Overcoming the challenges of digital transformation – lessons learned from the NZ Government

By Mr Darryl Carpenter, Head of Integrated Services, Department of Internal Affairs New Zealand. Mr Carpenter was a guest speaker at the 2017 Service Improvement and Innovation in Universities Conference held by the LH Martin Institute.

In 2012 the New Zealand Government embarked on the Better Pubic Services programme with the aim of delivering better outcomes across a range of specific, targeted Results for New Zealanders.

Better Public Services Result 10 (improving interactions with Government) has the ambitious target of ‘By 2017 an average of 70% of New Zealanders’ most common transactions with government will be completed in a digital environment’.

The transition from non-digital to digital agency-specific transactions was potentially achievable through agency work programmes already underway as well as leveraging the advancements in technology and the opportunities that brings. However, improving citizen interaction with government in the broader context particularly when citizens have to interact with more than one agency at one time is more challenging.

Result 10 research published in 2014 confirmed that citizens were largely happy with agencies progress to digital transactions. The New Zealand passport story is a good example of this. However the opposite sentiment was expressed when citizens had to interact with more than one agency during significant periods or events in their lives. The research also indicated a high level of citizen dissatisfaction and frustration through having to repeatedly fill in the same information when interacting with one agency or between agencies.

Rising citizen comfort, trust and largely positive experiences with emerging technologies in a more technologically joined-up and connected society becomes problematic when the same experience doesn’t translate to a more joined-up or ‘better’ government interaction.
It became clear that a more collaborative approach was required where government agencies, along with community, non-government organisations and the private sector (and citizens), needed to work better together in the co-design, co-development and co-delivery of customer-centric government services.

The Result 10 Blueprint, released in June 2014, and associated work programme of agreed actions was developed to provide the strategy and framework for participating agencies (and the system) ambitions. The Service Innovation Work Programme agreed in 2016 is taking this work forward.

While some positive progress was made, further research in 2016 identified a number of system barriers that needed to be addressed before the collaborative effort of agencies and the system could be fully realised as well as to accelerate progress to better support emerging digital services, digital government and digital society.

The research identified the five key barriers to the delivery of cross-agency change:

  • Lack of system-wide prioritisation - we currently make collective decisions about change when there are clear benefits and shared outcomes but default back to make actual change decisions in agency silos.
  • Misaligned cost/benefit frameworks - we currently value agency costs and benefits higher than system or user costs and benefits.
  • Insufficient trust to share data - we focus on capturing information from our users and only achieve incomplete data sharing as we do not trust other agencies’ data and processes.
  • Misunderstanding of policy and legislation - we are risk averse and use privacy, internal policy and legislation as reasons not to change rather than testing if changes can be made in the current environment.
  • Inconsistent change approach - we scope, plan and monitor change differently inhibiting the co-ordinated management of cross-agency change.

However, while these barriers exist in some form in most other jurisdictions the research also identified five critical success factors to overcoming barriers to cross-change including:

  • Chief Executives (CE) have secured Ministerial support - projects that are a priority for the lead agency CE are more successful. Strong and active CE leadership is required to secure and maintain buy-in from peer CE’s and to secure tangible support from Ministers.
  • Buy-in at all levels (especially Tier 2, 3 and 4) - to support the CE’s, the projects must also be championed at Deputy Chief Executive (DCE) and General Manager (GM) levels. Unless there is a clearly defined sponsor at each of these levels a project is not likely to gain the traction it requires to be successful.
  • Clear agreed problem statement - projects with a clearly articulated need for change are more likely to get buy-in from stakeholders.
  • Tangible commitment (people, investment) - a project with an agreed vision and outcomes is only likely to succeed when it is supported by committed funding and resources from all of the key parties.
  • Dedicated cross-agency relationship management - relationships with senior stakeholders across all agencies must be actively managed if the project is to succeed. A dedicated relationship manager is required.

Determining what collaborative approach would best address the barriers to cross-agency change and leverage the success factors within the New Zealand unique context, culture and history became critical to our continuing to make positive progress.

While other countries have taken a more structural or centralised approach creating new agencies or empowered central agencies to deliver collaborative change, New Zealanders, are instinctively collaborative, innovative and able to quickly scale new thinking into working models.

Within this cultural context, transformation in New Zealand is being delivered through a networked, collaborative model with clear leadership from the centre. While maintaining the mandate to lead and the decision rights developed in the 1980’s NZ government reforms that delivered strong, vertical (appropriate for that time) accountability, this new approach requires Chief Executives to also work with and through their peers to implement change.

This collaborative model allows a co-ordinated approach with an agreed set of outcomes, and the flexibility to innovate and share knowledge and resources across the system. Such a model, built on the current Partnership Framework , is becoming the decision point for investment and other decision making for the system.

While we have had some successes, such as SmartStart the first of a number of integrated services based around a life event (Birth of a Child), the barriers mentioned above (particularly the lack of system-wide prioritisation, no cross-agency funding models or cost benefit frameworks, and no ability to view investment early in the investment cycle) continue to hamper progress.

The next phase for New Zealand is to review our approach and ascertain what we feel is vital to transformation including new levers, powers or ways to incentivise the system.

As we move into the next phase, some of our challenges will be balancing Chief Executive accountability with more central decision making i.e. how to achieve both autonomy, a strength of New Zealand’s system, and alignment; getting buy-in to moving functions from government to third party providers; maintaining momentum while we reset the decision rights and move to possible new forms; and managing individual Ministerial priorities.

The emerging core principles we will be working to include:

  • Focusing on customer-centric services is critical to success but alone will not achieve system (and service) transformation;
  • A collaborative model that builds trust among members, resulting in the changes necessary to join up delivery;
  • Society will benefit more when government partners with third parties (including NGOs and private sector) to deliver services that reflect the desires of ordinary citizens; and
  • Building skills and capability across the system and creating the right conditions for a change in behaviours is key to success.

We believe that true system change comes from a combined focus on customer-centric service design, altering back office processes and reconfiguring the way government operates. Further, New Zealand believes that successful change is built on a mix of service delivery, cultural change and a futures-focused and flexible digital environment. The integrated services model (SmartStart etc) is an example of this thinking.

We will continue to advance this strategic, collaborative approach through our emerging strategy for Digital Services. Our journey, and learning, is far from over.


1. A Digital Government Strategic Leadership Group made up of 1 agency Chief Executives supported by four working groups made up of Tier 2 & 3 leaders covering digital domains of Technology, Service Innovation, Information and Data and Strategic Investment.
2. SmartStart provides step-by-step information and support to help new parents access government services from Inland Revenue, Ministry of Social Development and Internal Affairs through a single digital channel (smartstart.services.govt.nz)