Over the last two weeks I have been visiting Italy, Germany, Spain, the Netherlands, Belgium and Sweden, meeting a fair amount of clients in each country.
With the notable exception of Sweden, almost all conversations revolved around the need for cost savings, something I have touched upon in a previous post. The other common theme is the fragility and even awkwardness of political alliances that are required to either form or keep governments afloat. It appears that the only topic where governments can agree is indeed on the need to reduce the cost of government. Sweden, in spite of high unemployment and the struggle of the traditional manufacturing industry, is still doing ok and there is palpable confidence that, while efficiencies are important, there won’t be any major budget cut or emergency measure for IT.
Elsewhere the situation is different. Pressure can be felt at both national and local level, and the topic of efficiency dominates. Most agree that, in tough times, when most savings come from reducing headcount and automating processes, IT should become more important. But, as I have been arguing for the last two years, IT professionals and vendors have not been effective during the good times to show how IT investments were contributing to demonstrable improvements in service levels and in mission effectiveness. The mythical issue of demonstrating the “business (or public) value of IT” has remained unresolved in most cases, leaving IT vulnerable to be seen as a commodity. This impression is reinforced by all the vendor messaging about “cloud computing”, which give politicians the impression that getting rid of IT is as easy as buying electricity from a utility.
While government organizations need to be taking steps toward the use of commodity technology where it makes sense and it safe to do so, they also have to look for new, creative ways to use IT to slash (not just reduce) the cost of operations. This requires to take a close look at how IT can help transform and even revolutionize the way of doing business to make it sustainable. One example is the use of social media to engage constituents in service delivery, leading to completely new levels of self-service. How can this be achieved if government agencies do not give technology a central role?
The problem is that this runs partially contrary to the common wisdom, where IT gets more and more shared and centralized and individuals are more and more deprived of their IT investment autonomy, hence leading to fewer chances of discovering how IT can transform their respective businesses.
Interestingly, Sweden is one of the countries where the development of shared services is most difficult, due to the constitutional independence of its agencies. Of course they are looking into common solutions, but they do so in a somewhat gentler and cooperative way, as opposed to jurisdictions where centralization is a mandate (see previous blog post). I bet they will stay better off.
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