As we emerge from this crisis, local government likely faces its biggest challenge yet, particularly among local authorities now struggling to deliver essential services. A recent study from the Centre for Progressive Policy described the scale of the problem in very stark terms: 'More than eight out of ten (131 out of 151) upper tier councils in England do not have sufficient funds to make up for projected increased costs and reduced income due to COVID-19.'
Other research has painted a similarly dire picture for regional and local public services. However, the Government has chosen this moment to make a statement about its vision and intent for public services moving forward. Perhaps aimed first at central Government, Michael Gove used the Ditchley Annual Lecture to state ‘public service is a privilege’ and it is incumbent on everyone in the sector to prove what they are doing is ‘genuinely transformative.’
Whatever your views are on how achievable it is to realise this philosophy, it is clear there will be growing scrutiny on how spending is allocated and on the return it delivers. Some commentators feel this shift has been a long time coming, but if public sector bodies are to fulfil a “genuinely transformative” agenda, a much greater synergy between the leadership team of the chief executive, CFO, COO and CIO will be necessary.
The harsh reality is that where these roles are better aligned, organisations will likely emerge healthier from this crisis. For the local government CIO, the Government’s apparent intentions present a unique opportunity not just to enable this alignment, but to drive the strategic change demanded. The obstacle for every council CIO can be the board’s instinctive response to crisis, which is to prioritise cost savings. To counteract this reflex the CIO must build a close relationship with the chief executive – and equally the chief executive must understand that the traditional hierarchy of relationships must be broken down. Get it right and the CIO could become tomorrow’s hero. Get it wrong and it will lead to intense public scrutiny that could be very career limiting.
So how does the CIO achieve alignment and drive the agenda?
It is not an ‘either or’ decision between cuts and investment
There was much talk of Roosevelt’s ‘New Deal’ in Michael Gove’s speech, and subsequently when the prime minister made his 'Build, build, build' announcement. It appears the Government’s intention is to be radical to improve service delivery, so local government CIOs - along with their peers - will be challenged to demonstrate the same level of ambition at a time of such constrained budgets.
To deliver ‘genuinely transformative’ change CIOs must avoid getting stuck in ‘business-as-usual’ mindsets and allow IT planning to be dominated by traditional budget cycles. It is understandable that the initial reaction is to prioritise cost savings ahead of investment to protect essential services, but emerging from this crisis should not mean strategic IT projects are sacrificed to deliver efficiencies.
Cuts and investment should go together. Indeed, properly planned and costed strategic projects should deliver transformation and cost reductions. So why put them on hold?
For CIOs reaching for success, it will be critical that they reflect the objectives of the board and demonstrate that IT investment is being effectively targeted. This will help enable the organisation to be faster to agree and implement change. It requires the leadership team to operate with an integrated mindset, where all the business functions are prepared to work together. If this does not happen the organisation will likely be too slow to respond to citizen demands and it could lead to poorly implemented IT projects, cost overruns and project failures. It falls to the CIO to demonstrate the communications and negotiation skills necessary to convince the Chief Executive and the rest of the board that this more collaborative model of planning and executing IT strategies will also deliver greater efficiencies.
But we can’t afford it
It is perhaps tough to say, but if a CIO doesn’t have the money to invest in transformational IT initiatives, then surely the question has to be: “Why not?”
It is incumbent on the CIO to constantly review vendor costs to identify the ‘best value’ for the organisation. For example, why pay the vendor 22% of net license fees to support enterprise applications, when organisations could be paying half of that figure by using third party support? Kent and Essex Police and Nottingham County Council have used third party support in conjunction with a shared services model. Kent and Essex Police split finance, payroll and HR processes between them, while Nottingham County Council runs SAP Payroll on behalf of other organisations including the Nottinghamshire Local Government Pension Fund. This model enables them to maximise efficiencies, so resources can be re-directed to invest in essential services and innovation.
When considering genuinely transformative projects, public sector CIOs must also assess the potential risks. Implementing a SaaS ERP application may fulfil the ‘cloud first’ mantra but will it lead to the change the Government is apparently pushing for? Ultimately, it is questionable as to whether moving a stable, existing ERP application to a SaaS environment will be seen as driving a public sector body’s innovation strategy especially in the current climate.
Genuinely transformative initiatives are more likely to come about through the adoption of microservices and agile development techniques, as well as cutting edge technologies such as artificial intelligence. Such dynamic methodologies will enable local government bodies to get closer to citizens and build more responsive applications. They will also help fulfil the cost saving demand. If a CIO carefully plans the long-term strategy through alignment with the chief executive, it will be possible to create a virtuous cycle driving transformation through such initiatives, while delivering savings that can in turn be reinvested in future projects.
We are digital
Beginning now, local government must find a way to plot its path forward. Looking at Michael Gove’s speech, it appears the Government wants to encourage a very different mindset, which could be perceived as permission to do things differently. Gove said: 'We need to move to a system where those who propose the innovative, the different, the challenging, are given room to progress and, if necessary, fail.'
Local authorities and public service organisations might be able to see this as the ‘green light’ to create the right operational structure to support an agile IT strategy. It will demand a closely aligned leadership team, which will be vital to ensure the organisation fails fast and learns quickly from its experiences.
The CIO must seize this opportunity to lead the change needed, in conjunction with the chief executive. Ultimately, together they should encourage the organisation to adopt the mindset: “we are digital”
A brief review of recent examples in the public or private sector underlines that the successful organisations will 'just be digital'.
This means across every aspect of planning, implementation and interaction with the public the organisation has a multi-channel strategy, which seamlessly combines on- and offline experiences. It requires a deep understanding of technologies, such as open source, and development approaches, like microservices, and how they will empower an organisation’s future IT roadmap.
Certainly, this is a bigger challenge in the public sector but adopting the right transformative mindset will lead to greater success and alignment with the Government’s apparent vision.
Mark Armstrong, GVP and GM EMEA, Rimini Street