New Zealand’s digital journey

Introduction

As an island nation, New Zealand shares a number of similarities with Japan. We are almost the same size and our position in the Pacific ring of fire means we understand and often have to respond to the weather patterns of the ocean, as well as the volcanic and seismic events that have formed our beautiful lands.

Like Japan, our citizens are served by a constitutional monarchy and parliamentary democracy and our institutions are stable and trusted. Unlike many other countries, New Zealand has only two tiers of government – local and national. There are no states or territories.

But our scale is quite different. New Zealand has 4.8 million people spread across our long, thin nation, compared with the 127 million that call Japan home. Our economy and budget reflect that small size and, with our geographical isolation, make innovation and collaboration vitally important.

Our journey
In 2001, the New Zealand government released an e-government strategy to guide agencies in using the Internet to change the way government works, to improve the quality of what it does, and to provide better opportunities for people to have their say. The strategy and vision were focused on achieving a better understanding of and meeting the needs of New Zealanders, as well as creating opportunities for greater public participation in government and democratic processes. Over the next 10 years, successive governments extended and built upon this policy direction.

In 2010, our government adopted a set of directions and priorities for ICT management and investment across the State services. The aim was to harness ICT as a critical lever for business innovation.
Ministers launched the Better Public Services (BPS) programme in 2012, which focused on better outcomes for New Zealanders and outlined 10 results they expected government agencies to deliver together. In developing the BPS programme, their aim was to achieve a higher performing and resilient State sector that New Zealanders trusted and that delivered outstanding results and value for money. A key recommendation to support the programme was the establishment of functional leaders across the system to maximise benefits and reduce overall costs to government of common business activities which may not be achieved by an agency to agency approach.

Functional leadership roles were created in three areas: procurement, property and ICT. The Government Chief Information Officer (GCIO) role would be the ICT Functional Leader, and drive a central ICT strategy and a whole-of-government approach to investing in technology. That role was given to the chief executive of the Department of Internal Affairs, an agency with strong strategic and operational functions.

That same year, we had two significant government privacy breaches and extensive delays and problems with a multi-million dollar government ICT project, resulting in intense media scrutiny and a loss of trust with Ministers and citizens.
These events focused government attention on the need to maintain trust and confidence in public services and led to the creation of the GCIO assurance function. We needed to regain the trust of Ministers and citizens and providing a system-wide view of ICT investment and operational risk would play a key role in this process. These events also provided a mandate for change.

The GCIO brought agencies together and embarked on a two-year programme to lift privacy capability and maturity across our system, focussed on the public facing systems of 70 agencies. That programme achieved its aims and this important multi-agency work is now led through the Government Chief Privacy Officer and a set of protective security standards and expectations for all agencies.

In 2013, we launched the Government ICT Strategy and Action Plan, which drove a progressive change in the way our government invests in and manages technology – from owning ICT assets to outsourcing and consuming shared capabilities. But the strategy stretched beyond ICT to include service, information, leadership and culture change.

Another intervention was the identification of key positions in the system. These are key influential roles, such as agency CIO, that the functional leader needs to be involved in recruiting and appointing and which can help agencies align with the central strategy. Our government also extended the reach of the GCIO to double the number of agencies originally in the scope for change.
Our challenges and opportunities

As all governments know, digital transformation is not really about technology. Technology is an enabler and sometimes a driver, but what we’re trying to achieve goes far beyond digitising existing processes.

Digital technology needs to be at the centre of how governments do business. It should support inclusive growth and make it easier for people to connect and participate online. But our digital journey is not about technology; it is about a cultural change within our government and society, and changing the ways we think and operate.

We live in a rapidly changing world and today’s technology is changing at an unprecedented pace. Just about every country in the world recognises that harnessing the digital revolution will play an important role in achieving economic growth and is looking to ensure they benefit from technological progress.

However, we can’t foresee the full impact of digital so we need to build resilience into our communities so we can respond to any unintended consequences. We don’t want a fully digital government to exacerbate existing divides in society or create new divides.

We know that not everyone has the same access to digital services – so we need to give people more choice in how they can access government services whenever and wherever they need them, and we need to make sure our citizens have the right skills and capabilities to confidently use digital services and prosper in an increasingly digital world. Part of this is understanding their rights and obligations as citizens and knowing there are choices that can be made. Not every customer desire can be met every time and online behaviour needs to reflect the existing social norms.

Governments are instrumental in making sure no one gets left behind. In a digital context, this calls for new types of leadership, governance and, importantly, behaviours. We need to make the connections across our agencies and improve the way we work for the benefit of our citizens. This means working across traditional agency boundaries and beyond – with businesses and NGOs – to find ways to fund initiatives that involve multiple parties and make the most of the opportunities presented by the digital world. This requires experimentation and innovation, areas where governments haven’t been strong traditionally.

A global, networked society presents challenges for governments in regulating harms online and protecting our nation’s interests. We know there are cyber security and privacy concerns and citizens hold government to a high standard in protecting their information. Every government is grappling with these same challenges.

However, one of our challenges in New Zealand has been how to influence change across government in a system which continues to have vertical accountabilities. Since the 1980s, government agencies have operated independently and that has driven a lot of efficiency and a lot of value. More recently, we realised while that is a great strength, it also has some weaknesses.

Our approach
In New Zealand, we don’t have a standalone digital agency responsible for driving digital transformation, like there is in many other countries. Agencies continue to operate independently and retain their decision-making rights. But we have central leadership and drive change collaboratively, by working with many agencies. Our role leading from the centre is to work with agencies to effect change that may not immediately benefit the individual agencies, but will benefit the whole system and our citizens.

We looked at a number of models used in other jurisdictions and deliberately chose an approach that works for our context. A ‘centrally led and collaboratively delivered’ approach is more compatible with our working culture and, importantly, fosters shared ownership, which is vital for driving sustainable change.

Central to our approach is a networked leadership model that we call the Digital Government Partnership. We invited about 60 leaders from 21 agencies to work collaboratively with us – including chief executives, chief information officers, chief financial officers, chief operating officers and leaders working with data and information – to drive change across our system.

The Partnership has been very helpful for achieving a more coherent view across our system, getting greater agency participation and leveraging resources from across the system. It’s one of our key differentiators and something my international colleagues often ask me about.

Driving a central strategy means agencies need to align with system-wide goals and this needs to be clearly set out in every major investment plan. Our department sits alongside Treasury and a number of other central agencies to review every major project proposal to ensure alignment. We work closely with agencies to ensure that they have fit for purpose assurance plans and the ICT risks are being managed effectively across the system.

Co-design and co-creation is key and this is part of the culture change. We refreshed our Government ICT strategy in 2015 collaboratively. And that strategy looked beyond technology – with focus areas in digital services, information, technology, investment and leadership. The work programme for each focus area is delivered collaboratively.

From our point of view, asking people to co-design leads to a different outcome than asking people to comply. It might take a little longer to get there, but the results are more powerful and more sustainable, when there’s a sense of value and ownership.

The issues being faced by the public service are multi-layered and span multiple agencies. Digital gives us new tools and ways to deal with many of these problems and allows us more opportunity to respond to customer needs and engage citizens directly in the decision-making processes. But it creates risks as well, some of which I’ve outlined above.

Transformation doesn’t happen without disruption, even with a collaborative approach. Procurement is one area where we’ve introduced significant disruption both to existing practices and to our local markets. For a small country, it makes sense to position government as one customer. It gives us collective buying power and delivers significant efficiencies. Our 2012 all-of-government agreement with Microsoft was ground-breaking, ensuring the same terms and conditions for agencies big and small and freeing up precious resources our government could put into serving our citizens rather than negotiating hundreds of separate contracts. We’ve now signed similar agreements with Oracle, HP and Amazon Web Services.

When we went to tender for Telecommunications as a Service in 2015, we challenged the market to deliver outcomes rather than just services. Suppliers were used to government asking for specific services and initially weren’t sure how to respond. Two years later, there had been so much interest, and new technologies had come online, that we expanding the catalogue of services and suppliers.

We’ve recognised the need to innovate our approach to sourcing to keep up with the rapid pace of technology. Our latest disruptive innovation is a marketplace for public cloud services, which makes it even easier for agencies to find the services they need and suppliers to offer their products and services.

This move to consuming shared services and capabilities is changing government ICT departments, which no longer need to develop and maintain bespoke solutions but now manage multiple suppliers and consume the services they provide. However, it is changing the risk profile for government, meaning there’s an increased need to ensure minimum standards for privacy, security and assurance.

Driving a customer-centric agenda is also disrupting the way government agencies traditionally operate. We have focused on integrating services around our citizens’ life events, but we’re not organised to deliver integrated services and it’s a challenge within our traditional silos. To optimise the public value of digital transformation, it truly takes a culture change in the public sector – agencies need to work differently and change the ways we think and operate.

Achievements and result
What have we achieved? We have seen real transformation, but it feels like we’re just getting started.

Last year, Inland Revenue introduced a new system for Goods and Services Tax (GST) – the first major tranche of a big transformational change. Now, New Zealand businesses can file and pay their GST online each month, directly through their accounting software. There is no paper, no web transaction, just a direct connection from their own ledger into Inland Revenue’s system. This is one example of real transformation. It reduces friction and compliance costs significantly – for businesses and for the agency – and it’s a stand-out example of transformation that goes beyond ICT and digitising services. It has literally transformed how the agency deals with businesses and GST.

Over the past five years, we’ve changed the way our government plans and invests in ICT and put in place a solid foundation for delivering better public services. We recognised that traditional procurement models are no longer fit for purpose in the context of rapidly changing technology. Our response has been to simplify ICT procurement by establishing shared capabilities using a single government procurement process. More than 200 agencies are now using at least one shared capability but there are more that could move to shared services at the next stage of their investment cycle. This move to shared capabilities has improved resilience, as we saw after a major earthquake last year. By changing how we procure technology, we exceeded our government’s financial target of $100 million per annum in savings and cost avoidance by mid 2017.

We have a bedded-in Government ICT Strategy, which is broad, agile and outcome focused, agreed by agency chief executives and Ministers. We have engaged senior leaders across the New Zealand public sector in helping drive that strategy and a have in place a multi-agency programme of work that underpins it.

One obvious success that our citizens see of our collaborative approach is delivery of integrated services designed around people’s life events. Two years ago, we launched SmartStart, which links together services from five government agencies and several non-government organisations to provide advice and support to families about to welcome a child. It was the first service spanning multiple agencies and a clear demonstration of a new way of working. SmartStart is designed around new parents’ needs, not around the services different government agencies provide. We link together seamlessly behind the scenes to offer our citizens a connected and complete experience. We’ve been working collaboratively with other agencies through our Service Innovation Lab to explore other integrated services for our citizens.

Our Govt.nz website is another example of taking a cross-agency approach and making government information more accessible for all citizens. It’s written and designed to be easily read and understood, and has won several awards.
And importantly, given the issues we had to overcome five years ago, we now have a system-wide view and standards for privacy, assurance and architecture which give Ministers and citizens the confidence that government agencies are managing their information and taxpayers’ dollars well.
We have made good progress and have a strong base. Our challenge now is to speed up our activities.

Our place in the world
New Zealand’s approach to collaboration extends to our engagement in our international community. One of the benefits of working in government is the ability to share with other jurisdictions and learn from them, in a non-competitive fashion.
New Zealand is a founding member of the Digital 9 (D9) group of digitally advanced nations, which includes Estonia, Israel, South Korea, Canada, Uruguay, Mexico, Portugal and the UK. Each country commits to working towards the nine D9 principles of digital development outlined below.
Since 2014, we have been coming together around our shared goal of strengthening the digital economy, sharing best practice and ideas for how to improve our respective digital services, and collaborating on common projects. In 2018, New Zealand hosted this international summit, where we expanded the original five-nation group to the D7. It has subsequently been expanded to the D9.

D5 Principles

As an OECD member, we have also found value in sharing our experiences and finding areas of common interest with other OECD nations. Our Government Chief Digital Officer was asked to chair the OECD e-leaders in 2015 and has just completed his term as chair. Through the OECD, we work with like-minded governments, including Japan, on topics of mutual interest. Key areas of importance to all countries, like digital identity and procurement practices, are easier to solve if we all work together.
And we’ve been working with the Fletcher School at Tuft’s University, which labelled New Zealand a stand-out nation in their 2017 Digital Planet report, and worked with the original D5 countries to develop a Smart Society benchmark.

Our future
The future is one where we continue to evolve. Our Government Chief Information Officer has become our Government Chief Digital Officer, reflecting the broader scope of the transformation he leads across government. Digital government is one part of an equation that includes a digital economy and digital society. We have a critical role to play.

We see a future where people can engage with government from the start of the policy-making process and have the tools and skills to be closely involved in the decisions that affect them and their families.

Government’s services will be designed around citizens’ needs and easy to use. Citizens and businesses will have choice – they’ll be able to determine how it is best for them to interact with government and curate their own experience. That may involve paying tax seamlessly from their accounting software or they could use their favourite travel app to complete everything they need before they go overseas – make bookings, check the validity of and renew their passport and update their health record that they’ll be out of the country. In our vision of the future, government may not do everything and own the experience as it does today.

Digital and data offer government the opportunity right now to serve the public and work in new and better ways. But digital also gives us the opportunities to rethink the role of government and whether the old models are still fit for purpose in a rapidly changing world.

Improving service delivery and adjusting policy isn’t enough. Government needs to help communities adjust to the coming changes and ensure that its citizens benefit, rather than get left behind. We’re working on a Digital Inclusion Blueprint to help us understand how we can achieve this and we’re also working with other digital nations on how to ensure our citizens’ human rights are protected in a digital age.

For democracy to work, people need to trust their government and know that it will deliver a safe and stable nation where they can achieve their goals.

We already have an open and highly trusted government in New Zealand. We need to use the potential of digital to further engage our people and encourage them to come on the journey with us. Together we’ll discover new opportunities and ways for them to engage and participate in decision-making.

As a nation, we need to embrace digital opportunities, anticipate barriers and tackle them in a strategic way to build a better country for our children and future generations.

As a global citizen, we’ll continue to work with like-minded nations – to share, reuse and build on one another’s strengths and experiences and realise the digital opportunities – to create a better world.