The Trump administration’s budget blueprint (pdf) and the Office of Management and Budget’s (OMB’s) subsequent memorandum on public sector reform (pdf) both ask senior public sector managers to rethink how they structure and run their organizations, not only how they carry out their missions but also the scope of those missions.
These calls for reform are not new, as previous administrations have issued similar memos or pursued signature bureaucratic reforms, but there are definitely some novel twists to the tale. For one, the Trump administration has proposed deeper budget cuts to some agencies than ever seen before. This administration also has a higher proportion of cabinet leaders with a private sector background (38%) than did the Obama administration (5%). In some cases, those leaders were chosen for their skepticism toward the mission of the very agencies they lead.
So while adding a new degree of urgency to the perennial motivation of searching for “efficiencies,” this new cohort of leaders brings a private-sector outlook to public service, which includes a willingness to divest of underperforming services and make other significant business model changes.
Some are Embracing the Change
Far from resisting private sector influences as being irrelevant or unworkable in government, many government IT executives are using this as an opportunity to re-examine their function. They intend to go well beyond short-term cost avoidance and to fundamentally assess whether what they are funding is providing a worthwhile service to colleagues or citizens.
Delivering a limited set of high-value services is the best way for public sector IT teams focus their energies, reduce waste, and be more effective. This approach can be particularly successful for those agencies or functions facing significant budget or staffing constraints, or where demand for their resources outstrips capacity. Simply put, if you’re facing a 15% budget cut or if you’re understaffed by 25%, doing more with less is untenable. You have to rethink what you’re doing in the first place.
Given the budget and staffing context the public sector faces and the direction OMB and other policy-setting bodies are advocating, government IT teams have the opportunity to examine their offerings and stop any activities that aren’t relevant. They have the opportunity to be more selective, not to do more with less.
As government IT teams think about whether their function is offering the right set of services (probably no more than a handful), the following litmus tests will help. The flowchart below this is also useful (see chart 1).
Could we write a statement of work for this service? This first question is a test of whether your function understands precisely what its deliverables are and what business outcomes they support.
This question guards against activities that no one wants to do or even values, “fire fighting” problems, and the risks of becoming a catch-all function.
Would the consumer pay for this service? Is IT providing an activity, advice, or even approvals that IT’s customers value? Is the service still relevant in the current situation, or should it be eliminated?
Even in the case of a governance activity, there needs to be a stakeholder who not only values the outcome but also recognizes and approves of the trade-offs in delivery quality, timeliness, and risk mitigation that the function has designed. Performing a governance function does not provide an IT team with carte blanche to impede delivery.
Are we uniquely positioned to deliver this service? This question ensures that the IT team are the best people to provide the service in question — that they have the competencies to deliver efficiently.
If there is a lower-cost option that can provide the service at a sufficient level of quality, that is a trigger to get out of that business via outsourcing, shared services, or other options.
Can we deliver the service successfully? This last question is a test of IT’s ability to execute. Does the function have the resources, capacity, infrastructure, data, and so forth to effectively offer this service? Even the best-designed service, without appropriate staffing or support, is not a service that should be on offer.
This service orientation has a dual benefit for staff: it enables leaders to align their capacity more precisely while also reorienting the workforce to connect a clear purpose to an identified customer and a measurable outcome. This is a far more productive orientation than inward-facing titles and grades or even adherence to processes.
Chart 1: How to identify essential functional services Source: CEB analysis