Why Digital Transformation isn’t Enough

I’ve recently been in a position where I’ve had to open a business bank account. Having tried one major online bank that required a face to face meeting only to find they don’t accept a signed tenancy agreement as proof of address, I tried another. A week later I had an account, but for access to internet banking it was a case of downloading the dreaded pdf and posting to them. Both these two banks offer online banking and mobile apps but have overlaid them on a legacy processes meaning that there are still major flaws in their overall digital transformation effort. For my third attempt  I tried a new online bank called Tide. Within 15 minutes I had downloaded the app, applied, proved my identity and address (with image capture software and facial recognition) and had a bank account. Two days later I received my bank card in the post. I had a similar experience when I opened a Revolut account, and know many people who now use Monzo who tell me of the same experience. 

This is all great but why am I telling you? Well it’s quite simple. What the two major banks had done was continue to work in a legacy way but with an overlay of digital, and this is similar to most council services. What Tide and Revolut have done is start from zero and build a service that gives greater customer satisfaction and ease of use and puts the customer in control. And this is the radical approach that councils need to start taking as shrinking budgets take effect. I’ve been to many councils where the answer to Housing Benefit or Council Tax is a MyAccount service with a few e-forms. This is the equivalent of the two major banks offering an online bank account. However, most of the banks services still require a bank visit or a phone call at the very least and have legacy processes to complete. (There’s one notable high street bank that is advertising it now has a full mortgage application online. In 2019 this shouldn’t be worthy of a tv advert). 

So, how do councils start operating like a Tide or a Revolut? That comes from identifying the problems with the services they offer, looking at where the constraints are re-imaging the service as if they were a customer and utilising new technologies to deliver them. Most council back office software is built around the user, i.e. the council staff worker, not built from the customer perspective. 

If we go back to Housing Benefit and it operated in the same way as Tide then the only work the council would need to do is quality check the claim. The claimant should be able to apply, upload docs, prove their identity, income and address via the mobile app using recognition technology and all this information should feed directly into a claim system that processes the application. Housing benefit workers would then do less data input or re-keying of information and more claim checking. Bearing in mind that they are only required to check 4% of claims anyway currently, this number could increase and still reduce the overall workload of the department. 

There is actually no reason why there couldn’t be a national Housing Benefit app that could do this (maybe Universal Credit will offer some hope). This kind of model could be used across most council services, put the customer first and let the customer do the work and reduce staff numbers. It’s no different in the thinking to self serve checkouts in supermarkets and menu screens in popular fast food joints. Let the customer order their own food and you need less staff to serve them and the food is cooked in almost real time, rather than having lots of waste as was the old way. This goes across many industries in the same way it could work across most council services. 

Even with current legislation you can start to take a radical approach, look at the above banks and how tightly regulated banking is, or even Uber where taxi legislation is strict. Start from the point of ‘if I was the customer how would I want to do this?’.

Council’s can’t keep complaining about a lack of budget for services when in the main they are still delivering them in the exact same way as the legacy banks with an overlay of digital and think that it’s going to make a big enough difference. Or as I’ve seen many times, write to suppliers and ask for a 10% discount. Is that the best we can do? A national radical approach to the way councils deliver services is what’s required and maybe bring in expertise or speak to companies that have disrupted their industries and then start to make real changes. Services need to be completely re-imagined not just transformed. Digital transformation isn’t enough on its own. 

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Cloud Computing — Who Really Cares?

Well I do. But not because it’s necessarily cloud, but because it gives me the tools I need to be able to do my job better (or more efficiently). And that’s really the point here. IT as a support service has a role to ensure that the end users have the right tools to do their job in the most efficient and effective manner. Too often the focus is on the IT department and cloud first strategies, whereas the strategy has to be about the end users first.

To 90% of end users (non IT) the fact that the technology we all use every day and take for granted is cloud based is in the main entirely irrelevant. Does anyone using Instagram or Facebook care that much that its cloud based (apart from data protection), what really matters to them is that they can post an image or text or read / see images and text from others. As long as the application they are working on or using at the time opens and lets them do what they need to do in a timely manner then there’s generally very little interest in the technology that sits behind it.

The same is true of most staff that I come across at local authorities, although the same is probably true of end users in most businesses. What they want is an application that opens and works when they need it to and allows them to complete their work in the most efficient manner and is reliable. That may be cloud, hybrid or on-premise.

What companies need to be looking at is the benefits of their technology to the end user and not just the benefits of their technology to the IT department. The benefits to IT are of course important, but secondary to the end users, whether that be customers, residents or staff.

And this is where digital transformation needs a clearer definition. To me the phrase is more relevant when defined closer to ‘enabling transformation through digital tools’. The focus in this definition is on the transformation and not the digital element. Just moving services to digital and cloud is largely pointless without an element of transformation of services taking place first. Where cloud comes into its own is the ability to be configured in a way to enable and support the transformation in a relatively speedy process without huge upfront costs and in an iterative manner. I often speak about becoming digitally efficient over transforming.

Cloud computing of course has other huge positives, such as free upgrades, 24x7 access, security, flexibility, pupm price model, mobile ready, infrastructure free which are largely based around IT benefits. But it also provides everyday tools, such as instant messaging, Facetime, ubiquitous access, configurable systems, collaboration tools and joined up services which focus on the end user and can help change the way users work.

As an example, take my industry and an end user of one of our applications, a Planner or Planning Manager — Do we think they care that the latest version of our software is cloud hosted? Or do they want a system that turns on on a Monday morning, allows them and their team to work efficiently, maybe from out of the office, and isn’t subject to large amount of downtime for power failures or essential maintenance or upgrades?

The fact that the system that can provide all these things may well be cloud based is irrelevant to the fact that it just provides them. End users shouldn’t be looking for cloud first systems, they should be looking for systems that meet their requirements as end users. And as end users in today’s world, these requirements should be very demanding. The fact that its likely that only cloud solutions can or should be able to meet their demands isn’t the driver behind their decisions and nor should it be.

It’s time to put the focus back on the users of systems and away from IT’s cloud first strategies. Of course have a cloud strategy, it’s still the right direction to go in, in the main, but temper it with the needs of the end user. After all, are you trying to save 10% of the IT budget or 10% of the Companies / Authorities budget? I know which one I’d prefer. Use the cloud technology to enable your transformation plans, but establish these first. With the tools available to users these days, there really is very little to limit the art of the possible.

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Channel Shift — Where’s the Savings?

Those of you who work in a Local Authority will no doubt be aware of the numbers that SOCITM provided on the cost of transactions (£8.21 for Face to face, £2.59 Phone, £0.09 Web) that have helped drive a number of digital transformation business cases. In its most basic form, moving customers from a face to face transaction to an online transaction will save you £8.12 per transaction and is therefore a huge driver in reducing service costs.

In reality however it’s slightly more complicated than this based on the demographic of your customers. In order to understand where the potential savings are we can look to Pareto’s Principle to determine where the highest service costs lie and therefore where and what we need to target. Using a hypothetical council with rounded numbers to make the maths as simple as possible we can see quite clearly where the focus needs to be.

Imagine a Local Authority that has 100,000 households within its boundary. We can apply the Pareto Principle to break this into those households who contact the council a lot (High Need) and those who don’t (Low Need). We can then use the same principle to break these into Online and Face to Face Users. This can be shown as the first image below.

This gives us 64,000 low need users, happy to transact online. 16,000 Low need but wanting Face to Face services, 16,000 High Need online households and 4,000 High Need Face to Face customers.

Now looking at the costs of providing these households we can use the same Pareto Principle. So again using a hypothetical annual budget of £100m we can break these down into a similar diagram shown as the second image below.

What we’re now seeing is that although the largest group by far was the Low Need Online group, we can see that the cost per Household is only £62.50 per year (4% of the annual budget). Where we get to the High Need Face to Face households, we’re looking at £16,000 per household and an overall cost of £64m (64% of the annual budget).

When looking at the cost per household from this perspective it becomes clear that just looking to provide online services will result in some savings but it doesn’t target the largest area of spend. When talking about channel shift to online services I often hear and see business models that talk about tier shift to catch and deal with enquiries at the earliest opportunity and lumps all of the above groups into the same model. Ultimately what you need to be looking at is multiple models of delivery one of which will need to be ‘not’ online (face to face or phone) depending on the demographic of your users.

What this means is though is that you need to understand your users, their contact across the whole council and the reasons why they connect in the way they do and how often and therefore which group they sit in. In order to do this you need good data. One of the reasons we advocate the platform approach to services is to ensure that councils have access to this data and have a joined up view of customer transactions. Key to this would also be ensuring that all contact comes through the contact centre and is logged in a CRM and doesn’t bypass this step and go direct to the service.

Once you have an understanding of your customers and the groups they fall in, you can start to plan around the services you need to provide to them. Taking myself as an example, I haven’t contacted my council since the day I moved into my property three years ago. I pay my council tax monthly by bank transfer which although is an effort for me, the fact my council wants me to download a direct debit mandate and print and post to them means I’m happy to continue paying as I do (and shows how stubborn I can be). I could call, but I don’t really want to or they could make my life easy and allow me to apply for a Direct Debit online.

I recently took out an American Express Credit Card and downloaded the app and set up a DD within about 2 minutes. If only all council services were this good. What my council should be doing though is identifying that I’m in the Low Need Online category for this service and ensuring I stay in this category and don’t have a reason to move to a Face to Face or Phone transaction. Moving to providers such as Asperato and GoCardless would help resolve this quickly and easily. Looking at new service providers with modern ways of working will help give customers the experience they desire. It’s also imperative that you understand that customers may fall into different groups for different services. You need to be asking yourselves what can be done to keep online customers transacting online and avoid unnecessary contact?

With the Low Need Face to Face group there is a need to understand why these customers are avoiding the online experience. What services are they touching the most? How can we ensure that they can transact online? Do you need to implement better marketing, provide online user sessions, are the forms they need and follow up responses available via online services? With 16% of households falling into this category and a potential hypothetical saving of £12m to be realised its worth understanding the make-up of this group and how you can help enable the move to online. Creating simple easy to use forms with a company like 123 FormBuilder can help provide this quickly and easily. These can be simple unauthenticated forms initially with a plan to move to a fully integrated authenticated experience for users and staff in the long run to provide these services.

Likewise, having an understanding of the demographic make up of the Low Need Face to Face group would also help identify the changes you need to make in order for this group to transition towards the Low Need Online category. What is blocking this. Is it personal preference, the difficulty of moving to online, a lack of skills or something similar? Are they constantly chasing updates, how many services are they touching? What can you then do to change this. You might not be able to shift all to online but again if you could move 80% of these then the knock on effect and savings are still substantial.

In transitioning this group to the Low Need Online category what you are effectively doing is building capacity within your teams to focus their effort on the 20% of households that have a High Need.

Again splitting this group on 80:20, we have 16,000 household who are High Need but happy to transact online, (at the same cost as the Low Need Face to Face group) and as such the capacity that you build can spend more time here understanding why there is a High Need and therefore what can be fixed to move this group towards a Low Need Online category. Again looking at data and statistics we will be able to understand why these are High Need. Are they chasing enquiries because you don’t provide automatic updates; are the services they contact you about most not online yet? What can you do to move them into a Low Need category. Again using the data you hold across all services may provide insights into why this group is High Need and you can plan to change service provision to reduce their Need. The technology in all likelihood exists to help do this.

The final category is the High Need Face to Face category. This has the lowest number of Households, but costs you the most to service. Again, with the built up capacity and utilising the data held across the authority wisely authorities can invest the time and effort required to ensure that they are delivering the right services at the right time. The council should be looking at opportunities to move this group from High Need Face to Face to High Need Online and then to Low Need Face to Face. Obviously this will not be possible for every household in these groups, but at a saving of £15,000 per household it needs the proper time and investment everyone in these groups as this is where the key savings will be delivered from.

Again, referring back to my previous blog, only when really start to understand the data we hold across the council will we understand which group your residents sit in. Just looking at siloed departmental data doesn’t provide the necessary insight into the complete cost of that household nor the full interactions that they have with you and therefore you don’t have the necessary information to plan around digital transformation.

With the implementation of a CRM and MyAccount councils can easily begin to build a picture of residents, how they transact and the cost to deliver services to each household. With a single view of each household understanding which services are most impacted by each household type and then providing an integrated MyAccount function to understand those who are happy to transact online and those who aren’t then categorising households into one of the four categories is achievable, and therefore creating plans on how to move households from category to category can be established.

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Why IT is essential in becoming a Digital Council

The typical Local Authorities (LA) ICT department has traditionally been seen as a back office function that gets called upon to resolve issues as and when they arise. They work very much in a silo from the rest of the council operating from an individual budget with pressure to drive their own savings through their own efficiencies outside of the wider council transformation programmes. However, with new technology and cloud computing this model should be turned on its head. A modern ICT service should be seen as the knight in shining armour rather than the department of no.

Let me explain. 

Through transforming the requirements and service specification of the ICT department, councils should be seeing their ICT department as both the driver and the enabler for change. Modern cloud based (SaaS) systems such as Google Apps, Salesforce, Okta, Box and many others enable councils to transform the way that it delivers services, but also forces a change in the work practice of staff (both ICT and non-ICT) due to the differences in utilising cloud software compared to the traditional legacy on-premise solutions. ICT can effectively become a commissioning service: i.e.buy in solutions which would mean back office tasks, upgrades, patching, maintenance etc are undertaken by the vendor with little or no downtime to the council (client).

For example by moving to Google Mail from Microsoft Outlook, gone are the overheads within ICT of having to manage an Exchange environment, servers are removed from estate, expensive upgrades are removed, staff can have access to their email from any device and don’t need to be on the corporate network and disaster recovery becomes the responsibility of Google not ICT. Admittedly this approach requires Business Continuity plans to be in place, but should Google go down for any reason, you can guarantee there’s a lot of other companies asking for it to be brought back asap and Google will have more resources available to do this than a typical ICT department. But by moving to Google you’re also then changing the way staff work. It may only be subtle in some cases, after all Google Docs and Sheets look like their Microsoft counterparts, but the collaboration and sharing capabilities open up new opportunities for staff to be more efficient in their own working practices, whether it be remote, mobile or through more flexible working (Should 9–5 be killed off in certain roles?). There are then the added benefits such as staff using Hangouts, Keep, Drive, Sites and Forms as part of the package (How many LA’s have actually looked at the number of internal emails that are sent on a daily basis?).

This move also has the added benefit of councils looking at Chromebooks in place of laptops. Not only are they cheaper to purchase, but don’t require building, upgrades, anti-virus software or encryption software. They may not be the right solution for all staff but the vast majority will be able to work more than adequately from one.

Going a step further we need to consider the LA application estate. In most cases hundreds of different applications all hosted on on-premise servers requiring staff to manage and maintain them, power, air conditioning, floor space etc. But in reality, the true issue with the applications is two-fold. Firstly in the vast majority of cases they are silo’ed applications holding data specific to the service that uses the system with little or no integration to other applications. Silo’ed data should be seen as one of the biggest barriers to transformation within a LA. Without being able to see across the whole council, how can you possibly plan and prepare for future service demands?

The data that these applications hold is also an issue, especially when each application probably utilises a different reporting tool, requiring LA’s to employ staff who are able to get information from a single system rather than a more generic team of data specialists who can pull data from any system utilising a single Business Intelligence tool, meaning that it is simpler to view and analyse data across more than a single service.

By moving applications to a single platform such as Salesforce with common data standards, not only do you reap the benefits of moving to a cloud based system with similar benefits to those mentioned above with Google but you can also pull disparate and silo’ed systems together turning your performance team into what should be one of the most important teams in the LA, spending more time analysing the data that is coming out of the platform rather than churning out spreadsheets of data with little analysis of what the data is telling you. With the more modern cloud solutions more and more of this data is real time allowing staff to respond quicker to changes rather than looking at historic data and then trying to react.

The second issue is the application itself. The vast majority of applications that I have come across do not adequately function for the service using it. By this I mean that it’s only when you spend time with service users that you start to find the spreadsheets, the access databases and the workarounds that staff have employed to overcome some of the shortcomings of the applications. By again moving to a system such as Salesforce (Force.com) for your application requirements you can configure the system to work in the way that your users want it to work not how the supplier says it works. This is often a difficult concept for staff to get used to as they are often excluded from procurement and implementation programmes and does require a change to the way applications are purchased and rolled out, but ultimately with the right leadership and buy-in from staff moving to these type of applications will be hugely beneficial in their day to day roles.

You also have the added benefit of the more modern applications being designed to work across a wide range of device types, needing only a browser to access them. In moving to applications built for, by and with the workforce you can put an end to the workarounds, the databases and spreadsheets meaning staff can focus on just using the core system. Of more benefit though is that the data that was previously held outside of the core system is now within it and therefore you will have much richer content that your performance team can analyse.

But what about Security — this is the Cloud after all?

Cloud security is the most common reason I come across for not moving to cloud services. Often cited by ICT Security Officers as unable to provide adequate protection to council data. Without going into lots of detail on this, the simple answer is that most of the cloud companies spend huge sums of money on security and have some of the biggest companies in the world using their software. They can not afford data breaches and therefore invest heavily in this, much more so than a LA could afford. The question shouldn’t be about where the data is held, it’s about how you access the data. Ensuring you have the necessary systems in place to control access and having the right policies and procedures in place are key to ensuring cloud security. These procedures and policies should be constantly revisited, not signed off once and then consigned to a filing cabinet (cloud based one!). Do your homework, spend time looking at your data, put the necessary processes in place, ensure staff are trained and up to date on DPA etc and there is no reason why any LA can’t utilise public cloud services.

So what about those budgets?

There are a number of factors to consider when looking at your ICT budgets. Firstly, the ICT budget needs to be seen as an enabler to change and not seen as an isolated budget. The ICT budget in most LA’s will be comparatively small when compared to budgets in other services. Therefore if you are investing more in ICT to make non-ICT staff more efficient, then you should expect the ICT budget to increase.

However, when combined with transformation savings through those efficiencies, the net cost to the council should be beneficial overall. For example, let’s say your Social Care budget is £60m a year and your ICT budget is £6m a year. If the ICT budget increases by 10% but you’re social care budget reduces by 10% then as an authority you are still £5.4m better off. If the ICT budget is viewed in isolation however, this investment won’t happen, thereby missing out on the larger savings opportunities.

However, moving to cloud doesn’t necessarily mean an increase to the overall cost of the ICT service. I’ve already mentioned some of the benefits of moving to Google and Salesforce above, but if you factor in the Total Cost of Ownership (TCO) of applications, then what looks like an increased annual licence fee is actually reducing the TCO as you’ll be removing servers, reducing power consumption, reducing network cost and maintenance, upgrades, patching, SQL or Oracle Database licensing, downtime etc. It also should mean you can start reducing or redeploying the ICT team itself. By commissioning cloud services the number of maintenance roles required in ICT is reduced and for those remaining their role is changed from a back office rarely seen function to a forward facing dynamic member of staff configuring and enhancing cloud systems alongside departments with a small team of procurement and contract management roles.. This is where ICT can become the knights in shining armour. By focusing on improving service delivery and not maintaining systems ICT (alongside the Performance Team) will be seen as a core LA service.

This change obviously relies on a critical mass of applications moving to the cloud and relies on LA’s gripping the ‘bull by the horns’ and fully utilising cloud apps across the estate. So in reality, although the cost may look higher in some instances against the overall council model, in the end embracing cloud will reduce costs. It’s not a question of cost of on-prem vs cloud to save on an iCT budget, it’s a question of how can you utilise cloud apps to deliver transformation, change and savings across the authority.

So in conclusion where does ICT stop and Digital begin?

This isn’t always a straightforward question to answer. In some LA’s they will be seen as two distinct roles, in others ICT will be expected to lead on digital as well. In reality it’s a hybrid of the two. Digital is more than just a nice website and a few e-forms, it’s a complete business redesign that requires a different skill set than just those of ICT alone. It requires Business Analysts, Change and Transformation Managers as well as some technical knowledge.

If digital is only seen as the website and e-forms approach then really it’s just a sticking plaster over some poor work practices and incumbent applications (often related to each other).

Digital should be seen as an opportunity to redesign the entire workflow from how a resident accesses the council right through to the back office systems. It takes vision and leadership from those at the top of the chain, to understand how these new tools can modernise their workforce and change processes right through to end users who have the day to day service knowledge. Thinking digital should be embedded right across councils and not seen as the remit of just a single team. All processes have the opportunity to be improved through technology, even those that have already been improved. Technology is improving at an unparalleled speed and LA’s need to make full use of the capabilities of modern technology, as overall budget reductions continue to bite.

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The Birth of Circular Data

Ok so there already is such a thing as circular data, but it’s very different to the concept I’m going to talk about here.

There’s already been much written and lots of money spent over the years about the Circular Economy with many countries, cities and towns across the world looking at supporting the principles of its concept. In 2015 Peterborough won the World’s Smartest City award largely due to its work in this area. The Ellen MacArthur Foundation whose mission is to accelerate the transition to a circular economy, states that if there are three key principles to consider:

Design out waste and pollution

Keep products and materials in use

Regenerate natural systems

What’s clear though is that you can apply the same principles and thinking to data and how it is used across cities, towns, businesses and public services with regards to transforming services, by replacing some key words with the word data.

The Foundation also states that “Companies need to build core competencies in circular design to facilitate product reuse, recycling and cascading”. Again the word product can be easily replaced with the word data. Each of the three principles above are still valid and I will explain each of these in more detail below:

Design out waste and pollution

Many key systems are standalone and not designed to share data across services but through implementing a platform approach to both services and systems this data can be used more widely throughout the organisation (although inline with DPA principles) and siloed data that is used once and then ‘wasted’ can be designed out. This can be looked at in various guises such as single view of the customer or household through to using the data you hold in more ways than you currently do but also re-imagining services so that waste and lost effort are removed from the process and helping move to a data driven decision making model. Where possible data created by one system or service should be used to improve all the services you deliver and not ‘lost’. For pollution from a data perspective we should be thinking about removing duplicate records and bad data.

Keep data in use

As per the above point, keeping data in use is vital to achieving service improvements. I’ve worked with numerous public sector services where data is used by one team and not another; when it could clearly play a mutually beneficial role. Services need to learn and understand where ‘external’ data can be used to improve their services. By external data we mean any data not generated by the service itself. In the same way that a circular economy promotes the use of one company’s ‘waste’ to be another’s benefit; to keep materials and products in use, here we are keeping data in use. (Marmite probably being the world’s best example of this — and yes I love it). With machine learning, the machines are reliant on an ever increasing amount of good data to refine the responses and answers given. Arcus Answer which is a contact centre solution utilising the AWS Lex solution is a good example of this. All AI solutions can only ever be as good as the data they are utilising and there needs to be a constant feed.

Regenerate natural systems

We can look at this principle from a number of angles when relating it to data. For a pure natural system we could be looking at the Internet of Things (or the internet of data, as the data is the key not the ‘thing’ collecting it) which could look at everything from air and water quality (improving nature) through to a Social systems whereby transforming social care with IOT can both improve the lives of the vulnerable to look after themselves to enabling a family to be more in control of the care family members (and therefore improving the most natural of systems of family looking after family) which can now both be achieved. (https://www.youralcove.com/)

I’m passionate about data and its role in transforming services.The platform approach to Local Government services not only helps in transforming individual services but brings those services together to give that single view of the customer across multiple services. I’m also passionate about how better use of the data can improve services, a subject that I’ve presented to conferences previously, and how understanding the data you hold and being able to interrogate it in a meaningful and visual manner can show previously unseen patterns and anomalies.

It’s likely that as companies and services start to understand the concept of ‘Circular Data’ that it will will naturally spawn a circular data economy as well as playing a leading part in a helping to deliver the more conventional circular economy. The more that we all do to move towards both a circular economy and a circular data model then the better the services that can be delivered and the better economic and environmental health of our cities and countries can be achieved. With a lot of funding and effort being aimed at the Circular Economy, I think it’s time the the same levels should be applied to Circular Data taking the current Economy principles and frameworks and re-aligning them to better use of data.

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