Information Society development > Learning from success, avoiding the pitfalls

1. Information Society development >Learning from success, avoiding the pitfalls Andrew Pinder – 10 Jan 2007

2. Agenda • Introduction • Common reasons for failure • Gov3 Transformation Toolkit • Specific challenges for Poland • Computerisation vs. Transformation • Digital Inclusion • Citizen Centricity • Measurement and Metrics • Risk • Suggested next steps for Poland

3. Introduction

4. Gov3 > overview • Global strategy consulting business launched in September 2004 by the core team from the UK’s Office of the e-Envoy: • 1999-2004: reported direct to UK Prime Minister with mission to make UK a world-leading Knowledge Economy and e-Government • Gov3 is unique: • we use our ‘inside government’ experience to advise and support governments and international institutions on IT-enabled change • consultants from over a dozen countries, including 4 ex-Government CIOs • In two years have worked with over 30 governments, plus the UN, World Bank, EU and OECD

5. In our first 2 and a half years, we have … …. worked with governments across the globe 30+ countries world-wide Australia Canada China Colombia Denmark Estonia Finland Greece Hong Kong India Ireland Italy Kazakhstan Korea Malaysia Mozambique Nigeria Romania Slovenia Sri Lanka South Africa Taiwan Thailand Turkey United Kingdom United States Australia Canada China Colombia Denmark Estonia Finland Greece Hong Kong India Ireland Italy Kazakhstan Korea Malaysia Mozambique Nigeria Romania Slovenia Sri Lanka South Africa Taiwan Thailand Turkey United Kingdom United StatesAustralia Canada China Colombia Denmark Estonia Finland Greece Hong Kong India Ireland Italy Kazakhstan Korea Malaysia Mozambique Nigeria Romania Slovenia Sri Lanka South Africa Taiwan Thailand Turkey United Kingdom United States Australia Canada China Colombia Denmark Estonia Finland Greece Hong Kong India Ireland Italy KazakhstanKorea MalaysiaMozambique Nigeria Romania Slovenia Sri LankaSouth Africa Taiwan Thailand Turkey United Kingdom United States Governments we have already supported Live pipeline

6. Common reasons for ICT investment failure

7. Common causes of strategic failure • Using IT to reinforce existing silos rather than redesign services round citizen needs • Spending money on technology before addressing organisational and business change • Lack of cross-government strategy for key building blocks of common data sets and common applications • Government-focused design of services, with little partnership with private and voluntary sector service deliverers • Failure to integrate eGovernment delivery with an effective strategy to build access to and demand for e-services across society • Failure to integrate eGovernment programmes with broader mainstream programmes of public reform

8. Common causes of delivery failure • Lack of strategic clarity • Lack of sustained leadership at political and senior management level • Poor understanding and segmentation of user needs • Lack of effective engagement with stakeholders • Lack of skills • Poor supplier management • “Big Bang” implementation

9. Failure to manage benefits • Failure to pro-actively manage the downstream benefits after an individual IT project has been completed. • Failure at a whole-of-Government level to undertake the restructuring of the public labour market to take advantage of new efficiencies • OECD review found only 3 countries – UK, Canada and Finland – had undertaken cross-government drive to realise the efficiency benefits of eGovernment • UK example: • £18 billion pa savings • 84,000 staff reduction (largely in transactional services and corporate services) • Allowing the government to invest in 250,000 new front-line staff by 2008

10. No critical mass of users Duplicated IT expenditure NEGATIVE IMPACTS = Little impact on core public policy objectives Wasted resources Avoid making the same mistakes as other governments! No management of benefits Bad strategy + Poor delivery + “We chose gov3 because they have a deep understanding from the inside of what it is like trying to drive change from within Government, with real insight and know-how on how to do this successfully. We see it as a way to reap the benefits without having to commit the errors.” Mikkel Hemmingsen, Danish Ministry of Science and Technology

11. Gov3 Transformation Toolkit

12. The Gov3 Transformation Toolkit Strategy Delivery Benefit realisation 1 2 3 Lower cost Building an operational model for citizen-centric service delivery: • business management • channel management • customer management Service transformation: • Process re-engineering • Citizen-centric service prototyping • Service Delivery & Channel Strategies Back office transformation: • Inverting the traditional model • Simplify, share, self-service Marketing / Communication • Strategy • Branding • Campaign delivery Portfolio management: • Processes for revising investment plans and priorities through the programme life cycle Performance measurement: • Monitoring • Evaluation • Customer feedback Realising efficiency savings • Turning efficiency into cash • Restructuring the public sector labour market Strategy Development: • Current state assessment • International best practice • Gap analysis • Scenario planning • Strategic choice • Vision, objectives, targets Portfolio selection: • Essential building blocks • Services (G2C, G2B, G2E, G2G) • Legal and regulatory framework • Ensuring “digital inclusion” • Building the supply industry Business case Development: • Identifying strategic sources of benefit • Cost benefit analysis • Quantifying public value Outcomes Greater trust Increased GDP Core processes Public Value Transparency Transformed customer experience • Organisational Structures • Governance Processes • Programme & project management • Stakeholder management • Risk Management Governance Customer research • User-centric methodologies for ensuring citizen and business input into all stages of planning and delivery • Skills and competences • Pay and reward structures People: Key enablers • Service-oriented IT architecture Technology:

13. Five main challenges in Poland • Focusing on transformation rather than “computerization” • Addressing the root causes of Digital Inclusion • Citizen Centricity • Measuring the benefits • Risk management

14. Specific challenges for Poland > 1. Computerisation vs. Transformation

15. Brynjolfsson’s Benchmark eGEP ‘rule of thumb’ from set-up to full operation Hardware 10% ICT 45% Other ICT complements 15% Organisational assets 75% Organisational change 55% Source: Adapted from Brynjolfsson, E. “The IT Productivity Gap”, Optimize Magazine, Issue 22, July 2003 (http://www.optimizemag.com/issue/021/roi.htm ) Source: Case studies and interviews with experts Computerisation vs. Transformation > ICT investment strategy “rule of thumb”

16. ICT + Transformation = Multiplier effect Organisational Transformation No Yes Yes Productivity: + 2% Productivity: + 20% ICT investments Productivity: + 8% Decline, loss of productivity No Source: McKinsey/London School of Economics

17. Specific challenges for Poland > 2. Digital Inclusion

18. Digital Inclusion > All governments use the same three core levers • The legal, regulatory and fiscal framework • Government’s role as a market actor in its own right • Leadership to drive and shape the market … but they achieve different impacts

19. Digital Leapfroggers Digital Accelerators Digital accelerators Digital leapfroggers By comparing Internet users and growth rates, countries fall into four different categories High Growth rate of Internet users Slow Starters Successful but Stalling Low Low High Internet users as % of total population

20. Source: Gov3 Digital Benchmarking Tool: http://public.gov3.net/public_pages/limited/research/benchmarking/gov3_digital_dashboard.htm Digital Inclusion in Poland compared to EU countries

21. Source: Gov3 Digital Benchmarking Tool: http://public.gov3.net/public_pages/limited/research/benchmarking/gov3_digital_dashboard.htm Digital Inclusion in Poland compared to Southern and Eastern Europe

22. A strong digital inclusion strategy has the potential to make even a laggard a digital leader • In 1999, before the UK Online initiative, the UK was lagging behind other countries in its benchmark group – it is now a global leader • Other countries have successfully moved from slow starters to digital leapfroggers and even digital accelerators • Gov3 has supported governments to launch Digital Inclusion initiatives in the UK, the USA, Slovenia, Denmark, Turkey, Thailand and India • Gov3 has identified a set of critical success factors for Digital Inclusion, which can be applied in a country to ensure that Digital Inclusion is successful the first time

23. Critical Success Factors include: Voluntary & community organisations CSF 1: Deep understanding of the digital market place, centred around the individual digitally-excluded citizen Employers Motivation I see real benefits from use of ICT which are directly relevant to my life € Access Confidence I have easy and affordable access to ICT I have all the skills I need to use ICT, andI feel trust and security using it CSF 2: A holistic approach to all the drivers of digital inclusion : access, confidence & motivation Digital content and service providers Home Work ICT vendors Community Public sector CSF 3: A cross-sectoral partnership approach to foster business model innovation and achieve scale impacts Legal, regulatory & fiscal framework Government as a market actor Market enabling

24. Digital Inclusion Strategy > Example of Scope Education and training 1 Target initiative (e.g. Telecentres, Home Computing, etc.) Target initaiative (e.g. Student Computer Initiative, etc.) 2 3 Partnerships and Market Enabling 4 Communications Strategy

25. Specific challenges for Poland > 3. Citizen Centricity

26. Q1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2002 2003 2000 2001 While governments have made some progress with online services, even the leaders are falling farther behind the private sector 60 Buying online 50 40 % of Population Banking online 30 20 Government online 10 0 Source: UK National Statistics Omnibus Survey, 2000-2003

27. The problem: traditional “e-government” is not citizen-centric • Thousands of government websites, all organised around structure of government not needs of customers • Confusing customers – with agencies competing to provide similar services • Replicating the offline offer, rather than exploiting the benefits of technology to create new value for citizens • Incoherent or inadequate branding and marketing • Absence of systems to learn about the customers government do have, so they can offer them targeted services Putting a portal on top of this does not help!

28. Benchmarking citizen-centricityUser experience Directgov Firstgov Hong Kong Government of Canada

29. Take-up trajectories for US, UK and Qatar portals Internet users per 100 population Portal users per 100 population Directgov Firstgov Qatar eGov UKonline Internet users Portal users

30. Gov3 insights • It is easy to build a portal that won’t work • There is no shortcut to citizen centricity • Learn the right lessons from the countries that have done it before • Global business is customer-focused – and on the Internet, global business sets the standards • A citizen-centric approach is critical Knowing what your users want is essential

31. Specific challenges for Poland > 4. Measurement and Metrics

32. Government “Measurement Momentum” is mounting… Public Administration ICT Expenditure in 2004 Total € 36.5 billion • After several years of sustained investments in ICT by governments the measurement agenda is rising in importance worldwide and particularly in Europe • This is not surprising given the sheer volume that ICT expenditure in public administration is reaching • For instance, according to the EU sponsored eGEP study, in 2004 the total General Public Administration ICT expenditure in EU25 reached about € 36.5 billions (see Figure), of which about € 7.5 billions for hardware Hardware 20.5% (€ 7,5 bln) ICT Staff 20.0% (€ 7.3 bln) Communication 9.3% (€ 3.4 bln) Software 18.7% (€ 6.8 bln) Services 31,6% (€ 11.5 bln) Source: eGEP 2006 (www.rso.it/egep)

33. Multidimensional measurement: ICT investments can generate much greater value than can be captured by simple ROI metrics • One-dimensional financial metrics reflect only the most straightforward and low level direct cash and operational results, and are inadequate to reflect the deep strategic values that ICT can generate • Total Cost of Ownership (TCO) is a clear advancement compared to simple financial ROI, but still does not capture the full costs and benefits of ICT • Recently several governments have issued more comprehensive multi-dimensional measuring methodologies to fill this gap and, in particular, the European Commission eGEP study has put forward a new multidimensional eGovernment Measurement Framework (eGMF) • This multi-dimensional approach, has been further refined and is used by gov3, which is based on several type of both quantitative and qualitative metrics…

34. …four type of metrics for multi-dimensional measurement • Hard cash value, measuring short term savings in terms of avoided costs • Potential monetary value, assigned to impacts mostly deriving from increased employees’ productivity • Volume metrics, used to measure impacts for which is not possible to assign a monetary value, but which can measured in numbers (for instance “decreases in numbers of security breaches”) • Qualitative scores, assigned to strategic impacts (for instance “contribution of an IT investment to agency capacity to meet national policy requirements”)

35. Multi-dimensional measurement: fully grasp the costs of delivery and organisational change • Costs are the other side of the equation of measurement, though they often receive less attention than benefits • The analysis of costs must also be multi-dimensional and include both tangible and intangible costs • Understanding costs is important also to measure benefits, since the analysis of cost help define the baseline against which benefits are assessed • The best way to fully grasp costs is to adopt the Activity Based Costing, a methodology gov3 has tailored to the specificities of ICT and eGovernment projects

36. Specific challenges for Poland > 5. Risk

37. ICT development in Poland has very high levels of intrinsic risk • Based on what we know about the program so far, it scores at 90 on our Barometer: very high levels of intrinsic risk. • The Gov3 Risk Barometer is not a replacement for a detailed risk assessment - but it does give a broad sense of how difficult what you are trying to do is when compared with international benchmarks, and the intensity of the risk management processes which you should ensure are in place. • Try a self-assessment on the Gov3 Risk Barometer at http://public.gov3.net/public_pages/limited/consulting/gov3_barometer.htm

38. Gov3’s approach to Strategic Risk Management A 5 step process 3 Prioritise the critical risks Leadership 1 4 2 Stakeholder engagement The Gov3 Risk Barometer: an initial assessment of intrinsic risk Develop risk mitigation plans Identify current risks Benefit realisation Strategic clarity User Focus Do-ability Skills Supplier partnership 5 Implement risk mitigation plans

39. Strategic clarity Step 2 > Gov3 Strategic Risk Checklists User Focus • Do we really understand what it is we are trying to do, and are our outcomes clearly linked to the government ‘s strategic priorities? • Do we fully understand the Strategic Business Case for the programme? • Do we know how we will measure success? • Do we have a clear set of priorities, informed by real understanding of how costs, benefits and risks vary across different aspects of our programme? Strategic clarity • Do we know what priorities our citizens, businesses and staff have for e-services? • Can we measure user satisfaction? • Do we have robust mechanisms to ensure user feedback into every stage of service design and delivery? Benefit realisation User Focus • Is it clear which individual is responsible for delivery of the overall programme, and which individuals are responsible for each key element? • Do we have the authority we need to deliver this programme? • Do we have the leadership skills we need? • Does our leadership team have access to external support? • Do we have effective governance structures, processes and levers? Leadership • Do we know who our key stakeholders are, internally and externally? • Do all our key stakeholders have a common understanding of the programme? • Are these key stakeholders on our side? • Do we have robust processes for ensuring that key stakeholders remain supportive throughout the programme? Stakeholderengagement

40. Step 2 > Gov3 Strategic Risk Checklists • Do we have a delivery plan, mapping out key dependencies, risks and the critical path? • Have we done all we can to de-risk delivery through phased implementation? • Do we understand the organizational changes we need to deliver? • Are we making technology choices which give us maximum future flexibility? • Do we know when we should halt a failing project? User Focus Strategic clarity Benefit realisation Do-ability • Do we have the programme and project management skills we need? • Do we have the delivery skills we need – covering change management and service transformation, not just technology? • Have we effectively integrated the different skills sets into an effective team? Skills • Do we understand the supply market-place, and are we confident it is able to deliver what we want to achieve? • Are we selecting our suppliers on the right basis (including full life cycle costs and benefits, not just initial price)? • Are we able to operate effectively in partnership with our chosen suppliers? Supplier partnership • Do we have a benefits realisation plan for each outcome targeted by our Strategic Business Case? • Are we managing that plan effectively? • Do we have staff retraining and redeployment plans in place to ensure that we can turn potential efficiency savings into real cash savings? • Do we have robust mechanisms to ensure that successful outcomes will continue to be achieved when our change programme is closed? Benefit realisation

41. Step 3 > Prioritise the risks • Purpose: • To reach a common agreement on which of the identified risks are the most critical • What we are going to do: • Break out into two groups, to map each risk identified in Step 2 onto a Risk Prioritisation Matrix 4 7 High 9 2 5 Medium Probability 8 1 3 6 Low Impact Low Medium High

42. Step 4 > Risk mitigation • Deliverable: a top-level risk mitigation plan: • Who should own this risk • What mitigation actions should be taken • Timescales for next steps • Then manage the risks, not the Risk Register …..

43. Suggested next steps for Poland

44. Suggested next steps for Poland • Health Check: The government should consider running an outside “health check” of the initiative to review what has been done to date and provide concrete recommendations for correcting the initiative. • Build capacity: In order to successfully take this forward, it would be helpful for the government to build its capacity to deliver e-government and information society initiatives. This could be done in-house or working with a partner, but in either case it is essential that the government work with people who have a track-record of delivering similar programmes in government. • Portfolio Optimisation: It could be helpful to re-think the programme portfolio so as to ensure that the main action lines will deliver on the stated goals of the programme. This “portfolio optimisation process” would include the examination of initiatives based on strategic fit, user benefit, government benefit, and do-ability. The process would also balance early benefits (or “quick wins”) with longer-term benefits, costs and risks. • Detailed Roadmap: Would be useful to develop a detailed roadmap that delineates actions in the short and medium-term, and what exactly needs to be done in order to ensure that the programme delivers on its stated goals.

45. Thank You - Discussion