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Digital Transformation Agency


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Digital Transformation Agency

Submission in Response to the APS Review

Submissions due 31 July 2018

Digital Transformation Agency

© Commonwealth of Australia (Digital Transformation Agency) 2017

With the exception of the Commonwealth Coat of Arms and where otherwise noted,
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Version: 1702

Digital Transformation Agency Response .......................................................................... 1

1 Solid foundations – recent successes and the role of the Digital Transformation Agency ............ 2

2 The APS Review and the Digital Transformation Agency – working towards common goals ....... 3

3 We’re making progress, but there are big challenges ahead ........................................................ 6

3.1 Changes to current settings .................................................................................................... 6

3.2 New settings to account for a digital age public sector ........................................................... 8

4 It’s a bright future ahead .............................................................................................................. 13

References .......................................................................................................................... 14

Digital Transformation Agency – Submission in response to the APS Review iii
Digital Transformation Agency Response

Organisations worldwide are rethinking how they operate, respond to, and take

advantage of, the opportunities presented by digital transformation. Banks are using

virtual reality to overcome the barriers of distance. Airlines have moved from providing

flights alone, to helping customers have a seamless, end-to-end travel experience.
Even households are smarter thanks to digital advancements that let them save

energy, improve convenience, and be more secure. Across all domains, digital and

data are helping to improve the convenience and quality of our interactions with the

Governments are rethinking how they work to improve outcomes for people and

businesses, and seizing opportunities presented by digital transformation. There are

successes in the APS’ digital transformation journey, however there are structural

improvements needed for the APS to forecast, and respond to, the rapid changes in

society and the economy. The APS needs to evolve to accommodate the different

collaboration techniques, engagement practices and overall approach to business in

the digital world. Creating an APS that is fit for the digital age will require a fresh look

at current settings. It will also require new skills, processes and culture that accounts

for a digital-age public service.
This submission demonstrates the sound footing for digital transformation in the APS,
the close alignment between the APS Review and the Digital Transformation

Agency’s (DTA)’s objectives, and the DTA’s key recommendations to allow the

Australian Government to cement itself as a global digital leader.


Digital Transformation Agency – Submission in response to the APS Review 1
1 Solid foundations – recent successes and the role of
the Digital Transformation Agency

The Australian Government, among its international peers, is delivering on the

promise of digital transformation to make more informed policy decisions, to engage

users in program design, and to deliver more streamlined, tailored services.
There are many examples of digital transformation successes in the APS: The

Business Registration Service streamlines and reduces the time it takes to register a

new business. Very soon, the myGovID pilot will reduce the time taken to get a tax file

number from one month down to just a few minutes.
These are just a handful of the dozens of projects being delivered each year to

improve outcomes for Australians.
Australia is among world-leaders in the digital transformation of government. We

consistently rank near the top in international reviews, from major public institutions,
such as the United Nations’ (UN) E-Government Survey (United Nations, 2018), to

multi-national consulting firms, as in Boston Consulting Group’s Digital Government

Services report (Boston Consulting Group, 2017). As a result, our advice is regularly

sought by our international peers.
The DTA is driving change that is resulting in services that are simpler, clearer and

faster. We place Australians at the centre of all that we do, delivering services – and

helping government agencies to deliver services – that are designed around the

needs of those who use them. The DTA is delivering major improvements through

digital transformation in the APS, including:
• Leading changes to platforms – such as myGov and the recently-announced
myGovID – that will make it easier for citizens and businesses to engage with
• Delivering quality advice to government on the digital investment portfolio,
based on data and oversight that has not existed previously.
• Capability programs that lift digital capacity and capability at all levels of the
• ICT procurement reforms that open billions of dollars’ worth of government
business to small and medium enterprises (SMEs), and deliver better value
from arrangements with larger suppliers.

For a full explanation of the DTA’s role in government, please refer to the DTA’s most

recent corporate plan (Digital Transformation Agency, 2017).
The DTA is well-placed to help the APS address the challenges and opportunities

ahead. This submission identifies some of the immediate challenges for the APS to

respond to today’s digital transformations, the implications of digital transformation

into the future, and the DTA’s recommendations to affect change in these areas.


2 Digital Transformation Agency — Submission in response to the APS Review
2 The APS Review and the Digital Transformation
Agency – working towards common goals

Ingrained into the DTA’s ethos is an unwavering commitment to people using

government services. Our products and whole-of-government approaches help prime

the APS to make the most of digital and data. The DTA’s ongoing work will improve

outcomes for people and businesses, with line-of-sight to the objectives of the APS


The APS Review The DTA: Future work will:
challenge: objective:

• Is driving innovation in the • Encourage the APS to look
Digital Driving innovation economy through at new ways of designing
transformation is and productivity in procurement reforms, services in partnership with
creating new the economy. opening government ICT industry and the not-for-
markets and new expenditure to smaller profit sector, underpinned
ways to deliver businesses while deriving by digital and data.
services; often better value from the APS’
displacing those relationships with big • Take procurement reforms
we know. vendors. further, lifting participation
with industry – particularly
• Hosts the Digital SMEs – other governments
Marketplace that, since its and academia.
launch in August 2016, has
contracted $206m, around
70% of this to SMEs.
• Through data.gov.au, is • Drive the underlying
Digital and data Delivering high opening access to data systems and capability that
transformation quality policy held by governments at all will empower the APS to
create advice, regulatory levels, providing more make better-informed,
opportunities for oversight, robust evidence for data-driven decisions.
the public programs and government decision
service to services. makers and the • Take a fresh look at how
develop more community. the APS makes decisions
robust evidence
around digital and ICT,
and make better
• Through its capability including how to fund
programs is helping projects.
leaders in the APS to better
understand how digital
transformation can help to
meet government’s policy


Digital Transformation Agency – Submission in response to the APS Review 3
The APS Review The DTA: Future work will:
challenge: objective:

• Runs the Digital Service • Open up engagement with
Digital Tackling complex, Standard, mandated for people, businesses,
transformation multi-sectoral use across ICT projects, academia, industry and
creates challenges in that requires agencies to other governments – locally
opportunities, collaboration with collaborate with people and and internationally.
and the community, businesses to design
expectations, for business and services. • Help break down barriers
better services citizens.
between agencies through
• Conducts user research to life event journeys, showing
find key pain points when how services need to
people interact with connect to improve
government (such as outcomes.
through our GovX
• In partnership with the • Build trust into government
Cyber security Ensuring our Australian Cyber Security systems, through
enables trust and domestic, foreign, Centre, and the Australian engagement, transparency
is central to any trade and security Signals Directors, and strong cyber security.
digital and data interests are encourages good cyber
transformation. coordinated and security practice from the
High levels of well managed. outset through guidance on
trust create more digital projects across the
opportunities for APS.
collaboration and


4 Digital Transformation Agency — Submission in response to the APS Review
The APS Review The DTA: Future work will:
challenge: objective:

• Pioneered the Digital • Break down barriers
Private Improving citizens’ Service Standard, now between agencies through
companies experience of mandated across life event journeys that
compete for government and government ICT projects clearly show how services
market share by delivering fair that encourage co-design will connect to improve
offering services outcomes for with citizens and outcomes.
that are more them. businesses to ensure
convenient, more services are designed
accessible and around peoples’ needs.
better value
through digital
• Leads implementation of
This drives
platforms, such as
myGovID digital identity, to
expectations for
streamline peoples’
their dealings
experiences with
with government;
face ongoing
pressure to
reduce the
burden on

• Runs the Building Digital • Equip the APS to attract
The pace of Acquiring and Capability program (in and develop enough digital
change in maintaining the partnership with the APS talent to embrace new
technology necessary skills Commission) to lift the policy opportunities.
creates new and expertise to number of people with
policy fulfil its digital skills in the APS – at • Challenge current ways of
opportunities and responsibilities. all levels. thinking that can relegate
challenges. Staff
technology to a back-office
need to know
• Hosts communities of function, rather than having
how to take
practice, and runs training, a transformative impact.
advantage of
for APS staff to share
these, including
knowledge and build on
how to marshal
their existing digital skills.
or develop new
and rapidly-
technical skills.


Digital Transformation Agency – Submission in response to the APS Review 5
3 We’re making progress, but there are big challenges

The APS Review’s terms of reference reiterate the major influence of digital

transformation in society and the economy. Positioning the public service to respond

will take determination and renewed focus on transformation across the spectrum of

public service activity – including policy advice, regulatory oversight, and program and

service delivery.
Changing some current settings will allow for a more contemporary, digital public

sector into the future.

3.1 Changes to current settings

Set a clear and ambitious direction for digital transformation in the APS

The Digital Transformation Agenda, delivered by the DTA, has resulted in significant

improvements in the APS’ digital capabilities, when compared to its starting point

three years ago:
• Foundational platforms are being developed.
• A more complete view across the ICT portfolio exists where it did not
• ICT procurement reforms are improving value-for-money and making it easier
for SMEs to compete for government business.
It is timely to review the Agenda and set an updated direction for the future. The DTA

is developing a digital transformation strategy that is closely aligned to the goals of

the APS Review.
McKinsey & Company’s research points to strategy as the first foundational pillar of

successful digital transformation in government (Corydon, Ganesan, & Lundqvist,
2016). This is clear in the results of the international benchmarks, with all of the top

10 countries in the UN E-Government Index having robust and ambitious digital

strategies (United Nations, 2018).

Budget processes to respond to the changing landscape

Deciding where to invest is a challenging task with many perspectives to consider.
Current budgeting processes respond to many of these perspectives, though digital

initiatives add new considerations and complexity. Budgeting processes should

recognise the fast pace of change in technology, where the best solution to a problem

today may be obsolete in just a few years’ time. Similarly, budgeting processes

should support new models of working in the digital age, such as incremental, agile


6 Digital Transformation Agency — Submission in response to the APS Review
approaches to delivery or cloud-based solutions that are purchased more like a utility

than owned as an asset.
Future budgeting processes could help government make more frequent, smaller-
scale decisions, helping to adapt to new technologies sooner. This would allow the

APS to respond to emerging risks and changes in the policy context. It would also

help ensure that budget decisions – at the time they are made – are still relevant in

the current context.

Incentives for whole-of-government change

Digital transformation (and indeed, service design more broadly) cuts across

government portfolios. The hierarchical and policy-portfolio structures of government,
while necessary for efficiency and policy leadership, do not always correlate to the

way people engage with government. These structures also create complex

management and approval processes, amidst competing priorities, that often

succumb to the status quo.
The APS Review should examine where structural incentives could be tweaked to

improve collaboration – including accountability, incentives to share investments or

partner with agencies, or work together to address funding or technological barriers.
Critics note the “competitiveness amongst some agencies” that “hamper[s] the speed

of digital adoption, typically at the expense of customers” (Australian Information

Industry Association, 2017). Project assurance is one such example. There are some

views that the DTA should be involved in governing individual projects, however this

is resulting in blurred accountability in an area where the DTA has little direct control

over a project’s success. Governance over whole of government change is one

aspect that could be reviewed.
By extension, the Review could consider how the APS might better partner with state

and territory governments, civil society and the private sector to deliver more effective

outcomes (refer, for instance, to Mr Brightwell’s example for more effective and

efficient elections in his submission (Brightwell, 2017)). Digital transformation is a

global challenge, with other countries setting the pace and standards. The APS needs

to engage internationally with the same enthusiasm and priority as its local

engagement to ensure Australia’s interests are represented, and that collaboration

with international peers is promoted.

A fresh look at risk

Digital transformation requires a renewed appetite for risk. There is an opportunity to

revise the current tolerance for risk, through public discourse, to enable more

ambitious innovation. Research published by the Australian Institute of Company

Directors notes that the public service “adopts the risk appetite of its stakeholders –
the public” and that, “broadly speaking, their risk appetite is close to zero” (Kay &
Goldspink, 2016). Innovation, by definition, increases the risk of failure. Mr Ian

Brightwell’s submission (Brightwell, 2017) presented to the recent Senate inquiry into


Digital Transformation Agency – Submission in response to the APS Review 7
the Digital Delivery of Government Services suggests that the APS does not manage

expectations by addressing this “inevitability”. The submission goes on to suggest

consensus is required to determine what constitutes “acceptable failure”. Digital

transformation requires a discussion on what constitutes acceptable risk (with a view

to moving away from zero-tolerance), and the change through innovation that is both

expected and acceptable within these bounds of acceptable risk.
Setting a frame in which to innovate, where a certain amount of risk is tolerated by the

APS’ key stakeholders, will encourage agencies to explore newer and better ways of

delivering services. The process of learning from innovation is of equal value to the

deliverable itself. When captured succinctly and shared openly, these learnings

become a catalyst for further innovation.

3.2 New settings to account for a digital age public sector

Research of the future paints a picture of a world that is more connected, more

productive and more efficient – driven extensively by digital transformation (Innovation

and Science Australia, 2017; CSIRO, 2016). The research notes the economic

prosperity driven by the mining boom now receding and making way for a knowledge-
based economy (citing Australia’s strength in artificial intelligence and medical

technology as examples). It also emphasises the need for Australia to escalate its

innovation efforts – lest we fall behind our international peers who are investing more

in research and development – and seizing the opportunities of digital transformation

This creates a dual challenge for a digital-age public service. It needs to become a

data- and digital-native organisation to improve its own efficiency and effectiveness –
this includes leadership, willingness to innovate and embracing risk. At the same time,
public servants need a thorough grasp of how digital transformation changes the

fabric of society, so they may design policies, programs and regulation that are

relevant in a digital world.

Data- and digital-native organisations

Disruption through digital and data creates new opportunities – and expectations – for

organisations to recalibrate themselves. Forecasts suggest that, by 2030, Australia

will face a shortage of full time workers; a deficit in productivity that needs to be filled

by automation through digital technologies (Innovation and Science Australia, 2017).
Becoming digital-native will not only help the APS to deliver better outcomes, but also

make sure it can fulfil its core obligations to the public it serves.
The APS is making inroads through technologies that improve the customer

experience and reduce the cost of service delivery. For instance:
• The Australian Taxation Office and IP Australia created “Alex”, a virtual
assistant which, through artificial intelligence, can respond to first-line queries
that would otherwise need to go through a call centre.


8 Digital Transformation Agency — Submission in response to the APS Review
• Enhancements under the Welfare Payment Infrastructure Transformation
Program are leading to substantially reduced times to process claims for
income support.
• The Data Integration Partnership for Australia is giving new policy insights by
connecting Commonwealth-held datasets, leading to improved policy advice
and better-targeted service delivery.
These achievements are a significant first step, and they show a willingness to

harness new ways of working. Broadly consistent with thinking by McKinsey &
Company (Corydon, Ganesan, & Lundqvist, 2016), two further significant steps are

needed for the APS to remain a contemporary digital organisation over the next

The first step is to develop a culture of “digital by default” in all pockets of the APS, so

that digital delivery and thinking becomes the norm. Denmark’s “digital first” approach

legally mandates electronic interactions (United Nations, 2018), with offline

alternatives for those who cannot access digital versions. Denmark’s pursuit of this

goal coincides with the country’s rise to first place in the UN’s E-Government Index

The second step is to better harness technology to improve effectiveness and

efficiency. Increasingly, the technology services used by the public service can be

standardised, or even commoditised, so that APS employees can focus on the core

business that makes their agencies unique. We see this already in the increasing

array of cloud services that can provide cost savings and performance improvements

over on premise installations; a concept that will grow in scope and impact over the

coming decade (Innovation and Science Australia, 2017).
In this time, the APS will need to be prepared to automate parts, or all, of many roles

that are integral to how the APS operates today. Consider, for instance, how artificial

intelligence could process a set of rules or legislation to lay the foundations for legal

advice. How machine learning, combined with a broad array of sensors and data

inputs, can evaluate the effects of policies and programs in real-time and forecast

changes well in advance of field work or clinical trials. How an open and

well-connected data infrastructure with plain English querying could compensate for

the current shortage of data analysts and lead to better-informed policy. As well as

these, there will be many technologies that emerge in the years ahead. The overriding

principle is that the APS needs to be able to respond quickly to these opportunities.

Public engagement and user-driven approaches

Digital transformation starts and ends with people. The CSIRO (2016) observes the

megatrends that will shape the world over the next 15 years, many of which point to

changes in what people expect from their government services.


Digital Transformation Agency – Submission in response to the APS Review 9
Rising wealth leads to rising expectations for services and experiences (as opposed

to products). Increasing globalisation means people and businesses expect to deal

with international counterparts with the same agility and fluidity as they would with

locals. So too do the boundaries between private and public services begin to blur.
For example, in the transition from school to work, a person typically deals with a

state-based education department, a federal government employment service, the tax

office, and outside the APS, a bank or superannuation provider. With better user-
centred design, the APS could feasibly and within the next few years create a

seamless experience that helps reduce downtime between school and work.
Understanding peoples’ needs and involving them early in the design process leads

to government services that are more likely to be successful. A new public

engagement model, where ideas around service design can be openly discussed

before being decided, can help increase innovation in the APS. Democratic

engagement and consultation of this nature also increases the likelihood of success in

implementation and the ongoing use of the service. This understanding will help to

define the standards for success, allowing for more tangible and robust assessments

of the value delivered by digital solutions. As people become more digitally-connected

over the coming decade, the APS will have new opportunities – and expectations

upon it – to connect with those who use its services, and harness this relationship to

continually and regularly improve the quality of its services.

Building and Maintaining Trust

Digital transformation creates global challenges that can build, and break, public trust.
The Edelman Trust Barometer (Edelman, 2018) shows the technology sector is the

most trusted of all business sectors, however recent breaches of individuals’ privacy

could quickly undercut this trust.
Building and maintaining public trust requires government to show continued vigilance

and commitment to engagement, transparency, privacy and cyber security.
As the world becomes more connected, and the breadth and depth of information

grows exponentially, cyber security threats become more complex and sophisticated.
Through sound analysis and understanding of these risks, and using forecasting to

minimise the effects of such risks, the APS can maintain the trust it is granted to

protect the information it holds on behalf of people using its services. Good cyber

security design and effective responses to emerging risks help to engender trust in

government’s ability to provide services. The CSIRO (2014) presents plausible

scenarios over the next 10 years that show the potential damage of unforeseen cyber

security breaches. It also suggests collaborative investment and action to strengthen

cyber security in Australia, with engagement across governments and the private

Australia’s own data reforms will serve to increase peoples’ trust through greater

control and transparency, with protection of privacy and security at the core.


10 Digital Transformation Agency — Submission in response to the APS Review
Agile and iterative service design

New technologies are being adopted so quickly that the APS cannot afford lengthy,
bureaucratic processes that delay time-to-market for new solutions. Consider that it

took radio 38 years to attract an audience of 50 million people, television took 13

years and the Internet only three years (Innovation and Science Australia, 2017). By

the time the next project is scoped, costed, budgeted, planned, developed, tested and

then rolled out, it is foreseeable that a new technology could have come along to

replace it.
By contrast, agile and iterative approaches to designing and implementing services

help organisations respond to changes in context, learn from failures and limit risk by

scaling down the size of the investment. Agile approaches are supported by an

increasing body of literature (for instance, Serrador & Pinto, 2015) and international

best practice (for instance, OECD, 2014). The Global Centre for Digital Business

Transformation highlights many organisations that have responded to demand and

mitigated risk by allowing ‘fast execution’ – the shortest time possible between

concept and minimum viable product (Bradley, Loucks, Macaulay, Noronha, & Wade,
2015). By taking a large problem and breaking it down into smaller pieces,
government can begin delivering solutions faster. Starting with a small and quick

solution reduces cost and risk to the immediate challenge ahead. Delivering a working

solution faster – even if it is for the smallest, most essential need (or ‘minimum viable

product’) – allows society to start harnessing the benefits of the solution sooner, and

allows government to respond quickly to feedback and risk. These approaches apply

equally to digital services, as they do more broadly to policy and program design. In

fact, such approaches have been applied in these latter domains for some time, for

example, by rolling out programs to selected communities first. Embracing these

methods more fully, including by structuring governance processes to support them,
will help government deliver value faster and reduce risk.

Building capability

Given the pace of change in technology, digital capabilities will never remain static.
Understanding the transformative impact of digital and data, and being able to turn

this into better policies, programs and services, is a necessary skillset ubiquitous

across all levels and roles of the public service – it is not simply limited to the

technology arms of public service agencies.
Building strong digital skills across the public service is a worldwide challenge, – for

instance, as described in the United Kingdom’s Government Transformation Strategy
(Government Digital Service, 2017). The first step is to build an understanding of

digital technologies and how to deliver outcomes through digital projects, as per the

Building Digital Capability initiative under development at the DTA and the Australian

Public Service Commission (APSC). However, future capability across the APS needs

to empower public servants to better understand the impact of digital transformation

on society, so they may create policies, programs and regulation that are relevant for


Digital Transformation Agency – Submission in response to the APS Review 11
the time. For instance, the CSIRO’s ‘Porous boundaries’ megatrend (2016) indicates

a rise in the peer-to-peer economy. We see this already in the growth of ride-sharing

services, or peer-to-peer lending, or ‘gigs’ for small tasks. These digitally-enabled

peer-to-peer interactions make it much harder for government to regulate services,
such as ensuring protection of workers who are not contractually employed. These

services can also gain and lose market share very quickly; potentially at a faster pace

than the current processes for implementing regulation can keep up with. Being able

to forecast these types of trends, and develop solutions that are flexible into the future

is the major digital capability challenge over the next decade.
The private sector will always be in a position to offer to offer a fresh perspective

when it comes to digital transformation. The APS works closely with private sector

providers to elevate digital skills, and assist in policy and program design through

digital transformation. As technology evolves, it will become clearer which specialist

skills will be required (for instance, capabilities in using augmented reality to assist in

better service delivery), and there will be a need to build – or transition – skills in APS

staff around these specialist areas. There will be new roles that may best be delivered

in partnership with the private sector or with academia. The impact of digital

transformation is set to grow, and amidst ongoing competition for skilled workers
(Innovation and Science Australia, 2017), it may also be necessary to increase the

proportion of the permanent workforce in the APS that work in digital- or data-heavy

roles. In short, digital transformation in the APS will be best served by harnessing a

diversity of skills across public and private sectors, academia, different tiers of

government and the people who use government services. The key is to ensure the

public service builds the capabilities that allow it to deliver on its core business and

partner externally where it does not make sense to maintain those skills in-house. The

ability to partner externally in an effective way is itself a unique skillset to be

recognised and developed in order for the APS to make best use of the breadth of

skills in the market.


12 Digital Transformation Agency — Submission in response to the APS Review
4 It’s a bright future ahead

The DTA is well-placed to deliver on the objectives of the APS Review. Our goals are

clearly aligned.
As the agency leading digital transformation across government, the DTA has created

a solid foundation to help the APS respond to change, including recommendations to

come from the APS Review. Our work is helping to address the challenges ahead.
Our digital identity platform is creating a backbone to join up digital initiatives across

government. Our capability programs are building digital skills in the APS. Our

procurement reforms are delivering better value for money and creating the space for

the APS to partner with industry and innovate. Future work on platforms, such as Tell

Us Once, will build on the core infrastructure needed for holistic improvements to the

experience of people using government services.
The DTA looks forward to working closely with the APS Review team, and continuing

its leadership across government to make services simpler, clearer and faster.


Digital Transformation Agency – Submission in response to the APS Review 13

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Digital Transformation Agency – Submission in response to the APS Review 15