Many businesses have seen the return of digital transformation initiatives that transformed productivity and collaboration using a decentralised workforce during the pandemic, with Gartner forecasting that worldwide government IT spending will grow by 5% in 2022
While there has been positive progress in the private sector, the public sector is struggling to keep up.
A recent Accenture report revealed 75% of public service leaders believe that evolving existing technology architecture is essential to organisational success, yet most report they are being held back by outdated technology. New technologies have caused IT costs to become more complex, making it harder to measure and plan the value seen from IT investments. Not only does this make adopting new technologies harder, it leaves the public sector unable to effectively track and measure its legacy IT systems that might need replacing.
Additionally smaller, limited budgets make it more difficult for public service providers to allocate funds towards newer technologies. Before investing in smart technology solutions, the UK public sector needs to overcome two main challenges – handling its legacy IT and improving the management of future investments.
The importance of measurement and analysis
Transformation is a priority for the public sector. The UK government recently set out a digital agenda to drive transformation in the NHS and social care. But while initiatives like this are a step in the right direction, the stark reality is that many public sector organisations aren’t equipped to figure out exactly how to replace their legacy technology and how much it might cost. Poorly implemented initiatives mean that budgets for future investments in turn suffer.
The UK government recognises the challenges with legacy technology need to be tackled for new initiatives to succeed. For instance, using legacy IT means the government carries a large amount of technical debt – a significant blocker to digital transformation. The House of Commons Committee of Public Accounts identified legacy systems as a barrier to digital change, while the Director of the Central Digital and Data Office citing managing it as one of the public sector’s greatest challenges.
The US Federal Government has taken on this challenge by mandating the use of the Technology Business Management (TBM) discipline to manage IT investments. TBM frameworks and tools help to connect IT leaders and other decision makers by treating public sector IT like a business within the organisation. Through governance processes which ensure IT costs are properly tagged, and a common language which helps both IT and finance leaders to understand what value is being generated by IT systems, organisations are able to make more informed decisions about legacy IT. In doing so, legacy systems which do not bring value to the business can be cut back, and the additional budget can be reinvested into newer technology.
One technology that is being adopted as a ‘first step’ in the shift away from legacy IT is cloud. With the UK government having adopted a cloud-first policy, public sector IT leaders need to be smart with managing burgeoning costs. Cloud is a powerful tool that can help revolutionise public sector IT, but it is complex. Public cloud bills can run to thousands of lines long, making it difficult to identify overspend and inefficiencies.
Public sector bodies risk rushing into cloud and seeing their costs spiral if they can’t manage them effectively. There has been some progress in tackling this challenge – the government has shared advice for managing cloud spending, while some departments have adopted the FinOps industry framework, a cultural and financial practice that encourages teams from across the business to collaborate in managing cloud through a common framework.
But more needs to be done, as effective FinOps programmes need to be supported by tools which help to automate and speed up the process. A report from the National Audit Office identified a “consistent pattern of underperformance” in transformation initiatives, with a gap in understanding between digital leaders and senior decision makers cited as the root of many issues. Bridging this gap with FinOps tools which provide a transparent view of cloud costs is key for ensuring the success of future investments in smart technology.
The public sector is seen as a digital laggard compared to private sector businesses. Initiatives such as digital transformation within the NHS will certainly deliver better outcomes and drive efficiency. However, if you don’t understand the cost and value brought by the technology in your portfolio, moving forward can be tricky and hamper further progress.
Defining a culture of measurement and analysis through frameworks like TBM and FinOps allows public sector leaders to easily categorise complex spend data and compare it to value delivered. Simplifying analysis will allow organisations to make confident, insight-driven decisions around technology investments and communicate these across departments.
About the Author
Gerry Ryan is a Sales Director at Apptio, currently responsible for its public sector and healthcare business in the UK&I working closely with central and local Government and NHS organisations. Previously working at EDS, CSC, Wipro, and SAS, Gerry has supported many public and private sectors organisations through their adoption of data & analytics and ML & AI capabilities that help deliver operational effectiveness whilst improving outcomes.
Featured imageL: ©Jovanna V