Introducing the digital offset effect

Written by John McMahon on 13 July 2017 in Opinion

John McMahon from IEG4 takes Isaac Newton as his inspiration for new method of measuring the success of public sector digital transformation projects

Isaac Newton penned his third law in the year 1687, and it’s fair to say he was not considering its relevance to the digital transformation which would happen some 330 years later. But it very much holds true in the public sector today. 

Digital ubiquity in the public sector is where all contacts and transactions are handled entirely through the digital medium. But how does one measure how close one is to achieving such a state, and whether the action from the introduction of digital services has had the appropriate reaction? There needs to be a new term to measure the level of reaction to digital transformation. And it could make sense to use a financial term: offset.

The basis of the digital offset effect (DOE) is that, for every digital service introduced, there should be an equal ratio of reduced activities through alternative channels. Therefore, if a council were to make every service it offered – such as paying council tax and benefit applications – a digitally complete one, it would be able to remove all alternative channels of access. 

While there are certain areas in the public sector, such as social care, where it may not be possible to make every service digital, the principle holds true for those that can be digitised. Therefore, the de facto DOE measurement would be 100%. This harks back to Isaac Newton’s 1:1 action and reaction ratio.

When reviewing and creating digital-transformation business cases, DOE should be measured to establish the efficacy of the new digital service in achieving its intended goal. Clearly, unless alternative channels are removed, not all digital services will achieve the gold standard of 100% DOE. 

Not achieving this rate of success may also be a consequence of the fact that not all services which are digital are designed very well. Not just in terms of how they look – such as whether they are mobile-device friendly – but also in terms of the user experience, including factors like the speed of registration process.

It is true that a DOE of 100% is difficult to achieve for public sector organisations with a legacy investment in alternative methods of delivery, but it is certainly not impossible. The private sector shows time and time again that, in a bid to minimise operational costs, it is possible to innovate on service development to keep a high DOE level over time.

Digital transformation is happening in every sector, and the private sector has a huge vested interest to deliver innovative solutions in the interest of minimising operational costs, while simultaneously improving customer service. 

Progress tracking, proactive updates, and real-time communication within a single council-wide digital platform are critical to the next generation of public sector services, and to achieving high DOE and near digital ubiquity.

Of course, in reality, all of this should be balanced up with the fact that the public sector has significantly more processes than the private sector, as well as a political balancing act to do in its carrot-and-stick approach to digital. While there remains a service-delivery paradox which public sector leaders and politicians are versed in – or should be – digital is about providing better services for citizens, not just alternative ones. The digital channel just happens to be significantly cheaper, and, because it provides a better service, is one that citizens increasingly want to use.

I'm sure that if an explanation of the Digital Offset Effect were to be provided to Isaac Newton, he would tell you it is a no-brainer. 

John McMahon is product director at IEG4

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