Master´s thesis “Total Portfolio for Public Services” (1) introduces the way to prepare existing public services for the digital era. Citizens and their life events can trigger new demand for digital public services, but introducing or improving digital services will require tectonic changes in the current service base.
How does the current service base look like in public organizations?
Most public organizations struggle with a myriad of independent services. Services and customer insights are scattered in disparate offices or entities; and so are the corresponding digital assets. This disparity makes the change towards a smooth digital experience hard and financially challenging to execute. As a result, customers often have to find and select their public services from bits and pieces of a fragmented, incoherent mass of services.
Yet, citizens of today expect the same smooth experience from all services they consume – either digital of physical, public or private, automated or manual. What primarily matters for them is that the service gets its job done as expected, and when expected. It also matters that the customers can find the service easily. The cool “wow!” effect happens when the citizen gets the service available even before he or she realizes the need for it. And it is only after such a happy discovery that he or she starts inquiring how much the service can cost, and how the cost is charged i.e. through taxes, through insurance, or out of the pocket. If the cost is right, the citizen chooses the best option and enjoys the experience.
Definitely, it is much nicer to pay a few dozens of euro for a childbirth, instead of 10 000 Euro or more, depending on potential complications. This angle is one of the strongpoints for consuming public services. They tend to be affordable and predictable without unexpected extra bills. Public service quality also tends to be high, as there is a lot of public attention, monitoring, and quality checks. In addition, public services are found in public offices, which makes them easy to spot. Private services must struggle much more for being noticed. In addition, many public services have traditionally been incumbent without much of a competition. All these factors make the current service base look very attractive and promising. But is it for long?
Not only “what” but also “when” and “how easy”
Digitalization changes this natural attractiveness of public services. A much wider, “heavier” public service base faces unprecedented direct rivalry and a threat of substitution from the private side in the ways that were not possible in pre-digital era (2, 3). Hence, today it is not enough to concentrate on the traditional strongpoints of public services (affordability, quality, wide coverage). These services must meet the customer needs better.
Let´s start with “when”. In essence, public services consumption happens in certain life situations. When a child is born, certain childcare services are triggered. As the child grows, new service needs come to the picture, and they form a web of service needs. Imagine if those life situations could be identified and analyzed so well that the citizens could be offered the right services proactively. This is why Stiglitz-Fitoussi-Sen commission modeled the typical citizen´s core needs for the European Union in 2009 (4). Since then, for example, Finland and Estonia have established their Artificial Intelligence programs pursuing this capability to identify citizens’ life-events for focusing public services better (5, 6, 7). In other words, the providers of public services look ahead and have a clear vision how to be more proactive.
So, after building such visions, why there is still a problem with “how easy” the public services can be? Unfortunately, this problem exists, and it is both managerial and technical. It originates from the fact that few public services are islands of their own, and they are not really restricted to certain service areas or tools either. Yet, the operational models of local governments have divisional silos which separate public services into the urban environment, cultural, education, social and health services. This dilemma makes an obstacle for triggering a change in public services into easy and proactive digital services, as envisaged above.
What to do?
My Master´s thesis (1) addresses these issues and proposes an approach to handling them through constructing a business operational concept named the ´Business Wheel´. The ´wheel´ first describes the related business dynamics and then suggests a Portfolio Management setup and the necessary organization around those portfolios. The key pivotal portfolio for a municipality is a Service Portfolio because local governments run hundreds of services. If they are run disparately, without clear service structures, it becomes almost impossible to match those hundreds of existing services with the citizen’s life situations in the way envisaged above.
This is why the thesis recommends that local governments should consider the Service Portfolio and the customer life events first. Addressing both areas will directly lead to a need for fundamental transformation towards digital services, but there is also agility required in adapting strategic targeting. The success will depend on the ability to continuously assess the environment and effectively steer the execution.
However, to capture the value, just steering and targeting is not enough. New and improved public services will be needed, which requires a substantial amount of innovation. All these parts of the ´Business Wheel´ and Service Portfolio practices should contribute to constructing a managerial ecosystem and prepare public services for a turnaround based on life-events triggered services.
About the author
Ilkka Kautto works as a directing chief specialist, ICT development in the City of Helsinki. He has over twenty years of experience in innovating and developing new digital solutions and related organizational capabilities in international technology cluster and public organizations.
- Kautto, I. (2020). Total Portfolio for Public Services: How to Prepare Existing Public Services for a Turnaround to a Life-events Triggered Proactive Ecosystem. [Master´s Thesis]. Helsinki, Metropolia university of Applied Sciences.
- Christensen, C. et al. (2016). Competing Against Luck: The Story of Innovation and Customer Choice. 1st edition. New York, NY: HarperBusiness.
- Ulwick, A. (2017). Jobs-to-be-done for Government. April 19 2017. [online] [Accessed 2 March 2020].
- Stiglitz, J. E. and Sen, A. and Fitoussi, J-P. (2009). Report by the commission on the measurement of economic performance and social progress. [PDF] [Accessed: 10 June 2020].
- Sikkut, S. and Velsberg, O. and Vaher, C. (2020). #Kratt AI: The next stage of digital public services in #eEstonia. Republic of Estonia, GCIO Office. [PDF] [Accessed 25 February 2020].
- Maunula, A. (2019). Julkisen sektorin digimenestyjät 2020, Suomi. [online] BearingPoint. [Accessed 19.1.2020].
- Ministry of Finance (2020). The AuroraAI national artificial intelligence program begins – with the aim of using artificial intelligence to bring people and services together in a better way. [online] [Accessed: 10 February 2020].