On January 23, Tony Abbott and Malcolm Turnbull announced the formation of a Digital Transformation Office (DTO) within the Department of Communications.
The DTO has the stated mission of enabling the Commonwealth Government to deliver services “digitally from start to finish and better serve the needs of citizens and businesses.” It will comprise of a small multi-disciplinary team and will operate more like a start-up than a traditional government agency.
But will this be sufficient to tackle the systemic service delivery problems across government?
The mentality of a lean technology start-up company has significant merit as an approach to stimulate efficiencies and effectiveness in government ICT delivery.
However, the focus should extend beyond applying lean start-up concepts to a single centralised digital capability and seek to develop a rich “start-up ecosystem” across government.
It’s a question of scale
Bringing government service delivery into the digital era is a substantial undertaking. It cannot be delivered without significant financial and human resource investment.
The recent report ‘A New System for Better Employment and Social Outcomes’ found that replacing core ICT systems was fundamental to income and support reform.
The government estimates the cost associated with that replacement is between $1 billion and $1.5 billion. Work of this magnitude cannot be delivered using a small start-up workforce and will involve complex dependency management issues.
Attributes of a successful start-up
Successful start-ups are lean, focused on a specific market niche and can pivot quickly in response to customer feedback. Some notable examples of start-ups that have achieved sustainable success through pivoting (changing their product offering in response to market needs) include:
Virgin Records. Started as an indie music magazine and a single retail store before pivoting to become a record label in its own right.
Pinterest. Started as a tool to browse and shop online, providing notifications where a user’s favourite items were on sale.
Instagram. Began as Burbn, a check-in app with multiple features including online gaming and photos. It was subsequently stripped back to the photo sharing features that we recognise today.
Successful start-ups learn from feedback and quickly improve their business models. Refinement of a business model can take many forms ranging from jettisoning product features to focus on a core offering, to refocusing on a new product that retains some or none of the original product features.
Start-ups continually test their concepts with real customers. Effective government service reform will require consultation and testing of concepts with real end users. Some government agencies have a tendency to accept a public servant’s anecdotal evidence as a proxy for actual customer engagement to avoid red tape.
There are several reasons why creating a start-up incubator to help with government service delivery would be beneficial.
Start-up incubators foster knowledge and communication within the start-up community, but are not a start-up themselves. Incubators support the creation of connections between strategic partners, and this is a significant contributing factor to start-up success.
In a government context the DTO could provide value through establishing strategic industry partnerships to supplement agencies capability gaps.
Providing mentoring and coaching services to support agencies to bridge the cultural divide between the current and future states will be crucial.
Commonwealth agencies have been experimenting with agile techniques for several years. Recently the focus has shifted to scaling agile for large programmes and complex, integrated solutions.
The “DTO as an incubator” model could support agencies to make this transition in a structured manner and prevent the proliferation of home-grown methodologies that are currently appearing.
Changing agency thinking and culture
Many government agencies have ingrained thinking and value systems that have evolved over many decades. Service delivery reform will be most successful if it is based on a new set of values that include:
- Clear accountability for service delivery outcomes.
- A clear statement of values and priorities that enables decisions to remain aligned with strategic direction.
- Empowering middle-management to make decisions, rather than deferring decisions up the reporting hierarchy to those who are by necessity less in touch with the end customer.
The Digital Transformation Office should establish itself as a start-up incubator – teaching agencies how to run lean, innovative and responsive digital service delivery teams.
To achieve this, the DTO must build credibility through exemplar delivery examples, not just policy definition. It must help agencies establish a minimum viable product to test with real customers.
The DTO’s value proposition is in assisting agencies to have the right conversation with their customers, focusing on the customer needs and not internal government processes and efficiencies.
It should foster private/public competitiveness for delivery of digital services and guide the establishment of improved procurement approaches for these activities.
The UK government has been using an alternative funding model for ICT projects that enables incremental funding through Alpha, Beta, and Live phases.
This allows agencies to confidently engage with their supply chain to prototype new services while limiting resources wasted on unsuccessful service delivery concepts. It is better to fail fast than spend months or years on design effort that never sees the light of day.
Australian government agencies need to establish lean start-up digital teams and provide support to prevent organisational red tape becoming a barrier for innovation.
They should have the autonomy to allow local decision-making and engage with the appropriate level of risk; and create an internal culture that accepts failure within limited boundaries and encourages iterative adaption to improve the customer experience.
The DTO will provide greater benefits to the Australian community if it acts as a start-up incubator rather than the actual start-up. Fostering cultural and methodology changes across government agencies will result in a more sustainable and effective government ICT sector.
Matt Lewis is a principal consultant at MXA Consulting
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