Digital transformation for governments
Dog owners want to register their pets online, and councils are keen to offer the service. This is digital transformation in action – bridging the gap between consumer expectations and what local governments can provide. For Hills Shire Council, it was also a useful place to start broadening their online payments options.
“Our customers have been able to make straightforward payments online for some time,” says Warwick Purdy, Manager – Information Technology at the Hills Shire Council. “Our goal now is to provide them with a simple, end-to-end, real-time way of making any payment that involves input and calculation. We chose dog registration because it includes all of the key elements – a form that has to be completed, an attachment, a calculation based on the customer’s responses and a peel-off to a payment gateway. All of this information then has to go into both our document management system and our debtors or banking system for reconciliation. So, while it sounds like a relatively straightforward process, it puts many systems to the test.”
Challenges for local governments
According to a recent report from Deloitte Access Economics, Digital Government Transformation, governments have already adopted a range of digital innovations and are gradually moving services online. However, they’re lagging behind both the private sector and their own customers.
“The problem for councils is that there are so many different aspects of our business – everything from payments and registrations to providing information and resolving complaints,” says Purdy. “Unlike an online store, a bookings agency or even a pizza restaurant we don’t have the option of purchasing a simple, single-point solution.”
Existing back-end systems can be a particular pain point.
“Many legacy systems were put in place years ago and have been growing piecemeal ever since to accommodate evolving methods of payment such as credit card, BPAY and PayPal,” says Joseph Egan, Executive Vice President of Business Development and Global Markets at UniLink Data Systems. “Some local governments are concerned that digital transformation means discarding them all and starting from scratch, but that doesn’t have to be the case. For example, we work with our clients to overlay existing systems in a way that will minimise costs and make the most of their previous investments.”
Another major innovation is in the pipeline – the New Payments Platform, due to be launched in 2017.
“This will enable local governments to receive certain payments in real time and, by collecting rich data, streamline the reconciliation process,” says Egan. “Taking the right steps now could put them ahead of the curve, so they’re ready to make the most of the opportunities.”
Digital transformation can bring significant savings as well as enhanced customer service.
The Digital Government Transformation report found that, of the estimated 811 million transactions at the federal and state levels each year, approximately 40 per cent are still completed using traditional channels. Reducing this to 20 per cent over a 10-year period would achieve productivity, efficiency and other benefits to government worth around $17.9 billion (in real terms), along with savings in time, convenience and out-of-pocket costs to citizens worth a further $8.7 billion. Taking benefits to governments and citizens together, the next stages of digital transformation could deliver benefits worth around four times as much as they cost.
“Studies suggest that sending out a physical rates notice can cost anywhere from $7 to $20 when postage, printing and time are all taken into account,” says Egan. “Converting even 20 or 25 per cent of paper notices to a digital platform would bring an immediate reduction in costs.”
Egan believes that every local government should have some kind of digital transformation plan or program in place. Purdy suggests starting with the low-hanging fruit – processes regularly used and that would be relatively easy to put online.
“It’s important to understand where you can get the best return from both customer service and processing perspectives,” he says. “This will vary from council to council – for example, new development is a priority for us but an established council would need a different focus.”
He also questions the need for signed copies.
“The Australian Tax Office now accepts tax returns without a physical signature,” he says. “I think local governments could adopt the same mindset and look at other ways of establishing identity.”
Digital transformation may be inevitable, but it won’t happen overnight.
“It’s up to local government leaders to drive change by continually challenging their organisations,” says Egan. “They need to ensure that new technology is being used in the most efficient and beneficial way.”
About the Author: Business View
Business View Connect is NAB’s online source of economic updates, business trends and case studies specifically for small to medium enterprises. We draw on insights from NAB’s economists and a range of Australian business experts so you’re armed with the tips you need to help your business succeed. Regular topics include cash flow, business planning and wealth management. To receive free updates subscribe now. Contact us at email@example.com
04 October 2016
14 September 2016
13 September 2016
23 December 2015
25 January 2016