Digital disruption in government


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Tom Burton: Welcome to the Mandarin. Vivek Kundra is our guest today and he’s the former CIO for the Obama administration and now Vice President for Salesforce. Welcome and we want to talk today about digital transformation. For our Australian audience, could you describe your experience with digital transformation in government?

Vivek Kundra: Sure. First of all, Tom, thank you very much for having me here today. When I reflect on my journey and the focus on digital transformation it actually begins at the local government level where I started my career in public service then went on to work at State Government and eventually at the Federal level for the President. And one of the biggest areas that we focused on throughout in our federal State the local government was really putting the citizens at the heart of government operations and if you think about the journey when it comes to technology and the public sector.

In the 1960’s the past was very much about system of record so there’s massive amount of investment that went into building databases and ERP system and supply systems. And then over the last decade we moved into an area which was very much about systems of engagement where you’re able to negate whether it’s through Facebook or through Twitter or LinkedIn and now we’ve entered an era of systems of intelligence. And so, throughout that whole journey I spent a lot of time making sure that whichever era we were in that we were engineering systems very much focused around the citizens.

How do you make sure that they’re interaction with government is frictionless? Most people only think of government today, they look at it and they say you have to wait in line, hold on the phone or submit a three part paper form. Yet, in their everyday consumer life there’s an app for that and it is this gap in information technology in today’s world that we’re seeing that’s creating a bigger drive towards digital transformation across every level of government.

Tom Burton: The engagement piece is obviously impacting across the economy. What other disruption would you say digital is causing in government besides that engagement piece?

Vivek Kundra: I think the biggest one today is this notion of the system of intelligence and what I mean by that is the average Australia today can pick up their smart phone, they can tap or swipe to literally have a car shop and pick them up, they can tap or swipe and order something that will appear on the doorsteps the same day or the next day, they can tap or swipe and book their flight anywhere in the world. Yet, when you’re looking at government that isn’t happening today, so what’s happening in some part of government like in New South of Wales is the fundamentally redefining customer service and what it actually looks like.

So, you can actually anticipate the needs of your citizens when you go on Amazon and you buy a product there are other products that are recommended or when you’re watching a movie on Netflix and you like the category of thrillers there are other thrillers that are recommend to you. That is where the government is headed now and we’re seeing this in terms of the leadership in New South of Wales where they’re using technology to create end to end digital processes, but more important than that actually recognizing that the best experience in a government office is the one that you don’t have to set foot in the government office.

Tom Burton: This is the Service NSW model.

Vivek Kundra: Absolutely.

Tom Burton: Where they’ve taken four hundred government services, brought them all together in one unified system and obviously there’s a backend that supports the whole process.

Vivek Kundra: And they actually went beyond technology, right? So, the other thing they did is they went in and they said well, one somebody has to walk in and for one reason or another into the government office. How do you make sure that that experience is the most excellent experience? So, one of the thing they did is they went out and they recruited people who were focused solely on customer service. So, whether it’s receptionist, bank tellers, and they brought them in to make sure they’re providing world-class service to anybody that walks into a government office and that is extremely powerful. That’s one of the reasons they have a 99 percent customer satisfaction rating.

Tom Burton: So, it’s a good example of digital transformation leading to a much bigger change. When you reflect on your own experience with digital transformation in government you had this really unique experience of three tiers of years of government, watching it. For a country like Australia would you have any observations we could pick up or learn from. I think the UK and USA are a little bit more advanced than we are in digital transformation in government are there lessons we could learn from?

Vivek Kundra: Well, I think that there are lessons that need to be shared around the world because I don’t think there is one clear leader because you have pockets of excellence around the world. So, when you look at the UK, for example and the focus on digital services by actually engineering every experience and user interface with the citizens in mind, that’s extraordinarily powerful. When you look at Japan what’s happening as far as investments are considered around identity management and creating platforms that will enable you to easily interact with their government. Or you look at the US context where a lot of work is happening right now as a result of 18F around making sure that the same innovations that people are used to from silk and value are being applied in the conscience of government services. Or whether you look at the amazing leadership that Minister Turnbull is applying to actually the digital transformation office and reimagining the future.

There are some amazing things that are happening that just need to be scaled and I think for too long what’s happened is government leaders in capitals around the world has focused purely on systems of records. It was easy, it was comfortable and they’re still stuck in the 1960’s era of the technology model, but their customers have leapfrogged, the citizens have leapfrogged and what needs to happen now with any of these initiatives is actually to meet your citizens where they are.

Digital leadership in Government


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Tom Burton: If you were coaching agency leads, okay, the world’s going digital, your citizens are now well ahead what would be some of the points you would want to make to sort of agency head when they think about this. Some of the agency that are very hand digital, some quite digital but we got sort of common observation for those sort of people CEO, secretary of the department that sort of thing?

Vivek Kundra: In a lot of the meetings that I’ve had around the world you know whether I’m in Tokyo, in London or Washington or in Canberra, one of the common themes that I’ve observed is that people are trying to boil the ocean. And so there is this kind of analysis paralysis where there is somehow this view that there is a magic outlet out there and the reality is you’ve got to be able to be very, very focused, pick a few areas that you want to go after, be ruthless when it comes to executing your initiatives and make sure that they don’t get caught up in the old kind of doctor no reason for why things don’t move forward whether it’s procurement, or its budget or people are talking about talent.

What I think it’s really about is leadership and I have to tell you in my meeting with Minister Turnbull, I’ve been inspired, you actually have a leader who not only deeply believe in this transformation but has put together a dream team that’s going after this and I would argue that any agency had or secretary need to tap into that energy and leverage that momentum so that you’re actually racing to the top, so you’re the first agency that’s moving towards this transformation rather than what is traditional the default setting of government which is to resist change.

Tom Burton: Right and if I’m hearing what you’re saying kick off particular target, so a particular point points within your agency what you mean if you regulate it, it might be you got a whole bunch of people coming at you for applications, how do I manage that, is that the point you meant?

Vivek Kundra: Absolutely, let’s take an example right if you’re the department of social securities, today if you want to interface with the Department of Social Services you can go online but you’re forced to download a form that has 250 questions that you have to answer and then you submit it and I believe you’re told you shouldn’t call for 30 days. There is no feedback group that tells you they received your form, where they are in a process and what’s required as far as any information that’s missing. So, you create this horrific interaction with government…

Tom Burton: Just to be clear are we talking about the US security department?

Vivek Kundra: No, here.

Tom Burton: Okay.

Vivek Kundra: You could see a whole host of use cases where the government can take it to the next level and be much more predictive. So, for example, if you’re driving and your licence plate is expired and you get a ticket instead of the answer being you’re constantly being ticketed what if the government were to say, ‘hey, you’re ticketed, we can renew you licence and if there’s issues as far as the instruction is concerned here’s your appointment that has been set up for you’. I mean that’s the model where a lot of these agencies can really, really focus, pick one or two areas, prove success and then build a momentum behind that.

So even in the case of New South of Wales they didn’t start with four hundred transactions over a 24-hour period, it was very much discipline around starting with a few transactions and then every quarter building on that momentum, building on that success. And I think most leaders forget who they work for; they get too caught up in bureaucracy instead of going out there and having town halls with your citizens asking them which transaction would you like to see online. What would you like to have transformed as a customer and they have the answers and there is a demand side there. You could build a lot of positive momentum for your agency if you step out of your office, engage the community, bring them with you, build the solution and then scale rapidly.

Reimagining procurement


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Tom Burton: One of the things I’ve noticed in the USDS (US Digital Service) materials is there’s quite a lot of discussion around how to rethink procurement and rethink contracting, that sort of space if you like. I suppose the question I have is procurement one of those impediments that government need to look at and that may start open up a new way of thinking.

Vivek Kundra: Absolutely, so I think procurement that traditionally have been problematic and if you look at most government procurement around the world it’s looking at IT the same way the government would look at building, a physical building that is going to last a decade. Yet, IT with Moore’s law, over 18 months there’s massive innovation, and that is why when you think about the technology models it’s less about asset ownership, it’s much more about service delivery. So, you’re seeing these new computer models around cloud and social and mobile that are fundamentally changing everything we held to be truths whether it was around security, whether it’s around infrastructure ownership. So, procurement absolutely requires transformation in terms of being able to buying in an agile way.

But I would argue that if you have the right leaders even with a current procurement laws in place you could drive transformation. What ends up happening with a lot of agency heads is they for some weird reason start working for their procurement heads and that’s not how it’s supposed to be.

The agency head is supposed to represent the interest of the citizens, so you need to be able to be aggressive, to be able to drive that agenda and be clear with the procurement representatives who are in your agency in terms of what you need.

At the end of the day if you talk to most procurement people you know what they will tell you, there’s nothing wrong with the procurement rules, you tell us what you need.

And so, we’ve gotten to this culture of faceless accountability or people just pointing fingers at each other instead of getting together in a room, having a conversation with citizens first in terms of what the talk needs are, then bring it together the appropriate agency leaders whether it’s from procurement or the CFO and say here’s what we’re trying to accomplish and this is the timeline and this is not a 3-year timeline but 90 days. Right and every quarter creating that cadence, that quarterly cadence and they think magic begin to happen when you have a focus and execution.

Tom Burton: Discipline around deadlines and trying to do things in sprints.

Vivek Kundra: And I would argue that for government agencies one thing they could do to really do to drive outcomes, is to operate the same way you would a publicly traded company which is report in the same way you have to report earnings every quarter. Why is it that these agencies not reporting progress every quarter? Have a call with your State callers, your citizens, tell them what you’ve accomplish in the last 90 days.

Tom Burton: And that gives you the urgency you need

Vivek Kundra: Absolutely and be honest about the successes and the failures.

Unlocking technology


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Tom Burton: Are there any other impediments, as you’re speaking in Australia, and elsewhere that you think are headline issues for government at a high level to think about? Procurement being one, but are there any others that you think are blockages?

Vivek Kundra: I think that one of the other really, really big problem is that there’s so much capital locked in the old legacy systems and a lot of agencies haven’t been aggressive enough on cracking down on wasteful IT spending.

So, the ability to actually freeze all this monolithic old IT projects where you’re implementing an ERP system or you’re implementing 1960’s era technology and you’re just buying more hardware you know freeze that spending.

And so I think what you have is as a big impediment is a set of agency assets are so locked in the past and you don’t have people who are leapfrogging 1960’s era and recognizing that you’re entering this system of intelligence universe.

And how do you pull money and free it from that era and bring it to this new era. And it isn’t as hard as people characterise it, I think what has ended up happening is it ends up becoming a battle around who owns which project which budget, line items and frankly in terms of positions within the government agencies.

Connected citizens


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Tom Burton: In some of you work you have done in US, I’ve noticed Philadelphia and the connected citizen proposition. I think we’ve talked about this earlier in the interview regarding engagement. What were some of the learnings from what you saw in Philadelphia, that would be relevant to a city like Sydney or an agency like DHS (Department of Human Services)

Vivek Kundra: So the amazing thing about the city of Philadelphia is you had a mayor who was very determined to make sure that the city of Philadelphia was attracting investment, so businesses would move there, was cracking down on crime and had made education a big priority.

So, it begins with public safety and one of the things he did, he had said, look the government doesn’t have the answer to every problem.

What if we use these modern platforms and we were able to engage citizens, in the same way they engage with each other on Facebook. So they realise that there were parks where there’s needles in the ground, open air drug markets and graffiti everywhere. And so they said what they said was well what if we had precinct captains online in this program called Philadelphia Rising, and allowed citizens to self-organise, and bring government in as part of that conversation, as part of that solution, instead of being the only solution.

All of a sudden you started seeing these areas that are crime ridden, people are coming in and taking pictures and reporting graffiti, getting pictures of the open air market and bringing police officers who are necessary and you started seeing outcomes that weren’t possible in the past.

In the same capacity every city in the world, including Sydney, can benefit from that. Where the government can become the platform and can tap into the ingenuity and they create a spirit of its citizens so no longer do you have this relationship that we now have to deal with the government be a subject and unfortunately that’s how a lot of government think.

Instead citizens can be co-creators in a general part of society and they can help solve a lot of the problems and I think too many political leaders don’t tap into that. They don’t unleash the creative energy of their people.

Tom Burton: Is that what you mean by government is a platform, the idea that it’s like a whole platform that ; can support a whole set of conversations, and engagement processes.

Vivek Kundra: Absolutely and a very rich ecosystem where you have the public sector, the private sector, the citizens, the NGO community coming together and addressing this problem in a multi-stakeholder model, rather than just one agency that’s responsible for solving it, because the problems are not that simple.

Tom Burton: If you think about it you got all this interaction happening from a digital perspective, you got to manage all that. So often the top end is relatively easy to start getting going, but you have to manage the whole underneath of it. What’s your advice around that sort of area?

Vivek Kundra: Well, I actually think its significantly easier, right and the reason is because with this interactions you have a wave of data that’s generated and the capability that existed today with analytic ability to slice and dice and cube and be much more precise at predictive around what types of intervention you need or services you need to deploy.

So the example of let’s say there’s snow in the city of Philadelphia and you need to be able to plow. What if using sensor data and snow plows and mobile device you could tell somebody when the snow plow is coming to plow their street, on a real-time basis.

What if you could actually get these departments of public work trucks that are going out there and picking up trash or cleaning streets, have cameras that could actually take pictures of licence plates and figure out which ones are delinquent or haven’t paid their tickets, right?

So, you can actually not only lower the cost of government operations, but you can provide better data around public safety, around health care; so that the government is investing in the appropriate places.

Let me give you an example on the private sector side which I think is amazing. So you look at a company like Uber, they have amasing data set that cities can leverage. It’s the ability to be able to figure out if you and I are neighbors and are leaving our house roughly around the same time, and going roughly around the same area in the city for work. what if you could carpool and that’s one of the things they did.

That’s why they created Uber pool and they have amazing data plus a whole city to be able to say what if we could lower the cost of providing transportation that’s even cheaper than the municipal bus service, and the city can benefit immensely if it share that data with Uber to be able to figure out how can the city do better planning.

Tom Burton: Right.

Vivek Kundra: It’s not just Uber, what about Airbnb?.Maybe you look at occupancy rates around the city. What does that mean in terms of growth and economic values that are created?

Rethinking data


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Tom Burton: So, just thinking about the big data issue, one of the things often we talk about all the time, but Lets imagine if you’re the Prime Minister of Australia and you got the chance to think about data, what would be your high level thought for government?

Vivek Kundra: Well, I would say one would be the default setting of government needs to open, transparent, participatory and what I mean by that is there’s a whole host of data that the government own right now and you could unleash massive innovation on the economy if you democratize that data, it is the digital fuel of the 21st century.

So, you can get entrepreneurs to start building billion dollar company on top of that government data and we recognize that that data that’s been democratize will create value when there’s interception between public and private sector data, right?

So, if you think about even the data from the weather service or satellite that’s kind of available all of a sudden you get all this apps that have been built and companies that are worth billions of dollars that could not have existed without that government data.

Second is on fighting corruption. The ability to be able to see how your government is operating, how much money is being spent, real-time data on credit cards and where government employees are charging government credit cards. It will allow you to actually hold your government accountable.

Third the ability for agencies to start sharing data, right, in ways that will enable you to create seamless services, so that you can actually abstract the very notion of central government, state government and local government. If you’re entrepreneurial why should you have to get a license from your local government and the State and then the central government, right? If you’re applying for benefit why should you have to navigate the maze of government, when you have this open data and the ability to create this new generation of services, it fundamentally transforms not just the government, but also the economy because you can enable and unleash entrepreneurship.

Tom Burton: So for agencies sitting there and thinking yes I want to be a part of this, what advice do you have around the data proposition, because I think a lot of agencies are looking at it and they struggle to find a business case under the current way we think about it, to be honest. They struggle to find a business case to even put together an open set of data, so what’s your advice to them?

Vivek Kundra: I would say that’s the wrong approach to think about it, right, because it presumes you know the answers to all the problems. I think you need to approach it from a completely different lens which is you need to be able to believe in the principle that your government should be open, transparent and participatory. If you believe in that principle you need to recognise that you’ll put out that data and an entrepreneur somewhere in Australia will find amasing value.

I’ll give you an example in terms of their case in the United States. There was data that was put out by the Department of Labour and some folks were saying who are you, who will use this, it’s useless data. But this entrepreneur came in and created a company called BrightScope which is worth millions of dollars and they were able to actually use that data to score 410k plans. They had built a business out of it.

So part of it is to think about that data almost like a grocery store, and you have no idea what restaurants are going to be built, but you’re providing the raw ingredients to create innovation.

I think it’s not smart to think about it in terms of what is the right business case and how do I justify it.

Think about just health care data, right if you democratise that health care data, the ability then to build application that can allow you to compare outcomes before you walk into a hospital, so you could see what is the outcome if you get a knee replacement in this hospital ,versus another hospital. How did people rate this doctor versus another doctor? You create a level of transparency that will fundamental change the way services are delivered and frankly the economy.

Tom Burton: It’s been fascinating Vivek, thank you very much for your time and we’ve been very privileged to have you here today. Thank you and hope you enjoy your visit to Australia.

Vivek Kundra:Thank you. Thank you very much for having me.