it’s likely the smartest thing these governments can do; and when they do, they should do it together.
When I was in high school – and admittedly that was quite a while ago — my neighbor quit his job as an insurance salesman to go into the car phone business. My mother couldn’t understand why someone would give up a good, stable job to sell something that she couldn’t imagine anyone ever using. Who would use a car phone? Why would anyone talk on the phone in a car?
Fast forward a few years… (OK, a few more than a few)… and most of us can’t imagine not having our phone with us. We use our phone everywhere… And, yes, according to Forrester’s 2013 Consumer Technographics survey, 68% of US online adults use their phone in the car, and 48% even use their phone from the bathroom. Who’s guilty?! As for my mother, she has still never used an ATM card at a bank and still writes checks for cash at the grocery store, but she DOES have a cell phone and just might have used it in the car once or twice.
My sister used to tell me that I wasn’t smart I was just organized. I’m not here to argue (anymore) but I have never forgotten her claim. In fact, it’s true for more than just me. It’s really what is at the heart of smart cities. It’s not about what you know but what you can do with it. The industry has been pushing “smart” on cities for a half a decade. But the most successful stories about cities cutting their cost of operations and improving the lives of their citizens are about being better organized or more efficient.
At the Schneider Electric Influencer Summit in Boston this week, Schneider execs and customers focused their smart city story on just that – getting more efficient. We all have heard the numbers: cities take up only 2% of the world’s surface but they consume 75% of the world’s energy and account for 80% of the world’s carbon emissions. As the Schneider CMO cited, “If left unchecked, our appetite for energy will grow 50% by 2040.” And there is significant room for greater efficiency. The sweet spot for Schneider in this Next Age of Change is in helping cities control their public energy consumption. While their vision – and “marketecture stack” – extends into water and other domains, they plan to establish their footprint with energy efficiency. Phew! That’s a refreshing change from vendors who want to do it all.
Here at Forrester we are busy planning our upcoming Forum For CIOs And CMOs. With a theme of “Building A Customer-Obsessed Enterprise” the event explores the partnership between marketing and technology leaders. But what about our government clients? The role of marketing is associated with the private sector. Companies employ marketers to identify their target markets and the opportunities for providing goods and services to them. Public-sector organizations don't typically have the luxury of choosing their target market or their products and services. Or at least that’s what most organizations think. But even if that is the case, it doesn't mean that these organizations shouldn't get to know their "customers" and understand how best to meet their needs. While the service might be prescribed by legislation or regulation, public organizations can influence the customer experience, and the rising focus on citizen engagement mandates they do so.
Vacations are over – or at least mine is – but I’ve brought home some of mine for homework. Yes, I did a little work while on vacation. While in Costa Rica this summer, I had the opportunity to meet with the country’s Director of Digital Government, Alicia Avendaño Rivera.
Governments worldwide recognize the power of “going digital.” The recently announced US Digital Service and the appointment of its dedicated Administrator illustrate a commitment on the part of the US Federal government. Yet the US is merely joining others who have made similar commitments to transforming government with a focus on efficiency, effectiveness, transparency and empowering citizens and businesses through new digital technologies. Alicia Avendaño has served as Costa Rica’s Director of Digital Government since 2009.
Costa Rica Digital Government initiatives address four main goals:
G2C: Government to Citizen – citizen oriented services
G2B Government to Business – rapid and transparent business services
G2G: Government to Government – efficient and interconnected services
Infrastructure – favorable ICT infrastructure and legal framework
I had a fascinating inquiry this morning with a government securities commission (not the SEC and not in the US). The client had a classic question about how to navigate the new data economy. The commission produces and consumes large volumes of data but continue to struggle to answer persistent business questions like how well they are doing or even who they are doing it for. Yes, securities commissions regulate securities markets; they monitor publically traded companies, investment houses, and brokerage firms. Howevver they continue to ask, “for whom?” Who are the investors that they are protecting with their regulation? As they expressed the question, “How do we know what Mrs. Smith is investing in?” They currently work with several large data providers who provide financial information on companies but that information wasn’t exactly what they were looking for. Essentially, in this Age of the Customer, they want to know who their “customers” are. This was a question about how to best serve their customers, in this case the investors.
They wanted to know how to source additional third-party data that would give them a clearer picture of the investors that they are serving. Census data provides a wealth of information about households and individual finances. But the data teams at the commission are not experts in navigating census data. Data providers like Thompson-Reuters provide data on the financial services industry. Others such as Experian or Acxiom provide information on consumers. What kinds of other data providers can help them with their data strategy to answer that basic question of how to better serve their customers, and who they are?
So you need some work done that you’ve never had done before or you need to buy something you’ve never bought before. What should you pay? That can be a tough question. What seems reasonable? Sometimes we set arbitrary rules. It’s OK if it’s under $50 or under $100. But that’s just a reassurance that you’re not getting ripped off too badly. Certainly the best way to avoid that outcome is to know how much that service or thing is worth, or at least know what others have paid for the same thing.
Fortunately now, in the age of the customer, that’s easier to find out. Price information for most consumer goods is easier to come by, making the buying process more efficient. But what about governments? We’ve all heard about the $600 toilet seat or the $400 hammer. Stories of government spending excess and mismanagement abound. Some are urban legends or misrepresentations. Others have legs — such as the recent reports of Boeing overcharging the US Army. While these incidents are likely not things of the past, open data initiatives have made significant progress in exposing spending data and improving transparency. Citizens can visit sites such as USAspending.gov for US federal government spending or "Where Does My Money Go?" for details on UK national government spending, and most large cities publish spending as well.
As we all learned as kids, it's nice to share. That holds true for public sector organizations as well, particularly in tough times. Public sector organizations don't have the privilege of dialing back on scope in challenging economic times. In fact, when the going gets tough, government organizations often have to kick into high gear. And that was the case with state unemployment insurance (UI) programs in the US, which saw spikes in applications when the economy slumped. But in most states the technology infrastructure wasn’t up to the task.
Legacy systems were on life-support... Colorado’s 25-year-old COBOL-based mainframe systems continued to process unemployment insurance claims, but it was increasingly difficult and costly to find the "doctors" to keep it alive. They had to bring developers out of retirement to maintain it. State officials knew it was only a matter of time before they had to pull the plug on their system.
…and just weren’t up to the task. Not only did the “look and feel” leave a lot to be desired, the legacy system failed to deliver. The system ran processes in batch mode, meaning that data was typically collected over a period of time (daily, weekly, or monthly) and processed into the system at the end of the period. Daily downtime for processing excluded the possibility of 24-hour availability or even extended hours. The delays and lack of availability frustrated end users who wanted or needed real-time or near-real-time information to make decisions.
Transformation Should Focus On Improving Outcomes, Not Merely On Increasing Competition
I’ve spoken with many IT Procurement leaders in public sector organizations ranging from US county schools districts to national governments. Most are prevented from applying best practices such as Strategic Software Sourcing by their politicians’ ill-conceived edicts and directives, such as those included in this announcement by the UK’s Cabinet Office that optimistically claims “Government draws the line on bloated and wasteful IT contracts”. In related press interviews the relevant minister Francis Maude complained that “a tiny oligopoly dominates the marketplace” and talked about his intention to encourage use of open source alternatives to products such as Microsoft Office, to increase competition and to divert more spend to small and medium-sized IT companies. The new edicts include bans of contracts over £100 million or 2 years’ duration and of automatic renewals. Mr. Maude claims these rules “will ensure the government gets the best technology at the best price”.
Mr. Maude and his team have a laudable and important goal but their approach is misguided, in my opinion. Short term contracts, indiscriminate competition and avoiding sole source category strategies will deliver neither the best technology nor the best price, because: