Mapping potential impact and risks from digital transformation in public organizations

On Wednesday 13 July, panellists from the public and private sector and academia came together to discuss challenges and opportunities of digital transformation in public organizations. The event formed part of BEI Engagement Week 2022: Resilience in an Uncertain World.

For many organisations, digital transformation is well underway, in part driven by changed working practices caused by the COVID-19 pandemic. Digital transformation promises significant efficiency gains, but if not considered carefully, there is a risk of increasing inequality.

In this CIMR Debate, chaired by Dr Manto Gotsi, Senior Lecturer in Marketing and Director of the online MSc Marketing, we discussed targeted policies that can support public sector resilience through digital transformation.

Digital transformation does not happen in a vacuum
Josh Entsminger, University College London

Josh Entsminger, PhD student in innovation and public policy at University College London,began the discussion by linking digital transformation to a wider social and political context. Noting that digital transformation in the UK has accelerated heavily since 2010, when the Government Digital Service was introduced, Josh cautioned that digital transformation activities are not politically neutral.

New Public Management Theory posits that state action in the economy has the necessary but insufficient condition of a market failure, and that government failures, combined with the potential for market failures, mean that the public sector should be reduced or eliminated wherever possible. Josh argued “If you deploy AI in New Public Management contexts, you get new public management solutions. If you build AI for neoliberal administrations, you’llget solutions which reinforce the neoliberal vision.”

A concern for institutions is that AI becomes the means for privatising state activity, which would reduce the capacity of the state to adjust and respond to challenges. Josh encouraged attendees to consider theories of Public Value Creation, which explore how relationships between the public and private sector can better facilitate wealth creation while producing the goods, services and environments which a society demands.

Mapping the potential impact of digital transformation
Riccardo Zecchinelli, Senior Economist, Chief Economist’s Office, Cabinet Office

Riccardo Zecchinelli leads cross-governmental analysis on public sector productivity and on the impact of investments on digital technologies on public services. He presented aframework to map out digital transformation impact on the public sector in a data constrained environment. Such frameworks are needed as there is currently no clear roadmap and a lack of evidence to understand the problems that technology could resolve and the impact of this on public value.

Historically, policy makers have made decisions based on what took place in the past and it is difficult to continuously account for new evidence. Riccardo discussed the limitations of bottom-up experimentation, which is still very uncommon practice, costly and which can capture only a niche of the impacts of digital transformation, and called for an integration of such approach with a top-down mapping, which could contribute to provide a more complete picture.

He shared a framework for assessing the impact of implementing automation in the production process of a public service. The matrix has been applied to a case study of the Italian public sector, allowing researchers to map the different public services and identify the probability and value of automation. The highest value comes from services that tend to be more repetitive such as administrative tasks.

The framework can be used in anticipatory governance to develop more targeted policies based on mapped risks and returns.

Introducing AI ethically
Maria Axente, Responsible AI Lead, PwC

Maria Axente shared insights from her experience in implementing responsible AI and data across PwC UK, its operations and clients. As organisations are increasing budgets allocatedto AI and producing more proofs of concept, there is mounting pressure for AI to be managed responsibly. Maria cautioned against looking to AI to solve every problem and advisedlooking instead for the most sensible solution, which may not involve machine learning or voice assist technology.

She highlighted the need for collaboration in the ethical production of AI, between different departments in large organisations and between data scientists, legal scholars and ethicists. AI brings a new risk that needs to be managed, either through technical interventions, governance or strategic planning. Maria called for a holistic and iterative approach to implementing AI and stressed that everyone is accountable for ethics in AI. She encouraged the public sector to assess the learnings from industry and engage with the private sector to translate how this could apply to their organisations.

Workforce planning for digital transformation
Hayfa Mohdzaini, Senior Research Adviser in Data, Technology and AI, CIPD

Hayfa Mohdzaini is interested in how the people profession can contribute to good work through technology. She encouraged attendees to consider access when implementing new digital technologies.

Hayfa also called for organisations to do better when transforming roles to accommodate digital technologies: “Organisations are pretty good at planning next roles within the organisation, but if they don’t have anything to offer, there is no coordination or collaboration with other organisations, instead they just go for redundancies.” She drew on the example of Hilton hotels during the pandemic, who turned their recruitment pipeline on its head to place temporarily unneeded staff in other organisations, as a creative example of providing opportunities for staff through transformation.

Hayfa encouraged organisations to involve HR if they can see changes in the future of their organisation, to enable skills planning to support people through digital transformations.

The recording of the event is available here.