Digitalization of government

(First of two parts)

In almost every industry, “digital” has become the latest buzzword. The scope of digital possibilities is being explored across every business sector, from financial services, health care, to manufacturing, and many others. Given the widespread adoption of digital in business, it would be reasonable to consider the significant benefits that digital can bring to government services and its impact on its constituents.

For some reason, going digital has been on the back burner of government priorities, particularly in developing countries. In fact, few governments in developed and developing countries have attempted to adopt a digital approach in servicing their respective citizens and stakeholders, despite the obvious benefits. One notable example where digital is enhancing government services is in India, which has a national digital identification (ID) called Aadhaar.

The ID system was established for all its residents to promote inclusiveness, and which can be used as an electronic Know-Your-Customer (eKYC) tool to acquire financial products, telecommunication plans, and avail government services. The eKYC cuts significant processing times for the benefit of all parties.  While significant investments are needed for governments to digitize some, if not most, of their citizen-servicing mechanisms, the potential benefits that can be reaped cannot be underestimated.

EFFICIENCY AND COST-SAVING

Digitalization typically results in better efficiency. Various institutions have different drivers for digitalization, such as accessibility, cost-cutting, tracking, or even simply for the sake of increasing digital adoption itself. All these will — to a certain extent — lead to efficiency. In the most basic sense, a government agency that wants to go paperless (by transferring all its printed materials into the cloud) will be able to save and share space with other government agencies, as well as reduce its carbon footprint and traffic (e.g. delivery and disposal of supplies). In addition, government officers can save time when looking for specific documents due to digital indexing, which can further enhance productivity. Estonia, for example, claims to have saved 800 years of working time per year as a result of its digital campaign.

Improved social services
Digitalization can potentially improve the citizenry’s quality of life. An example would be renewing one’s driver’s license which could involve traveling to the national transportation agency, filling out forms, and waiting in long queues. The entire process can take hours instead of just minutes if the government transportation agency were to embrace a digital approach. Many processes can be accomplished online.

Promote transparency
Given how most governments are promoting honesty and transparency programs, digitizing transactions can help provide better visibility and clarity. Corruption can occur during cash transactions between citizens and government agencies. Making transactions digital will not only help state auditors monitor cash flow but will also encourage citizens and government agencies to uphold ethical practices. With digital platforms, every transaction can be effectively tracked and be monitored, while at the same time, reducing bureaucracy and corruption.

TECHNOLOGY APPLICATIONS IN DIGITAL GOVERNMENT

Big data and analytics
The main benefit of data analytics in government is to harness the enormous amount of data available, which is often underutilized. By leveraging data analytics, government agencies can speed up their decision making supported by specific data and information.

For example, one application would be to determine peak hours on certain roads to better address traffic management. In Singapore, the use of analytics during peak hours helped successfully implement the Electronic Road Pricing (ERP) program. Singapore’s government claims to have decreased the number of vehicles on the affected roads by 35,000 vehicles and traffic by 13% during peak hours. Additionally, the Singapore government was able to use the proceeds from ERP to improve public transportation and/or subsidize fares to encourage public transportation usage. Indonesia has conducted trials for the similar implementation of ERP in one of its business districts in Jakarta.

Another sample of big data application is establishing industry-specific tax benchmarking systems. The Australian Taxation Office was able to gather about a million tax returns of small and medium-sized enterprises (SME) and used predictive analytics to establish industry-specific financial benchmarks in order to spot any possible discrepancies in the income reported by the firms. The use of predictive analytics in this example is useful for any evaluation-related processes in government agencies that are prone to undervaluation practices.

Robotics Process Automation and Artificial Intelligence
Robotics Process Automation (RPA), which refers not to a physical robot, but to a type of software, is a rules-based process tool used to eliminate swivel chair processes which can cut a significant amount of time compared to regular individuals doing the job. A ‘bot’ may work with greater accuracy and can work 24/7. It can create a document, read instructions from e-mail, transfer a document from a file type to another, input text  into specified fields, and other manual, repetitive, and error-prone tasks.

RPA can be implemented in the field of new application processing and customer onboarding. For example, citizens who want to apply for government services for their PhilHealth, SSS, TIN, and Pag-IBIG accounts, need not to go to their sites to enroll. The bot will simply extract information from data submitted online, store them in the defined database, and process them for delivery of their respective IDs (detecting discrepancies, generating unique numbers, printing IDs, and initiating courier delivery order) with little to zero human intervention.

On the other hand, the purpose of artificial intelligence (AI) is to create an intelligent machine that can mimic how humans think. AI has opened the world to new possibilities, and continues to advance and gain popularity. AI may greatly assist governments in fraud detection, services delivery, and decision making among others. AI, combined with RPA, is a powerful tool called Intelligent Automation which improves the capability of the rules-based ‘bots’ to be able to create their own rules, eventually existing without the need of humans to maintain themselves.

One possible application is also to establish intelligent chatbots in various government agencies, which are capable of answering basic queries and performing basic tasks to improve service delivery. This can allow government front liners to focus on doing more complex and value-added tasks, thereby improving workforce satisfaction and resulting in better services. An intelligent bot can be tasked to answer inquiries on tax brackets and rates, schedule appointments, perform rough valuation tariff estimates on customs goods, and engage the citizens by conducting digital surveys.

As an example, the city of Los Angeles, in partnership with Microsoft, introduced a chatbot named CHIP (City Hall Internet Personality) that is able to answer more than 700 queries at the same time. In addition, it has reduced the incoming number of e-mails by 50%, so employees can focus on more complex issues instead of taking the time to respond to each e-mail.

Similarly, the State Government of Mississippi established a chatbot named “Missi” to handle inquiries about hunting and driver’s licenses, and taxes; reducing citizens’ waiting time for queries from an average of 45 minutes into less than 10 minutes.

In the second part of this article, we will discuss more areas where digitalization can create significant impact on government services.  We will also look at the current level of digitalization in Philippine government operations.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the authors and do not necessarily represent the views of SGV & Co.

Christian G. Lauron is a Partner and Irsyad Stamboel is an Associate of SGV & Co.