Closing the gap between their private and public sector service experience has created a modernisation agenda for governments worldwide. Using technology to enable public services and adopting market-based service delivery practices are the key methods for transforming government services.
A recent report from KPMG’s global government practice and the Economist Intelligence Unit found competitive sourcing and e-government initiatives to be the most widespread programs for reform (having been implemented by 60 percent of government bodies).
The experience of KPMG firms suggests that governments are pursuing a number of initiatives together for maximum impact. For example, process re-engineering can make shared services much more efficient. Shared services are a tool to promote more joined-up government. E-government projects often lead to technology investments to facilitate shared services.
What is driving modernisation in the public sector?
Many governments are sharpening their focus on accountability and efficiency. Technology can reduce costs and change processes.
Increased customer focus is another important factor. The shift in power to consumers has hit the public sector, where service delivery plays a major role in client satisfaction.
Other reasons for modernisation include:
- improving failing services
- access to funding for capital investment
- political reasons.
Areas for modernisation
As advisors to government looking to modernise, KPMG firms frequently encounter the following areas of reform:
- Technology -Technology is a key enabler on many fronts; it plays a major role in boosting productivity, reducing costs and improving information sharing between departments.
- Shared services and outsourcing - The growing popularity of shared services is confirmed by the KPMG and Economist Intelligence Unit survey, and officials expect this trend to grow further in coming years.
- Procurement: The sheer scale of government procurement suggests that ensuring efficiency and effectiveness should be a major focus for officials. Given the massive amounts of government spending, procurement reforms can have huge pay-offs.
Modernising government: the challenges
- Human capital management - Governments are facing similar recruiting and retention problems as the private sector. Senior public sector executives interviewed for the KPMG and the Economist Intelligence Unit survey identified strategic human capital management as the most beneficial performance measure.
- IT Challenges - The problems encountered securing IT benefits are well-known. The sheer scale of IT projects causes problems. Poor IT management is also a key issue – as is the poor choice of technology vendors or systems integrators.
- Political leadership - Sometimes the problem is identifying who is in charge of the modernisation agenda. Political will may be lacking, leaving public officials without any authority to enact any of the modernisation measures. There is also a strong “legacy” organisational structure within governments that can inhibit efficiencies.
Modernising Government: the road ahead
There are ample opportunities to make government services more responsive, effective and shaped around people's lives. Available technology solutions are improving almost by the day, and alternative sourcing options are developing at a fast pace. But to achieve success, governments will need to be open to fundamental changes in the way public services are delivered, and to challenging the instinct to protect the status quo
- Professional skills. Nearly half of all government organisations suffer from a lack of professional skills and specialist knowledge, particularly in the key area of procurement. Public managers are not traditionally trained to deal with the implementation of complex IT projects or market-based service delivery mechanisms and they often look for professional advice on how to successfully choose structure and implement new initiatives. KPMG’s procurement approach helps clients to: balance business performance, reduce costs, gain productivity and mitigate risk.
- Private sector experience. Through their commercial client experience, KPMG professionals understand what is needed to succeed in the private sector, and how to apply this knowledge in the unique government environment. We know what it takes to manage a complex change process, and how to approach transformation in organisations that are by nature risk averse. Through their commercial client experience, KPMG professionals understand what is needed to succeed in the private sector, and how to apply this knowledge in the unique government environment. We know what it takes to manage a complex change process, and how to approach transformation in organisations that are by nature risk averse.
- Creative thinking. Despite the impending challenges, governments find it politically difficult to take the risks necessary to implement change in legacy processes and structures. And public sector officials cannot always be expected to think like business advisors.KPMG professionals bring a creative approach and conceptual thinking, combined with knowledge and experience of organisational structures and change management. We can motivate leadership to think boldly, to help change the culture of the public sector.