Digital transformation: Lessons from the private sector for the public sector

private sector public sector, digital transformation
© Fizkes

Antonio Weiss, Senior Partner at The PSC, discusses lessons and limitations from the private sector for the public sector about digital transformation

We live in an age where the digital experiences of citizens are delivered through the channels of a small number of enormous technology providers.

The “Tech States” influence most digital services

These “Tech States”, as Tortoise media has coined them – Apple, Microsoft, Google, Amazon, Tencent and Meta – now deliver the vast majority of entry points to digital services. Yes, none of these Tech States can claim public services, or the public sector as their origin story. It’s true that these giants are – and will continue – to deliver significant transformations in the way public services operate; from moving digital services onto the cloud, to opening up access to digital information of government guidance, to even delivering medical devices quickly and safely to residents.

Three limits to private sector parallels in digital transformation

But we must also remember where the limits of private sector parallels lie and what to do about them. Three specific and vitally important differences are at the heart of this.

1. First, public services are universal.

This means they need to be for everyone. This is the single most important differentiator with the private sector. There are legal requirements – but also societal expectations – that mean that health and care, education, justice and wider public services must be accessible by everyone. Practically, this means making an iOS app for reporting a fly-tip might sound like a great thing for a local authority to do, but the authority must also maintain a way for non-app and non-Apple users to also access the service.

This makes financial savings difficult because services may often need to be duplicated. And it also means that services need to be designed to be easily accessible for as many people as possible; taking into account, language, learning, visual or technology challenges.

2. Second, the metrics for success for digital transformation in the public sector are inherently more complicated.

An ecommerce company cares about conversion rates and revenue. An algorithm will be tailored to optimise for a specific outcome. Yet, digital transformation in the public sector requires caring about all of these things and citizen satisfaction, access, usability and meeting whatever the policy and political aims of the day are, however well or poorly defined or inconstant they may be.

This is not to say things are easy in the private sector, with more and more firms considering purpose is as – or even more – important than profit alone. But the number of stakeholders and competing interests in the public sector are particularly extensive.

3. Finally, the risk calculus in the public sector is different.

This works on two levels: that statutory requirement to run services means fail-safes and backups must always be in place; and that the spotlight is brighter when things go wrong in public services. There is no National Audit Office or Public Accounts Committee equivalent to hold private firms accountable for technology failures in the private sector. This doesn’t mean that public service organisations should be especially risk-averse, rather, that they should proactively manage risks by using agile approaches, iterating service development and constantly testing with users.

There are many good and useful lessons to be taken from technology firms and the wider private sector, but we shouldn’t be blind to the difference between sectors.


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