dl2013 conference report

Digital Leaders Conference Report 2013

Building Digital Capacity

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CONTENTS

Chair's Introduction - Dr Mark Thompson _______________________________________ Page 3

Welcome from Microsoft: Derrick McCourt, Director of Government, Microsoft UK ____ Page 4

Panel 1: Building Digital Capability – The Public Sector Perspective ___________________ Page 5

Panel 2 – – The Industry View ____________________________ Page 12

Graham Walker, CEO, Go On UK _________________________________________________ Page 18

Interactive Discussion Groups – Report Back Session________________________________ 1

Chi Onwurah MP, Shadow Cabinet Office Minister _________________________________ Page 24

Concluding Remarks from Chair Mark Thompson __________________________________ Page 27

Building Digital Capability

Digital Leaders Conference 2013


Welcome to the first Digital Leaders Conference on the topic of Building Digital Capacity across the Public

Sector and the role of the private sector in supporting that building. This is an important issue that needs

not only to address the ‘organic’ building of digital skills from the ‘bottom up’ – but also, with manifesto

season looming, to address the need for those framing digital policy direction to do so from an informed

standpoint. Do our leaders have enough direct engagement with the digital community? In some cases,

unfortunately, they do not, one such example of this being Obamacare.

Today we will be having two panel discussions, one from the Public Sector and one from the Private Sector,

as well as keynote speeches from CEO of Go ON-UK, Graham Walker, and Shadow Minister for the Cabinet

Office, Chi Onwurah MP. There will also be an opportunity this afternoon to take part in Interactive

Discussion Groups which will focus on the topics of Digital Skills, Capturing Innovation and Change,

Digital Procurement, Digital Payments and Digital Platforms.

Chairs Introduction – Dr Mark Thompson

3Digital Leaders Conference 2013

Welcome from Microsoft: Derrick McCourt, Director of Government, Microsoft UK

Digital leadership in essential part of leveraging technological advances to maximise positive social and

economic outcomes – which is why I am delighted to welcome you all to today’s event at Microsoft.

Digital skills and training are vital component of successful digital transformation. The Microsoft Partner

Apprenticeship Program supports the UK Government in creating more jobs and qualified individuals

within the ICT sector. The Microsoft Partner Apprenticeship is a core strand of Microsoft UK’s Youth

Initiative Get on; Microsoft's program to help 300,000 young people get inspired, get skilled and get a job.

The Microsoft Partner Apprenticeship is designed for and developed by Microsoft Partners to help bring

new talent into the industry. Comprising Advanced and Higher Apprenticeship versions the programme

covers 5 areas: Desktop Support, Database Support, Server Support, Developer and Technical Sales; and is

delivered by 4 core learning partners: QA, Firebrand, Baltic Training and Remit IT Academy. The

programme is fully supported by National Apprenticeship Service, Skills Funding Agency and awarding

bodies such as City & Guilds.

Our partnerships with charities, educational institutions and local governments enable Get On to reach

out to people from all walks of life and through the Microsoft Partner Apprenticeship Program these

individuals can support the growth and development of our partners' businesses. Since its initial roll out in

September 2009, over 3,700 apprentices have enrolled in or completed the programme. The programme

has also leveraged over £30 million of government funding and represents over 30% of total work-based

IT apprenticeships in the UK.

Actually it so happens that my nephew has participated in this apprenticeship programme and is here

shadowing me at today’s conference. Under this placement scheme each apprentice is invited to deliver a

presentation on a topic of their choice. Interestingly, my nephew’s choice was “why I buy Apple

products”!


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Panel 1: Building Digital Capability – The Public Sector Perspective

Rachel Neaman, Deputy Director, Digital, Channel Strategy and Publishing, Department of

Health

Brian Etheridge, Managing Director, Motoring Services, Department for Transport

Digital transformation is now a mainstream and acknowledged priority. We can debate how we should be

delivering this – but not if or why. Digital is a completely cross cutting way of doing business. It is about

using technology for better business ends. Ultimately the reason why we are all here today is to enable

citizens, public sector staff and customers to harness technology for better business ends.

If we are going to become digital by default in government, we need to ensure we are building up and

investing in the right capabilities. What are the structures that we need in order to deliver this? We need to

develop multi-disciplinary teams to work across silos, and to take a holistic approach towards sponsoring

the development of more digitally capable employees. At the Department of Health we have set up cross-

cutting teams to promote digital across our organisation. This is not just about promoting specific digital

skills but also an awareness of what digital transformation means across the piece. We need both

grassroots capability but also leadership capability. Digital transformation is a context in which many

organisations organisations are concerned about risk and failure. It is important to accept that ultimately

there will be failures but we need to concentrate on mitigating and moving past these challenges in order

to focus on achieving success over the medium term.

It must be remembered that all this is not just about IT or technology – it is about how to run a business,

how to run an organisation. We are quite used to dealing with change in politics, so there shouldn’t be any

difference in our capability to respond to change in a technological context. The focus on the user is

absolutely essential, but the internal employee/internal customer is also a crucial part of success. This is a

massive cultural change, but it is not about the technology itself in isolation – it is about successfully

leveraging this technology to deliver positive outcomes.

I’m not a technologist, but I am passionate about transforming some of the public services I am

responsible for at the Department for Transport. Currently the Department for Transport’s Motoring

Services are delivered across four key agencies:

o Driver and Vehicle Licencing Agency (DVLA) – maintains driver and vehicle records, collects car tax

and supervises enforcement, assesses fitness to drive and supports the police, the courts and

other agencies (annual expenditure of £600 million; annual income of £470 million)

o DVSA – covers licencing, testing and enforcement for commercial vehicles and operators whilst

administering the MOT scheme (annual expenditure of £170 million; annual income of

£185 million)

o DSA – regulates 47,000 professional driving instructors and 3,000 motorcycle instructors, as well

as 386 practical driving test centres and 148 theory test centres nationwide (annual expenditure

of £184 million; annual income of £190 million)

o DVSA – approves vehicle types and certifies vehicle systems and components (annual expenditure

of £15 million; annual income of £15.2 million)


By next year these activities will ideally be restructured into just two agencies. The DVLA currently

conducts 130 million transactions every year – many of which aren’t fully online. It maintains 44 million

driver records, 36 million vehicle records – whilst carrying out 100 million vehicle transactions (54%

electronically) and 16 million driver transactions (31% electronically). Nevertheless, the DVLA offices in

Swansea still receive 2-3 van loads of paper every day. 58% of car tax is now done online – with the rest

delivered through the Post Office (which arguably nudges us towards 100% digital).

We are currently in the process of reviewing the DVLA’s functions and services, as well as rationalising the

number of agencies within Motoring Services. The DVLA is responsible for delivering three of the

government’s digital exemplar services. By next year we will have shut 30 physical offices – and we will also

be removing paper counterpart licences and auctioning the removal of the insurance check component.

We will be undergoing a major IT transformation, as well as instituting a new HGV levy. Essentially, there is

a lot going on – so covering all bases while delivering digital transformation is a challenge. Also under

consideration will be the removal of the tax disc and offering new direct debit payment options.

A central thrust of the Department for Transport Digital Strategy is that we want to do the digital

transactions we already do better. We need to increase the number of digital transactions, minimize the

use of paper, and ultimately continue exploring the art of the possible when it comes to further service

transformation. Generally speaking we need to think in a different way. We want to start designing our

organisations and services – not for a better yesterday, but for a better tomorrow – ahead of the curve!

Digital transformation requires many changes which are both broad and deep in scope – and this can

often be organisationally and culturally challenging. There is a lot of logistics behind most front end

transactions which are often invisible to users of those services. Furthermore, the principles of agile and

iterative development cannot always be successfully applied in the context of transport infrastructure. If

you are building a road or rail link you can’t launch a beta version or iteratively alter the route in response

to changing circumstances! Business continuity also remains a critical factor, as well as the need to tackle

the digital skills and experience deficit. An on-going elephant in the room are the challenges associated

with existing legacy ICT systems – some of which date back to the 1970s. However, ultimately we have to

recognise and accept that when it comes to digital transformation, the genie is out of the bottle and there

is no turning back!

I notice that today’s conference has already generated an array of tweets and blog posts. Ten years ago

those sorts of communications with the outside world in the middle of an event would have been

unthinkable. We are all communicators now – and how to manage that from a government perspective is

certainly a challenge.

Cabinet Office has carried out a review of all government communications, including an audit of digital

skills and output across government communicators. Specialist digital teams have strong

communications capability, but there is a need to extend this to become more standard for every

employee with a public facing role.

Ultimately, government needs to work harder than ever to keep up with technological, social and

demographic changes. This begs the question - what should a modern communications team look like? In

order to identify the right answer we have established a Digital Communications Action Group with the

task of driving reform throughout government. By the end of 2014 we want all communicators to be able

Anthony Simon, Head of Digital Communications at PM and Cabinet Office


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to accomplish every day digital tasks. We want to ensure that we have the right structures in place, and

that staff have the right skills and understanding. A key challenge looking forward is not “whether” or if

we should do this – but how! We are moving from a one way broadcast paradigm to more of a two way

conversation between government and citizens. Modern government communicators need to learn new

skills and be able to carry out new functions:

o We need to be data analysts in order to identify where the story is

o We need to be content editors – capable of working out the best way of sharing announcements –

e.g. graphics, photo, audio or video?

o We need to be equipped to distribute this content across different platforms and channels

There are three guiding principles behind out Manifesto for Change:

1. Digital communication in government should be a core skill for all, not a specialist area, by

end of 2014

2. Communications leaders, Digital Leaders and GDS must work more closely together – a more

collaborative approach is needed to get the most out of GOV.UK. and other GDS

3. We mustn’t let a risk-averse culture block innovative and impactful digital comms – attitudes to

risk need to be balanced, pragmatic and informed by business Examples:

The essential thinking behind the transition to Gov.uk was to no longer assume that people need to have

an in depth understanding of how government works to find the information that they need. Instead the

aim is to provide all relevant information on government services in one place.

There are also significant opportunities to leverage current interest in existing government social media

channels. For example, @number10gov has 2.5 million followers on twitter; the Prime Minister’s LinkedIn

blog has 560,000 subscribers, and Number 10’s Facebook page has 200,000 followers. It is essential to

ensure that we to use the right channel for the right audiences and messages.

At this point many communications specialists are predicting the end of the traditional press release?

Certainly press releases have played a key role in how government has previously approached

communications – but it is clear that we need to increasingly move away from this broadcast approach and

embrace other digital channels and strategies. Indeed there are several recent examples of this. The Prime

Minister announced the last ministerial reshuffle changes using Twitter. @DefraGovUK also represents a

good case study as to what can be achieved when the appropriate digital channel is used for a suitable

purpose after they won the CIPR award for best use of social media for proactively engaging with Twitter

users on the subject of badger culls and horsemeat.

Ultimately it is important to remember that all this is work in progress – although hopefully the next 12

months will see these kinds of approaches being ever more integrated into our mainstream activity –

rather than just being illustrated through a few big digital set pieces.


Mark Davies – Post Office

Jos Creese – CIO Hampshire County Council

I am not a technologist – but I am passionate about how we can use digital communications and how we

can empower customers to access better and more convenient services.

What has Post Office got to do with the digital agenda? The Post Office is currently undergoing dramatic

change. We are extremely proud of our 11,500 strong retail network (the largest in the UK). We are

developing new services all the time to meet the demands of the digital age. We are also thinking about

the future and what additional services need to be designed.

For example, our new digital applicant enrolment identification system is currently available in 800 post

offices already. Driving licence renewals can be done in this way – but could also be applied to passport

renewals, benefit payments and residency applications in the future.

The Post Office is a commercial business but with a strong public purpose and social role within

communities – with a commitment to connecting them to the services and products that they need. This

social role is part of our DNA as an organisation. There are still 11 million people who are not online and

lack digital skills. As we move forward as a digital organisation we simply cannot afford to leave these

people behind – which are why we are closely involved with Go ON UK. We are very proud of the role we are

playing in this area. Last month we launched a campaign in the North East which is specifically designed to

increase digital skills which are very important for that regions economic future.

We have also recently launched the online centre locator initiative. This allows people to walk into their

Post Office with their post code and branch staff can print out a list of the nearest digital centre/online

centre/public library. This is a simple idea, but it can make a massive difference in extending access to

online resources to thousands of new people.

Of course, under taking large scale digital transformation and service redesign is not without substantial

internal challenges. We are a massive organisation with 8,000 staff, 50,000 sub post masters and 11,500

retail outlets. We have started using twitter to communicate with sub post masters – but we are also

looking at Yammer and additional platforms/communication channels. For some people there is stark

choice between the existing physical Post Office network and a modern technological approach to

delivering services. In reality these two are complementary. The challenge is how to maximise those

synergies to deliver broader access and engagement across communities to digital services and the wider

benefits of technology.

My job is to bridge the gap between creativity, productivity and business opportunity. 80% of interactions

with the public take place through local public services. Part of our problem is not the ideas or creativity –

but how do we practically achieve digital transformation.

The process contains significant opportunities but also substantial barriers. We have over 400 different

business streams and providing an IT infrastructure which supports all of these is difficult. We are trying to

rationalise a shared service centre which brings together multiple functions (such a finance, human

resources…etc) within one integrated system/approach. We already support 1600 local associations


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which share our web services/platforms. For example in the field of adult social care we have strong links to

community self-help groups and third sector players like Age Concern. These partnerships are extremely

important.

There are also challenges associated with policies which are imposed upon us from the outside. Our risk

approach needs to be balanced against what the public want and how our organisations need to work to

support the public.

Nevertheless the evidence base behind the case for digital transformation and redesign is overwhelming.

A recent report from Cap Gemini suggested that genuine digital leaders are 90% more profitable and offer

20% more revenue for their organisations.

18% of the population are now online and many more have mobile phones. We are very supportive of the

work of Go ON UK and the Post Office, but we also have a paranoia about switching off channels! We need

to make some genuine changes if we want to be digitally mature in the public sector – and by that I mean

putting digital at the heart of strategies, approaches and services. At the moment throughout most of the

public sector digital is a bolt-on service which we offer whilst continuing to operate all the old expensive

channels simultaneously.

We need a grand overarching strategy which is linked to clear outcomes and objectives. Part of the

solution will be concepts like bring your own device and cloud infrastructure – but the roadmap from

strategic planning to delivering outcomes needs to be more clearly articulated and analysed. For example,

if you decide to use social media seriously then it should become the life and blood of how you

communicate internally and externally (including the most senior stakeholders).

Ultimately, we need genuine digital leadership to drive service innovation and service design in order to

bridge the gap between technological opportunity and the massive amount of creativity and innovative

potential that exists within all of our organisations.

Based on this session it would appear that there is a fundamental tension in this debate between the need

for greater top-down leadership to drive enterprise and make digital mainstream and cross-cutting – and

the need for a greater democratisation of digital skills/communications.

Where does the enterprise vision lie within organisations? Is it in their DNA or is it just about offering a

bolt-on to an existing vertically integrated structure or organisation? How do you let go sufficiently of

traditional risk concerns to maximise innovation? There are also issues around the sheer volume of change

- how do you cope with the genie being out of the bottle whilst mitigating against service delivery failures?

There certainly seems to be agreement that we need to put the customer first – and avoid designing

services around the convenience of public sector/civil servants. On the one side there is a clear need for

leadership and design from the centre in order to successfully administer shared services and back office

functions rather than just adding digital as a bolt-on. However, there is also the decentralised imperative

to let go of traditional risk concerns, learn on the job and design flexible services around the customer.

Session Review – Mark Thompson


Panel discussion

Q: On the subject of the origins of the DVLA online renewal service – it has been alleged that this was an

early and successful use of agile – consulting cost was only 120k and embarrassing that something so

successful could be so cheap. How did this come about and what are the obstacles to best practice?

A: The service was launched back in 2006. One of the issues with DVLA is we have a long standing

relationship with a contractor. We stood back and looked at a lot of agencies – and a lot of them seemed

to be doing the same things. The reality is that they would rather chew their own legs off than share

things with each other! Also culturally civil servants don’t rush to trumpet their successes!

Q: How can we persuade civil servants to be more extroverted about their success?

A: In the context of social media you need to be more extroverted to be heard and get your message

across. Once people metabolize these new opportunities it may help make them more professionally

outgoing in communications terms.

Q: We are all becoming increasingly digital citizens. We have heard about legacy IT systems and

applications – but isn’t data the biggest inhibitor? Do you see the challenge of the degrading of data to be

the biggest barrier to enabling digital transformation/innovations?

A: There are certainly issues around data in relation to data matching, security and quality. Ultimately I

think it is more of a culture problem than a data problem – although once the cultural barriers are down

then data considerations will be more important. We still work in silos and design services around specific

needs rather than around more generic requirements. People who are leading public services at the

moment have built entire careers in a non-digital world. It is about professional risk, data and information

risk, as well as fear, uncertainty and doubt around the consequences and challenges of digital

transformation. Nevertheless there also significant opportunities which can be exploited through the

provision of better quality, linked and open data.

Q: Are the issues surrounding the government’s Business Impact Level 3 (IL3) security accreditation for

cloud systems more of a human problem rather than data problem?

A: The DVLA has a vast amount of data and we have to manage this carefully and responsibly. We also

need to think imaginatively and offer transparent explanations to citizens about what we are doing with

their data and why we are holding it.

Q: There is a clear paradigm shift that we are trying to adapt to and implement. Would you agree that this

paradigm shift has three stages, starting with service adaptation, which if poorly implemented leads to

bad practice which is then scaled up to disastrous effect? Therefore if stage 2 does lead to bad practice

then the third stage results are compromised. What is being done to ensure that the practices, techniques

and related mind sets are right for going digital?

A: The Post Office has an awful lot to do – but we have fantastic opportunities to leapfrog. The Post Office

is over 400 years old – and yet we are facing a lot of new exciting possibilities. Nevertheless our business

will only thrive if it becomes a digitally networked and multichannel business.


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Q: Digital means different things to different people. For example in relation to digital payments there are

343 different definitions. Does it matter that digital means different things to different people?

A: The IT industry likes to invent new terms/definitions – so in one sense I don’t think it matters – and yet it

does have the benefit of stimulating debate and discussion. I am seeing a level of enthusiasm for the

transformation agenda across many different parts of central/local government – but this is being

approached and implemented in different ways.

Q: Which roles and ways of working are going to be changed through digital transformation?

A: There needs to be an incentive to get on and do things – not hire expensive consultants! It is about

changing the way we work and achieve things as organisations. In the old communications landscape

digital used to just be another channel – whereas moving forward digital should be seen as a new

paradigm or way of thinking.


Panel 2 – Building Digital Capability – The Industry View

Stephen Beard, CEO, Agilsys – Creating a Digital First Culture

We have been talking about culture and change in our own organisations, but it is also important to

consider the requirements of the citizen/end user. What we do know looking at other countries and how

they use technology is people in the UK are half as likely to share information online in comparison with

other countries. This is evidence of a fear culture which surrounds perceptions of privacy and data misuse

in the UK. In this context prevailing levels of fear and ignorance represent a significant challenge for

digital transformation.

A 2013 Capgemini survey which asked employees about cultural barriers to digital transformation

generated the following responses:

o 53% of respondents cited the issue of competing priorities – “we don’t have time for this right now”

o 52% of respondents cited lack of familiarity with digital – “we don’t know how to do that”

o 40% of respondents cited resistance to new approaches – “this is the way we have always done it”

o 23% of respondents said that digital transformation threatens current power structures – “I will

lose influence in my organisation”

o 21% of respondents cited internal politics – “it doesn’t have the right political support”

o 18% of respondents cited risk aversion – “it’s not worth the risk”

For these reasons, we need to be clear on how to enable and support change – and develop a business

strategy which leverages digital opportunities rather than developing a digital strategy. At a national level

this process will take at least a decade because those currently in charge of policy and agenda setting will

not take the necessary decisions – but with a fresh generation of decision makers change will happen.

Public opinion is changing and becoming increasingly intolerant of non-user friendly online services.

There will also be incentives for change based on the need to balance budgets. Current expensive face to

face and offline delivery channels are not sustainable in the long term. They need to be maintained for

vulnerable/disadvantaged groups – but not as a means of mainstream access to public services.

How do we create a multifaceted digital culture in organisations? We need to focus on innovation,

integrity as well as pragmatism. From the Agilisys perspective, injecting 200 young people into our

business through apprenticeship schemes has shifted our culture. Today we are handling over 4 million

user transactions online.

We also need to acknowledge that digital isn’t necessarily at odds with people. Digital is certainly

becoming an integrated and automatic part of young people’s experiences and skill sets. As

demonstrated by the recent online video which showed a one year old child trying to pinch and zoom a

magazine with its fingers – touch screen user interfaces have become so intuitive that for a one year old a

traditional magazine is just an iPad which doesn’t work!

Finally, looking at our work with local authorities – typical clients will have 1000 back office systems. We

tend to start at the opposite end and look at what citizens need and what they are prepared to share. We

try to offer them the opportunity to self-administrate their data. We use interconnectors and API’s but we

still have lots of legacy systems to deal with. As we proceed on this journey we do also iteratively self-

learn. The more people that transact online the more user interfaces and systems can be refined to


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improve user experiences. In the public sector paper routines take 5-7 years to refine themselves in

response to this kind of feedback loop – in the world of digital services and platforms this evolution can

take place immeasurably faster.

Clearly there are a number of cultural issues that we have which are common to both public and private

sectors. We need to look at behaviours that we want to change and determine how this can be achieved.

Sodexo is a global player in digital payments carrying out 16 billion transactions per year, with a key focus

on maintaining user experience.

First I’d like to set a bit of policy context in relation to digital payments:

o The Government Digital Strategy published in November 2012 was designed to address the

Government’s previous commitment in the Civic Service Reform Plan (published in June 2012) to

make public services digital by default.

o The 17 Departmental Digital Strategies set out the steps that each department will be taken in

support of the wider Government Digital Strategy. Action 5 of the Government Digital Strategy

requires each department to identify a minimum of three exemplar services for redesign – with

this process commencing no later than April 2013.

o After April 2014 all new or redesigned transactional services will need to meet the Digital by

Default Service Standard when they go live. All services handling over 100,000 transactions per

year need to be redesigned in compliance with the Digital by Default Service Standard by March

2015.

A key question here is how do we measure success if we all have different definitions of what digital

means. Perhaps one common denominator might be the need to deliver digital services which adequately

satisfy user aspirations and expectations.

In terms of a definition for digital payments, I can offer four key components:

o Proven, secure and low cost component of today’s digital ecosystem

o Integrates with existing reporting, accounting and reconciliation systems

o Digital payment accounts do not have cheque books, cannot go overdrawn, and do not require a

branch network

o They help increase efficiencies, track payments and reduce the time it takes to make/receive

payments

If we now look at the scale of the current challenge – currently 17 Government departments deliver 714

different transactional services with 1.41 billion transactions every year. Data covering high volume

transactional services (over 750,000 per year) indicates that larger transaction volumes are carried out at

lower cost the more services are digitalised:

o HMRC processes 934 million transactions at a cost of £553 million (with 88.6% digital take-up)

o Home Office processes 118 million transactions at a cost of £1.3 billion (4.04% digital take-up)

o DWP processes 107m transactions at a cost of £4 billion (6.98% digital take-up)

Iain McMath, CEO, Sodexo Motivation Solutions Technology


Of course, it is also important that we don’t just look at the largest transactions. There is a huge

opportunity in government to get payments and technology working in a more efficient way. Part of the

behavioural change we need is to encourage a higher degree of innovation and risk taking as opposed to

traditional risk aversion.

An independent report published in 2013, by think tank DEMOs, referenced the “quiet spread of pre-paid

cards” as one of the great untold stories of public policy. Pre-paid cards can help reduce the

paperwork/administrative costs associated with monitoring and managing direct payments; enhance

financial inclusion and support the “personal budgets” agenda; offer flexibility and convenience for the

user whilst increasing accountability and control over how these funds are spent. They also limit

government exposure to fraudulent spending by reducing the scope for potential transgressions. So in

relation to digital payments to citizens, all of the necessary technology already exists – but the question is

how to use it for maximum benefit.

The normal government payments cycle involves multiple stages from request to authorisation to

departmental instruction. This payment instruction is then transferred to the relevant bank. This process

takes from 5-7 days to complete. In contrast, the pre-paid card payment cycle a much more streamlined

process, and takes between 5 hours to 2 days to complete. It also allows far more comprehensive

monitoring and reporting routines in relation to tracking those payments and how they are eventually

used. There is also a potential for these mechanisms to be used by government to improve or incentivise

behaviours of those receiving payments.

Digital payments are not nirvana, but they do offer significant benefits and improvements to user

experiences. An example of this is that any money unspent on a pre-paid card after a certain agreed

period can be restored back to government. They also support greater transparency and visibility of

public spending. However, in order to successfully reap the potential benefits and efficiencies, we need to

effectively circumnavigate the fear associated with exploiting some of these technologies.

When it comes to digital transformation there are cultural, technical and political challenges – but the key

aspect I want to focus on today is the skills crisis.

Kainos is one of the longest standing independent digital technology companies in the UK with 26

successful years in business and 500 staff based across offices in the UK, Ireland and Poland. Queens

University in Belfast remains our largest shareholder. We have firsthand experience of how difficult it can

be to bring new talent on board and the importance of valuing and nurturing skills development.

By way of offering some context, the supply of digital skills in the UK has hugely diminished since the year

2000. The 7,000 new graduates entering the IT industry each year is just a drop in the ocean when

compared with unsatisfied industry demand. A 2012 report by eSkills projects that the employment of IT

professionals will grow by 1.62% per year through to 2020 – which is nearly twice as fast as the UK

average. The same report highlighted that the proportion of IT & Telecommunications staff receiving

education/training each quarter has been in decline since 2008 and is below the UK average for UK

workers.

The conclusion to be drawn here is that new thinking is needed. The sector needs not only a vibrant, well-

skilled recruitment pool but also more innovative and skilful approaches to recruitment, workforce

Brian Gannon – Kainos


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development and HR management in order to secure the technical, business, design and innovation skills

needed for the future.

Here are some of the projects we are working on within the context of the Kainos Digital Academy:

o Code Camp – with a view to fostering an interest in digital technology among bright teenagers

we set up code camp working with the UK Department of Education. This is two week exercise

engaging with 15-17 year old school children. The project has been very successful in generating

high levels of enthusiasm and innovation. The plan going forward will be to run similar exercises

in London and Bristol.

o App Camp – this initiative targets first year university students (offering an incentive in the form

of a free Macbook) training them for 6-8 weeks over summer on how to write an App. Few

university courses give students a flavour of what it is like to work in the real world, which is why

App Camp is such a valuable growth experience for its participants.

o We also work with young professionals through our Career Path Development, Fast Track Talent

Programme, and Advanced Education Programme initiatives.

o For mid-career professionals we offer an On-the-Job Digital Conversion Programme and

Apprenticeship Scheme to cultivate creative and enthusiastic non-technical workers and convert

them to digital experts with partners including GDS and VOSA.

Many of us pay lip services to the skills deficit – but until we solve that I think a lot of challenges we face

delivering digital transformation will endure.

In tomorrow’s pre-budget report the Chancellor will tell us how things are going with the UK’s finances. If

we look at the current breakdown of public sector spending, debt interest, at £51 billion, is currently the

fourth highest area of spend (more than defence which is £40 billion). Total public spending in 2013-14 is

expected to be around £720 billion, while expected public income is projected to be around £612 billion

in 2013-14.

A key part of my job is to understand where our clients are going and how they are operating. When we

talk about deficit reduction we are talking about spending as much as we earn (not paying money back).

Looking forward the current financial outlook remains relatively bleak. 2013-14 will see a public deficit of

£84 billion, public sector net borrowing of £108 billion and a public sector net debt of £1.2 trillion.

Looking ahead to 2017-18, current projections see this deficit being eroded down to £16 billion, net

public sector borrowing down to £42 billion, but with net public sector debt actually rising to £1.6

trillion.

So it is clear that in this environment austerity will be an on-going feature of future policy for many years

to come. As a result Government will have to do things differently in light of these enduring

circumstances. Currently Cabinet office (in collaboration with the Treasury) can approve departmental

ICT and digital projects under £50 million. One can also distinguish three separate approaches:

i) The Cloud – which involves market specified commodity products, including the G-Cloud

cloudstore (£400 million) and the Digital Service Agile Framework (£100 million)

David Dinsdale, Head of G-Cloud, Atos


ii) Framework - Government specified commodity products including Identity Assurance 2

(£25 million), Assisted Digital (£40 million), Public Sector Network 2 (£? Billion), Education ICT

(£500 million), and ERP support (£100 million).

iii) Custom products – OJEU

Current projections for G-Cloud spend predict that this will rise from £75 million in 2013 to over £125

million in 2014. In reality £125 million in 2014 is a conservative estimate – it could end up being over

£200 million.

A recent survey identified several key barriers to change: network and data security (41% of respondents),

current and future business models (32% of respondents), and difficulties in managing change and new

operating models (11% of respondents). From a private sector perspective cost savings should always be

implemented fast and be certain in nature and scope. In the public sector the first thing to be cut in most

departments is the free biscuits! The Treasury have even gone so far as to install a coffee shop in their

reception area so you can purchase your coffee before attending any meetings (as opposed to receiving

free coffee). In this context true transformation is the hardest cost saving approach – chiefly because it is

not always fast and not always certain.

So challenges surrounding security, change management and developing the required business case will

continue to act as barriers to digital transformation. For example, micro payments and prepaid cards are

the future – but what is the best way to deliver these services and implement this technology from a user

perspective? I can offer a quick case study on protecting and scaling online services. I was called in to see

HMRC in 2008 while I was running Business Link the online portal for digital business support. They said

4.1 million businesses were going to login to business link within the next week – in a context where the

typical number up to then had been about 100,000 users. As the worst thing you can do in the public

sector is to embarrass your elected official, we implemented technology from Akamai (which provided us

access to 46,000 servers) – which allowed us to successfully handle unexpected peaks in demand.

Two further case studies:

o Mothercare and Early Learning Centres – using the cloud to manage multichannel contacts led to

a 40% reduction in the number of emails received, a two week reduction in agent training which

allowed a greater focus on face-to-face in-store help at Mothercare outlets.

o The Olympic Games – the use of cloud systems for the security monitoring system allowed 2.3

billion security messages to be logged, 200 malicious connection requests to be blocked, and

ensured that none of the 686 serious security incidences managed to disrupt live coverage of the

games.

Business Impact Level 3 (IR3) services used to cost several million pounds and take over a year to prepare.

We are now able to do this for £294 pounds per month. Splitting IT into commoditised lego brick

components.

So in conclusion, deficit reduction will last until 2020, at which point we will begin to start paying back an

outstanding public sector debt of close to £2 billion (with £70 billion per annum interest payments). In

this context the public sector cannot achieve the savings it needs without transformation. The future will

be a commoditised approach to technology which splits up IT services into individual Lego brick

components which can achieve 50-90% cost savings in many instances.


16

Bob Harrison, Education Advisor, Toshiba

The notion of digital natives is nonsense! When I look at my three grandchildren – all of them will be

leaving school in late 2020s. Those schools won’t have paper or pens – they will have gesture and touch

screen based technology interfaces. Ultimately, the national curriculum has too much emphasis on

computer science – and not enough on IT and digital literacy.

Bob asked the conference audience to participate in a quiz which involved 30 questions covering the use

of mobile devices, digital platforms, social media and online learning environments. The majority of the

audience answered 50-80% of the questions correctly).

Of course all children need digital skills – but not all of them need to be the Alan Turing (the father of

modern day computing). First and foremost, they need to be digital citizens and workers. We should

remember that most of the jobs the next generation will be doing do not yet exist. Our current education

system is based on an industrial model, predicated on Taylorism for a Google world!


Keynote

Graham Walker, CEO, Go On UK

What does a digital future mean? In a nutshell, it means world class digital public services, digital skills

and access to superfast broadband. As Internet pioneer Tim Berners-Lee tweeted at the end of the 2012

Olympics opening ceremony – “this is for everyone”. I think this message is central to ensuring an

inclusive digital future for the UK.

If we start with superfast broadband – the UK has one of the most competitive broadband markets and

lowest prices (as well as 4G roll out). Central and local government, alongside BT are putting significant

investments into delivering greater superfast broadband coverage.

However, it is not all good news. I was disappointed when government slipped the 2015 deadline for 95%

superfast broadband coverage to 2017. I was also disappointed to see some the funds for rural

broadband being diverted to urban superfast broadband/smart cities projects. I am not convinced that

broadband vouchers are the right way to incentivize take-up. Lots of local authorities are keen on the

voucher scheme, but they are a blunt instrument for driving demand. I think there is real passion in BT to

deliver this vision. But I have concern that many in government see this as “job done”, given that they

expect us to reach coverage of nearly 90% by 2015. In other words - the investment has been made and

they can focus on other things. Indeed there is still some prevailing uncertainty around whether we will

hit our revised targets for both the roll out and take up of superfast broadband.

Moving on now to the world class digital public services – the President of Estonia was recently asked how

they achieved such a high degree of digitalised services. His answer was that they were bold in their vision

and they invested in the people side to help them get used to using these services. Some of the poorest

and disadvantaged members of our society are the most intensive users of public services. So in pursuing

successful and effective digital transformation we need to focus on those services which can help

vulnerable and disadvantaged groups.

I have confidence that we have strong leadership from the Government Digital Service (GDS). Gov.uk has

a way to go on progressing past the information and publishing side and tackling transactional services –

but progress to date has been impressive. Gov.uk is seen internationally as a gold standard for accessible

and transparent government information which is a credit to both GDS and the departments who

worked with them on this.

There is a real focus on digital capability right now – and there are lots of capable people across local and

central government. If we look at Universal Credit, I think we can all agree that simplifying the benefits

system and offering a world class digital service is a good thing. But of course it is a huge undertaking –

and there are many potential competing approaches and ways to deliver this. But I’m sure we all would

like to see this initiative succeed in delivering on those objectives.

Identity, data sharing and privacy are all areas within which we need to be very clear what we are trying to

achieve. Martha Lane Fox’s 2010 report, Directgov 2010 and beyond: revolution not evolution was clear

about the scale of the challenge and the level of change required for successfully migrating services to a

digital age. And yet I get the impression that civil service reforms in relation to these issues are still slowly


18

evolving rather than being revolutionised. I don’t see Estonian boldness in our approach to digital by

default!

It is vital that the institutions of government support a revolutionary approach to digital transformation

and boosting digital skills. It is unlikely that this will work without providing all UK citizens with the skills

and access to take advantage of digital opportunities and services. Currently 7 million UK citizens have

never used the internet. But it is not just about providing access – skills to exploit that access successfully

are an essential part of this piece. It is worth remembering that 11 million people in the UK still lack even

basic digital skills.

We have a million SMEs in the UK who make some use of the internet – but who do not transact online.

The research suggests that those businesses which transact online are growing faster and less likely to

fail. Only 45% of charities in the UK can accept online donations.

Go On UK’s mission is to make the UK the most digitally skilled nation by 2012, a mission which is shared

by our partners including Barclays and the Post Office. Our founders and local government partners have

all signed up to our Digital Skills Charter to ensure that all their staff have digital skills, that their services

are digitally accessible, and that they reach out to the communities in which they operate to increase

digital skills and engagement with online services.

Go On North East – working with 80 local partners in Liverpool – got 50% of those people who were

offline, online within 18 months. We are trying to get our national partners to work with local

stakeholders and groups in partnership to achieve maximum impact. We will be launching this work

programme in additional UK regions over the next two years. Moving forward Go On UK is looking into

creating a central online hub offering content and support materials for businesses and individuals

(including public sector, commercial and third sector content.

All this is critically important to the future of UK society and our economic prosperity. Ultimately we are

not going to be able to compete with China on the size of our workforce – but in the future we could

compete on the basis of our national digital skills base and world class digital public services.

Mark Thompson – forum for national digital leaders to challenge each other. This is too important for us

not to be more critical on a regular basis!

Q: Martha Lane Fox recently resigned as Digital Champion via twitter – what is going on there?

A: Martha Lane Fox is now in House of Lords which means she can serve as critical friend of Go On UK.

However there was a slight tension in combining both her position as Digital Champion and a Member of

the House of Lords – hence this recent decision. Of course Martha still remains an active and engaged

Chair of Go On UK.

Q: Will there be another UK Digital Champion?

A: Probably in the long term a new Digital Champion will be appointed. Martha recently received a letter

from Commissioner Neelie Kroes updating her on the European Digital Champions initiative and praising

her work in pioneering the Digital Champions concept in the UK.

Questions:


Q: I heard the President of Estonia speak last week, during which he emphasised the issue of digital

identity and that they are going to be creating a public key identity system. What are your views on that?

A: Estonia has a culture of people having ID cards which makes migration to this kind of identity system

somewhat easier than in the UK where there are longstanding and ingrained cultural misgivings about

identity cards.


20

Interactive Discussion Groups – Report Back Session

Digital Skills

Capturing Innovation and Culture Change

Early learning and acquisition of digital skills were key topics in this group discussion. Participants also

talked about the national curriculum and its deficiencies in relation to digital skills. A key foundation for

future success will be enthusiastic and engaged teachers. There is also a need for a practical focus on

education.

There is also a clear distinction between digital skills for everybody (skills everyone needs) and the high

level skills that employers are particularly keen on. Employers do need coders and programmers

(specialist niche disciplines) but they mainly need more project management/customer facing skills

(which don’t always sit quite so well with technical skills disciplines).

One big employer reported that young people should think about going to university in a context where

on the job learning and apprenticeships might be a better approach for them. There was also discussion

about the up-skilling of the existing workforce. There will be a huge deficit amongst the existing public

sector workforce in terms of digital skills and skills for redesigning services. Tackling this issue will take

time and a lot of work.

Overall it was concluded that the challenge is no greater than in education – particularly in primary

schools in Key Stage 1. We have a national curriculum which asks for them to be taught about algorithms

and coding – when the teachers who are supposed to be administering this don’t have a clue about how

to approach such subjects. Finally, given that the concept of digital skills is also somewhat ambiguous it is

challenging to offer a universally satisfactory definition for all contexts and applications which then

makes it harder to determining appropriate funding streams.

Key challenges identified were issues with breaking ranks, existing hierarchies and institutional

conservatism within many organisational cultures which prevent new ideas bubbling up to the top.

Siloed structures also constitute a significant barrier. Another common denominator related to internal

challenges and people within organisations. How do you define your customer? Are they the external

people who you are trying to reach or are they the people in your organisation? The answer is that in

reality both of these groups need to be engaged.

Generally speaking it is important to establish the right routines, structures and tools to help people

connect, collaborate and learn from each other. There is also a need to ask difficult or controversial

questions (rude questions in the nicest possible way)!

Providing open data and API’s can yield significant benefits. For example there are 200 Apps available

which have been created based on open data on bus transport in London. Ultimately it is about winning

the hearts and minds of decision makers to help innovation happen. If not the existing barriers

surrounding vertical silos, resistant organisational culture and existing power relationships will prevail.


Digital Procurement

Digital Payments

Digital Platforms

Digital procurement models are moving towards an electricity type approach to procuring IT – and yet

government procurers tend to prefer to commission X number of units per year rather than receive

monthly invoices!

As the old adage suggests, if you give a person with a hammer a problem – the answer will usually involve

a hammer. There is a need for significant tweaks to be implemented within the G-Cloud framework –

including offering discounts and frequency of the refreshing of the framework. Currently this is refreshed

every six months, but this approach creates problems for procuring products from previous frameworks

as they are deemed to no longer exist under the new framework!

In business it is essential to identify who your customers are and what they want. Government needs to

avoid a “fire and forget” approach to dispensing funds and making payments. Instead government needs

to track the money after it has been dispensed and assess how it is being used and the value it generates.

There is significant value in gaining big data insights from the spending decisions and habits of citizens

receiving payments. Such approaches are common in the private sector but not so much in the public

sector. In other areas government has successfully deployed a stick and carrot approach. For example

HMRC will fine you if you send in a paper tax return after the 31st of October, but allows you to submit

online tax returns up to the 31st of January – which represents a powerful incentive for digital uptake.

Educating people and having the right incentives are very important. In some instances even education

by stealth is appropriate and necessary.

A key factor which determines whether people engage with something new is the emotional effect it has

for them or the emotional association they have with that new opportunity. For example, many of those

working with people who have never used computers tend to employ the first step of showing

participants a picture of their child or grandchild. Participants can also be shown Google street view

which allows them to look at places they used to live (with which they will often have an

emotional/nostalgic attachment) – and then move on to services like online shopping and service

comparison. Experience demonstrates that once an individual has an emotional connection with a

positive outcome or experience they are more likely to use a particular technology platform or service.

There is also a clear need to engage with grassroots – right now SMEs tend to be innovating most in

partnership with local authorities because the payment amounts are relatively small (therefore less

attractive to big players). For the migration to Chip & PIN the large banks invested £3 billion to make the

system viable. Right now the transaction sizes are not large enough to generate this level of corporate

investment in new pre-paid systems. In conclusion, the solutions are there, but the key issue is how do we

move this agenda forward and achieve public sector efficiencies and savings whilst boosting user

convenience, flexibility and experience.

Successful, user friendly and accessible digital platforms need to be citizen-centric not organisation-

centric. They need to be fully inclusive regardless of whether the channel is a mobile phone, a website, an

App or an Interactive Voice Response system….etc.


22

In relation to digital platforms the discussion identified four key blockers/enablers

1. Common standards – there is a need for initial leadership from central government to establish

common standards – and then let the market run with the ball and innovate

2. Authentication is absolutely key – one option is to pass the responsibility for data sharing back to

the customer and let them decide whether to share or not

3. Culture – politics and institutional inertia often tend to dictate outcomes which are in opposition

to what customers and platform users actually want


Closing keynote

Chi Onwurah MP, Shadow Cabinet Office Minister for Digital Government, Cyber Security

and Civil Society

Digital leadership is a critical factor in the transformation I hope to see in our public services. This is not a

party political issue – we all believe it is a good thing. I worked in ICT for 23 years, and as an electrical

engineer I want to use this opportunity to evangelise the importance of the power of digital for those not

already converted to the cause. And yet it is important to remember that digital by default should be all

about driving service improvement as opposed to merely implementing cost cutting schemes.

The truth is that the digital divide and economic inequality and the cost of living are all growing. Combine

this with delays in broadband roll out and the rise of Big Data and the Cloud – and there is a real risk of a

large disenfranchised and disempowered underclass developing whilst the privileged enjoy greater

freedom and transparency. Technology has the power to entrench existing power relationships or redress

them. Digital government has not even begun to disrupt existing power relationships. The internet

should yield more horizontal (as opposed to vertical) relationships which allow individuals to redress the

balance of power with governments, big companies and institutions.

A good example of how data can empower is the social enterprise Patients Know Best, which enables

patients to take control of their healthcare by giving access to medical records. In social media “Gig

Buddies” pairs up people with and without learning disabilities to be friends and to go to events together.

This gives carers time off and provides people with more freedoms. In Newcastle we have piloted an adult

social care programme called Chain Reaction where personal budgets are used not for individualised day

care but shared activities – like a trip to the cinema - co-producing care based on sharing preferences and

capabilities. There are so many areas in which service users can harness their own data to help define and

improve their service and yet more where data sharing can improve service experience.

Right now – most people are experiencing what I would describe as “digital discomfort”! Whether it be

the security services monitoring our communications and online activity, amazon tracking our

purchasing choices, Google recording our every move, or our children being exposed to internet

pornography - in many instances fear of digital overshadows the positive benefits and opportunities on

offer. If government and industry do not work together to drive the positive power of technology then it

will transform the relationship with government for the few – whilst entrenching disadvantage for the

many.

It is worth remembering that 80% of government interactions with the public take place with the bottom

25% of society but only 15% of people living in deprived areas have used a government online service or

website in the last year, compared to 55% nationally. Digital government without inclusion risks a return

to an 18th century model of democracy. We must ensure that technology drives power and data out to

the frontline with the service user, not just to be conserved in vast data stores.

Indeed I would question the basis of a Consumer Relationship Management (CRM) approach to public

services particularly when it comes to resolving the really difficult problems which is where the real

challenge is. A book recently published by three academics from Newcastle University – Digital

Government @Work – argues that we need to know the nature, relationships and context of all the


24

players before determining the appropriate identity and information governance. Only in this way the

repeated polarisation between the ‘service state’ and the ‘surveillance state’ can be overcome.

This kind of federated managed network approach may be organisationally and technically challenging

but also powerful in the opportunities for dramatic and disruptive government change it could unleash.

Because so far, despite all its promise, digital government has entrenched existing power relationships

rather than disrupting them. Used properly, with proper concern for privacy, transparency and service

design, technology can be a powerful tool and reshape how government and citizens interact with each

other. But it cannot be imposed - whilst they must be evangelists, digital leaders must not see themselves

as missionaries colonising the ignorant.

Whatever the question, technology is never the answer on its own. Technology only works in the context

of the people and processes who work with it. When it comes to technology there is definitely such a

thing as society. If we see technology as simply a way of shrinking the state, then we risk betraying the

vulnerable. Bad technology always costs more than good people. We must see digital government as a

way of empowering people - service users and public sector employees, citizens and consumers – and

enabling cost reduction in the process. We need to drive the power of digital out the GP’s waiting room,

the housing office and the school. But it can’t just be pushed out – we need the pull as well. We need

public sector stakeholders to have the skills and capacity to share in the design of the new services people

need.

Rather than addressing these challenges ad hoc and reactively we need a framework for the relationship

between the people and their data, Government and digital. That is the debate we need to engage in.

This is why I am pleased to announce today that Labour will be publishing an updated copy of the Digital

Britain report before the next election. Already we have a number of digital policy development streams

including the recently announced independent review on digital skills led by Maggie Philbin. Digital

Britain 2015 will be the product of Labour’s engagement across departments with businesses,

consumers, academics and institutions to develop a long-term digital strategy that works for the many,

not the few. It will be the product of engagement with academics, businesses. I look forward to working

with you to implement it after the next election.

Now I have the privilege to make another announcement, one which chimes absolutely with my message

of driving power out from the centre. Digital Leaders Local will be beginning in the 9 English Regions in

2014. The first of these will be Digital Leaders North East starting in January – this was not my doing but I

am very, very pleased about it. The bringing together of knowledgeable people from Business, Academia

and local and central Government to discuss these regional issues is so important and I am reassured that

Digital Leaders recognise this, and the importance of the North East helping develop digital

transformation strategies that will create more social and stronger economic cohesion between often

disconnected local stakeholders.

It is encouraging but not surprising that the prospect of Digital Leaders North East has been very well

received. From talking to local stakeholders I know many in the North East understand the importance of

digital leadership, and indeed it was recently announced that we will soon have the first and only

Doctoral Training Centre for Digital Civics at Newcastle University.

I look forward to taking part in a Digital Leaders north East salon in the not too distant future.


Questions

Q: What is the role of the SME sector in all of this?

A: Support for SME sector covers a wide range of areas. There is a huge proportion of SMEs who don’t use

technology – there needs to be higher level of support for procurement in terms of increasing the

engagement of SMEs and support on cyber security, g-cloud, skills, training and engaging with the

Technology Strategy board. It is about the digital skills agenda in terms of up-skilling small businesses and

also about making procurement process more attractive and easy to engage with for small businesses.

Local authorities have a big role to play in this. Also important to enable central and local government

procurers to reward social added value – given that working with local SMES can often add more value

through their knowledge and commitment to their local communities.

Q: Helen Goodman announced Labour would move £75 million out of the smart cities budget and invest

this in support for greater digital inclusion – will be a feature of the revised Digital Britain Report?

A: The first Digital Britain Report was primarily focused on digital infrastructure. The updated report will

be about digital transformation and inclusion.


26

Concluding Remarks from Chair Mark Thompson

Today’s discussions have identified a tension between bottom up and agile approaches – versus top down

civil service redesign and reform. It has also been suggested that without bold and revolutionary

approaches to digital transformation, progress is likely to suffer due to cultural and institutional barriers.

In the field of procurement, there is a shift towards commoditised consumption behaviours which is not

something that many of our procurement departments are up to speed with. The future will see

increasingly levels of “Lego brick-style” componentisation and commoditisation. There is also the

capacity of the Internet and big data to support more direct and horizontal relationships between

governments, companies and individuals – as opposed to maintaining existing vertical organisational

structures and relationships.

Another important debate is the importance of computer science skills versus creative technological skills

and how to ensure the right balance across national training and education programmes. In this context,

multiple definitions of what digital means offers both an opportunity for innovation and change, but also

a set of competing technological and systemic options. Much of the current ICT skills shortage is actually

around business management and project management/customer facing skills – not just coding and

programming.

Above all, culture – at a philosophical, organisational and individual level was repeatedly identified as the

most important barrier to digital transformation. There is also a clear need to focus on generating

demand for digital platforms and services instead of just concentrating on the supply side. A further

tantalising and complex area was explored in relation to the possibility that payment cards can help

nudge citizen behaviour in beneficial directions. The potential for the use of big data to track and analyse

outcomes of how people are using public funds is attractive on many levels – but also raises issues with

privacy and data protection which must be satisfactorily addressed.

A final overarching conclusion is that if our approach to digital transformation becomes politicised it

would be a loss for all of us. The internet is for everyone – and it is not just about shaving money off the

deficit or about mandating one specific set of technologies.


Civic Agenda

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E: [email protected]

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