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 / Spring 2013 / Issue 70(originally published by Booz & Company)


The Digital Government

How government agencies can use information and communications technology to increase efficiency—and better people’s lives.

For the last decade, advocates of government reform around the world have bet on the promise of information and communications technology (ICT). The availability of new digital tools and strategies would strengthen connections among various government agencies and, it was hoped, enable governments to improve their services, increase efficiency, boost economic growth, and eliminate red tape. But then came the Great Recession, and policymakers were forced to focus their attention on managing the financial crisis.

As a result, too few governments have reaped the full benefits of digitization. Yet in the not-too-distant future, integrated ICT will not just be “nice to have” in the public sector; it will be a prerequisite for keeping the promises that governments have made. National, state, and local governments alike face a true challenge: They must maintain and improve opportunities for their citizens and business interests as fiscal pressures mount, demographic shifts place greater burdens on traditional services, and public sentiment increases for them to be more transparent in their policy and investment decisions.

Digitization can help governments meet this challenge. Just as it has transformed business enterprises, digitization can enable governments to aggregate their capabilities across agency boundaries and orchestrate the most cost-effective solutions, whether public or private, to meet their citizens’ needs. Admittedly, however, enabling a digital government presents obstacles that companies don’t typically face. For example, most chief executives have much greater authority to make strategic decisions and build the capabilities needed to carry them out than do government officials. And governments must operate within the constraints of the current political agenda, and their time frame for implementing transformational change is limited by the election cycle.

Typically, each individual government agency—whether it be treasury, defense, education, or human services—plans, buys, and manages its own ICT systems. The agency builds the full set of end-to-end services that it needs, and critical investments are often deployed redundantly throughout branches of the government. Attempts to integrate updates across the board usually stagnate—or worse, they are actively stifled. The list of stakeholders, constituents, and entrenched interests at most government agencies is long, and the potential for resistance to change is high. The leaders of many agencies don’t want too much interconnection; they are concerned, often with good reason, about the loss of autonomy.

The result is excessive government investment, often spread across or duplicated within a large number of diverse capabilities in different areas, and a support system that fluctuates in response to changing political pressure and policies. As with companies whose strategies are poorly aligned with the capabilities needed for success, this leads to a lack of focus on the true mission of the government or agency, and an inability to carry it out successfully.

Government as a Digital Broker

Digitization can provide a catalyst for moving away from this entrenched agency-based model. The new role of government in a fast-digitizing world is to act as a “broker,” orchestrating the construction and supply of services through public and private operations, linked by information systems and chosen to ensure the most cost-effective service and to meet the different needs of citizens. By providing greater flexibility, this model allows the government to be more responsive to future challenges and changes. And it does so at lower cost, because agencies will no longer need to build and maintain their own individual infrastructure, but rather can concentrate their investments on the specific capabilities they need to fulfill their mission.

The key to this broker model for government lies in coordination—maximizing the use of assets by building interoperable ICT systems to support, typically, the people who work for the public and NGO sector. Some governments around the world are already moving in this direction. They are making smart investments in ICT, focusing on the following five enablers of a successful digital strategy.

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