Voices from Accenture Public Service


In my last post, I discussed public finance leaders’ enthusiasm for taking the lead on digital transformation. A full 70 percent of those Accenture surveyed believe that the CFO is the best person to drive organization-wide performance improvement from digitalization. Driving this change begins with securing resources. It means building a compelling—and exacting—business case for digital innovation that sets out the expected return on investment (ROI). Not just for the finance function. But for the entire organization too.

Public sector finance leaders have begun to focus on establishing returns on digital investments. Their experiences have run the gamut. In fact, 28 percent say that their early digital investments are delivering as expected. And 25 percent say that attractive business cases are emerging from their early forays into digital. Even more promising, 6 percent report that digital ROI is actually ahead of their expectations.

Still, one quarter are struggling to define the ROI for their digital investments. Add to that the scrutiny that public organizations face around optimizing resource use, and what results is a perfect storm of mounting pressures that finance leaders must address. The way through is to take a clean-slate approach to building the business case for digital investments. Instead of clinging to how things have always been done, there is opportunity to push beyond convention to put a new, relevant set of metrics in place to measure ROI. Here are some ways to do that:

1. Delivering social value  

Public finance organizations can think beyond pure cash returns and explore ways to measure new social value made possible by digital transformation. The reality is that in the digital world, the value of the data that organizations generate, store and process for insight lies as much in the public service improvements it drives as it does in the new organizational savings and efficiencies it delivers.

2. Unlocking new revenues

Public sector finance leaders can use digital tools to increase the revenues flowing into their organizations. The director of finance and administration at a national agency in Italy told us he hopes investments in data will pay off in this way. “The systems will help us become more precise about pricing, which could help increase revenue,” he explains. “We could also be more precise around managing the cash of the organization and, as a consequence, reduce and manage debt more effectively.” Such gains should also be explicitly measurable.

3. Doing better with less

Digital technologies do provide opportunities to establish more traditional measures of ROI, too. For example, more than two-thirds of the public sector organizations in Accenture’s research say they are, to some extent, providing real-time or near-real-time insights into organizational performance. Digitization can clearly reduce costs—which resonates in more austere budget environments—and create efficiency improvements that free up staff. Quantifying these improvements is non-negotiable in creating the case for change.

Even with these ways to quantify returns on digital innovation, many public finance organizations will find themselves pursuing new opportunities to fund transformation. We’re already seeing interesting movement in this area. Some organizations are exploring “payment by results” concepts with contingent fee contracts or revolving financing arrangements that operate over several years. The Commonwealth of Massachusetts in the United States, for instance, has raised funding for technology investment through bond issues.

Even as agencies pursue unconventional funding opportunities like these, it will still be important to develop metrics for measuring the results achieved once these resources are deployed. Because relevant, specific metrics are the oxygen of successful digital transformation.

I encourage you to read the survey results in details,  and follow me on LinkedIn and Twitter if you aren’t already.

Bill Kilmartin

North America Industry Lead, Finance and Administration

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