The European Commission (EC) and many countries in the region, are revamping their digital strategies. Local governments start to introduce bots to personalize citizen services. Enthusiasm runs high when new strategies come out and new technologies are piloted. That is until execution starts, and the underestimated organizational, technical, project, financial, and security risks start to materialize. This blogs looks at lessons learned from previous iterations of government digital strategies to inform future implementation of new plans.
The European Commission (EC) and many countries in the region, like Norway, Italy, Denmark, and Portugal, are revamping their digital strategies. Local governments, like London's Ealing Council, are introducing robotic digital assistants based on machine learning to improve citizen services. As usual, enthusiasm runs high when new strategies come out and new technologies are piloted. That is until execution starts, and the underestimated organizational, technical, project, financial, and security risks start to materialize. Recent reviews conducted in the U.K. provide some useful lessons learned:
- The scrapping of the paper tax disc that certifies a vehicle has undergone safety inspection in favor of a website that checks that the inspection has been completed and fees paid, has caused a £200 million fall in tax takings in the first six months for the U.K. Driver and Vehicle Licensing Agency (DVLA). The switch from a paper disc to an online system in 2014 cost £1 million. The National Audit Office (NAO) said the change "has likely contributed to an initial increase in reported levels of nonpayment, which has led to additional compliance and enforcement activity." Local authorities are now using a network of cameras linked to a database to work out which vehicles are being driven illegally. According to the DVLA, almost 99% of all vehicles on the road are correctly taxed — around £6 billion in vehicle tax passed to the HM Treasury every year. IDC research indicates that, while the financial impact is not major, this is still a financial risk that was not fully taken into account in the rush to put every service online. The process of getting the paper disc acted as a reminder that should have been supplemented by some other form of communication with taxpayers.
- According to the NAO, the HM Revenue and Customs (HMRC) also ran into problems with digital services. The digital strategy moved more personal taxpayers online, thereby reducing demand for costlier telephone and postal contact. HMRC, through substantial staff reductions, decreased the cost of its personal tax operations between 2010/2011 and 2014/2015 by £257 million. However, the NAO's report says that while the HMRC maintained or improved customer service up to 2013/2014, it then misjudged the cumulative impact of its complex transition and released too many customer service staff before completing service changes. The NAO found that the quality of service provided by the HMRC for personal taxpayers collapsed in 2014 and 2015, and in the first seven months of 2015-2016 when average call-waiting times tripled. Services have subsequently improved following the recruitment of additional staff, but whether this performance is sustainable depends on the HMRC achieving successful outcomes from its digital-first program. IDC research indicates that this is a typical flaw in the transition to online services. New channels are added, and the assumption is they immediately supplement old channels — that is not the case. The online channel adds convenience for existing users of telephone and paper channels, but it requires some time for citizens to get used to the new services, thus increasing demand for triaging and supporting online users. Online services also attract groups of users that may not have interacted through the call center. For both reasons, the volume of activities increases across channels (in some cases) for up to three years after introduction of the digital services — before the substitution effect kicks in. This is a lesson to keep in mind as governments increase the introduction of mobile apps and start to introduce bots.
- HMRC is setting up an online authentication service to run alongside GOV.UK Verify the digital service identification channel created by the Government Digital Service (GDS). The HMRC accounts for 5 of the 10 services that have been using Verify in beta and were identified for the formal "go live". The HMRC is working on its own authentication portal to replace the Government Gateway, the legacy federated identity system, which is due to be decommissioned in 2018. The HMRC claims that the new service is being developed for businesses and agents that currently use Government Gateway to access online services, while Verify will be used for individual taxpayers. IDC research indicates that this is another lesson of great significance. Subsequent waves of government service digitization have not only offered opportunities to increase efficiency, but also reduced the marginal cost to increase the number of services and features offered. More affordable digital services resulted in increased convenience and personalization for end users, but risks creating technical and organizational duplication for the government. Enterprise architecture and service portfolio management play a key role in this case because appropriate governance of those processes allow the identification of services and features to be decommissioned and capabilities that can be reused across services in a continuous innovation-integration-incorporation cycle. That is what IDC calls leading in 3D. CIOs and other IT executives must tune their organizations to be agile enough to innovate and industrialize quickly new capabilities, so they become an integral part of the service portfolio and continuously incorporate new skills and technologies that close the virtuous cycle by prompting more innovation.