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Looking for the RoI on digital transformation

30/05/17

Industry voice: Finding the return on investment in digital involves more than looking at the financial bottom line, writes Microsoft's UK public sector director for Dynamics 365, Paul McPherson

The financial factor is both a spur and a barrier for digital transformation in the public sector.

Hands on jigsaw over pile of cashSavings are often cited as one of the major incentives for a big investment in digital to align with a widespread redesign of processes; but the financial squeeze is driving most of the resource into maintaining existing operations. Leaders know they cannot put off the change for long, but need to identify a return on investment (RoI) to make the business case.  

They also have to deal with the cultural challenge that stands in the way, requiring significant changes in relationships with colleagues and suppliers, and between the organisation and the public.

This formed the basis of a recent discussion among a group of public sector digital leaders, staged by UKAuthority and supported by Microsoft, aimed at establishing the prime factors in identifying and achieving that RoI.

An important lesson to emerge is that there are often different benefits for different people in the transformation. Leaders are likely to be impressed by financial savings; management by the chance to improve performance and raise the standard of services; people on the frontline by the potential to make their jobs easier and improve their relationships with the public.

Differing benefits

One of the keys to making it all possible is to identify the likely benefits for different groups up front, then emphasise the relevant ones in selling the change. The financial case is going to be the key feature in winning the funds for investment, but success depends on the other groups being willing to work with the change, and highlighting the relevant factors that win their support.

Several other important features emerged, some of which are familiar are in the transformation debate: get the leadership on board; be bold about sharing data with other public authorities when it can provide benefits; look for flexibility in IT contracts; and remember that information is ultimately more important than technology.

But the participants also emphasised the importance of a couple of less familiar ideas. One is to tap into the corporate memory, talking with experienced staff to understand how existing services were developed and how they tie in with others.

The other is to remember the underlying purpose of public services – to do the right thing – giving staff the freedom to take decisions that will have an impact on people and communities, and being ready to stand by them.

The dynamics of all this vary between organisations, and digital leaders always have to pay close attention to the circumstances and relationships that create the local landscape. The lessons to be learned, and the sources from which they emerge, are not always the obvious ones, and the RoI should not always be seen purely in cash terms.

A briefing paper from the discussion provides more detail on the ideas that emerged, and food for thought on how to identify and deliver the RoI on transformation. It can be downloaded below.

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