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Article Article July 25th, 2016

Core systems: building up the backbone of the machinery of government

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DC's metro system may help remind policymakers of the dangers of de-prioritising investments

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Government must recognise that sub-par modernisation efforts should become a thing of the past

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Rather than a big upfront investment, implementation should be conducted in small pieces

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What will the summer of 2016 be remembered for? The surprising outcome of the Brexit vote? Clinton v. Trump and what is shaping up to be two exciting conventions in Philadelphia and Cleveland? For those, like me, who live and work in the Washington, DC metro area, the summer of 2016 may well be remembered for the ongoing shutdown of the DC metro rail system.

With a growing list of performance challenges — many of them safety-related - the Washington Metropolitan Area Transit Authority made the difficult decision to close significant portions of the rail system for overdue repairs and maintenance. In the meantime, millions of residents, workers, and tourists need to budget extra time as they navigate around our nation's capital this summer.

Recently, while sitting in a traffic jam on the streets of DC, I started to think about the important lessons learned from this summer's metro shutdown. The current state of disrepair was certainly avoidable if the right investments in upkeep and infrastructure had been made over the past 10 years.

However, from my many years serving at the Office of Management and Budget (OMB), I can recall how difficult it is to get key decision-makers to prioritise funds for basic maintenance. Many times we tried to make the case that a $100,000 repair today can help prevent a $1 million replacement tomorrow. Yet, too often, the $100,000 repair goes unfunded because the need is not immediate or urgent. Perhaps, the story of the DC metro system will provide government facility managers and budgeteers with a powerful story of the dangers of de-prioritising investments in infrastructure.

Core fitness flagging

For the US government, the deleterious effects of deferred maintenance threaten many activities. A recent report from the Government Accountability Office (GAO), for example, highlighted the potential risks if we fail to update the core legacy IT systems that make up the backbone of government operations. According to the report, “legacy IT investments across the federal government are becoming increasingly obsolete”. The report shines a light on how a lack of proper investment in keeping the government's core technology systems up to date will ultimately cost the taxpayer - both in dollars and lower mission effectiveness.

GAO also aptly points out that success is not solely about more funding. Successfully upgrading and maintaining our infrastructure requires an array of different management disciplines. As GAO describes it, the federal government “has spent billions of dollars on failed and poorly performing IT investments which often suffered from ineffective management, such as project planning, requirements definition, and programme oversight and governance.” A recent report by The Boston Consulting Group reinforced this conclusion by looking at public sector organisations across the world and finding that roughly 70% to 80% of modernisation programmes either fail or deliver results that are mediocre at best.

Breaking a vicious cycle

I've written before about the importance of workforce management for a higher-performing government, but technology is equally critical. Underpinning the success of all essential government functions - e.g., keeping our skies, food, and borders safe - are people with the right skill sets and training and a well-functioning IT platform at their disposal. Imagine, for example, our air traffic control systems without reliable technology to support them.

Yet, how do we secure the right investments to update an ageing system infrastructure when the track record for managing successful upgrades is less than stellar? It's important to remember that this is far from a lost cause. During the implementation of the American Recovery and Reinvestment Act of 2009, the federal government successfully created a new nationwide data reporting system with unprecedented speed. And despite the rough start for, its rapid recovery and turnaround demonstrates that when the right skills and disciplines are applied, the federal government can deliver.

In order to clear the path for new investments, the government must recognise that sub-par modernisation efforts must become a thing of the past. BCG has identified a variety of elements that frequently characterise great modernisations. For a start, policymakers need to look at transforming the organisation as a whole - not just the systems. Transforming how the government operates involves digging into the way things are done within the agency or department and then rethinking the way that the services are actually delivered.

Focusing on flexibility is also key. Rather than involving a big upfront investment, implementation should be conducted in small, manageable pieces, and high-value, low-risk components should be taken care of first. Plans also need to be adapted regularly on the basis of lessons learned. Another priority should be to select the right delivery partners. To this end, government leaders should consider using a scenario-based selection process in which a small number of possible suppliers outline how they would respond to several different situations and how their system would perform in each case.

Once selected, these partners need to abide by a proactive project management office, one that is forward-looking and identifies and tackles problems early on. But it is equally important for leaders to continually communicate and work with key stakeholders during the course of a modernisation project. Highly successful projects are focused on delivering maximum value, rather than seeking consensus. And finally, you've got to recruit and invest in the right people and capabilities from the get-go - from both inside and outside government when necessary.

In this or any election year, partisanship is an all too frequent influence on public discourse. But one thing we should all be able to agree on is the importance of establishing a modern government ready for 21st century challenges. It can be done. And the same goes for fixing our country's infrastructure. Dual targets, both eminently achievable.

Let's get to work.



  • Invest more to get… less? The next US president will need a high-performing federal workforce in order to be successful. Danny Werfel explains why some fresh investment would not go amiss
  • Keeping score of the core. Governments are increasingly relying on technology to enable complex transformation programmes of their core systems. We hear from three government leaders from around the world about their lessons learned from efforts to transform government - from inside to out.
  • Fitness first. Getting a government department's IT function up to speed is no small feat, admits Andrew Arcuri. It can be done, however, and he explains how
  • Core workouts. Governments are increasingly seeking to transform their core systems. Andrew Arcuri explains how they can move from achieving good results, to truly great
  • The Transformer. BCG's Vikram Bhalla has spent the last 20 years working on transformation projects large and small. Here, he shares some of the key ingredients of a successful change programme
  • Beltway and beyond. A former senior advisor to two US presidents, Elliott Abrams' view on public impact has been shaped by decades of public service. He shares his perspective on how governments can achieve more
  • DC despatch. Kate Josephs reflects on her experiences driving performance improvement in the British and US governments
  • By the people, for the people. Colorado's voters certainly like John Hickenlooper. Recently re-elected as governor and enjoying strong approval ratings, the former mayor of Denver tells us about his approach to policymaking and why he believes collaboration is key to success
  • To the Max. Helping US policymakers to be more effective is the task facing Max Stier and his colleagues at the Partnership for Public Service. He tells us about transforming federal government inspiring a new generation

Written by:

Danny Werfel Partner and Managing Director at The Boston Consulting Group, Washington DC
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