digital transformation in thepublic sector · automation eu wide employment accountability...

Digital Transformation in the Public Sector

SeizingthedigitaladvantageforgovernmentDinand Tinholt – VicePresidentCapgeminiConsulting

Copyright © 2017 Capgemini Consulting. All rights reserved.

CapgeminiConsultingconducteda3-yearresearchprogramme withtheMITtounderstandtheimpactofdigitalinorganisations

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400Organisations 30Countries5Continents

200publicly-tradedfirms

C-levelexecutives11Industry-specificbenchmarks


Whatisdigitalmaturity?

DigitalIntensity TransformationManagementIntensity

Technology-enabledinitiativesin:• CustomerExperience• InternalOperations

Leadershipcapabilitiesincluding:• Vision• Governance• Engagement• IT-BusinessRelationships


Fourlevelsofdigitalmaturity

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Digitalinten

sity

Transformationmanagementintensity

CONSERVATIVES•Overarchingdigitalvisionexists,butmaybeunderdeveloped

•Fewadvanceddigitalfeatures,buttraditionalcapabilitiesmaybe

•Stronggovernanceacrosssilos•Takingactivestepstobuilddigitalskillsandculture

BEGINNERS•Managementskepticalofthebusinessvalueofadvanceddigitaltechnologies

•Maybecarryingoutsomeexperiments

• Immaturedigitalculture

FASHIONISTAS•Manyadvanceddigitalfeatures(suchassocial,mobile)insilos

•Nooverarchingvision•Underdevelopedcoordination•Digitalculturemayexistinsilos

DIGIRATI•Strongoverarchingdigitalvision•Goodgovernance•Manydigitalinitiativesgeneratingbusinessvalueinmeasurableways

•Strongdigitalculture


DIGIRATI

CONSERVATIVES

FASHIONISTAS

BEGINNERS

Digitalmaturityvarieswidely

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+6% +9%

-4% -10%

Basketofindicators:• Revenue/Employee• FixedAssetTurnover

RevenueGenerationEfficiency

-11% +26%

-24% +9%

Basketofindicators:• EBITMargin• NetProfitMargin

Profitability

-12% +12%

-7% +7%

Basketofindicators:• Tobin’sQRatio• Price/bookratio

MarketValuation

Digitally-matureorganisationshavesignificantlybetterfinancialperformanceRevenuegeneration,profitabilityandmarketvaluation


Someindustriesaremorematurethanothers…

Banking

ConsumerPackagedGoods

Insurance

Manufacturing

Pharmaceuticals

Retail

HighTechnology

Telecoms

Travelandhospitality

Utilities

Average industrymaturity:

PublicSector


Digitalgovernmentshavefocusedtheirdigitalinitiativesoninternaloperationsattheexpenseofmoreinvestmenttoenhancethedigitalcitizenexperience

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2Capgem

iniC

onsultingandMIT-CDB.AllRightsReserved

Cross-channel,self-service,personalizedexperience

(Figure6)

Clientunderstandingthroughdigitalchannels

(Figure7)

Clientanalytics(Figure8)

Useofmobilechannelswithclients

(Figure9)

Useofsocialmediawithclients

(Figure10)

Workerenablement(Figure11)

Processdigitization(Figure12)

Self-service/personalizedexperience

Citizenunderstandingthroughdigitalchannels

Citizenanalytics

UseofmobilechannelswithcitizensUseofsocialmediawith

citizens

Workerenablement

ProcessDigitization


Europeangovernmentsaremovingintherightdirection

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FordetailedinsightsontheEUE-GovernmentBenchmark,see:

https://ec.europa.eu/digital-single-market/en/news/eu-egovernment-report-2016-shows-online-public-services-improved-unevenly


Whatabout

OpenDatabenefits?

Copyright © 2017 Capgemini Consulting. All rights reserved.11

€325 BillionDirectMarketSize2016– 2020fortheEU28+


OpenDatahasbothadirectandanindirectimpactontheeconomy

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Indirecteconomicbenefitsarei.e.newgoodsandservices,timesavingsforusersofapplications

usingOpenData,knowledgeeconomygrowth,increasedefficiencyinpublic

servicesandgrowthofrelatedmarkets.

DirectbenefitsaremonetisedbenefitsthatarerealisedinmarkettransactionsintheformofrevenuesandGrossValueAdded(GVA),thenumberofjobsinvolvedinproducingaserviceorproduct,andcostsavings. 73%

27%

>€1.7BninsavingsinPublicAdministration

>2,549hourswastedfindingparking

>16%lessenergyused

>25,000JobscreatedinOpenDatain2020


OpenDatamattersbecauseitrepresentvalueforbusinesses,citizensandpublicadministrations… itisthefoundationofbeinga“smart”nation/city/region…

Geospatial

25.8%

Statistical

27.3%

Companies

19.5%

Top 3 Open Data domains re-used most

Clear popularity of three types of Open Data domainsDomains expected to have the highest economic impactMore data on companies requested most

Transport

Regions & Cities

Environment

Population & Societiy

Top 4 combinations of Open Data categories

Regions & Cities data is often combined with the other 3 categoriesOn average companies use 5 categories of Open Data36% of the companies aggregate the data, regardless of its nature

St


TheoverallOpenDataMaturityscoresin2016amongsttheEU28+countrieshaveincreasedsignificantlycomparedto2015

More advanced featured on portals, better Open Data policies in place, more activities to stimulate re-use


The European Data Portal - facts & figures -

745,806datasets

Metadatain24Languages

34countries73 catalogues

www.europeandataportal.eu


ThenextevolutioninE-GovernmentisanArtificiallyIntelligentGovernment

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Artificial intelligence is technology which allows digital systems to perform one or more of the following tasks:

Source:Capgemini

The ability to execute orders (set certain processes in motion)

The ability to detect patterns and recognize trends

The ability to watch and record key data

The ability to listen, read, talk, write and respond to users of the AI solution

The ability to store and find information

First generation AI (AI 1.0) has the ability to perform one or two of the abovementioned tasks

Second generation AI (AI 2.0) has the ability to perform three or four of the abovementioned tasks

Third generation AI (AI 3.0) has the ability to perform all six abovementioned tasks

AI Generations

Password reset

CCTV

Order placement

IoTsensors

Chatbots Voicebots

Cloud software

Data crawlers

Algorithms Big data analytics

Act

Analyse

Monitor

Interact

Remember

Examples

Anticipate The ability to pre-emptively recognize patterns and issues Predictive maintenance

Video games


AI is able to give itself orders and create processes from scratch

AI machines are aware of their existence and the fact that they are not human

CurrentlyAI3.0isthemostadvancedtechnology,butmorecomplexAIwithlargerpotentialvaluewillbecreatedinthefuture

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Cognitive analysis

Conscious process

Process automation

Learning

ReasoningAI proactively provides new and innovative insights by being able to analyse and learn from its previous actions

AI is able to adapt to and learn from changes in the automated process

AI is able to automate processes that are routine and do not change over time

Emotional awarenessAI machines acknowledge that humans feel emotions and incorporate this input in their decision making, causing a sense of moralityImagination

Feeling

AI 6.0

Complexity

AI 4.0

AI 5.0

AI 1.0

Pote

ntia

l Val

ue

AI 2.0

AI 3.0Currently the most advanced AI technology

Self awareness

Creating

Knowing


Artificialintelligencewillhaveaprofoundpositiveimpactonsociety,buttheimplementationofAIalsoawakesconcerns

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Benefits

§ Automation of processes increases production rate

§ Rational decision making with help of AI

§ Complex tasks can be simplified with support of AI

Productivity gains

§ Complex customer analytics allow businesses to better understand customers’ needs

§ Prediction-based maintenance scheduling

Service personalization

Efficiency gains§ Improved logistics through supply

chain optimisation§ Inventory optimisation allows

business to better serve customers§ Waste reduction because of

maximised use of resources

Product quality§ Advanced quality can be assured

because of AI§ Production can be customised§ Software bugs can be tracked down

Business driven Customer drivenConcerns

Low income jobs have a 83% probability of automation, opposed to 4% for high income

jobs

Inequality

It is expected 1.86 million FTEs will be displaced in the public sector due to

automation EU wide

Employment

AccountabilityAutonomous AI has the ability to draw its

own conclusions and act upon it. Potentially, resulting in unforeseen and undesirable

outcomes

AI may be reinforcing discrimination and segmentation when trying to predict the

future by looking at the past

Biases

Economicconcerns

Ethical concerns


AIpresentsanopportunityforthepublicsectortoreachtheirgoalsthroughamultitudeofAIusecases

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→ The government is the largest employer in most countries. Implementing artificial intelligence has not only the potential to radically change how this organization operates, but also support and broaden public sector goals. Especially since the public sector holds some of the most valuable data.

Protection of citizens

Maintaining societal stability

Providing general welfareHealthcare

EducationSocial welfare

AgricultureFinancial regulation

Public safety

Transport/Infrastructure

DefenceJustice

Goals public sector Department (not exhaustive)

Energy & sustainability

Use cases

Source: P.R. Openshaw (2014), Promises Of The Constitution: Yesterday Today Tomorrow

AI farming system that uses machine learning to constantly monitor an plant growth to maximize a farm’s productivity3

Equipping trains sensors that can monitor the tracks, be more efficient, and operate with less downtime4

Natural language processing and machine learning to analyse hundreds of data points to create crime heat maps1

AI monitoring of data about firefighters’ environments to detect danger and help them recover from disorientation2

1) Hitachi; 2) AUDREY; 3) Moterleaf; 4)Autohaul; 5) Autoscope; 6) Microsoft Tacoma

AI neural network to rapidly analyse blood samples in the field and diagnose malaria with 90 percent accuracy5

Analysing student data to predict which students are at risk of dropping out and in need of early intervention6

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§

§

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AcrossvariousgovernmentdepartmentsAIhasbeenimplementedwithsecondgenerationAIbeingthemostadvanced

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The Cincinnati Fire Department has developed an AI system that is able to classify emergency calls based on their urgency

Public safety

Enfield London Borough Council implemented an virtual agent to improve its service delivery

Transport/Infrastructure

The Australian Taxation Office (ATO) implemented a virtual agents to answer their customers most frequent questions.

Social welfare

The Ministry of Justice (MOJ) used an AI system to sort and classify millions of documents in a case

Justice

The NHS used Google deep mind to analyse and diagnose patients with a rare eye disease

Healthcare

AI 1.0

AI 2.0

AI 3.0

AI 1.0

AI 2.0

AI 3.0

AI 1.0

AI 2.0

AI 3.0

AI 1.0

AI 2.0

AI 3.0

AI 1.0

AI 1.0

AI 1.0

AI 2.0

AI 3.0


AI 1.0

Pote

ntia

l Val

ue

Complexity

AI 2.0

AI 3.0

Currently,thepublicsectorhasadoptedAImainlyforitsabilitytoautomateprocesseswithoutmakinguseofitspredictiveanalyticcapabilities

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§ Governments have the capabilities to implement AI solutions

§ Benefits of AI overrule the concerns

§ AI creates significant productivity gains and efficiency gains

Takeaways

Improvement opportunities§ Scalability, as most AI project are targeted at a

specific process

§ Security concerns due to sensitive data (health, financial, among others)

§ Long implementation period of AI solutions should be shortened


ByimplementingmoreadvancedAIindifferentdepartmentsofgovernmenthigherpotentialvaluecanbereached

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General public service

Health

Economic affairs

Education

Public order and safety

Social Protection

Defence

Recreation, culture & religion

Environment protection

Housing & community amenities

Functions of government

Greatest AI impact

Complexity

AI 4.0

AI 5.0

AI 1.0

PotentialValue

AI 2.0

AI 3.0

AI 6.0

digital transformation in thepublic sector · automation eu wide employment accountability...

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