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Change the regulatory environment to enable innovation


By Al Blake, Principal Analyst, Ovum’s Australian Government practice
Monday, 13 February, 2017


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Digital innovation needs more than technical advances — it also needs organisational and regulatory change.

Public servants are continually encouraged to do everything faster in the name of innovation. Unfortunately, saying something doesn’t necessarily make it so, and that is especially true when there is a disconnect between the desire for ‘agility’ and the organisational environment in which it must be delivered.

Often the CIO has endeavoured to deliver ‘agile’ outcomes, while grappling with organisational environments that need months to procure software or recruit new staff. Frustration is compounded when legislative or regulatory compliance concerns are thrown into the mix. Fortunately, the tide seems to have turned, with recognition that the rules and regulations under which agencies do business are at least as important, and maybe more so, than the database engine they use.

Late last year, the newly rebranded Digital Transformation Agency announced its agenda to implement simplified digital government services at the national level. Apart from the rationalisation of its efforts to a smaller number of projects, the most interesting aspect is recognition of the impact of the wider regulatory environment on the ability to deliver “changes to existing policy and legislation that blocks change will underpin the success of the transformation”.

This is a crucial and, as yet, neglected aspect of the innovation agenda, as in many instances discussion of new approaches is pre-emptively shutdown by invoking a (real or perceived) legislative impediment. When discussion reaches “the legislation won’t allow us”, investigation halts — rather than considering whether a) the interpretation is correct and b) whether the legislation should be changed. Placing potential legislative change front and centre sends a welcome message about the new approach.

Practical expression of the new attitude can be seen in changes to the myGov authentication service, where the user experience to date has often been frustrating and disappointing. Using long, random numeric IDs and complex password reset procedures may provide adherence to an ultrahigh-grade security requirement — but at the expense of usability.

To address this myGov will move to using email addresses and mobiles for authentication — after all, if it’s good enough for online banking, surely it should be acceptable for tax and welfare transactions?

A similar understanding of the importance of taking a rational approach to the legislative environment has been identified across the Tasman, where a cross-agency working group on collaboration in the NZ government called out a tendency to use ‘security’ or ‘privacy’ issues — real or imagined — to prevent unwanted change. Furthermore, it cautioned senior executives and project managers to sanity check claims that something can’t be done “because of privacy”.

The increased understanding that innovation will not come about through purely technical implementation but that it is fundamentally dependent on external, non-technical, environmental factors is a welcome sign of increased maturity. It will help CIOs to assist agencies in holistic digital transformation — rather than being simply viewed as a problem for IT to ‘fix’.

Image courtesy Eduardo M.C. under CC

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