CIOs Must Lead the Move to Transform Government Services with Digital Business Models
Faced with relentless pressure to reduce costs and improve the performance of government agencies, CIOs must choose between maintaining current operations or transforming government services with fully digitalized business models, according to research and advisory firm Gartner, Inc. Analysts said that in this environment, government CIOs are uniquely positioned to assume a critical leadership role in cultivating the necessary digital knowledge, competencies and expertise to place technology at the core of every government process.
“Governments at all tiers and in all regions of the globe continue to operate in the long shadow cast by the global financial crisis, negotiating growing demands for public services with economic uncertainty and a perpetual state of austerity,” said Rick Howard, research director at Gartner. “There remains an acute need to reduce the overall cost of providing government services while remaining responsive to citizen expectations. However, the need to manage risk while taking steps to fix broken models with new digital innovations is equally important. CIOs will need to make the case to invest in digital capabilities by recapitalizing stressed IT budgets and optimizing technology portfolios to provide more stable operations at a lower cost.”
“Gartner’s 2014 predictions for government highlight the logical consequences and impacts that flow from the adoption of cloud computing, mobile devices, social media and accessibility to new sources of information,” said Mr. Howard. “By embracing and not obstructing these disruptive technological changes, government CIOs can pursue opportunities to transform their agency into a digital business.”
By 2017, public cloud offerings will grow to account for more than 25 percent of government business services in domains other than national defense and security.
Governments will increasingly favor cloud computing over long-running in-house IT deployments to contain costs and increase predictability. Nevertheless, the heightened sensitivities of many governments, particularly in Europe, will act as the limiting factor on the speed of take up as new, more stringent policies, and possibly legislation on cloud adoption, are developed and implemented.
“Government CIOs should insert themselves into public cloud sourcing decisions, lead discussions of available sourcing strategies with political leadership in the wake of higher levels of concern, and review current cloud migration activities in light of potential legislative changes,” said Mr. Howard. “It’s essential for CIOs to recognize that they have a proactive role in ensuring that public confidence in government data handling is maintained by ensuring that data protection policies, contractual arrangements and practices are sound and aligned.”
By 2017, as many as 35 percent of government shared-service organizations will be managed by private sector companies.
As private sector sourcing options become more attractive for governments due to cost and service-level advantages, government agencies will increasingly find themselves paying a premium for IT services unless they become more adept in their contract and vendor management abilities. Public-private partnership arrangements have started with infrastructure as a service and will eventually move to integration and software as a service. Initially, cost and service advantages will be clear, but only governments that are able to structure favorable agreements will see continued cost and service advantages. Exit clauses and credible alternatives will support government negotiations and governmental ability to form whole-of-government coalitions will also support contract negotiations.
“CIOs and shared-service executives must seek to preserve the relevancy of their service by maintaining or enhancing investment in the enterprise's skills and service offerings, developing multi-sourcing capabilities and regularly evaluating their sourcing decisions,” said Mr. Howard. “It’s essential to develop the dialogue with existing agency leaders and program managers concerning which services are inherently governmental and need to be maintained internally for reasons of security, mission sensitivity or other factors.”
By 2017, more than 60 percent of government open data programs that do not effectively use open data internally will be downscaled or discontinued.
Externally focused government open data programs have sparked some interesting application development and transparency initiatives, but have not delivered sustainable value for government itself in terms of improved business performance or outcome management. Open data is considered a nice-to-have activity or a compliance exercise that is often delegated to a specific role (such as chief data officer), but has yet to become an essential element of routine business processes. Most open data programs are narrowly approached as an end in itself rather than a means to an end, with benefits that are too indirect or intangible for the agencies that own and publish their business data.
“CIOs need to take ownership of the full spectrum use of open data, helping their agencies identify useful internal applications that deliver measurable value, as well as promoting partnerships with other public-sector and non-governmental organizations that are also active on open data initiatives,” said Mr. Howard. “Working with other relevant roles, such as chief data or chief digital officer will help influence open data portfolio management in ways that prioritize the publication of data that is useful for internal purposes.”
By 2016, at least 25 percent of government software development positions will be eliminated to fund the hiring of business intelligence and data analysts.
Cloud economies dramatically reduce the need for internal software development. While the conversion to private and public cloud is growing more slowly in government than in the private sector, the need for internal custom software development is being eradicated. Information availability is exploding to make data analysis the priority skill. Without analysts and business intelligence, the tidal wave of big data will lead to overload rather than progress.
“CIOs need to evaluate cloud cost-effectiveness. The focus should be on identifying where cloud offerings provide superior service at low risk and alerting and supporting staff in preparing for new skill sets and job classifications,” said Mr. Howard. “The key is to use the new tools to solve business problems and to use improved productivity to fund priority innovations. CIOs and their staff can use the productivity made possible by cloud and business intelligence to fund the transitional work required to make the new capabilities operational. They must prepare and sell the business cases required for this progress.”
More detailed analysis is available in the report "Predicts 2014: Government CIOs Are Key to Moving the Digital Enterprise Forward.” The report is available on Gartner's website at http://www.gartner.com/document/2625824
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