Embracing technology: the public sector of the future

To better serve its citizens, the public sector faces an existential need to become more agile, more mobile and more efficient. Some of the most hotly anticipated solutions include those enabled by artificial intelligence (AI). Ranging from predictive analytics to machine learning to intelligent robotic process automation, AI is one of the surest paths for extracting insights and value from growing volumes of data.

This has fuelled aspirations for everything from advanced smart cities to new approaches in population health management – often these solutions involve predictive analysis that could help agencies make better decisions, respond faster during crises and even pre-empt problems altogether. Some agencies are making use of AI applications already, likeĚý, which used machine learning to predict tax non-compliance and netted the state an extra $27 million in revenue.

Government also has a unique role to play when it comes to AI – since all Australians are impacted in some form or other by government services, governments must take the lead in their use of AI, whether through operations or service delivery.

Yet broader adoption remains low. A 2018 investigation by the 51ˇçÁ÷Institute for Digital Government (The SIDG) found that, while 80 per cent of public sector organisations were working toward data transformation, less than 15 per cent had progressed beyond the prototype stage.

The SIDG teamed up with University of Queensland researchers to assess where the sector is at in 2020. The resulting white paper,Ěý, identifies the biggest AI challenges in the public sector – and how leaders can overcome them to finally harness the true potential of AI solutions.

The resource challenge: building AI capability and securing human talent

AI relies on large datasets, high-quality data, the right platforms and – importantly – data science talent.

This is resource-intensive – an acute challenge in the public sector where data is often purposefully siloed, and fractured across complex, ageing legacy systems. These overlapping issues create a sort of chicken-egg dilemma, where leaders may struggle to secure funding and executive buy-in without proven value – but proving value depends on funding and executive buy-in.

The research did uncover examples of success, though. One agency was able to overcome data-sharing barriers by outsourcing its AI model development, which was then trained with citizens’ payment data instead of sensitive personal data. Another agency chose a commercial-off-the-shelf AI development platform to decrease maintenance burdens.

Misunderstandings about AI and inflated hopes also demand project-level governance to manage expectations and encourage ongoing commitment from executives.

The process challenge: pre-empting machine fallacies by keeping humans in the loop

Despite myths of robot overlords and job losses, algorithms only outperform humans in their ability to process huge datasets. They still lack the context-specific reasoning capabilities that we have, which means AI solutions can’t simply be plugged into existing workflows. Agencies will need to rethink processes to combine the strengths of machines and people.

This is complicated because of the barriers that often separate data scientists and subject matter experts, demanding redesign for entire workflows. The researchers found that agencies who were able to reconcile these issues were those who embedded data scientists in everyday operations and encouraged collaboration with subject matter experts.

Successful approaches include co-location and collaborative workshops but, interestingly, interview data also highlighted the importance of attracting data scientists with strong soft skills and good communication.

Organisations were keenly aware of the need for human oversight and the risks of deferring to automation. Many were already redesigning workflows to ensure AI was doing the heavy lifting and data-crunching, with human workers acting as the controllers of the AI and making final decisions.

The explainability challenge: minimising bias and enabling transparency

Advanced AI models have an “explainability problem” – that is, the complexity of their logic and the sheer volume of data can make decision-making inscrutable to us.

This is a massive hurdle in the public sector, where public trust often depends on transparent rationale and straightforward accountability. It’s an even bigger challenge once we consider that algorithms have already demonstrated a serious risk of bias and error.

The researchers found that some agencies have been establishing strict oversight and procedural systems with these specific risks in mind. For instance, one agency excluded demographical data in favour of behavioural data to minimise bias in the model’s predictions.

Another created a more extensive end-user interface that visualised a customer journey and highlighted risky payment behaviours. This provided visibility into the factors affecting the overall risk estimate.

The culture challenge: reducing distrust among employees and citizens

Despite research indicating AI adoption rarely comes from a desire to reduce headcounts, job security fears abound. Additionally, the researchers found some human workers continuing to distrust AI’s decisions.

One solution is educating employees about the potential of AI-enabled tools – this can be an easier sell once employees witness the elimination of low-value tasks and admin burdens, freeing them to focus on more strategic and interesting work.

The public sector faces public resistance, too. Some agencies have the added challenge of a power imbalance, as citizens who rely on their services may not be able to switch providers like they would in the private sector.

While wider societal perceptions may evolve in a way that reduces distrust, there’s no simple solution to these challenges. Trust will depend on proven value and the effective management of unintended consequences – which will in turn depend on many of the solutions mentioned above.

The public sector faces unique challenges with AI solutions but also stands to gain some of the biggest rewards. And, promisingly, some agencies are already demonstrating how to address these issues.

Using an even deeper look into the public sector’s relationship with AI,ĚýĚýprovides a practical framework for developing the foundations necessary for effective AI development in government.

However, it’s an area that requires deeper exploration, which is why The SIDG will continue partnering with the University of Queensland to understand ongoing challenges.

To read more about 51ˇçÁ÷Australia’s public sector offer, Ěý

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The government’s online recruitment tools and Jobseeker systems may not be fit for purpose given the mass unemployment expected post-Covid, an 51ˇçÁ÷report warns.

The software company’s report, , also states the construction industry needs to digitise to increase productivity and create new jobs, with even a 2% cost reduction likely to result in billions saved for the government as it embarks on shovel-ready projects.

It also flags a possible $4.4 billion saving if businesses and the government adopt e-invoicing and e-procurement, and recommends a digital health certificate be pioneered with Australia to enable borders to open sooner.

NBR was given a first look at the report, which will be shared with public agencies this week. Nick Quin, 51ˇçÁ÷NZ’s director, public sector, said the government’s online recruitment tools were designed to solve the issue of a small number of unemployed people within a tight job market.

What New Zealand faced post-Covid was totally different, with vast numbers unemployed at one time and some key industries suffering and unable to accommodate large workforces.

The Reserve Bank’s Monetary Policy Statement on May 13 forecast unemployment rates would more than double from 4% to about 9%, with models suggesting the recovery to the 4% mark would not arrive until 2022.

Quin said, as a result, government systems helping jobseekers find work needed to become more individualised, with new abilities to marry needs directly with solutions.

Too much government data concentrated on the ‘how’, and not the ‘why’, he said. Addressing the why meant collecting data on the circumstances that led to that person losing their job, the person’s intentions for the future, and any constraints in their job search, including whether they were prepared to relocate.

In response, Ministry of Social Development spokesperson Kay Read said the ministry had received $150 million over two years in Budget 2020 to scale up employment programmes to support the increased numbers expected to become unemployed.

“This will be a more diverse group, including highly skilled people who have not previously approached MSD for support before,” she said.

The funding would bolster existing programmes such as Transition to Work (a grant for items someone might need to start a job, such as clothes and living expenses) and Flexi-wage (a subsidy to help with costs for those who wish to start their own business).

“Funding will also provide for new innovative approaches to support people into work, such as short-term employment supports and services, for people new to a benefit, to enable a quick return to work,” Read said.

The ministry has also said newly unemployed workers will be exempted from the normal obligations required from those receiving a Jobseeker benefit or hardship grants for six months. That included attending meetings and job interviews when asked and accepting suitable job offers.

Construction digitisation

Productivity was widely considered sub-par in the construction sector, which is one of the least digitalised industries, Quin said.

He referenced a 2016 report by McKinsey and Company that observed “cost and schedule overruns are the norm in the construction sector”. A subsequent report in early 2017 said construction continued to show “limited improvements in technological capabilities, production methods and scale”.

Quin said digital tools that should be considered included those that enabled the digitalisation of project management and how companies planned and forecast costs.

Other digital capabilities including abilities to create ‘digital twins’ – copies of builds created on the computer that allowed builders to verify all methods and materials were up to spec and appropriate.

“These would also help you support maintenance of the build in future,” he said. The 51ˇçÁ÷report recommends choosing a public works project as a pilot to explore the application of digital tech – a suggestion supported by Infrastructure NZ chief executive officer Paul Blair.

He said of the estimated $300b of infrastructure assets in New Zealand, 80% was owned by the local or central government, so they were well placed to lead the industry in adopting digitised systems.

Infrastructure NZ – which aims at advancing best practice in transport, energy, water, and telecommunications – recently published a report called Unlocking the Value of Data, which highlighted the benefits of creating digital twins.

It found that with the right data, workers could minimise disruptions and costs, while maximising outcomes, because issues could all be worked out through pixels on a screen, rather than with hammers and tools.

Blair said the government could make it a condition of the build on new shovel-ready projects that private companies adopt digital tools and create a digital twin, thereby stimulating exploration in the sector.

The under-utilisation of digital tools in construction was a global issue, Blair said, and Kiwi companies were often unwilling to invest because they typically operated on a low margin, and the sector was prone to boom-bust swings.

“You don’t over invest in a flash new machine that give you greater productivity, you tend to put on another worker,” Blair said.

Naylor Love general manager of construction Pete Lockhart said digitisation is a huge opportunity for the construction sector. “We are making progress, albeit rather slowly.”

Key challenges Lockhart identified included there being no one product that met the sector’s needs or one that had been widely adopted.

“We remain fragmented and inconsistent from project to project as teams change,” he said. “The other key issue remains the New Zealand market’s reliance on outdated procurement and contracting models that don’t encourage true collaboration and innovation.”

He said the key would be to create integrated systems, because “time and time again, we see that there is wasted data that has been created in silos”.

Businesses were also worried about the contractual risk of providing incomplete data to other members of the supply chain, Lockhart said.

E-invoicing and e-procurement

According to MBIE figures quoted in SAP’s report, Kiwi businesses send 282 million invoices annually.

The processing cost of an e-invoice is estimated to be $7.63, compared with $23.01 for pdf paper invoices and $25.67 for a paper invoice.

This equates to an opportunity to save $4.4b annually, which Quin said would translate to companies being able to expand quicker and hire new staff.

“If you can electronically solve a problem you are going to naturally help resolve some productivity issues.”

Quin said it was time to accelerate the deployment of these capabilities, which were already being encouraged by the government, but which had to be adopted sector-wide to be fully effective.

Digital certification of wellness

The report says an open border is critical for New Zealand’s economic recovery and suggests a digital health certificate is worth exploring.

“We could understand and be comfortable if people entering our borders have had a health check,” Quin said. “We just simply have to acknowledge that opening the borders is essential for this recovery.”

The report recommends the New Zealand and Australian governments work with industry to pilot a technology solution to establish a “digital health check certificate” between trusted jurisdictions to allow border movement.

Jamie Bamford leads Customs’ work programme to develop smarter borders, and said Customs continued to work with overseas partners to refine how border security operated and how it could be strengthened.

He wouldn’t comment on whether work on a health certificate was being considered.

Article first published on .

To read the full 51ˇçÁ÷report -Helping Kiwis Get Back to Work – .

By Geraden Cann
Journalist, The National Business Review
Contact the Writer: geraden@nbr.co.nz

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The online event attracted over 60 delegates from the Australian and New Zealand public services, representing all levels of government.

Measuring citizen engagement

Included in the agenda was an online poll, focussing on how agencies measure the citizen experience and how they respond to citizen feedback. While the sample size is small and not necessarily representative of citizen engagement across the public sector, the responses were intriguing and prompted valuable discussion.

As shown, Customer Satisfaction (CSAT) is the most popular approach for measuring the citizen experience among our respondents.

A characteristic of this approach is that it’s a transactional measurement – CSAT reflects satisfaction with a specific interaction or service.

By comparison, relational measurements like Net Promoter Score (NPS) are better approaches for longitudinal analysis. Admittedly, it can be difficult to apply standard NPS questions about customer loyalty within a public sector context, but it’s possible to adapt the questions to focus rather on citizen trust in government.

Another measurement worth considering isĚý, which reflects the ease (or difficulty) of doing business with the organisation. In the commercial world, CES is an excellent predictor of customer churn, and while this typically isn’t an issue for government, agencies are motivated to make their online services accessible and easy to use.

Since this was a multiple-choice question, it was possible for the survey participants to select more than one response, and possibly that’s the optimal approach… A sensible combination of these measurement tools can provide excellent insight into citizen satisfaction with service delivery, and the impact that experience has on citizen trust in government.

Using feedback

Encouragingly, all our respondents ask the citizen about their service delivery experiences.

Yet the responses to this question seem to align with the transactional measurement approach of CSAT.

Adopting a more relational approach, by embedding feedback throughout the process, can enable agencies to take proactive action and mitigate risks before they turn into problems.

We could argue the merits of all these responses – it’s important that agencies respond in a variety of ways to close-the-loop with citizens.

We’ve observed that citizen satisfaction is increasingly being included in agency service commitments, and it’s encouraging to see that this feedback is also being actively used to inform service design.

Untapped opportunity

There appears to be an untapped opportunity for data-driven policy development among our respondents, to truly close-the-loop on citizen feedback.

It’s interesting that more than half of respondents cited issues with motivating and engaging a representative sample of citizens as their biggest challenge in measuring citizen experience.

SIDG research intoĚý, suggests that a bi-directional view could help to increase participation in government surveys.

Two-way conversation

The rationale being that, if the citizen can see how the data the government is collecting will be used to serve them better, they will be more willing to engage and contribute.

Improving the efficiency and effectiveness of service delivery has always been a motivating factor for collecting citizen feedback, so the leading response here is not all that surprising.

It’s encouraging to see a relatively high percentage of our respondents wanting to focus on keeping citizens informed throughout the service delivery process.

Public sector best practice

Experience from leading government agencies suggests that providing transparency and traceability into government processes can improve the citizen’s perception of the timeliness of service delivery.

This might be because the citizen can see their case progressing through the system in real-time, giving them confidence that their feedback has been heard and is being actioned.

The SIDG would like to thank all respondents to our online poll, as well as our partners from the PSN and QUT. We found the participants’ responses to be very insightful and through-provoking, and we hope that sharing these reflections will further progress the conversation.

If you’d like to find out more about becoming a Responsive Government,Ěý.

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“The new normal should borrow techniques from the software world, where products are released early and then quickly “iterated” upon as flaws and insufficiencies appear,” said 51ˇçÁ÷Australia President and Managing Director, Damien Bueno.

51ˇçÁ÷suggests data should be utilised to inform policy in ways that was rarely used before the coronavirus crisis.

“Someone who’s in Melbourne who has the right skills could now do a job that’s based in Queensland, because the appetite to do things virtually now exists,” Mr Bueno said.

“The scale of SAP’s business and national reach means that 51ˇçÁ÷can partner across the public and private sectors to provide insights into the functioning of the employment market,” the public policy paper said.

You can read more on the AFR website

Read the Executive Summary on how 51ˇçÁ÷is helping Australians back to work

Read the full 51ˇçÁ÷Public Policy Paper

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