Digital transformation in the public sector

Organizations are embracing cloud and analytics, but challenges remain

While the COVID-19 crisis will surely strain budgets, it will also challenge leaders to think differently about their digital bets. Today, millions of people around the world are experimenting with new digital tools and apps to get work done remotely, to find and buy necessary items, and to stay connected with friends and loved ones. When the crisis subsides, they won’t likely return to earlier tools and behavioral patterns.

“We’re having a worldwide crash course on how to temporarily become more digital,” says Sam Ransbotham, a professor at the Carroll School of Management at Boston College. “In many cases, temporary will become permanent.”

What does that mean for public sector organizations?

Digital transformation is never easy, but it’s especially tough for governments, large universities, and other public organizations. They serve millions of people and face a gauntlet of bureaucratic, regulatory, and cultural obstacles. Not only do they need to envision how the world will be in a decade or more, they must also prove they’re on track every year to keep their programs funded.

Lately, more public sector organizations in the U.S. and abroad are rising to the challenge. And they’re more likely than their peers in other industries to have successfully used cloud technologies and data analytics to meet their innovation goals, according to a survey by ESI ThoughtLab and ServiceNow.

“We see a lot of public sector leaders painting a vision for the future, along with tactical plans to get the money they need,” says Asish Ramchandran, a principal in the technical services consulting practice at Deloitte. He observes that many private-sector clients tend to focus on a particular service or set of workflows. Government clients, he says, “are a lot more thoughtful about how to invest in platforms for a wide variety of services.”

One striking example is Arizona State University, the largest university in the U.S. During the COVID-19 outbreak, ASU was able to shift its 60,000 students to remote learning setups in a matter of days, thanks to a forced march to the cloud over the past two years.

ASU made 5,000 courses, from public speaking to nuclear engineering, available online. Between March 14 and 21, the number of daily classes and other meetings held on Zoom jumped from 603 to more than 10,000.

Pulling that off without a major hiccup was the result of a digital-technology transition that started a decade ago, says ASU Chief Information Officer Lev Gonick. For years, the campus IT team had experimented with a variety of cloud strategies. When Gonick arrived in 2017, one of his first moves was to implement a single strategy to address all of the university’s IT needs.

Since then, the team has moved hundreds of other applications to the cloud, including the learning management system for delivering classes electronically, and the student information system for tracking student’s grades, scholarship, and other data.

“Not a single major piece of that digital, remote-delivery system sits inside the campus. That gave us a pretty amazing ability to flip the switch to the cloud,” says Gonick, who notes that traffic on the old enterprise network fell to 25% of the norm as cloud-traffic spiked.

A wide variety of government agencies are making similar progress in digitizing citizen services. Estonians do their taxes from a prepopulated form, rather than a blank one, and can vote and see their health records online. The governments of India, the EU, and the state of Utah are working on digital identity systems that make it easier for citizens to access public services with far fewer authentication headaches.

AI-powered chatbots help citizens get help with non-life-threatening health issues, while a virtual assistant named Roxy answers roughly 85% of the questions typically asked by callers to Australia’s Department of Human Services.

The United States Digital Service, created after the disastrous launch of the website in 2014, has helped several agencies rethink essential services and adopt modern software-development methodologies such as Agile and DevOps.

Still, the public sector has a long way to go. Even as many government agencies spend more than half of their budgets on obsolete legacy systems, the COVID-19 pandemic has exposed glaring weaknesses. For example, limitations on the number of checks that IRS systems can issue could delay emergency stimulus payments to Americans by as much as five months.

Gonick remains an optimist about the digital transformation of government, if only because governments are rapidly running out of other options. Once agencies realize the benefits of cloud-based platforms and more automated, integrated workflows, he says, they won’t go back. “We’ve burned the bridge on 99% of what we do,” he says. “Anything that’s in the cloud as a result of COVID is going to stay there.”