The pain and the gain

The pain and the gain

“It’s a change and it’s a challenge and often it hurts you.” That is the blunt summary of SAP’s director of public services, Dietmar Pfaehler, discussing e-government.

“It’s a change and it’s a challenge and often it hurts you.” That is the blunt summary of SAP’s director of public services, Dietmar Pfaehler, discussing e-government. Pfaehler was in New Zealand to talk about e-government and related issues with senior public servants, members of parliament and the information technology industry.

While definitely keen to talk about the benefits of e-government, for both the public sector and citizens, Pfaehler was not exactly sugar-coating the impact of the change involved.

The fact is, he says, that governments have to adopt e-government in some form or other. It has become a customer driven issue — and that demand can only grow.

“Governments have to become consumer responsive,” he says. “It’s a trend based on the fact that people are having internet experiences with private sector companies and organisations, and they are starting to expect the same of government.”

One way of thinking of e-government is that it is a way of adopting the customer relationship management (CRM) model to the relationship between the citizen and the government.

That is one way e-government reflects business trends that are already taking place. E-government is beginning to bring about the kind of business process re-engineering within the public sector that many businesses went through in the early to mid-1990s.

Governments have, in various ways and often somewhat incoherently, been moving towards some form of e-government since at least the mid-1990s. Enough methods have been tried, and enough mistakes made, for some clear lessons to be learned, he says.

For that reason, New Zealand’s position in a recent study by Accenture — quoted by Pfaehler — is a good one to be in. New Zealand rates as top of the “steady achievers” in the study — not quite in the “visionary followers” category but almost there. (See graph). In fact, Pfaehler told an audience of public sector managers in Wellington, he would drop New Zealand back one place, behind Hong Kong. “They have put every service online,” he says.

Countries like Hong Kong have at least a geographic advantage over New Zealand — their compactness means costs can be kept lower. Singapore has a similar advantage. “They have ‘e’ everything everywhere,” says Pfaehler. “There, e-government has involved renewals and re-organisation on all levels of government, and if necessary they have been prepared to take difficult decisions fast.”

Singapore has one other advantage, he says: “They don’t need to worry too much about democracy, although they talk about it a lot.”

One of the biggest pitfalls he has seen is in public-private partnerships (PPPs) to build e-government projects. This is something the New Zealand government has been looking closely at, and has been advocated by the Information Technology Association (ITANZ).

Pfaehler is not keen on such partnerships. “They have often been driven too much by the political hope of cost reductions,” he says. Others have been based on the notion that a project would eventually finance itself — and these too have tended to fail, he says.

“Most public-private partnerships have failed,” he says bluntly. The real cost savings — which is often what governments are after when they adopt PPPs — are not in such partnerships but rather in business process re-engineering projects in the back office.

“That is where the real cost savings in e-government will be. Industry has been through this whole process itself, and it hasn’t been easy. And governments have a big challenge ahead of them.”

He does not rule PPPs totally out of contention. They are, he concedes, one way of funding e-government. But they must not been seen as mainly a cost-cutting exercise. “They are one answer to funding e-government, certainly. But the private sector partner must be able to make money out of the project.” That part of the equation has not always been politically saleable.

Different countries have had different approaches to e-government, he says. In the US, the initial emphasis across many of the individual states was on the cost savings side. “They stepped back from that, and many states are now looking at ERP (enterprise resource planning).” That approach has much to recommend it, he says — not least, he admits with a chuckle, because of SAP’s strength in the ERP solutions market.

“But also it mirrors the industry’s approach. Of course, each state has its own process and priorities, and there’s no common view about the improvements.”

Australia has taken a similarly devolved approach, although one common issue there has been the early replacement of the legacy systems within the various state governments. “But I am amazed at how few services are actually online in Australia,” he says. “There have been some considerable political changes since they started, and they’ve lost momentum. Also, there have been no countrywide actions, and it has been slow, overall. The states are not in harmony with each other and there is nothing like a common agency driving it. They were leading for some time, but that no longer is the case.”

Canada — which has a similar federal structure to the US and Australia, has instead opted for a push from the centre. There has been a strong emphasis on getting information out on the web, accompanied by a concerted and public political push behind e-government, he says. The push has come from the centre, rather than leaving the vast country’s far-flung provinces to work it out in their own way.

Importantly, says Pfaehler, Canada has put a great deal of emphasis on getting the back-office part of e-government right — something New Zealand’s e-government unit has been quietly working away at for the past year. Canada’s approach comes highly recommended in Pfaehler’s book. “This is one of my favourite countries,” he says. Europe, which he is obviously most familiar with, has different approaches reflecting the different cultures.

“There’s an old saying in Europe that heaven has British police, French cooks, German engineers, Italian lovers, and it’s all organised by the Swiss; and that hell has German police, British cooks, French engineers, Swiss lovers, and the Italians have organised the whole thing. Well, e-government in Europe is a bit like that.”

The Nordic countries have placed great emphasis on the technology side of e-government, with mixed results, he says. The UK has taken what he considers a smart approach. “They are doing it right — they’ve had a strong drive from prime minister Tony Blair, and they have clear goals.” Extra money has been made available to government agencies that want to adopt e-government processes as part of their business plans — an incentive that has sped up the adoption of e-government considerably.

One country that has taken an even stronger lead is the Netherlands. “They have been the first country to take a countrywide decision to renew the public sector business approach, and also the first country to install e-government together with internal modernisations.”

The scope of the Netherlands e-government project is considerable, he says. “They are changing the way their government is managed at the same time — something New Zealand did 15 years ago. They’ve really gone for the ‘big bang’ in doing that at the same time as they are adopting e-government. And that’s my biggest reservation about the Dutch approach. It’s too big.”

That is because the biggest shift that has to come with e-government is not in external processes or new technologies, but in the way the public sector managers and staff think, says Pfaehler. “No longer do you take this form and do something with it and then take it into the next room and give it to someone else, so it becomes their responsibility and not yours any more. It’s about changing the way government is run, it’s a different mentality. And the best evidence that that change has been successful is when you see that mental shift. And that is also one of the reasons why the change happens slowly.”

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