AWS Government, Education, & Nonprofits Blog

Why resisting digital transformation is riskier than embracing it, and how to mitigate risk

Risk of Digital Status Quo report cover

 

When considering digital transformation, governments tend to focus on the potential drawbacks instead of focusing on the risks of failing to adopt new technologies. A newly released report by Ottawa-based Public Policy Forum and the Amazon Web Services (AWS) Institute, “The Risk of the Digital Status Quo,” outlines four risks of forgoing digital modernization in Canada and offers strategies to address those risks.

The first risk stems from maintaining legacy systems, which requires special skills and funding and creates barriers to integration with new technologies. Cyber security due to the inability to secure legacy systems and a lack of updates to the systems is the second risk. The third risk is driving away talent and reinforcing a stagnant work culture. The fourth risk is the increasing risk of service failure as the gap between government service delivery and citizen expectations widen. Failure to embrace expectations could lead to irrelevance, citizen frustration, and eventual disengagement.

Despite the Canadian government’s drive to modernize services, public servants remain risk averse. In a survey of senior Canadian public servants, those officials revealed the reasons behind their hesitation: a rapidly evolving digital landscape with no clear modernization strategy; a poor understanding of the digital state of their organization; and a short-term focus tied to election cycles, among other factors. The report lists and ranks the factors contributing to the lack of support for digital transformation.

The report offers the following strategies to assess and address the risk of forgoing digital transformation:

  1. Factor in the cost of legacy systems maintenance. According to a recent report by the Information Technology Association of Canada, continued dependence on outdated legacy systems costs the government $12.5 billion annually. The government should also consider the cost of training employees to maintain those systems, and the accumulating technical debt in legacy systems. Review outdated procurement processes to help enable long-term digital opportunities.
  2. Frame the need for legacy replacement as a cyber security issue to elevate its importance. The potential impact of digital transformation is best assessed when weighed against the potentially greater risk of cyber security issues such as a data breach — and being publicly named and shamed for it.
  3. Factor in the financial cost of cyber security risks posed by legacy systems. Organizations affected by a breach should consider the cost of data loss, business disruption, regulatory penalties, and other factors when evaluating the overall costs of digital transformation.
  4. Leverage digital transformation to attract and retain talent. Shifting to a digital workplace culture and embracing flexibility, innovation, and rapid technology adoption can reduce the risk of losing or failing to attract skilled workers. In an environment where private and public sectors are competing for the best talent, consider how digital transformation can attract talent.
  5. Factor in the risks to government relevance and citizen engagement – a key performance indicator for many governments. Governments need to improve how they provide services to meet the needs of their citizens. Providing easy-to-access and seamless service offerings will lead to a more positive interaction with government. Technology enables the kind of services that citizens have come to expect of their governments. Resisting digital transformation risks diminishing citizen engagement.

In addition to surveying senior Canadian officials, the authors drew on the perspectives of 16 current and former government leaders from the United Kingdom, Scotland, New Zealand, Australia, Finland, the United States, and Canada. Their insights and examples of governments around the world, demonstrate that although digital transformation poses challenges, it is proving to be the less risky option.

Read the report, “The Risk of the Digital Status Quo,” and read more insights from the AWS Institute.

 

Maysam Ali

Maysam Ali

Maysam Ali is Global Content Lead for the Amazon Web Services Institute, based in Washington, DC. She writes about how technology helps solve challenges in the public sector. The Amazon Web Services (AWS) Institute helps break down barriers between public, private, and nonprofit sectors to identify common problems and engage technology experts to find a path forward. For more information on the AWS Institute, visit https://aws.amazon.com/institute/.