Digital transformation: lessons from private enterprise

As the federal government’s digital transformation effort builds steam, we sought the insights of IT industry experts to see what the public sector can learn from similar projects in the private sector.

The federal government is embarking on its biggest IT initiative yet — the transformation of public-facing services from traditional avenues to a digital approach. It’s a plan that will be rolled out across the whole public service, with the aim of making interactions with the public faster, easier and cheaper.

It’s fair to say this is an enormous task. The person in the spotlight is Paul Shetler, CEO of the Digital Transformation Office. He’s been charged with leading the digital transformation effort and so far is impressing the IT world with his approach (see ‘The Dean of Digital’, page 10).

But are there any lessons the government can learn from digital transformation experiences — good and bad — in the private sector? To get some insights from those on the frontline in private enterprise, we spoke with senior executives from four diverse firms: Chris Harrop, Director of govCMS for Acquia Asia Pacific; Alec Gardner, General Manager, Advanced Analytics for Teradata ANZ; Peter Sabine, LivePerson’s Senior Account Executive, APAC; and Robert Parker, Verizon’s Head of Security Solutions for Asia Pacific.

GTR: Do you think the government’s digital transformation agenda is realistic, in terms of scope, scale and timing?

GARDNER: A government-wide digital transformation plan is a daunting undertaking. We’ve seen examples in other countries of what can go wrong when a very large, monolithic digital project is carried out in a traditional way. The DTO’s continual, iterative approach is one of the main strengths of the plan. Another factor that is likely to lead to the plan’s success is the move of the DTO from the government’s Communications portfolio to the Prime Minister and Cabinet portfolio. This means that Malcolm Turnbull, as Prime Minister, can retain oversight of the government’s overall electronic service delivery agenda.

PARKER: As it stands, a lot of work behind the scenes needs to happen for the government’s digital transformation to bear fruit. It has done a lot of things right and hired some heavy hitters in the DTO, but there is some way to go. Defining a standard or a direction is necessary, but it is not sufficient. The key to digital transformation is that all the stakeholders need to be engaged. This includes all levels of government and the citizens — or consumers — who are the ultimate beneficiaries. If this doesn’t happen, digital transformation won’t work.

SABINE: When looking solely at the program of work that needs to be completed to meet the agenda, yes, I am confident it can be completed. Many complex global organisations facing similar challenges, such as major banks, have been successful with similar transformations. An area of concern, however, is that this requires a lot of change and, generally, people and organisations (government or not) are resistant to change. Success is likely for agencies with strong leadership who are committed to the required changes.

GTR: Can you give an example of a successful digital transformation effort, private or public, and how they got it right?

HARROP: govCMS is a great example of digital transformation in the public sector right on our own doorstep. It provides all the compliance ticks such as security, web accessibility and support, allowing an easy path for even a small agency to deploy a mobile responsive, open source website in the public cloud. What I really like about the program is the idea of a centralised coordination of effort that allows agencies to continue to own their destiny, but with the effort fed back to benefit everyone else.

PARKER: Probably the best example of successful digital transformation in Australia was the introduction of the GST in 1999–2000. That was a while ago now, but it involved digital transformation on a massive scale. When the ATO was faced with the realisation that it would have millions of businesses submitting their Business Activity Statements every month or every quarter, it realised they could not handle it manually with paper-based processes. It would have to move to electronic filing. That meant a massive effort and the involvement of a large group of stakeholders — businesses, accountants, the financial industry and government. It was in everybody’s interests.

GARDNER: Australia’s banking sector has been particularly active in undergoing lengthy digital transformations for commercial success. The Commonwealth Bank and Westpac are two local players that have both demonstrated how a long-term, overarching digital transformation can help establish a certain level of commercial superiority. By using customer-centricity as the underlying driving force behind a long-term digital overhaul plan, these banks can determine the relative success of their programs through increased customer numbers and improved interaction.

SABINE: In many respects, Australia is a little behind compared to other parts of the world. A good example of success is a UK-based global bank that has successfully transformed its company to a digital-first organisation. It was successful because it listened to its customers and was committed to giving them what they want — the ability to bank online, on the move, 24/7 across all their key brands. This included ensuring the full transaction could be completed digitally.

GTR: How about the opposite? Are there leading examples of botched digital transformation efforts?

GARDNER: It seemed like the whole world was watching when, in October 2013, the US government’s Healthcare.com website failed spectacularly upon launch. It was marred by serious technical problems and the site was almost unusable at the time. It took another month to fix the problems, and the cost of the disaster is estimated to have been more than US$900 million. While not itself a government-wide digital transformation, it showed how a large-scale digital project can go wrong, even when backed by enormous funds and resources. One of the main problems was that many of the underlying legacy systems and networks across the country with which the portal needed to interact remained largely unchanged during the process, which made integration difficult.

PARKER: An example that comes to mind is the introduction of smartcard drivers licences in Queensland. There should have been a better business case, better planning, use of proprietary technologies and a more comprehensive understanding of what they were trying to achieve. Much of the cost of the whole project was moved on to the consumer, in the form of significantly higher costs for the smartcard licences, with no perceived benefit. The government lost over $100 million. The smart meter rollout in Victoria was also similar in terms of planning and engagement with all parties, where consumers were asked to pay for a new technology when there was no perceived benefit in it for them. In both cases the big problem was a failure to ensure stakeholder engagement — you absolutely have to get everyone involved.

HARROP: Before govCMS, we found that agencies wanted to move to open source and the cloud in order to follow policy guidelines; however, they often had to compromise on this. Internal IT teams feared what cloud meant for them, and management simply didn’t get the idea of open source. We also saw some adoption of a technology that called itself open source, but actually wasn’t, and agencies struggled to unshackle themselves from vendor lock-in.

GTR: What are some of the most important pitfalls that the government must avoid?

HARROP: I’m impressed by the drive of the DTO approach of ‘Do, not talk’, which has avoided the pitfall of becoming simply another layer of documentation. I love the turn of phrases from John Sheridan such as ‘iterate wildly’ and ‘fail, but fail fast’. A pitfall the government is avoiding is spending years locked up in isolation from the project stakeholders, and working with a fixed determination to deliver something that might not be right. The idea of failing, and admitting failure, is completely alien to both the public and private sector. Small iterations, alpha and beta launches, willingness to change are all characteristics that need to be adopted for this to be successful.

And I think there needs to be a focus on ‘Content, not control’. Individual agencies and departments might not want to release control of their content. Explaining that content could, and should, be re-used outside of an individual agency’s control website is not an easy proposition. For digital transformation to be successful, this needs to be addressed so that there is a concept of open data.

GARDNER: I’d say don’t skimp on costs, communicate the benefits to all stakeholders and do it in small steps. While the government’s digital transformation agenda has been allocated a specific, and relatively healthy, budget, it is important to make sure that the funds driving the transformation do not dry up before the agenda’s complete implementation. The methods and goals of the transformation need to be clearly communicated to government employees and the public alike. By clearly communicating the agenda’s details internally, the government can help drive cultural change and acceptance.

PARKER: If I had to list the top three pitfalls, they would include lack of vision, lack of planning and not getting stakeholder engagement from the start. For a project to succeed you need to know what it is you are trying to achieve, how will you deliver it and what are the benefits. Planning, or lack thereof, is a known pitfall, but it’s important to stress how you will plan to get the desired outcomes. And finally, the biggest pitfall is not getting stakeholder engagement. It’s worth stressing that anybody who will be affected by the changes must see how they will benefit and how they are involved.

GTR: What are the most important things that the government must get right?

SABINE: The government must get the focus on the user right. The reality is, people only interact with the government when they have to, rather than want to. This means that the ideal interaction with government is quick, occurs whenever and wherever the user wants, and requires as few interactions as possible for resolution. In addition, it needs to be agency-independent so that a user just contacts ‘government’ and not multiple agencies for multiple interactions.

PARKER: Security is number one — it almost goes without saying, but at every level and every layer, security is fundamental to digital transformation. Stakeholder engagement also is critical. With digital transformation it’s not about trying to do too much or being too clever in the approach; don’t be unrealistic about what you can achieve, and know what benefits the changes will bring and communicate these to all parties, especially the consumers.

GTR: Finally, what do you see as being the biggest challenges facing the government’s digital transformation effort?

SABINE: The biggest challenges are related to organisational inertia. Human nature, both on a personal and organisational level, exhibits the following traits: resistance to change, tribalism and an internal focus. The government needs to set these aside and commit to a new, digital relationship — the technology exists to enable this to happen. The leadership, and others responsible for the change, have to commit to making it happen.

HARROP: My advice to agencies is, don’t try to fix everything at once. Focus on those things you do own and control, no matter how small. Make those work, promote them and, as confidence grows, try to get new areas to control. The revolution has to start somewhere.

Image courtesy of OzMark17 under CC