Opening up the public sector for innovation

In the commercial world, innovation is driven by the fundamental need to survive. Changing consumer expectations have led to businesses embracing innovation — rethinking strategy, reexamining core functions and adopting new operating models.

However, in the public sector, the nuances of governing set up different challenges for innovation. Policy — the primary instrument used by government to effect change — isn’t agile or necessarily fast, and it doesn’t handle failure well. Yet, a critical part of innovation is the willingness to be open to failure.

As citizen expectations of quality, value and availability in services grow, governments are increasingly expected to be at the forefront of change. Innovation is well within the reach of the public sector, yet often (and with the caveat that there are, of course, wonderful exceptions) it has been held back by rationalisations and legacy systems.

Cloud adoption, brought about in large part by COVID-19 remote work requirements, is changing the game, enabling governments to move beyond previous limitations. By capitalising on government assets, including data and spending power, it’s time to open up to true innovation.

Barriers to innovation

Changing government IT systems can be complex and expensive, yet it remains true that technological agility is a critical prerequisite for any organisation’s ability to innovate.

Traditional IT or ICT environments in government were optimised for their original use-cases, decided when a project was first stood up and then tinkered with whenever a dire need or funding was made available in subsequent months and years.

This is why we see departments littered with fragmented technology solutions — mission-critical systems that barely hang together — simply because they weren’t designed for an evolved purpose. The hard interlock between such systems and prevailing policy and regulation has been a limiting factor to making changes to either.

But COVID-19 has altered this binary situation. The necessity for government workforces to work from home amid the pandemic has increased the distance between the end-user and the source of computing power. While the on-premise systems or data centres may have been well connected to the places of work in the past, with unpredictability in the market and repeated lockdowns, people have relocated to work predominantly from their homes, spread across cities and towns.

Integrating government technology with home-based ecosystems was likely never on the cards. Yet it’s likely that some form of hybrid working will remain post-pandemic and a dispersed workforce, on some level, the norm.

In response, governments are increasingly moving operations upwards.

A cloud solution to an innovation problem

Cloud solutions have become prominent as a more affordable, rapid and scalable solution to address both legacy technology and the people-dispersion problem. Forbes predicts that software companies indexed to cloud infrastructure like AWS, Microsoft Azure and Google Cloud are set to grow revenues at 50% or more annually due to the increasing role they play in the post-COVID world, as well as falling costs when deployed at scale.

In the wake of accelerated technological realities brought by the pandemic, cloud will be an enormous catalyst for change, allowing organisations — and governments — to bridge the time and cost gap between strategy and execution, paving the way for innovation.

If not already, very soon ICT leaders will struggle to justify carrying an expanding cost line for any in-house infrastructure or platforms. Governments will seek to drive cost efficiencies using cloud and investment cases that don’t adopt these measures will likely struggle for approval.

While there is still a necessity to review existing procurement practices, budgeting processes and regulatory barriers to supercharge innovation, cloud goes a long way to kick-starting it in a traditionally restrictive, risk-based environment. The economic value of cloud systems is not just a change from capex to opex by moving the on-premise technology stack into the sky, even though this will have a sizeable positive impact by freeing up limited investment dollars on other transformative agendas.

Cloud’s real value is its ability to help remove the barriers to innovation that the public sector has traditionally faced. The scale and optimisation of new services offered by cloud providers help address issues of legacy technology unfit for innovative purposes. An optimal operating model and skills to utilise those capabilities give government departments the technological agility to innovate and fail fast and the opportunity to involve outside help in promoting innovation.

The innovation enticement

Innovation requires an openness to share assets, information and outcomes. In the public sector, these have often been seen in terms of risk, and objections expressed in terms of privacy, probity and public interest.

Such reasons are serious enough to deter the most enthused leader when trying something different. Even when accepted, they demand a higher effort in mitigating risk, often in the form of red tape or forums that can slow down or inhibit progress entirely.

The economies of scale brought about by cloud, and the increasing sophistication of risk-mitigation measures that can be rolled out with it, have the potential to change much of this. As governments become more accessible to the outside world, they can capitalise on unique properties to entice innovation partners.

For example, governments are asset-rich but asset performance has been difficult due to management and operating practices. Many governments attempt to design, build, operate and manage public assets on their own, yet each role demands a very different set of skills. Instead, as custodians of such assets, a wider set of options opens up including the involvement of the private sector in developing solutions.

Government also has large pools of data that have thus far remained fragmented and stuck in clunky systems. Fear of privacy breaches, leaks and unintended misuse means the value remains untapped.

Through cloud access, opportunities to engage market experts with skills in data strategies, data science, machine learning and artificial intelligence could lead to public and commercial partnerships through the likes of crowdsourcing and hackathons, creating innovative solutions to many burdensome public issues.

It’s also worth noting that the aggregated purchasing power of governments, and the economies of scale such spending enables, could be a strong catalyst for change in and of itself: driving innovation via investors, producers, manufacturers and third-party partners as they compete to develop cutting-edge product development and optimisation of services.

Innovating the future

A cloud transition for infrastructure and platforms could, with the right implementation and practices, overcome real barriers to enable government innovation to flourish.

The tech agility brought about by cloud opens up possibilities government didn’t have before. The ability to change functionality, scale with demand, operate in new markets, support a distributed workforce and drop and pick up technology to maintain pace are just some of the advantages that will lead to a new era of government innovation.

Combined with attractive government attributes — including data, assets and spend — a new era of public and private innovation opportunities is ready to be unleashed.

Get ready to create.

* Asanga Lokusooriya is a partner in the digital innovation & cloud engineering business at PwC Australia. Article originally published on Digital Pulse.