The challenges the public sector must meet over the next 5 years

Digital transformation and geopolitical issues are set to put the UK public sector under more strain than ever.

Innovative technologies such as AI, Blockchain and Cryptocurrency threaten to change the way public sector organizations interact with their citizens. It is imperative to consider these challenges and to devise strategies to deal with them.

In this article, we consider the main technologies that public-sector organizations must deal with, the crown commercial service and whether skunkworks might be the answer.

Controlling cryptocurrency

Technology has already had a profound impact on everyday life. Netflix has changed the way we consume media, as well as Amazon disrupting shopping in every imaginable way.

Procurement teams in public sector organizations face challenges from AI, blockchain and cryptocurrency and we believe it is the latter they should be most concerned about.

Cryptocurrency is steadily increasing in popularity, despite Bitcoin tanking in January 2018 because of market manipulation.

It is almost inevitable that because of a loss of confidence in banking institutions after the global financial crash in 2008, that cryptocurrencies may eventually become a credible alternative. The question is, how do public sector organizations marshal this new currency?

One would expect cryptocurrencies to be piloted on a small scale, with small incentives offered to encourage adoption. For instance, selected local authorities could offer a discount on council tax bills or other services. A culture of starting small and learning big would be the best approach for adopting cryptocurrency.

Do skunkworks, work?

Skunkworks - autonomous groups within organizations - that are designed solely to innovate, are increasing in popularity in the public sector. The Razr phone, developed by Motorola, was designed by a skunkworks and became a market-leading product at launch.

Fostering a culture of skunkworks can allow public sector organizations to deliver innovation. It can help avoid the typical issues public sector organizations face such as long-winded processes, and a lack of business agility.

However, innovation in the public sector has to be balanced with the need to be open, transparent and inclusive – all attributes which are directly in conflict with the concept of skunkworks. And even where they can be used, care must be taken to ensure that skunkworks don’t become ‘one-hit wonders’ and that their learnings and knowledge are distributed throughout the entire organization.

The challenges facing the Crown Commercial Service

Public service organizations must strike a balance between transparency and efficiency in their procurement practices and under EU law, all tenders procurement professionals submit must be recorded on Tenders Electronic Daily (TED), the official journal of the EU.

With Brexit looming, and no-deal a possibility, Crown Commercial Services is building replicas of TED and the Official Journal of the European Union (OJEU).

If a no-deal Brexit were to occur, the UK would default to World Trade Organization rules, and therefore, would require public sector organizations to record all tenders on the Crown Commercial Services versions of OJEU and TED.

At present, the intent is simply to replicate what is there, and rightly so, since the investment will be written off without ever seeing the light of day in the event of a negotiated Brexit deal.

But should the transition need to be made then there is a great opportunity here to disrupt the process through future developments that utilize AI to transform the way in which public sector organizations find suppliers and vice versa.

From better automating how, opportunities are published to intelligently inviting supplier businesses that might be well placed to engage in a tender based on their history of responses, risk ratios, size, location and other factors, the whole way in which the public sector engages with potential providers is ripe for innovation.

And that could genuinely transform outcomes for both buyer and supplier.

But the question remains, is the Crown Commercial Services up to the task? And will they be given the resources and brief to enact that transformation? Only time will tell.

What challenges do you think the public sector will face over the next five years? Do you think it is possible to create a culture of innovation? Do let us know on our Twitter and LinkedIn channels.