Digital Challenges

Over the last year I’ve worked in various different places, public and private, reviewing projects.

The most common line I’ve distilled from dozens of conversations is

“We are X years into our Y years transformation”

Which is greater, X or Y?

Obviously, X should be smaller than Y. Eg we are 1 year into our 3 year programme to digitise (whatever we are digitising).

Sadly, the opposite has been true in every case. We are 2 years into our 1 year plan to make change happen. Or even 3 years into our 1 year plan to turn the world on its head.

Things take longer than expected. Invalid assumptions are made. The specific outweighs the general. Every time.

Streamlining or Transforming

In early 2001 I presented to an audience of civil servants from the Inland Revenue, 300 or so grade 5s up to the Permanent Secretary (grade 5 is old money for what is now SCS 1).

The idea was to walk them through the changes that the Internet was bringing – and, particularly, what it would mean for the way they engaged with taxpayers (oh the debates that were had about customer versus taxpayer versus citizen versus many other words).

At the time Self Assessment was the only online transaction available from the IR’s website – we’d put that online in April 2000, though the application itself came on a floppy disc (we moved it to a truly online app in time for the 2001 tax year). Those were, indeed, the days.

I’ve pulled a couple of the slides out

Cell-phones as the next generation access tool? Who would have thought.

The conversation I wanted to have, mainly, was around the change in the customer experience that would come about from moving online – a shorter, more interactive, more reponsive process that had the power to change everything about the way tax was collected (timing, amounts, compliance etc)

Today, many would call this “digital transformation.” But, it’s not. It’s streamlining the process – getting rid of redundant steps, using technology to replace paper, speeding the turnaround time, providing feedback etc. The customer experience is certainly transformed; now a taxpayer / citizen / user / customer can reliably send their tax return in 1 minute before the annual deadline and know that it has been received safely. The numbers of people who send their tax returns in on Christmas Day was surpisingly high, from day one of putting this service online. Much of what we call “digital transformation” is like this – getting a paper process online and making it easier to use isn’t transformational at the macro level, although it can be in terms of customer experience. Do it when you want to, not when we want you to.

There are constraints of course – the Internet was new for many, but expectations were quickly moving much higher:

Looking at that all these years later, I wonder if I got hierarchy and capability the wrong way round, or whether I was making a different point. I think the former.

But we had a plan

True transformation needs a fundamental re-engineering. It changes not the process but the outcomes, removes constraints and affects people, the economy and the government fundamentally.

There are precious few examples of Real Transformation (TM), except where people throw the T word around to gloss over a lack of innovation, or lack of new thinking and just want to pretend that the planned changes are a big deal.

Just What Is Digital Transformation?

Yesterday, building on a Tweet from @hondanhon I posed the question

“What is a successful digital transformation project, from the last decade, that everyone would recognise?”

I started the list off with Netflix. This company has achieved four impressive feats:

  1. Disrupted the video rental market with its postal model, no late fees, large back catalogue etc … putting Blockbuster out of business (there are a couple of good books that tell the whole story, and an even better podcast from Wondery, in its Business Wars series)
  2. Transformed its own business model into a fully digital model by moving, first, to an online streaming business, letting customers watch major films and TV shows (though not those currently showing)
  3. Made a further leap to become a content company – like Warner, Sony and others – producing and commissioning its own shows and films, not just in English but in several languages.
  4. In doing (3), Netflix disrupted TV (binge watching entire series) as well as bringing “watch what you want when you want” to their customers

This has all cost a lot of money – their content budget this year is rumoured to be some $15bn – and it’s not clear if there’s a path to profitability, but all of it together makes for an astonishing transformation

But if you look for other examples of transformation and, particularly, digital transformation, it’s hard to find them.

That, for me, is because it feels like we’ve linked two words that are largely nothing to do with each other.

Digital is about putting your previously offline services online and improving them to fit better into the online world. Transformation is about fundamentally re-engineering your business model (in a positive way).

In 2001, HMRC put Self Assessment online. It wasn’t called digital then, but e-government. It was clearly a move to digital services. From that year on, you could fill in your Self Assessment form online, at 2 minutes to midnight on deadline day, 31st January, and be confident that your tax return was accepted.

Later, PAYE forms could be sent, from pretty much any accounting software, via the Government Gateway, achieving the same result. Over a few years, paper returns were largely wiped out.

But was this transformational? The forms were the same – they weren’t on paper, but they were still forms, asking the same questions in the same way. You didn’t need to print PAYE forms from your Sage package (or buy their hugely marked up paper), but the data you needed was the same. Perhaps the biggest benefit was that various applications – whether HMRC’s own or those from third parties – validated the data you were entering and ensured that it would be accepted (it didn’t mean it was right of course – there were, and are, still plenty of ways to get the data acceptably wrong).

More recently, an example might be that of DVLA with their online tax disc transaction.

That’s clearly a digital service – no longer did you have to go to the Post Office with your MOT and Insurance documents to pick up a new paper disc. If I recall correctly it was a two stage change, with the more recent work getting rid of the tax disc.

But is it transformational? Those who don’t buy a tax disc are now slightly more difficult to catch because a passing Police Officer can’t look in the window and check the date. And, of course, you still need a “tax disc” albeit now it arrives via email.

Perhaps transformation would have meant that the tax disc was purchased along with your insurance, or was given to you when you passed your MOT, collapsing some transactions, moving the point of collection to industry and changing the relationship with the customer so that it was no longer with government,

Very recently the Home Office launched an app that would allow an Android phone user to scan their passport when applying for, say, settled status. In a couple of weeks that same capability should be available for the other 50% of the population – the iPhone users – as the new release of iOS will allow the Home Office access to the NFC chip.

This is definitely game changing – some 85% of transactions (and there have been roughly a million so far) have apparently come through the online channel – and when iOS launches, this should jump massively (and help cover the 2m who haven’t yet used it but who may need to). Is this transformation? It could be, but then, of course, it’s a new burden that we are imposing on people and we are giving them a faster way to remove that burden, we are not removing the burden altogether,