OECD E-GOVERNMENT PROJECT RESEARCH PAPERS

E-government and Organisational Change: New Ways of Linking the Front and Back Offices of Government Departments, Government Agencies and Local Government Tony Bovaird Professor of Strategy and Public Services Management Bristol Business School Coldharbour Lane BRISTOL BS16 1QY September 2002

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Introduction This paper was commissioned by the Public Management Service [PUMA] of the OECD as part of its e-Government Task Force initiative. This initiative takes as its starting point that e-government has the potential to be a major enabler in the adoption of good governance practices, with a major focus on the longer-term vision (2005-2010). The overall project will produce papers, policy briefs, and specific reports, which will be considered at a series of seminars, and a Flagship report will be finalised by the end of 2002. The topic of this paper is the relationship between e-government and e-governance and organisational change in the public sector. It looks in particular at new ways of linking the front and back offices of government departments, government agencies and local government. In this paper, the following shorthand will be used for convenience:

e-government will be used to denote electronic enablement of all the services provided or commissioned by the public sector e-governance will be used to denote electronic enablement of all the other activities of government (e.g. management of democratic activity, ensuring fairness and transparency of decision-making in public bodies, etc.).

Aims of paper The aims of this paper are:

• To develop a conceptual approach to the analysis of how e-government and e-governance is impacting on organisational structures and processes, while taking account of the differing context in OECD Member Countries

• To identify key themes and issues in the impact of e-enablement on organisational structures and processes, and prioritise them

• To identify new organisational structures and processes which are emerging to make use of the potential of e-enabled processes

• To analyse the issues, with a focus on identifying potential and existing solutions and approaches

• To identify priority areas and issues for future analysis • To identify key information sources, and current gaps and

approaches to identify these

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The need for organisational change in response to e-government and e-governance There are a number of drivers of organisational change arising from the emergence of e-government and e-governance. They include:

• The need to ensure that what gets e-enabled is better, not just the same – the move to e-enablement means that service major redesigns are now possible in public services and other public sector activities. This redesign is often long overdue, particularly in the least innovative public agencies. This tendency, by itself, would mean that the organisational forms of public agencies and public services is likely to experience a period of convergence, as less successful approaches are abandoned and more organisations seek to adopt the approaches of the ‘best-in-class’ service providers and public sector actors. (Of course, this will only happen if there is wide agreement on what ‘best-in-class’ might mean in a particular service or activity, and widely disseminated knowledge of which public organisations perform well against these criteria).

• Pressures toward increased transparency, so that public organisations move towards good governance as well as good government. This will mean that the organisation will be need to display new levels of transparency, be subjected to new levels of scrutiny and will need to ensure that its decision-making processes are fully informed by the needs and wishes of all stakeholders. The challenge to achieve this is likely to involve new relationships between the different stakeholders, as well as new ways of working. In particular, authority relationships (e.g. between professionals and service users, or between service professionals and senior managers) are likely to change significantly if decisions, and the criteria on which they are based, are subject more fully to the public gaze.

• New empowerment possibilities provided by ICT for all stakeholders. There are a number of different ways in which stakeholders can be empowered by ICT:

o All stakeholders can be kept better informed o All stakeholders can choose the information which they wish to search

and download, rather than having it chosen for them o Stakeholders with weaker voices can be given a more powerful

platform, as there are fewer ‘gate keepers’ to e-enabled discussions and consultation processes

o Stakeholders with highest priority (in social or political terms) can be given special access rights to service providers or other public servants (e.g. through password-controlled sites)

These mechanisms can be used to improve interactive decision-making with internal stakeholders or with external stakeholders. Perhaps most excitingly they can allow more imaginative approaches to service co-planning, co-design and co-production – and preferential access to these opportunities could, if so desired, be extended to disadvantaged groups, rather than allowing them to be

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primarily seized by articulate, well-educated (and often middle-class, lower priority) clients and service users – the ‘wheelers and dealers’ who have so effectively commandeered resources in many non-e-enabled contexts. With greater possibilities of stakeholder involvement, there is a need to reconsider a whole range of interaction mechanisms in each public service and public organisation:

o Information dissemination to the general public and to specific target groups

o First points of contact for those who know what they want from public services – and for those who are not clear what they want

o Continuing contact mechanisms for those who are in the process of receiving (or waiting for) a service or other engagement with a public organisation

o Continuing dialogue mechanisms for those who wish to engage in the debate on service improvement, new service development and other innovations in the public domain

o Feedback mechanisms to ensure that each party understands more clearly after important interactions how that interaction was perceived by the other party and how it might be made more successful if it is needed again in the future.

• To take advantage of new decision-making tools provided by ICT. These include a range of decision support systems, such as Priority Search, etc. However, the most commonly used systems at the moment tend to be rather prosaic versions of the Balanced Scorecard, to ensure that the organisation is able to focus its performance improvement efforts on the most strategically important, rather than the most urgent, areas of poor performance (Martin et al, 2002; Farrant et al, 2002).

• To take advantage of new data-base analysis possibilities. At a prosaic level, this includes the updating and regular ‘cleaning’ of client data bases – something which has been neglected in most public organisations, so that their record systems are incomplete, inaccurate, misleading or even potentially dangerous. More ambitiously, there has already been great interest in the potential forlinking all data bases for an individual client, so that a holistic assessment can be made of that clients needs, in the light of a full history of the client’s interactions with public services and public organisations. (Clearly, there are important data protection issues here which need to be satisfactorily handled). More ambitiously still, there is the potential for joining up all the agencies who are involved in the key life events (births, deaths, marriages, moving house, moving jobs, etc.) for an individual citizen. At an international level,

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there is the opportunity for similar agencies in different countries to compare notes, e.g. the collaboration of national tax agencies to ensure that individuals and multi-national companies do not evade tax payments. (Again, data protection issues must be carefully handled at both national and international levels). Finally, there is scope for linking all clients relevant for a particular service provider, so that that provider has a clearer picture of the profile of demand for the service, now and projected into the future. This might allow, for example, a social housing landlord who is providing some informal social care for an elderly tenant to notify the social care network that at some time in the near future a more formal care programme may be needed which will require resources from a dedicated social care agency. Again, data protection issues are involved. In each of these cases, the sharing of data bases will significantly alter the basis on which the organisations concerned distinguish themselves as service providers and creators of value added to the community. Organisations which have used their unique knowledge about service users or other stakeholders as a key element in their claim to public funding will now find that they will need new ways of adding value. This is public sector equivalent to the loss of what would be known in the private sector as ‘competitive advantage’ or a key ‘core competence’. Typically, we might expect new configurations of organisations to emerge in such a scenario, after a suitable lapse of time.

• To take advantage of new communications possibilities provided by ICT. This

is clearly one of the areas in which most progress has already been made with the huge increase in the use of email and websites. In addition, the web-enabled telephone systems – call centres, etc. – have greatly extended the functionality of the telephone, which will probably be further extended in the near future through internet-linked wireless technology, video messaging, etc. At the same time, existing technologies such as video-conferencing may become much more common and may be available through both web and telephone channels. The communications potential of ICT will therefore make the typical member of staff in a public organisation part of a much more densely and closely interconnected team which can respond very much more quickly to requests for assistance, whether this be in the form of information, advice, funding, or the delivery of a specific face-to-face service. This will clearly have repercussions for the kinds of skills which will be needed by organisations (and this is the subject of other papers at this seminar). Many of these communications possibilities are likely to alter greatly the role of the citizen and the service user vis a vis government. Just as the web is the ultimate form of direct mail, the mobile phone is the ultimate way for big brother to send messages to every individual. Such technologies can clearly be used for good but also for evil. They could liberate those who are now able to keep in touch with those with whom they wish to be close – or they could

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harass those who feel their privacy can now much more easily be intruded upon. They could give a mass audience to those who have previously been marginalised and even largely invisible in society – or at least in decision-making circles. Or they could raise to a new level (perhaps a new ‘low’ rather than a new ‘height’) the self-aggrandisement of arch-marketeers who seek to smother information in a blanket of hyperbole. If these communications technologies are therefore to function in ways which are likely to create public value rather than to destroy it, then it will be necessary for public organisations to develop strategies for managing their communications with each of their different stakeholders. No longer will ‘one size fits all’ strategies suffice. However, differentiated communications only make sense if there is genuine knowledge about the different groups to whom differentiated messages are being sent. This means that this tendency will need to be considered in harness with the previous one, namely the greater potential for use of data bases in public services.

However, it is also important to acknowledge that there are other drivers of organisational change, which are not directly related to e-government, but which may be reinforced by the opportunities which e-government offers. On the one hand, there are the opportunities to take advantage of new forms of organisation emerging from government reform and modernisation programmes. As the NPM agenda has rolled out in various parts of government around the world, some organisational structures have tended to become associated with the focused strategy and policy making which it recommends. In particular, organisations have been encouraged to establish more ‘business-like’ decision processes at the top of the organisation, often with small (‘decisive’) Management Boards rather than Policy Committees. The danger that these Boards might become out of touch, because they are so small and exclusive of many interests within (and outside) the organisation, can be reduced by means of the intensive communications between levels in the organisation which ICT can offer. At the same time, the very different move to a much greater emphasis on governance processes has also suggested that transparent Boards, with clearly identifiable key actors in the organisation, can often be more accountable than large committees in which individuals become rather anonymous. This is especially likely to be the case if ICT is used to relay the decisions of these Boards to a wider audience. A dramatic example of this is provided by the Cabinet in Estonia, which publishes the minutes of its meetings online, just minutes after decisions have been taken. Furthermore, there is backing from both the NPM and governance camps for ensuring that top managers move away from their ‘silos’ towards a more corporate form of management – rationalised under NPM as ‘espousing a corporate rather than selfish strategy’ and under governance as ‘tackling cross-cutting issues through joined-up working with multiple stakeholders”.

For all of the reasons given above, it is likely that organisational structures will change to reflect the new ways of working which have become available and inter-

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organisational relationships will change to reflect the new stakeholders with whom the organisation now has to interact. Mechanisms by which new ICT applications impact on organisational structures, processes and behaviours in public services In this section, we consider how it is that ICT innovations are able to impact upon organisational structures processes and behaviours. We argue that, although ICT may appear to be simply a support resource like many others, it has two key functions in organisations – it acts as the channel for knowledge flows and, simultaneously, it has become the main archive for stocks of knowledge. In a knowledge-based society and economy, ICT is therefore both the engine for organisational growth, through the generation of ‘new’ knowledge and the ‘iron cage’ of organisational stability, based on the use of and reproduction of ‘old’ knowledge. We will look at three, inter-related specific mechanisms by means of which ICT can support – perhaps even trigger - change in an organisation. The first is through enabling improved decision-making in an organisation. Here, information flows are made faster, more reliable and more relevant than they were before, so that decisions are likely to be improved. The second is through improved use of data bases in the organisation – here, the stocks of knowledge in the organisation, at least in so far as they are embedded in the organisation’s data bases, are more accessible and can be cross-referenced more easily. This should help both in improving the decisions which get made and in implementing decisions more consistently. Thirdly, ICT can support better communications an organisation – partly through the use of the organisation’s data bases, but also because it opens up much faster, more personalised communications channels to individuals (through email, interactive websites, etc.). We now look at each of these mechanisms in turn.

• ICT impacts on decision-making in public services (front and back office)

Decision makers call on many sources when making decisions – intuition, past experience, trust of some actors and distrust of others, stories (‘anecdotes’) which they have recently heard in their favourite bar, websites they have visited, reports from their staff, and even, on occasion, their own organisation’s data bases. It is not necessary to believe that any one individual’s decisions are ‘determined’ by an organisation’s information systems in order to grant that information systems are likely to exert a significant long-term influence on the decisions emanating from an organisation. In practice, the information system is likely to be a resource which is called upon by most stakeholders from time to time, either to verify their prejudices or to fill in blanks in their knowledge. Consequently, this information system shapes the arguments and the rationales which lie behind many of the decisions which get made. Front office decisions get made based particularly on information about the

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service user or citizen – yet in the past this knowledge was very basic, inaccurate and incomplete. It is quite likely that serious losses of welfare have arisen because wrong judgements have been made by front office staff about clients needs or wishes. ICT can improve the function of the front office in many ways, but key examples would include:

o Longer term records about the client’s characteristics and past services received

o Wider information available from other agencies and stakeholders about the client’s current activities, services received, etc.

o A wider menu of services available, with their pros and cons in terms of the client’s needs

o A more extensive list of service providers, with their strengths and weaknesses in terms of the client’s needs

Taken together, these factors mean that clients are not just seen from one aspect or one perspective, but are seen as whole persons: information which was collected for different purposes (tax, social security, population registration, etc.) is combined and integrated (Bekkers and Zouridis, 1999). Furthermore, the matching of potential providers to clients takes account of a much wider range of characteristics of both than has typically been the case in the past. Back office decisions get made based particularly on information about the organisation and its units – their tasks, their competencies, their availability, their costs. Yet here too the knowledge base is often very poor. Indeed, it is quite likely that many ‘support services’ in public organisations are far from the ideal provider of back-office services for their front-office colleagues. ICT can improve the decisions made in the back office on support services in closely analogous lines to the ways listed above in relation to the front office, but substituting ‘internal customer’ for the ‘client’. The ways in which ICT can help to improve decision-making capabilities in organisations can be modelled by looking at how it can improve the value chain in the organisation or, alternatively, by looking at how it can improve the core competencies of the organisation. In the UK, joint work by central and local government recently produced a model of the e-organisation by means of which local government (and other local organisations) can build and implement their e-strategies (see Exhibit 1). • ICT impacts on data-base management in public services (front and back

office) ICT can make data-base management faster, cheaper and more accurate. The role of ICT in this area has been fundamental – this was the driver of the first business computer

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Again, it is possible to model these impacts by looking at how different elements in the business value chain can be improved by ICT-enablement.

• ICT impacts on communications in public services (front and back office)

ICT can make communications more targeted, more relevant in terms of message, faster, more vivid and more interactive. Communications are not just ‘knowledge packets’ – they come with emotional connotations, both from their content and the form in which they are delivered. In the past, communications in the public sector often concentrated on accuracy, to the detriment of its ability to get the message across. ICT offers the promise that both benefits may be easily available.

Exhibit 1 In the UK, joint work by central and local government recently produced a model of the e-organisation by means of which local government (and other local organisations) can build and implement their e-strategies. The e-organisation is made up of five themes:

o Transactions – from the citizen’s perspective, service outcomes are experienced through their day-to-day transactions with councils and other local service providers. It is possible to analyse how a given priority service might be realised through a variety of generic e-enabled transactions (such as providing benefits and grants)

o Access Channels – these transactions might be conducted through a variety of e-enabled access channels (such as Digital TV or One-Stop Shops)

o Enabling Technologies – the channels can be supported by a range of enabling technologies which facilitate effective, integrated information management (such as Customer Relationship Mangement and Geographic Information Systems)

o E-enabled Business Systems – service delivery can be underpinned by a suite of core, e-enabled business systems (such as intranets, financials and e-procurement)

o Organisational Leadership and Capacity – successful delivery depends on organisational leadership and capacity (including the capacity to lead and manage change and to re-engineer major business processes

Source: DTLR (2002), p. 22.

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• ICT impacts on linking front-offices and back-offices within public services

This is fundamentally a communications issue. However the key impacts of ICT in making these links are likely to be:

o Allowing front-office staff immediate access to past records in relation to the client

o Allowing front-office staff to input new information about the client in real time, including all details of each new interaction as it occurs

o Allowing front-office staff to access key expertise in the organisation in real-time when it is not embedded in the electronic knowledge bases (through telephones discussion, text-messaging, web- or telephone-based video connections, etc)

The importance of integration in business improvement has been emphasised in modern management by the stress placed synergy (Campbell and Sommers Luchs, 1992) and on horizontal strategies (Porter, 1985). A key barrier to these integration processes has traditionally been professional autonomy, but this may now be being at least partially eroded in the post-modern organisation (Bogason, 2000). • ICT impacts on linking different organisations involved in public service

planning and delivery

The impacts here are very similar to those in linking front and back office staff within any given organisation. However, there are some other impacts – particularly in helping to break down distrust which often occurs between people working on opposite sides of organisational boundaries. Here the use of e-signatures and security-graded passwords to allow automatic access to information in the data bases of other organisations is likely greatly to speed up the processing of many types of inquiries. It is also obviously the case that moving to ICT –driven solutions entails public organisations becoming more open to working with private sector companies, since public-private partnerships are almost always inevitable in designing and delivering appropriate ICT systems.

Mechanisms by which new ICT applications impact on organisational structures, processes and behaviours in good governance

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There are a range of mechanisms by which ICT can impact on organisations in ways which can strengthen good governance.

• ICT impacts on transparency, inclusiveness and ethics in decision-making

(front and back office) ICT has several characteristics which were much less marked in previous systems of knowledge transfer and knowledge storage and which have revolutionised the communications capacities of modern organisations:

§ It is extremely quick, so that communications can normally take place in real time

§ It is extremely cheap (except for peak time long-distance telephone calls) so that volume of communications is much less of an issue now than before

§ It is much less text-based than the paper-based systems of the past, so that visual and sound images (including music) are now much easier to produce and transmit in communications media

§ It is easier to ‘nest’ information within websites, so that the user has more control over what is visited and downloaded

Moreover, partly derived from these characteristics, there are a number of features of ICT which also make it particularly valuable in developing systems of ‘good governance’:

§ It is very easy to keep records of all correspondence, so that it is easy to hold people accountable for statements they have made, promises they have given, targets they have accepted, etc.

§ It is also easy to log electronically the progress of all work done in respect of particular inquiries, requests, transactions, cases, issues, etc and post them on an limited access website, so that all stakeholders can be kept aware of how their item is progressing, who is with, and what steps it still has to go through

§ By the same token, it is very easy to highlight which people and organisations have been involved in any decision-making process, at all stages during that process

§ It is easy to give cheap and convenient access to the decision-making process to all stakeholders who are considered relevant

§ It is easy to check what use different stakeholders have made of these rights of access to decision-making

§ It is often possible to encourage more stakeholders in particular groups, even ‘hard to reach’ groups to join in the debate and the consultation processes, through use of direct mail or email contact lists, etc.

§ It is possible (if it is considered appropriate and ethical) to carry out detailed surveillance on the e-correspondence between all relevant stakeholders, e.g. where there is a question

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about whether proper standards have been maintained in the behaviour of the parts concerned

Consequently, ICT now offers major opportunities to pursue the governance agenda in a much more systematic way. Moreover, this is not only true for public agencies – it is also true for NGOs, community groups, etc., so that the potential for setting standards for transparency, inclusiveness and ethical behaviour – and then monitoring them – is much greater than it was before. (Of course, there are offsetting negatives to all of these possibilities, which will be considered later).

• ICT impacts on transparency, inclusiveness and ethics in data-base

management (front and back office)

Similar arguments apply to the ways in which ICT can impact upon data base management. Whereas, under manual record systems, information on individuals and companies could be kept in many ways which were almost impervious to external scrutiny – partly because they were also very hard to find and to access internally in the organisation – it is now much easier to establish what information an organisation has in its information systems. For example, under Data Protection laws, it is now much easier to make a company search its data bases and to declare whether or not it has personal information on an individual, with reasonable confidence that the organisation will be able to find this out quite quickly and cheaply. Previously, even if the organisation were willing to cooperate, it was quite likely that the existence of such personal information in manual records would not be uncovered in such a search. The key organisational issues which emerge from these impacts of ICT are that • ICT impacts on transparency, inclusiveness and ethics in communications

and stakeholder engagement (front and back office)

In France, taxpayers can view their accounts and files online. A Public Key Infrastructure delivers free digital certificates online for authentication and digital signatures. Now all of France’s 32m taxpayers have their personal tax file accessible online. This is the start of a process which will eventually offer to all taxpayers the possibility to manage online their relationship with the Tax Administration, including personalised services, online filing, online payment, access to their account, tracking the progress of their requests, etc. Source: Accenture (2002)

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We have already seen major changes in the communications strategies of organisations, due to the impact of ICT. However, from a governance point of view, one of the most intriguing aspects of ICT is that it builds up the expectations of stakeholders to be included in all relevant communications – and it allows them more readier means of checking if this is happening. So, for example, if a service user believes that he or she is not being told all the relevant details about home care services available, he or she can phone up a call centre or visit a website and check out this suspicion, then email a complaint and ask for the public organisation to demonstrate that he or she has been added to the relevant electronic mailing list – and potentially of this can be done within a matter of minutes, and from the comfort of one own’s home. The corollary is also true for unwanted communications – the recipient can ask to be removed from the mailing list or can, if desired, block all future emails from that source. Stakeholder engagement, too, has been significantly altered in its scope and methods by the ICT possibilities now available. Moreover, stakeholders who believe that the consultation or participation process has not been entirely transparent or that they have been excluded from it now have much better methods available to them than was previously the case to check on what has happened to date and to include themselves into the engagement process. Here, the use of websites has been influential, but so too has been the use of website browsers which throw up the existence of (and often the contents of) discussion/bulletin boards in the public domain.

• ICT impacts on transparency, inclusiveness and ethics issues on linking

front-offices and back-offices within public organisations

While many of the most exciting developments in service improvement have resulted from better linking of front and back offices, particularly in relation to dealing with customers’ requests, the dangers have also been clear that data-sharing could lead to data abuse. The problems of engineering these linkages become even more fraught when they involve the integration of front and back offices across different levels of government. Here, the problems are not simply about data security and data protection. There is

South Africa’s independent Electoral Commission uses its website (www.elections.org.za) as one of its primary means of communication, providing voters with information on where they should register and vote, providing registered voters with details on their current registration details. It also publishes detailed detailed analyses of voting and results on each voting district. Source: Accenture (2002)

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clearly also a set of issues about agencies being reluctant to work with each other because it potentially reduces their autonomy and their power, both vis-à-vis individual clients (since clients can play off one agency against another to achieve more favourable decisions in respect of their own case) and vis-à-vis other agencies which are involved in helping the same clients to achieve a better quality of life. Games playing, in order to create or maintain ‘competitive advantage’ in comparison to other public agencies, is common in these circumstances. ICT can certainly help in exposing the ‘irrationality’ of certain stances by specific public agencies; however, it can also get in the way by providing fertile ground for claims of ‘non-compatability’ of systems which, with a minimum degree of ingenuity, can be protacted indefinitely to block whatever bright ideas may emerge to suggest ways of making progress. • ICT impacts on the transparency, inclusiveness and ethics issues in linking

different organisations This impacts on all organisations involved in public issues (national government, regional government, local government, voluntary organisations, private business, media, etc.). The dangers of data-sharing leading to data abuse are, if anything, even greater when personal data is transferred between organisations. Furthermore, there are significant dangers of dissembling by public agencies about the real problems. Under Freedom of Information laws in the EU and in many other countries, citizens have rights to information about policy decisions which are supposed to provide a strong protection against corrupt practices. However, these rights are severely constrained. One major constraint is that, where public private partnerships are involved, relevant data may not be released to the general public – or even to closely involved stakeholders – on grounds of ‘commercial confidentiality’. Here we see a straightforward conflict of interest between two of the public sector’s stakeholders - its citizens and its suppliers. This conflict of interest is likely to be particularly sharp and important in the area of ICT provision to the public sector, since this is normally done through public private partnerships. Emerging organisation structures and processes which allow better use to be made of the potential of e-enablement The changes itemised above are often more potential rather than real. However, there have indeed been major reorganisations in many public organisations around the world, which have been wholly or at least partly influenced by the potential thrown up by ICT. In this section we explore some of the organisational forms which have been emerging across OECD countries. None of these can be said as yet to be ‘tried and tested’, in the sense of having been rigorously evaluated. However, some have been used sufficiently often, and for a sufficient length of time, that some interim judgements can be made as to their strengths and limitations. These latter judgements are dealt with in the next section.

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New configurations and working patterns in front offices in public service organisations Here we look at how new configurations of front offices have emerged to deal with new forms of customer relations management (CRM), new expectations of the public and new methods of staff working. The growth of CRM: in the last ten years, there has a major growth in the theory and practice of ‘Customer Relationship Marketing’, influenced by the work on relationship marketing by Christopher et al (1991). The principal tenet of CRM is that marketing will be more successful (for both sides) if it is based on successful management of the mutual relationship between the organisation and the customer. This has led to much more investigation into what ongoing relationship customers actually want with service organisations (which, in some cases such as the police, may be none at all) and how this relationship can be developed and used to mutual advantage in a range of ways, going well beyond simply dealing with the initial issue which brought the organisation and the customer together. Changing public expectations: partly because of the ways in which the private sector has developed, and partly because of the growth of two income families, the public now expects public services to be available more easily and more often than was previously regarded as acceptable. This may not necessarily 24/7 availability but it does mean that services will often have to available for much longer than ‘normal’ working day. Moreover, the public is now typically better educated and more knowledgeable about services than was the case when the welfare state was developed – and much more ready to ask questions and to be sceptical of unconvincing answers. (The level of customer knowledge is itself now often enhanced by their use of the internet). Consequently, staff now need to have more access to wider knowledge bases (either through access to relevant colleagues or through professional data bases, many of them on the intranet or internet). It is now much less common for a member of staff to able to act as a lone professional – the ‘barefoot doctor in the bush’ – and much more common for professionals to demand high quality back up in the performance of their tasks. New methods of staff working: There are other ways, too, in which staff working is changing. Many staff now explicitly do not want (and may not accept) ‘normal working hours’ based at an office desk some distance from their homes. They may insist upon part-time working, flexible hours, working periods dovetailed in with school terms, home working, etc. These possibilities are all enhanced by ICT but have up to now been seen as relatively marginal in most parts of the public sector (other than in some parts of education and social care). Some new configurations of front offices We consider here some of the generic configurations of front offices which are now to be found in public organisations and give some examples from particular countries.

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Front Office A: the Inquiry Point – where the front office simply takes inquiries and passes them on the back office.This can be done face-to-face with customers (e.g. at reception desks in public buildings), by telephone (e.g. receptionists for public offices or a call centre), by email (e.g. to info@public.org, perhaps available on the organisation’s website). This is a very cheap solution but it is slow and the least responsive to the customer’s needs. It was a very common model in public services up to the 1970s and still persists in some places. Front Office B: the Advice Point – where the front office not only takes inquiries, but can give advice and even solve some problems (sometimes through trained receptionists, sometimes by allowing receptionists to have quick access to advisers in the back office, sometimes by putting customers in direct contact with back office staff so that their inquiries can be dealt with immediately). This approach is responsive to the needs of those customers with relatively easy inquiries and easy-to-solve problems, but it requires significant training for receptionists and it requires a high proportion of back office staff to become good at dealing with customers. It is typically expensive and can be very frustrating for those customers who don’t get immediate help, for receptionists who have to find back office staff willing to help, and for back office staff who find that their ‘batch processing’ work is often interrupted and who often have to stand in for missing colleagues, giving advice to customers on issues or cases with which they are not very familiar. This was the most common model in many public services from the 1970s onwards and still persists in many places. Front Office C: the One Start Shop – where the front office takes inquiries not just for one service but for all the organisation’s services. This is equivalent to a joined-up version of the Inquiry Point. One example is the website www.consumer.org in the USA, which is a ‘one-stop link to a broad range of federal information available online. It is designed so that the consumer can locate information by category, such as Food, Health, Product Safety, Your Money and Transportation. Such ‘one start shops’ are a convenient marketing device which makes it easy for the organisation to inform all its customers of how they can get in touch. It is cheap – perhaps even cheaper than a series of separate Inquiry Points, but it needs better trained and more widely informed staff. Front Office D: the One Stop Shop – where the front office gives advice and solves problems not only in relation to one service but in relation to all services which the organisation offers. This is equivalent to a joined-up version of the Advice Point. It is a very convenient and responsive facility for most customers. (Typically, over 90% and sometimes 95% of all inquiries and requests can be dealt with satisfactorily in one contact). It has the advantage that it can therefore deal with cross-cutting issues and problems which involve many different parts of the organisation. However, it does require very well trained staff, with the right to demand instant co-operation from staff in many different parts of the organisation. If it is based on premises in main shopping centres, then it can be expensive to provide enough for the whole population (and this is especially true in rural areas). If it is based on a call-centre, then it can be difficult to find staff who are both knowledgeable about a wide range of services and also good at keeping customers waiting patiently for their inquiries to bear fruit - although this is easier if video links are installed, as has recently been done by the

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East Riding of Yorkshire in England (DTLR, 2001). If it is based on a multi-service website, then it can be difficult to make a site easy to navigate. Front Office E: the Customer Account Manager – where each customer is given one named personal contact, through whom all future inquiries and requests are to be made. This has the advantage for both the customer and the organisation of providing continuity (and therefore organisational memory). It also makes the experience of contacting the organisation much pleasanter for the customer (which, of course, may increase the level of contacts made – not necessarily a good thing for the organisation). It means that the members of staff involved need to become much more powerful than in a typical front office position – and will probably have corresponding status (and therefore they may also have higher pay). It is an expensive option – basically a more staff intensive version of the One Stop Shop. Front Office F: the Customer Representative – where each client has someone appointed by the organisation to act on their behalf in all dealings with the organisation. (In the US, this is often known as the ‘Advocate’ model). The Customer Representative may be a person who is a member of staff of the organisation (as in the case of a probation officer) or an outsider, paid by the organisation (as in the ‘guardian ad litem’ appointed by courts to represent children who are looked after in Social Services residential homes in the UK). This is a version of the Customer Account Manager in which the member of staff has switched loyalties to some extent, from being largely the representative of the organisation to being at least partly the champion of the customer. It is expensive in terms of the effort involved, as in the Customer Account Manager approach, but may not cost so much if the representative works in a voluntary organisation or as a private individual. Changes to back offices in public services Here we look at some examples of how back offices have been changing in public services to deal with a number of major changes, such as the new roles of politicians in strategic management, new approaches to flatter hierarchies, and the need to integrate the support services in public organisations: Back Office A: the Batch Processor – all tasks are done in logical batches, when it suits the back office staff. This approach is high on efficiency but can be slow to deal with urgent work. Back Office B: the On Call Processor – all urgent tasks are done in real time when asked for, by staff who take a personal responsibility for the job being done and maintain personal contact with the ‘customer’ for the job (who is likely to be one of the front office staff), while all other tasks are done in batches. This approach is high on speed and responsiveness but may require rather more staff and therefore higher unit costs than the Batch Processor approach.

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Back Office C: the On Line Processor – this model is the same as the On Call Processor, except that there is little or no personal contact between the back office and the front office, so that the urgent tasks will be done in the back office anonymously and contact is essentially through email. This approach is less staff-time intensive than the On Call Processor model and therefore cheaper, but may not allow such a high quality handling of transactions. Back Office D: the Automated Processor – this approach entails the automatic processing of most inquiries from the front office. Here, the back office acts as a designer of software systems for automating support services, and as a last resort provider of those services which cannot be automated or where the automated service breaks down. For this approach to work, front office staff have to become skilled in the use of the software. This approach is likely to be cheaper in the long-term, if a significant proportion of back office work can be routinised, standardised and encoded in software systems. However, it has high set up costs and requires more specialist skills in the back office (to enable back office services to be properly automated) and in the front office (to access and use the automated services appropriately) – this may mean that it is vulnerable to skill shortages, especially if public organisations are reluctant to pay market rates for staff with such skills. Clearly, most back offices have elements of each of these ‘ideal types’. For example, most back offices have systems whereby low priority work is passed on to some staff who process it when time permits, sometimes sending batches of work off to outside firms to deal with, if a backlog is building up. Again, most back offices allow personal intervention by staff to ensure that some jobs ‘jump the queue when they are considered an urgent priority. Finally, most back offices have some automated procedures, even if it is only the keeping of staff appointment diaries on the intranet or the ordering of publications on the internet. Configurations for linking front and back offices There are essentially four levels of integration which can occur in the chain between service users and service deliverers: Integration of users: typically, this is undertaken by an intermediary who ‘represents’ the customers and intercedes on their behalf with the public organisation. This role is stronger the more customers whose needs are integrated in this way, since then the customer representative can speak with experience and authority about what customers want (and need) in general, which is helpful in putting demands for non-standard services into an appropriate context Front Office Integration: this integration of the customer contact points is the typical ‘one start shop’ or ‘one stop shop’, in which the organisation presents a single face to the customer (which typically appears to the customer as a single contact point). This can be done in a variety of different ways – through a call centre with a well-promoted telephone number, through a website, through a ‘shop’ or office in the High St, etc. In some cases, these initiatives can integrate contact points across other organisations in the same area (e.g. local authority, health agency and social housing organisations).

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Back Office Integration: here, the different suppliers of back-office services are integrated with each other to provide a ‘joined-up’ service offer to the front line staff. Front Office - Back Office Integration: here, the back office service suppliers are integrated with the staff in the customer contact points to provide a ‘vertically joined up supply chain’, which should have advantages of speed, consistency and quality control. One example of this is provided by Three Rivers District Council in England, which aims to provide 100% electronic service delivery by December 2003 (two years earlier than the target set by the UK government) through the web-enablement of all its services and through integrating its website with its corporate Customer Relationship Management System and all of its back-office systems, using industry standard software and widely used back-office systems (DTLR, 2001). Changes in inter-organisational relations and ‘horizontally joined-up’ working The above analysis has been couched essentially in terms of internal relationships between front and back offices in the same organisation. However, very much the same framework can be applied to groups of organisations working together. Here, we need to look at how the front and back offices of a public organisation work with (or against) front and back offices in other organisations such as in other public organisations, non-governmental organisations (NGOs), voluntary sector organisations, private sector firms and others. A public organisation may see some of these other organisations as ‘partners’ in the sense that they have formal alliances with them; others may be seen as ‘stakeholders’ in that they have reasonably durable inter-relationships with them, which means that it is worth investing some time and other resources in making the inter-relationships work more effectively; but some may simply be seen as the other party in ‘spot’ transactions which do not merit any interest in each others’ work beyond that single transaction. Again, we can see that integration across several organisations can occur at different levels:

o Integration of service users (where intermediaries may represent users who get services from many different providers)

o Integration of front offices (e.g. several organisations sharing customer contact points, such as ‘one stop shops’ or highly inter-linked websites)

o Integration of back offices (e.g. several organisations sharing customer databases, engaging in consortium procurement from shared supplier, etc.); or

o Integration of front and back offices (e.g. the UK system of local organisations establishing an all-purpose, quasi-autonomous service unit for dealing with all the needs of drugs offenders or the Finnish system, where mobile phones can be used to make payments of taxes and public sector charges from the private sector banking system (Accenture, 2002)).

Clearly these integrations are likely to be more difficult and may be less sustainable than when the integrations simply have to be achieved within the one organisation. And the most complex integrations, particularly the final one (between the front and

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back offices of several organisations), are likely to be the hardest to achieve successfully.

The role of ICT in achieving organisational integration This paper has already suggested that the three main mechanisms by means of which ICT can affect organisational behaviour are through its ability to support improved decision-making, its ability to allow better use of data bases, and its ability to support better communications. We now look at how these interlinked mechanisms can impact on the integration opportunities identified so far in this section. In Table 1 we set out some ways in which ICT can be used to encourage and support functional integration in public organisations. Table 1 Use of ICT to support functional integration within public organisations Areas of ICT impact on the organisation Type of integration Decision-making Data base

management Communications

User integration Co-planning of services by user groups and interest groups

User monitoring of the use of personal data

Keeping networks of users of all agency services in touch with each other

Front office integration

Co-planning of new integrated service offers

Access to updated and consistent user information across all services in the agency

Providing joined-up communications to users to inform them of all services available

Back office integration

Transparent trails of all decisions made, with reasons

Updating and consistency-checking of all support service information across all

Transparent trails of progress of individual cases/requests/inquiries being processed in the

The Irish government has established a Public Services Broker, which will function as a One Stop Shop where the public can access and apply for a wide range of services and benefits. In order to make this cross-agency initiative work, the government has established a Reach Agency, a cross-departmental team of civil servants responsible for delivering the infrastructure to make the Public Services Broker a reality. Source: Accenture (2002)

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support services in the agency

organisation

Front-back office integration

Preparation of integrated service work programmes (e.g. care plans) for users

Updating and consistency-checking of all user information across all services in the agency

Ensuring that all communications to users meet ‘customer-first’ criteria

This Table contains only some of the ways in which ICT might support these integrations, but it demonstrates the wide range of possibilities. Table 2, similarly, demonstrates the role of ICT in supporting integration across agencies, again looking at the four different types of integration. The main differences are that in Table 2 there are extra opportunities for ensuring that public organisations take better advantage of the networks which exist in policy making, service planning, service delivery and public issue monitoring. Table 2 Use of ICT to support functional integration across public organisations Areas of ICT impact across organisations Type of integration Decision-making Data base

management Communications

User integration Co-planning of services by user groups and interest groups across all service providers

User monitoring of the use of personal data in all multi-agency units and partnerships

Keeping networks of users in touch with each other across all service providers

Front office integration

Co-planning of new integrated service offers across all service providers

Access to updated and consistent user information across all service providers

Providing joined-up communications to client groups to inform them of all services available from all providers of services to that client group

Back office integration

Transparent trails of all decisions made, with reasons, across all service providers and partnerships

Updating and consistency-checking of all support service information across all support services

Transparent trails of progress of individual cases/requests/inquiries, across all service providers and partnerships

Front-back office integration

Preparation of integrated service work programmes (e.g. care plans) for users across all service providers

Updating and consistency-checking of all user information across all service providers

Ensuring that all communications to users meet standard ‘customer-first’ criteria, agreed by all agencies

Impacts of organisational arrangements on strategic, operational and financial performance

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In this section, we look at emerging evidence across the whole of the public sector and public services, on the extent to which new organisational arrangements arising from implementation of e-government and e-governance have had impacts on the strategic, operational, and financial performance of public organisations. The first framework for reporting this looks specifically at electronic service delivery. The framework is from the OECD (2001) report From in-line to on-line: delivering better services. In Table 3, we explore the evidence on effects of e-government on critical success factors in service planning and delivery, including:

Ø Leadership Ø Strategy building (and policy cohesion) Ø Responsiveness to stakeholders Ø Integration Ø ICT management Ø Partnership working Ø Change management and innovation

This Table does not purport to be a balanced judgement on the success of the organisational changes overall in any one country, never mind across countries. Rather, it is a map which shows that some progress has already been made in these areas, in at least some countries, in ways which appear to have already improved service performance or seem likely to improve it in the future. Table 3 Emerging evidence on service performance impacts of ICT-driven organisational change Organisational change triggered by ICT

Evidence of impacts on organisational and service performance

Leadership Strategy building (and policy cohesion)

Responsiveness to stakeholders

More than 50 focus groups in Canada and abroad supported the redesign of the Canada site [www.canada.gc.ca] which was launched in early 2001 (Accenture, 2002). The average local authority in England in November 2001 was delivering just over a quarter of the basic features and facilities which are readily achievable on-line at the present time (National Audit Office, 2002).

Integration ICT management Partnership working Change management and innovation

Customs and Excise has used e-enablement as a driver for business change and now has the right level of skills and top management involvement right up to the Chairman (NAO, 2002).

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Note: Table 3 is incomplete – further research to be incorporated in next draft. Of course, we also need to explore the effects of ICT on the critical success factors in key governance issues. In Table 4, we use the framework in Bovaird (2002), which includes the following factors:

o Voting and political activism o Trust in institutions and organisations of government, at national, regional

and local level o Membership, volunteering, office-holding in organisations in civil society o Strength of sharing and collective behaviour in society and communities

(e.g. in issues such as environmental protection, social care, crime prevention, sharing of household work)

o Achievement of equity and equality - of opportunity, income, outcome, etc o Respect for diversity, tolerance of difference o Level of openness and transparency in organisations– in public, voluntary,

private sectors o Levels of honesty and integrity in public domain ability of the community

to manage itself and meet needs not met by the state Table 4 Emerging evidence on governance impacts of ICT-driven organisational change Changes in governance factors triggered by ICT

Evidence of impacts on quality of governance

Voting and political activism

Experiments with e-voting in both UK and overseas have yielded only limited lessons because there have been no large scale public elections using Remote Voting by Electronic Means. The large scale e-voting exercises in Belgium, Brazil and the Netherlands have all been in supervised locations. The commonly held assumption that e-voting will appeal to younger voters and will substantially boost turnout among certain groups of people is not supported by research (De Montfort University, 2002)

Trust in public institutions and organisations

UK business is very suspicious of data security in their dealings with government - two thirds of companies in the VAT on-line pilot withdrew during the experiment, partly from concerns over data security (NAO, 2002).

Activism in civil society Strength of sharing and collective behaviour

Achievement of equity

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and equality Respect for diversity, tolerance of difference

Levels of openness and transparency

Levels of honesty and integrity

Note: Table 4 is incomplete – further reseach to be incorporated in next draft. Again, Table 4 does not purport to be a balanced judgement on the success of the governance changes overall in any one country, never mind across countries. Rather, it is a map which shows that some progress has already been made in applying ICT approaches to these governance areas, in at least some countries, in ways which appear to have already improved the quality of governance or seem likely to improve it in the future.

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Conclusions This paper has argued that e-government and e-governance initiatives are likely to have major organisational impacts through three major mechanisms:

o improved decision-making o more intensive and productive use of data bases o better communications.

These mechanisms will change the internal organisation of public agencies, but also the overall configuration of public agencies in networks and partnerships. The organisational changes which are likely to occur through the e-revolution are only just beginning to become evident. Many different templates exist of configurations for front-offices, back-offices and front-to-back-office integration. It is still not clear which of these organisational templates will become most common, or in which circumstances. However, it seems likely that existing organisational configurations in the public sector will not be sustainable as e-government and e-governance initiatives demonstrate new ways for collective issues to be organised in the public realm. Some emerging recommendations In this section, we make some recommendations for OECD and for governments of OECD member countries, in light of the previous analysis. Recommendations for OECD While OECD does not make binding recommendations upon its member countries, there are some recommendations of which it should be possible for member countries to take account when designing their e-government and e-governance programmes. First, the separation of service commissioning, purchasing and provision, which was a key plank in the NPM of the 1980s, needs to be revisited. The economic, social and political drivers of organisational change in the new millennium are very different indeed from those of two decades ago. It may well be that service commissioning can be done at a very local, even neighbourhood level, while service provision may often (but not always) be more efficient when undertaken by large scale (therefore regional, national or international) organisations. However, purchasing of these services may continue to be done at an intermediate level. A recent example is provided in Potsdam-Mittelmark in Germany, where services that were previously the exclusive responsibility of the county are now mutually provided by the county and the municipalities, with some co-production of services (Schuppan, 2002). The e-revolution will affect these calculations dramatically – and in ways which are not yet clear. It seems likely that the current separation of powers between central, regional, local and neighbourhood levels of government will be radically transformed. Second, there is likely to be major changes in the relationships between public bodies and the other organisations in civil society which have interests in, and

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responsibilities for, the planning and delivery of public services. The growing understanding of the potential role of civil society, and the growing understanding of the limitations of purely public sector organisations, mean that a redrawing of the boundaries between the sectors is necessary. Added to this is the role of the private sector in providing the ICT platforms which will drive many of these changes. The potential of the new ICT developments means that this rebalancing of the organisational landscape will often be possible with minimum fuss and disruption. Indeed, it may largely be virtual, in that existing organisations need not disappear in the new order – only the balance of power (and of resources) between them may alter. It is important that OECD member countries now look to find more imaginative ways of encouraging organisations across the sectors to work together, linked by ICT-driven communications which are much more powerful than were ever possible before. As Michael Porter(2001) has recently suggested, in the e-revolution, it is now much more difficult for organisations to sustain operational advantages than previously – and therefore it is much more important that they achieve strategic positioning in the roles they choose to play. Recommendations for governments of OECD member countries A number of inter-related (indeed, potentially conflicting) recommendations arise from the above analysis:

1. Inter-governmental relationships may now have to be seen in a new light, since e-government and e-governance now give to central government the possibility, so long denied, of having a direct interface with the general public, at both national and local levels. Consequently, it may be necessary for local government to think very hard about what is specifically local (and local-value-added) about its contribution to local governance.

2. Small-sized local authorities, so often thought to be uneconomic in these times of multi-national companies and large ‘efficient’ municipal local authorities, may no longer need to be merged to achieve economies of scale. Rather, e-procurement in partnerships or consortia may allow even small organisations to enjoy least-cost provision by large regional or local organisations (which might come from the private, public or voluntary sectors).

3. Inter-governmental relations may become very much less important in the future (even, in the extreme, obsolete), as citizens come to insist that all their dealings with the public sector are undertaken through a single portal. This raises the prospect of a citizenry which is very sophisticated in its knowledge of what services it requires, and why, and very knowledgeable about what can be provided (and why not). In these circumstances, the public sector will have no choice but to accept ‘unitary’ provision of services in the public sector – at least as far as service users are concerned. This will, of course, raise serious questions of accountability, since it will be difficult for the public to hold accountable organisations which they did not even realise were running the services.

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References Accenture (2002), e-Government Leadership – Realizing the Vision. [www.accenture.com/xdoc/en/newsroom/epresskit/egov/realizing _vision.pdf]. Victor J. J. M. Bekkers and Stavros Zouridis (1999), “Electronic service delivery in public administration: some trends and issues”, International Review of Administrative Sciences, Vol. 65, pp. 183 – 195. Peter Bogason (2000), Public Policy and Local Governance: Institutions in Postmodern Society. Cheltenham: Edward Elgar. Tony Bovaird (2002), “From corporate governance to community governance: citizen-driven community scorecards for UK local service providers?” in Andy Neely, Angela Walters and Rob Austin (eds), Performance Measurement and Management: Research and Action. Cranfield: Cranfield School of Management. Andrew Campbell and Kathleen Sommers Luchs (1992), Strategic Synergy. Oxford: Butterworth Heinemann. Martin Christopher, Adrian Payne and David Ballantyne (1991), Relationship Marketing: Bringing Quality, Customer Service and Marketing Together. Oxford: Butterworth Heinemann. De Montfort University (2002), The Implementation of Electronic Voting in the UK. London: Local Government Association. DTLR (2001), Modern Councils, Modern Services, Access for All. London: DTLR. DTLR (2002), e-gov@local. Joint Report with Local Government Association, UK-Online and Local Government Online. London: DTLR. Graham Farrant and John Tatam (2002), “Adapting the Balanced Scorecard as a Comprehensive Performance System for a British Local Authority” in Andy Neely, Angela Walters and Rob Austin (eds), Performance Measurement and Management: Research and Action. Cranfield: Cranfield School of Management. Jeremy Martin, John Haines, Tony Bovaird and Mik Wisniewski (2002), “Developing a balanced scorecard in the Somerset Health and Social Service Community” in Andy Neely, Angela Walters and Rob Austin (eds), Performance Measurement and Management: Research and Action. Cranfield: Cranfield School of Management. Michael Porter (1985), Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Michael Porter (2001), “Strategy and the Internet”, Harvard Business Review, March.

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National Audit Office (2002), Government on the Web II. London: National Audit Office. OECD (2001), From in-line to on-line: delivering better services. Paris: OECD. Jeffrey Roy and Christopher Wilson (2002), Making Sense of Smart Communities. Ottawa: Center on Governance. Tino Schuppan (2002), Integrated Local Government – Steps Toward IT-based Service Delivery in Rural One-Stop-Offices. Paper delivered to Study Group on Local Governance, European Group of Public Administration Annual Conference, Potsdam, 4 – 6 September. Acknowledgement This paper draws on several research projects which I am currently undertaking, including:

• a study for the Cabinet Office on the impacts and effectiveness of the Civil Service Reform Programme in the UK

• a book on multi-level governance which I am preparing for the Study Group on Local Governance, based on papers presented to the Potsdam Conference of the European Group of Public Administration