Dan JellinekEditorTuesday 25 November 2014

Government business model obsolete, academic warns

Mark Thompson addresses last month’s Socitm annual conference in Manchester - by Dods / SocitmAll UK public services should be broken down into smallest generic components - from case management to web hosting - to be run using shared digital tools, allowing a completely new business model for government to emerge which would save billions, according to a book to be published next week.

"Digitizing government" is written by two academics and a former civil servant: Alan Brown, professor of entrepreneurship and innovation at the University of Surrey; Jerry Fishenden, former deputy chief technology officer for UK government; and Mark Thompson, senior lecturer in information systems at Cambridge Judge Business School and strategy director at Methods Group.

The book reviews 25 years of government technology policy which, in its various attempts to modernise services, has formed "boom and bust cycles of decentralisation, centralisation, outsourcing and insourcing," Thompson told UKAuthority.com this week.

Most recently policy has focused on channel shift - making digital services more user-friendly to encourage more citizens online - which is good as far as it goes but has not shifted underlying inefficiencies, he said. There is also a need for local government and local services to join up and communicate with each other.

"Although all of these things at the time claimed to be transforming government, nothing particularly changed. All we were really doing was vertically integrating business models, adding different management layers over the top."

However, a recent revolution in open standards has meant it is now possible to break down these service stacks and finally transform the business model of government into one that properly exploits a shared web-based infrastructure, Thompson said.

"If you look at G-cloud, it is terrific, but still only represents a tiny slice of government IT spend," he said. To boost the model, public services must embrace a new concept of "minimum viable capability" - the smallest sharable components of each transaction such as collecting money, or case management.

"Take food safety in local government. You can break down into minimum viable capabilities shared by all authorities - generic assessment processes, a generic complaints process, workload scheduling, and technical elements like database technology, e-signatures.

"All those things traditionally would have been wrapped together in some overpaid stack and replicated across government. But if you can build a raft of shared capability, then for the first time it will drive business change the like of which has never been seen."

To kick-start the process, some free solutions to meet these needs might have to be created by the public sector itself, but eventually a thriving cross-sector marketplace would develop, Thompson said.

In proposing the model, he acknowledged the public sector is different from the private sector in its need for greater accountability and transparency, but said this had all too often been used in the past as an excuse for administrators and suppliers to protect their positions.

"Yes, government is different, but the problem is that the government likes to fly club class. It uses the excuse that we are special, and DVLA does something different from Defra and everywhere else, to bake in a whole level of inefficiency that is unnecessary.

"But it can't possibly think it is immune to all these changes that are revolutionising all these other businesses. Every traditional model that has been touched by shared web-based business model has not survived: Uber, Amazon, Rightmove.

"The government response to date has been everyone uses agile to build more user-friendly stuff in their silos... all sorts of weird and wonderful apps that replicate each other. There has been no real cross-government discussion of shared transactions. But we have got to stop building individual products and build capabilities."

Ultimately, while such a move would threaten internal bureaucracies, the fear that digitisation might reduce front-line services and make public services more remote from citizens would not be realised, Thompson said.

"Digital government is actually about increasing face to face services: the real win is nobody has to have any of these front line service cuts if UK plc can only get a grip on its business model. The scale of what we are talking about here would add billions to front line public services."

Pictured: Mark Thompson addresses last month's Socitm annual conference in Manchester
Digitizing government: understanding and implementing new digital business models: www.digitizinggovernment.org