Eight questions for digital transformation and adoption

Digital transformation is a key strategy towards increasing productivity, particularly in the public sector.

But within the public sector there is unease at the concept of productivity, linking it with cost-cutting measures and reductions in services.

Putting a sole focus on efficiency and cost savings comes with inherent risks, including compromised service quality, difficulties in retaining staff, and missed opportunities for innovation.

Research and analysis by Dr Nina M. J?rden , Lucy Hampton and Ayantola Alayande for The Productivity Institute finds that productivity needs to move to a more comprehensive evaluation of organisational processes and effectiveness. Digital transformation, along with Human Resources management, are of high importance to achieving the goals of the cross-government review of public sector productivity.

Digital transformation in the public sector

Digital transformation is a critical catalyst for driving continuous innovation in the public sector and offers the potential to simplify, optimise and enrich the delivery of products and services. In addition, organisations can increase their operational efficiency through, for example, digital platforms, freeing up scarce human resources for frontline services.

That is easier said than done – and the public sector has had a litany of unsuccessful IT projects, that failed due to budget constraints or never even materialised. But for every NHS National IT Programme, there is a ResilienceDirect, a platform designed to foster cooperation preparing for, responding to, and recovering from emergencies.

This platform was introduced in 2014 by the UK Cabinet Office to help foster collaboration in multi-agency emergency operations. While not a perfect system, ResilienceDirect offers an insight into the impact of digital transformation in the public sector. Research underscores that technology's role in information sharing is particularly pivotal when specific conditions are met. These conditions include user-friendly technology, seamless integration into daily routines, and equitable information sharing among all partners involved.

But user needs evolve and technology’s capabilities increase over time, so technologies must not be perceived as static tools to address specific problems, but continuously adapt and evolve.

Lessons learned

The Productivity Institute research recommended the following lessons for introducing new technologies:

• Extended adoption time Allow time for the technology to embed into the organisation.
• Accept organisational change Accept that cultural adjustment will sit alongside structural modifications.
• Well-defined data policies These frame the insights, aid decision-making processes and optimise operational workflows that data brings.
• Impacts of IT outsourcing Too many external dependencies can risk operational resilience, impede organisational flexibility and hinder swift responses to changing circumstances.

Eight questions to ask

Given the potential that technology and digitisation offer for the public sector and the lessons learned from past experiences, enhancing public sector productivity requires consideration of eight questions, which can be found in The Productivity Institute’s research Public Sector Productivity Review: 15 Questions.

1. What is the long-term impact of technology adoption and digitisation on public sector productivity, particularly in terms of continuous innovation and optimisation of service delivery, when it has succeeded?
2. How can data generated through digitisation be accessed and used effectively to improve public sector performance, support evidence-based decision making, and drive innovation and productivity across the economy?
3. How can a data policy be designed to enable data sharing between different authorities?
4. What lessons can be learned from specific case studies, such as the Covid-19 response, in terms of the impact of technology adoption on different units or departments within the public sector?
5. What is the impact of digitisation on the quality and efficiency of service delivery in the public sector, and are there variations in outcomes between services or functions that extensively embrace digital transformation and those that do not?
6. What is the long-term impact of outsourcing on public sector cost savings, and at what point do outsourcing cost savings plateau or decline?
7. What are the potential risks and challenges associated with outsourcing public services to the private sector, particularly in terms of quality, accountability, and public perception?
8. How can we tackle the complexity of accurately quantifying the impact of digital innovation on productivity?

Find out more

• Read Public Sector Productivity Review: 15 Questions, by Dr Nina M. J?rden , Lucy Hampton and Ayantola Alayande .
• Read Why digitalisation isn’t improving productivity growth by Diane Coyle in The Productivity Agenda.
• Read Investigating Police Productivity: A Literature Review by Bart van Ark and Joel Hoskins .
• Listen to Making Public Sector Productivity Practical, an episode of Productivity Puzzles featuring Paul Abraham , Stephen Aldridge and Anna Smart .

The Productivity Institute??

The Productivity Institute is a UK-wide research organisation exploring what productivity means for business, for workers and for communities - how it is measured and how it truly contributes to increased living standards and well-being. It is funded by the ESRC: Economic and Social Research Council .