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Digital transformation: What does it mean and how to do it

Digital transformation - Featured Image LG April 2018

When a panel of four local government IT specialists answered questions on the future of IT in councils at the ALGIM Conference in Rotorua, digital transformation proved to be a hot topic. The following are redacted highlights from the session.

On the panel
JOS CREESE
CEO of Creese Consulting in the UK, where he provides business technology consultancy services. Jos is a past president of both SOCITM (the Society of IT Management) and the BCS (The Chartered Institute for IT). He has been cited as “the most influential UK CIO” in the Silicon 50 survey. For over a decade, Jos was CIO, and latterly chief digital officer, for Hampshire County Council, leading a range of groundbreaking shared services.
MARTIJN SCHRODER
Former digital transformation manager at Ballarat City Council, Victoria, Australia, where he created the council’s digital and innovation strategy. Martijn is now business innovation and optimisation manager at CeRDI, the Centre for eResearch and Digital Innovation at Federation University Australia.
MARION DOWD
With over 25 years in local government, Marion is currently the IT & services manager at Western Bay of Plenty District Council. In this role, she is responsible for the strategic direction and operations for information technology, business solutions, digital services, GIS and information management / records at council. Marion has been on the ALGIM executive since 2004 and is currently co-vice president. Passionate about delivery of customer-centric services to citizens through digital channels and continuous improvement of business solutions for council, Marion was one of the creators of ALGIM’s web & digital symposium, which was recently combined into the organisation’s Spring Conference.
RUSSELL BENNETT
Manager business systems at ‎Southern Grampians Shire Council, Hamilton, Victoria, Australia. During his tenure, the council won the Digital Innovation Award for its ‘Digital transformation of a rural community’ project which aims to ensure the community can take advantage of the opportunities that digital transformation provides.

Where should IT managers focus their energy and time today in preparing for the future?
Jos Creese IT managers need to fundamentally replumb what they do and how they do it. They need to stop looking inwardly to their operational infrastructure responsibilities and start looking outward to what the organisation is trying to achieve. They should embrace shadow IT rather than trying to resist it. And they need to move away from a lot of the technology management into data information – how they can empower the organisation to do some new things.
If I’m an IT manager and my day is already packed to the brim, how can I get the buy-in to start focusing outward?
Jos Creese We all have legacy and operational IT responsibility to deal with, whether we do it directly ourselves or through our contracts. We need to find smart ways of minimising the amount of our time doing that. Of course, the infrastructure matters but if we are devoting all our energies to that, and to firefighting, it’s a problem.
So, one of my first bits of advice is to sort out the prioritisation. Don’t try and do everything. Sort out what are the key things you want to be known for to make a difference over the next 12-month period.
Do you need to get buy-in from higher up?
Jos Creese No. You’ve got to just do it. One of the problems we have – particularly in local government – is this hierarchy of decision-making from the pre-digital age.
Martijn Schroder IT needs to grow up. There is this myth that the business knows what’s best for the business. I don’t believe that myth any more. The business needs all the help it can get in terms of sorting out its practices and how information flows.
There’s an excellent opportunity for IT to rise above itself, forget about the technology and start being a partner with the business. We need to grow relationships and we need to learn a fair bit about how the business operates, what generates value and then start thinking about applying that back to IT. It’s a beautiful challenge and opportunity.
Marion Dowd I don’t think I’ve had anything much to do with technology since about 2010. That’s mostly because that side doesn’t interest me – it’s the business that does and I think technology is really helping with that: virtualisation, moving to looking at software as a service (SaaS), and infrastructure as a service. IT needs to get out into, and help, the business.
How do you help them?
Marion Dowd You need to show them what’s possible because I don’t think they understand that. That will change over time as the millennials come up through the organisation. In some ways, more than we manage IT, we need to manage change.
What does successful digital transformation look like and how will we know we’ve got there?
Jos Creese We hear the term digital transformation everywhere but I see very little true transformation. For me, it is about looking at the democratic process in an organisation and the way in which decisions are made.
The way in which councils work is archaic. It’s 100 years old. And it’s extremely expensive. Tot up the amount of resources used in your organisation to service the needs of councillors, the executive decision-makers, informing the public… the list goes on.
It’s not that we have [this way of operating] because we believe in democracy.
It’s possible to have a different way of operating now. With social media, with some of the new technologies, we can fundamentally change things. We can rip out overheads and costs. We can collaborate better with the public and inform politicians better.
That is transformative. What is not transformative is being clever in the way you use social media or collaborative tools. That’s business as usual with some new technology.
I could go through a whole list of areas where we need to reshape how our organisations operate. That [reshaping] will typically be resisted by middle managers and leaders who are, perhaps, uncomfortable with the risks. They are probably uncertain about the technology and have seen a lot of similar types of projects come unstuck along the way which have brought reputational and, potentially, financial difficulty.
Martijn Schroder When we wind the clock back 100 years and look at the top 100 companies in the world, very few, if any, exist today. Some of those companies did not make changes to the way they operated or change their business models in line with society.
I can’t say what’s happening in New Zealand, but local governments in Victoria, Australia, at least, are at risk of commercial entities sizing up and doing better what councils do. I think that’s going to happen [in Victoria] in the next few years. We will just become regulators of practices.
Marion Dowd When I put out a question asking how many councils were adopting agile methodology I didn’t get many replies. We need to change the way we are working.
How can we build digitally-oriented, and more agile, organisations?
Martijn Schroder Scarcity made us do it at Ballarat City Council. We had less money so we needed to get better at doing what we do.
Russell Bennett Councils aren’t built to be innovative. If I see an opportunity and want to action it straight away I have to write a business case, wait for the new financial year, get approval, go out to tender, wait 30 days for the tender to come back, and then I can go ahead. That’s a very tough environment in which to be innovative.
Jos Creese Am I allowed to disagree? I think you’re right on one level but if you have a digital operating model for a modern council you throw a lot of that [process] away.
You don’t have to have a lot of that paraphernalia in order to make sure you’ve got the necessary transparency and democratic oversight. We’ve created a lot of rules that can go.
When a council comes to me and asks me to help define what a digitally-oriented culture means I usually start by getting them to work through a whole set of what I call digital principles. For example, what do we mean by being digital leaders? What do we expect from our management team? How are we going to use information? How are we going to empower the public to own their data – not our data but their data – about themselves? And how are we going to maintain this data? How are we going to change the way in which we can deliver services? This might mean collaborating with other councils or other public service organisations or getting the private sector more involved. How does this change our role?
If you start breaking down and defining these questions, you get an understanding of the appetite in your individual council for the level of cultural change that is required.
Some councils will be really innovative and are absolutely up for the risk. Others, when you go through this process, are much more cautious.
That’s not necessarily wrong but you need to understand where they are on that spectrum or you will start doing some incredibly exciting, risky and innovative projects that the organisation subsequently doesn’t have the appetite for.
Do we need chief digital officers sitting alongside chief information officers and IT managers? 
ie, where do you put your business analysts?
Jos Creese My advice to you as IT professionals is to build your business analysis capability. The business analysts should be sitting very clearly between the business and IT. They should not be seen as purely IT professionals. That defeats the object and you end up with an IT department saying it is going to build its own business analysis capability because it understands the business better than others.
There’s a real opportunity for IT to bridge the gap between business potential and ideas, and technology potential and ideas. That’s where the business analysis role comes in. It’s a great chance for IT to be more outward-looking and do this.
But you need to loosen up a bit. We all need to loosen up a bit to make that work, rather than just seeing IT as a ‘service’ from the IT department.
Do you think councils are confused with digital transformation? If you talk with different areas in councils such as the economic development team, IT, property services or communications, it seems they are talking about different things. It’s so broad. Do we need a whole new team with a new set of skills to come in and work on digital transformation?
Marion Dowd Bringing in internal staff on a project is good so they feel part of the change. I’d probably blend in an additional business analysis resource to bridge the gap between the business and IT. That works well.
There’s always going to be tension. Digitisation means many things. At our council it’s the tension between providing a better customer experience through digital and online services while at the same time we want to improve the way we do things or redesign the service that we’re offering –and that’s internally focused. So, you have to balance the tension between promoting to your external customers while also improving the experience internally.
Is fear of failure a barrier to transformation? Not just from an IT, but also from a business, perspective?
Jos Creese There are two answers to that. The first is no. There should be in the public sector a fear of failure. We’re talking about public money. If some of these transformative projects go wrong, people could get hurt. We’re looking after some of the most vulnerable members of society. We need to get stuff right. We should be cautious. We should be a bit more careful at times than perhaps the private sector needs to be.
However, having said that, I think fear of failure is also a bit of a barrier. It tends to be more about reputation – personal reputation, not just organisational reputation. The symptom is when you produce a short report which says ‘we could be doing something truly a bit different and we need a little bit of money’ and the response is ‘go away and write a more detailed business case’.
Then they suggest let’s get a working group together to look at it and, in due course, we’ll put it through the formal decision-making process, by which time things have moved on. Typically, there are always more reasons for not doing something than for doing it.
So, in that sense, yes, it is a bit of a problem. Risk aversion in the public sector needs to be defined a bit. There needs to be a discussion about that with IT. And IT has a particular responsibility to help the organisation understand where some of the risks around digital transformation and new technologies actually lie.
Fear, uncertainty and doubt often play on people’s minds.
But it also needs a strong executive team to resist the pressure that might come from middle managers to carry on ‘doing as we’ve always done’ and simply add a bit of technology to make things a bit slicker.
Martijn Schroder We need to experiment. Many experiments will fail and some will succeed.
What I like to do with organisations with these questions, is to create projects with them that are safe to fail rather than, in some organisations, which is to create projects which are failsafe.
It requires hard work in terms of ego and mindset.
That’s my challenge: how to create projects which are safe to fail.
Marion Dowd You have to be brave enough to say you don’t know if a project will fail or succeed.
There seems to be a blurring of the lines between business, IT and digitisation strategies. What’s your definition of digitisation?
Martijn Schroder Early on during my time at Ballarat City Council I counted that we had 78 or so different strategies. When I analysed the council plan it had the word ‘strategy’ well over 140 times and the word ‘action’ only five times.
I like practicality more than anything.
How do you manage shadow IT and let people innovate?
Jos Creese Many IT departments have been very paranoid about so-called shadow IT. This is the IT that exists under the covers, under the blankets, outside of departments. It’s very significant – about 40 percent of total IT in most organisations. I was doing some work with Dropbox at a local authority conference and people said, ‘we don’t use cloud’. I said, ‘yes you do. Dropbox is cloud.’ Every single council at that conference was using Dropbox one way or another but a lot is under the covers.
That’s a problem for security, data management and opportunity.
There are loads of great free apps. But an IT department should create a platform that will ensure that, if people are going to do stuff for themselves, they are doing it knowingly, safely and responsibly.
So, yes, tell people in council they can use SurveyMonkey if they want. That’s fine. We don’t worry about that in the IT department. But also tell them not to start sharing health records on a Facebook app with citizens, for example, because that’s seriously dangerous. It’s council staff members’ responsibility – not the IT department’s responsibility – to protect citizens and the organisation.
And if they get it wrong, they will be liable for that. In IT, we’ll produce the car and the airbags: you need to drive safely.


This article was first published in the April 2018 issue of NZ Local Government Magazine.

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