Technology is often seen as an enabler that facilitates the achievement of some other objective rather than an end in itself. As such, it is often treated as a cost factor in these projects and is managed accordingly. However, technology often has a far greater impact both financially and in the projects’ outcome.
This can be observed in many segments of the economy, including the public sector, where the management of public funds carries an added responsibility. While existing methods of budget management are still relevant, newer outcome based measurements should also be taken into consideration, to provide a more holistic view of the impact of ICT projects over traditional methods of focusing only on the financials.
With rising expectations on governments to be more responsive and nimble to the needs their citizens, ICT will increasingly be seen as a crucial enabler by governments in achieving this objective. However, while large non-ICT related public infrastructure projects are often more visible and easily subject to greater scrutiny by the public, ICT projects are often implemented as part of an overall initiative and hence out of the public view.
In order to enhance recognition of the role that ICT plays in such projects, and to encourage greater transparency in the management of these IT-related components, governments have adopted frameworks similar to the US Federal Enterprise Architecture to improve processes and streamline work, resulting in better governance of IT budgets.
Conflicting Priorities
However, governments often face conflicting priorities in executing their duties for the benefit of the country and its citizens. While boosting spending in the right areas is seen as desirable, this often results in political conflicts. For example, populist initiatives are often seen as being politically motivated in support of the incumbent parties in power. However, while this may not always be true, treading the narrow line in order to avoid such criticism is difficult and often leads to a certain degree of paralysis with compromises made that do not end up achieving the original objectives of the initiatives.
One example of this was the Australian Health and Social Service access card proposed by the previous Howard government in 2006. This initiative was terminated in Nov 2007 by the incoming Labor government with the main reason cited being the high possibility of “additional hidden implementation costs” and that the project was just another unnecessary “national ID card in disguise”. While the former reason could be construed as being a justifiable cost management reason, many see the latter as being politically motivated.
Economic Initiatives
With the changes brought about by the new economic environment that we face in the world today, has this situation changed? Can they now afford to budget for and execute initiatives justified solely by economic priorities? This can be seen in the focus of recent stimulus programmes where such economic initiatives have taken on higher priorities.
As a result of many of these initiatives, there is a greater sense of accountability expected of governments on how they manage such initiatives. Given the common perception that the monies allocated to fund such stimulus activities are seen as a mortgage on future government earnings, the concern is that any mismanagement will place the economy at further risks with fewer options of recovery.
While the existing challenges of providing similar or more public services with the same or reduced budget remain, government CIOs now face further challenges and need to adapt to the new economic realities in managing their ICT budgets. The following two illustrate this new situation:
- Balancing the need for greater governance and economic priorities. With the higher expectations of government officials in managing stimulus monies, ICT is likely to play a crucial role, especially with the demand for additional tools to support greater governance.
- Paradox of achieving greater efficiencies and the desire to increase employment. With the crisis affecting the once tight employment situation, governments are now under some pressure to not only create new jobs for the unemployed, but also absorb some of this additional slack into the public sector. However, many ICT projects in government were justified on the basis of being able to improve efficiencies in processes by reducing manual intervention while increasing effectiveness—doing more with less. Even in non-financial terms, return on investments often estimate improvements in service delivery while using fewer resources.
While this may seem to conflict with the efficiency drive of governments and cost management objectives (e.g. outsourcing of non-core capabilities as in Singapore’s standard operating environment—SOE initiatives), one can argue that this is in fact an opportunity for governments to re-align their business processes to expand capacity and performance at the same time, in-line with the new economic realities of greater self sufficiency.
Optimisation
Despite the bleak economy, ICT investments will continue. As governments seek to spend new money from stimulus initiatives, optimisation through innovation, rather than cost reduction, will garner a more pronounced focus. Indeed optimisation will remain the preferred approach to IT investment even in the post-crisis period.
In this light, while the traditional methods of IT budget management at the micro-level of specific projects are likely to remain unchanged, it is at the macro level of initiatives that we will see these adjustments being made. Government CIOs will need to increasingly play a greater role with a focus not just on ICT, but also on the larger objectives of aligning ICT to economic objectives.
Raphael Phang is vice president, IDC Government Insights, Asia Pacific.
