Challenges of the Interaction Economy (part 2) : embracing complexity in the Public sector

Table of contents

Challenges of the Interaction Economy (part 1)

Challenges of the Interaction Economy (part 2) : embracing complexity in the Public sector

Challenges of the Interaction Economy (part 3) : embracing complexity in the Finance sector

Challenges of the Interaction Economy (part 4) : embracing complexity in the Health care sector

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2.     Public sector

2.1 Introduction

The main discriminator between the private and the public sector is the fact that the public sector cannot go out of business. It can shrink and be reshaped, but will not disappear entirely. The same applies to taxes or legislation. The latter will even be rather more than less.

The public sector is characterized by the huge variety of services it provides. They range from deciding on permits and benefits to levying taxes, law enforcement and crisis management. One of the specific features of the public sector is the prerogative it has on policy making and implementation. The policy making process is carried out in a highly political arena. A balance must be found between the interests of the various stakeholders and interest groups.

Another characteristic of the sector is the fact that individuals have varying personal interests and roles in society i.e. they are citizens, voters and entrepreneurs, but also consumers and tax payers.[i] This causes dilemmas in providing public services that are adhere to the principles of good governance, as well being effective and efficient at the same time. The challenge, and the dilemma, is the natural limitation on public administration, in contrast with private business, in that it cannot “choose” its ‘customers’. Public administration must serve all citizens equally, no matter the cost and difficulty in doing so. And they must be efficient, doing more for less.

Figure 5 Dilemmas of burden reduction (Millard adapted by Archmann & Meyerhoff Nielsen, 2009)

The public sector is not only very heterogeneous, public sector organizations are also very autonomous. This causes challenges in an era in which participation and collaboration in process networks or value chains is a must. Autonomy tends to create silo solutions and silo behavior, which is being reinforced by the hierarchical nature of public sector organizations. Attempts to improve the interoperability between organizations and systems are often brought to a standstill by risk adversity, inertia and even by fear for loss of position and status.

The foregoing explains also to some extend why there is a gap between policy making and policy execution. Political interests can lead to policy intentions that are difficult to execute in the envisioned manner. Execution agencies are not or only limited involved in the policy making process and have to cope with the effects of the decisions taken. The same applies to citizens’ groups.

Internationalization and the media do also have an increasingly strong impact on maneuverability and priorities in the public arena. Internationalization limits the national decision room. The public limelight of the media influences the behavior of actors in the public domain.

Last but not least, the public sector is a very knowledge intensive sector with a myriad of interactions between organizations and individuals and between various organizations. The knowledge insensitivity leads to need to take decisions all the time. Therefore, is decision making at the heart of many public sector services.

2.2 Facing complexity

The public sector faces the same types of complexity as the private sector does. The first is social complexity, that deals with values. Society’s expectations of public service delivery have by no means diminished as citizens from the 1980s onwards have become more concerned with choice and service quality. They suffer from high administrative burdens, long lead times and delays which lead to growing cynicism and frustration. Citizens and enterprises expect a service oriented attitude that is expressed in supporting in what Gartner coined the ‘process of me’ and in a coherent and transparent set of multichannel services. Instead of that, citizens and business loose track, confronted with an overwhelming amount of institutions, laws and regulations. They do not know which rules apply in their specific situation. Trust in government and policy making practices is quickly evaporating. Therefore, public administrations are under constant pressure to modernize their practices to meet new societal demands in a highly individualized society with reduced budgets.

This led to the introduction of concepts like Citizen Centric Government and ignited vision of e Government. Strategically, governments use e-Government today to pursue more than ever the goals which are not specific to the crisis but that were embedded in public sector transformation strategies and modernization efforts over the last 10 to 15 years. These include: increased efficiency and effectiveness; structural and organizational change; regulatory reform/administrative simplification; citizen-focus; quality of services; openness and transparency; and responsiveness in policy-making and service delivery[ii]. Fostering transparency also leads to the need of increasing accountability and broadening the sphere in which citizens can make or influence decisions and building civic capacity. In this respect offers the concept of e-Participation instrumental value by strengthening the evidence base for policy making, reducing the implementation costs and tapping greater reservoirs of experience and creativity in the design and delivery of public services[iii].

Another manifestation of social complexity is the need to cooperate in networks between organizations of different cultures, terminologies and attitudes. This poses not only social challenges, but also managerial, operational and technical challenges that are related to dynamic complexity.

Keeping the focus on efficiency and effectiveness-oriented activities, together with activities that make public service delivery more coherent, is difficult if the interdependency between the parts of the system is unclear. Insight and oversight of cause and effect relations within the own organization and within the network in which one operates is hard to obtain, let alone to maintain. The same applies to productivity, since increasingly complex legislation leads to more and more complex applications and business processes to execute these laws. Productivity gains can be flushed away by new political and legislative demands. Standardized processes are forced to accept exceptions which lead to the creation of new processes and laborious exception handling.

A basic problem in managing public sector operations is the lack of a “real” bottom line. Most performance goals are put together to please those who must be pleased. Moreover, the goal posts can be moved when it’s politically expedient to do so. This also applies to e-Government programs which are at the heart of the effort to make the public sector more agile, simple and responsive to internal and external demands. Governments are focusing on achieving second-order effects from their economic crisis-related e-Government priorities but can reformulate the goals and outcomes based upon the political situation at hand. Putting purpose into practice is not only difficult because of the gap between policy making and policy execution, but also because of the moving targets.

Increased ICT use and user-centric service development presents an interesting dilemma in relation to e-Government. Higher demands from the system in which public organizations operate require a level of support that existing facilities fail to deliver. The present supporting infrastructure can be characterized by isolation, fragmentation, non-responsiveness to change and an eminent lack of crucial synthesizing support services. The knowledge intensive and decision making character of public services and public policy calls for an enabling ICT that empowers users and can connect structured and unstructured activities.

No wonder that the public sector has huge difficulties in coping with the third type of complexity, emerging complexity. Emerging complexity is characterized by disruptive change. Governments face challenges to which the solution is unknown. It can even be that the problem itself is still unfolding and not yet totally clear. The greater the emerging complexity, the less government can rely on past experience. It has to deal with situations as they evolve. This requires an adaptive approach and also calls for competences, methods and instruments that are oriented towards continuous change. Traditional organizational boundaries will not be sufficient to deal with the scale of the problem. More than thirty years ago Thompson already wrote: “Uncertainty appears as the fundamental problem for complex organizations, and coping with uncertainty, as the essence of the administrative process”[iv].

Dealing with multi-reality is one of the greatest challenges public organizations face. They have to cope with new regulative requirements and the time versions that arise from new legislation. Old cases have to dealt with according to the old procedure and new according to the new procedure. Citizens have to be treated as an individual citizen or as owner of an enterprise, depending on the case. Services have to be provided across multiple channels while users can switch between channels in between their process. New channels evolve due to for instance the mobility of citizens, while old ‘paper based’ services remain intact. New product can be offered, while old are still in place. New participants with specific knowledge and competences must be instantly integrated in an incident management operation along existing participants to unlock the power of specialization.

Emerging complexity calls for leadership that can deal with uncertainty, that is forward and outward looking. It must be able to respond to unforeseen situations. This type of leadership must be able to adapt, to influence and to generate. It has to transform public sector organizations into agile entities that are able to respond swiftly and dynamically on new political and economic challenges. Public sector managers want to be enabled to scale their response accordingly and ensure that investments made, have a broad longer-term economic impact. This focus will become more significant in the years ahead according to the OECD [v].

2.3 Looking at the public sector from the blank canvas viewpoint: examples

From a purely objective point of view do many public sector processes only consist of a few steps. If we take for instance the process of deciding upon permits, we can see that the process basically consists out of four steps: Informing or orientation about the requirements and filing the request by a citizen or business, followed by deciding upon the request and enforcing the decision by the government organization. If preferred the process can be drawn in more detail by adding aspects like ‘advice’ at the citizen side and ‘publication’ of the decision at the government side. But even then only a short list of steps remains. Every step consists of a limited set of activities, that can be executed multiple times.

In the center of the process resides the case file that connects the results of the activities. After each step the permit dossier will be in a specific state, like ‘requested’, ‘approved’, ‘rejected’, ‘checked’ or ‘fined’. The rules that determine which activities are allowed by whom, which deadlines apply and which regulations apply to the specific permit request are managed separately and infused into the process at runtime. Exceptions do not exist anymore; they are caught in the business rules. Data that are needed in the request and that reside in government databases are also fused into the process, in order to prevent asking information that government already knows.

A proven way of defining the context of the requester is the use of life events. These are common events like birth, study, marriage, work, moving, being unemployed or death. In line with these life events, also other events and appropriate scenarios can be defined that are specific for a certain type of service. By identifying the actor and event we can reason about the rules that apply to the specific combination. For instance, an au pair may be allowed to work in certain countries only if she is not older than X-years or an enhanced risk profile will be applied for entrants from a specific country. The following picture shows some examples of combinations that may illustrate how far reaching this simple concept of ‘life events’ can be applied. They are all based upon the “I am, I want/need” approach.

Figure 6 Using customer centric scenarios

One of the great benefits of this approach is that public services can be offered as self-service to citizens and businesses. The users are addressed in a language that they understand. Their replies and context is mapped upon the ‘government’ speak in a very transparent and manageable way. This type of semantic interoperability is also vital for specialists of diverse practices that have to work together in for instance an incident situation.

The dynamic case management approach can not only be applied to public services, but also to political decision making. In the next image is as an example the process depicted of deciding upon a proposal of the European Commission.

It consists of four main steps and two types of support. One for the political consultation process and one for the production process. The various actors in the consultation process have their own virtual case file that they control themselves. Only the approved products, like a report to the parliament, are transferred to the central case file. This central case file is the linking pin between all political and production activities. The same infuse and fuse approach is used to support the various actors and to interface with existing data stores and production processes. Separate viewpoints can be generated to support for instance e-Participation. Depending on the case it is possible to instantly involve other actors into the process.

In the background supports the dynamic case management service the logging of all data that are required to prove compliance to the executed regulations.

2.4 Empowerment by embracing complexity

By embracing complexity public sector organizations become capable of empowering their stakeholders, leverage first class public services and closing the gap between policy and execution. Existing value chains become even more valuable and new value chains can be created. Interoperability problems between autonomous organizations are solved by introducing semantic interoperability and dynamic case management support. Civil servants are released from doing monotonous work by introducing straight forward processing in order to enable them to use their expertise in solving more complicated cases and issues. Citizens and businesses can use self-service and a single point of contact for public services. They have the possibility to monitor progress and give feedback via their own personal dossier. Decisions are made faster and more consistent by using the same rules for request, decision making and enforcement. Managers can monitor progress and auditors and lawyers can trust upon the embedded compliance.

Figure 7 Value drivers for stakeholder empowerment

Many reforms in government in the last decades were based on increasing efficiency, effectiveness and value for money without giving much attention to the policy process and the way it affects the ability of policy makers to meet the needs of constituents in an increasingly complex, uncertain and unpredictable world. Modernizing this core process by embracing complexity will yield considerable economic and social benefits, including enhanced productivity, openness, transparency and participation as well as actionable integrated and interoperable policy intelligence. Policy makers can be empowered by semantic based support in legal drafting and by evidence based policy to meet requirements for smart regulation. The concepts of Public Sector Information and Open data can be extended to the use of open rules and concepts. Regulators can even start to offer public services based upon their legislation. These services can then be re-used and embedded in the existing services of other public sector organizations and private sector parties. Catalogues disclose the contents and rules of basic registrations in order to increase the potential for use and re-use. Product portfolios can be managed and adapted by the business owners themselves.

Managers are able to implement an expertise network that is tasked with design and continuity responsibility. This network will keep distilling the essence of the operations and focusing on supporting the essence in order to prevent the creation of new complicatedness. It will support the transformation process of the organization and the overall management. It will support business and ICT in working together to continuous improve the public service quality and manage the lifecycle of services.

Managers can sleep comfortable at night because they have embedded and embodied complexity in their organization.

[i] Anna Kelly and Morton Meyerhoff Nielsen. Scandinavia 2.0: Efficiency, cooperation and innovations to alleviate the Economic Crisis. European Journal of ePractice Nº 11 · March 2011 · ISSN: 1988-625X

[ii] Barabara-Chiara Ubaldi. The impact of the Economic and Financial crisis on e-Government in OECD Member Countries. European Journal of ePractice · Nº 11 · March 2011 · ISSN: 1988-625X.

[iii] Focus on Citizens; public engagement for better policy and services. OECD studies on public engagement. OECD. 2009.

[iv] Thompson, J. Organizations in action: social science bases of administration theory. New York, 1976.

[v]The Financial and Economic Crisis – Impact on E-Government in OECD Countries, November 2009, OECD, Paris, France.



Note: This series is a republication of a paper that I wrote in 2011.