A leader’s guide to government digital transformation

Digital Transformation

There’s a favorable momentum to push forward state and local government digital transformation because citizens now use digital services and online payments more than ever. The restrictions brought by the COVID-19 pandemic, such as the interruption of in-person government public services, forced the public sector to accelerate its digital efforts to attend to the demands of rapidly evolving and uncertain times. The consensus in the industry is that government officials should build on this momentum to become even more forward-thinking.

Government CIOs and CTOs have an opportunity to shift the dominant narrative about the public sector from reactive to change to a more proactive role in leading innovation. This article explores what is required to achieve this progressive mindset and what’s at stake here: government efficiency and better customer experience.

As a champion of smart city transformation, former Philadelphia Mayor Michael A. Nutter (2008-2016) knows well the challenges of investing in emerging technologies in a risk-averse environment. His experience highlights the importance of challenging the status quo, learning from other GovTech projects and raising awareness of what digital transformation can do for the public sector.

In an exclusive interview with PayIt, Mayor Nutter recalled what drove him to innovate in Philadelphia:

“Innovation starts with believing or wanting to believe that things can be better. Even if things are going well, there’s still an opportunity to make them better. The focus always has to be on the customers – also known as citizens. You want them to have a good customer experience, engagement and relationship with the government.”

~ Former Philadelphia Mayor Michael A. Nutter

Embrace the public sector’s need for digital transformation

When governments implemented lockdown measures to slow down COVID-19 transmission rates, offering a digital-first approach evolved from convenience to a necessity. Telehealth, virtual court hearings, and the rise in online payments are only a few facets of this new era. 

Many governments were blindsided by the overnight shift to remote work and online services and, consequently, had to accelerate the need for digital and contactless innovation to operate during the pandemic. According to a Deloitte survey with 800 government officials from eight countries, 74% of respondents reported that the pandemic has indeed expedited their government’s digital efforts. Another insight from this survey is that 67% of the government officials interviewed indicated an increase in investments in digital transformation even though the pandemic has brought budget pressures.

A government digital transformation lesson from the pandemic is that the public sector can be more responsive and adaptive to future crises by investing in technology now. For example, storing data in the cloud instead of legacy systems simplifies IT management and reduces costs and security concerns.

Research also shows that government officials are not satisfied with their organization’s current reaction to digital trends. More will be done as governments realize the return on investment from replacing outdated technology and deploying digital services and payment platforms that better meet their citizens’ needs. 

Challenges in digitalization

The public sector faces unique challenges when it comes to adopting emerging technologies.  In Mayor Nutter’s view, “Government is the most risk-averse culture that you’ll ever encounter.”

To innovate, it’s crucial to take risks, but, as noted by Mayor Nutter, it’s a “calculated risk” if you do your diligence and look for examples of other governments that have successfully implemented digital service innovation:

“Ask where it has been done before. Tell me five cities that have done innovation and have done it well. Let me talk with them. Let’s see their revenues. Are their citizens happy? Why wouldn’t I be interested then?”

~ Former Philadelphia Mayor Michael A. Nutter

Service delivery challenges in local government

Governments are more open to innovation now after the pandemic has accelerated the need to meet new demands of both employees and citizens. Still, CIOs and other public leaders need to understand the different rationales for investing in technology to address the challenges of service delivery in local government

Those are the top reasons cited by government officials around the world, according to Deloitte Digital Transformation Strategy Survey:

  • The need to modernize infrastructure and services to keep up with the times, for example, replacing outdated systems for cloud-based infrastructure
  • The ability to innovate faster
  • The need to offer services that meet citizens’ demands for faster and better service delivery – anywhere, anytime and from any device

There are also other common drivers for digital transformation, such as the need to address government directives. The takeaway is that governments embrace digitalization for several reasons and encounter themselves in different stages of that process. 

Digital transformation is more than only offering digital services. It is the adoption of technology to truly transform processes and service delivery, for example, through workflow automation and seamless multichannel services. In other words, there is a difference between simply offering high-volume essential government services through the internet and making more significant changes in how the government operates—in terms of both back-end process and public-facing services. 

Data from Gartner highlights that 80% of governments are still at the early or the developing stages of digital maturity. Digital transformation in government and the public sector can allow agencies to leverage technology to serve their constituents better and become more efficient and cost-effective in the process.

Navigate the digital transformation maturity model

Research has shown that digitally mature organizations place digital transformation at the center of their mission strategy. Deloitte has a digital maturity model pointing out that the objectives and barriers of government agencies vary according to the stage of their digital transformation. For example:

  • Organizations in the early stages of their digitalization tend to be solely focused on cost reduction
  • Developing mature organizations tend to focus more on improving customer experience
  • Mature organizations work toward fundamentally transforming processes

Organizations with high digital maturity are more confident in the ability of their leaders to understand emerging technology and keep pace with GovTech trends. Those insights point to critical characteristics of leadership teams that are stepping up and driving effective digital strategies

  • Being technology-savvy
  • Having the willingness to take risks

“Organizations at higher levels of maturity invariably have leaders with the skills and understanding to navigate the digital transformation process.”

~ Deloitte (The Journey to Government’s Digital Transformation, 2021)

Make technology for government a priority

In addition to the culture and the knowledge necessary to foster digital technology innovation, having a roadmap also sets apart governments with a more advanced digital agenda. McKinsey proposes a framework that looks at both core capabilities and enablers of digital government. Strategy, governance, leadership and technology are all enablers that support core capabilities grouped in four categories: services, processes, decisions and data sharing. 

This model emphasizes the importance of having a leadership team and a culture that contribute to placing government technology as a cornerstone strategy. Unified online access to several government services is an example of a core capability that technology alone cannot enable. It also requires, for example, leaders who take risks in proposing new ways of doing things.

For CIOs and public officials willing to take the next steps to make innovation a strategic priority, here are some ideas of where to start:

Transition to more modern systems  

There is a shift in IT investments from data center infrastructure to software as a service (SaaS). According to research from Gartner on how the shift to the cloud impacts all IT markets, more than 45% of IT spending on software, process outsourcing and infrastructure will move from traditional solutions to the cloud by 2024.

Cloud technologies provide more flexibility to access data when needed from any device and facilitate collaboration between government agencies. In addition, they help to free IT personnel’s time from supporting deficient systems. 

When Forrester conducted a Total Economic Impact study to examine the return on investment (ROI) of deploying PayIt’s digital government services and payments platform, the consulting firm concluded that, over three years, the increased productivity of the IT staff is worth $629,326 only by no longer having to support legacy payment solutions. 

Since PayIt takes over the effort to maintain the government services and payments portal, including customer support, the agencies’ IT personnel can take on other value-added projects. Better use of employee time contributes to improved morale and engagement.

Making the move to the cloud also contributes to higher adoption of electronic payments, because citizens often find legacy experiences slow and inconvenient.

Drive efficiency with government workflow automation

Government technology enables efficiency and effectiveness in the public sector. For example, workflow automation helps to  improve organizational processes and minimize the administrative burden, contributing to faster government services. Agencies can set workflows to eliminate redundant tasks, automate processes and promote department integration.

Automated business process workflow can contribute, for example, to the reduced number of physical forms and documents to process. According to Forrester’s study on the ROI of deploying PayIt, the benefits in increased productivity from reducing document processing amount to  $190,084 over three years.

Increase cost-savings and revenue with online payments

User-friendly online payments help state and local governments reduce costs, such as mailing bills and processing physical checks. The adoption of automated forms of payments also contributes to reduced walk-ins and calls. Online payments even lead to more government revenues because they make it easier and faster for customers to pay their bills. It’s possible to set reminders when a payment is due or even use the AutoPay option. 

Even during the pandemic, Beaufort County in South Carolina has achieved its highest collection rate ever. The Beaufort County Treasurer’s Office attributes this achievement for setting themselves for success by adopting PayIt’s easy-to-use, cloud-native payments solution.

Provide a one-stop-shop for government services

By investing in technology, leaders have an opportunity to empower citizens with easy-to-use and easy-to-access services that enhance their customer engagement. 

“It’s a game-changer. You don’t have to go to a lot of websites to pay bills. You get more services, more quickly. And governments increase their revenue collection.” 

~ Former Philadelphia Mayor Michael A. Nutter

The McKinsey Center for Government indicates that speed, simplicity and efficiency are all key to a satisfactory citizen experience with government services. Data from their survey with U.S. citizens suggest that the overall satisfaction scores correlate with satisfaction with online offerings. 

Being able to complete processes online is the first step, but not enough. To truly simplify the customer experience, agencies need to offer seamless multi-channel capabilities that enable citizens to interact with the government on their own time and device of choice.

That is the case with the myNCDMV platform powered by PayIt in the State of North Carolina. 

Using cloud technology, this digital service enables citizens to renew vehicle registrations and pay vehicle taxes, among other transactions, using their preferred method—desktop, mobile or native app. On average, PayIt’s clients thrive in a contactless world:

  • 82% increase in online dollars collected
  • 40% decrease in DMV walk-ins
  • 35% decrease in manual checks processed

Be transparent to enhance trust and satisfaction

Providing online access to information, such as the status of applications and permits, contributes to improved service delivery because it reduces the need for customer calls or walk-in visits. In addition, access to information is fundamental to expand government transparency and build trust. 

It’s also important to reassure citizens that their data is secure. PayIt’s digital government services and payments use AWS GovCloud technology to ensure that agencies’ and citizens’ data are protected.  This cloud platform offers compliance to the highest security standards.  

Drive transformation within your agency

Government technology can help agencies to provide better services with fewer resources, but to do so, both IT and leadership teams need to take a more proactive role in driving change. Digital transformation offers a unique opportunity to make operations more efficient and cost-effective while also delivering services that meet citizen’s expectations for a modern government.

Ready to become a champion of digital transformation? PayIt can help. Book your demo with us.