Schumpeter, the Economist’s business contributor, appears not to understand government. His recent article, Fixing common affairs, suggests why. The article implies that by harnessing the power of IT, government can become more efficient.
Government tries to harness IT’s benefits, they just do it badly.
The introduction of IT only mechanizes the processes, when there isn’t a simultaneous redesign of the existing controls. With mechanization the quality control sample is reduced to two (n = 2). By testing the first item in a batch, and the last item in the batch, when both samples meet the production standard, one is sure that the complete batch meets the production standard. But if the production standard is poor, mechanization won’t improve it.
When systems are not integrated, it requires human intervention to get controls to work. If a payment system requires that the person doing the authorization has had a specific training, integration with the training system should confirm that automatically. If the systems are not integrated, it requires that a second person checks the authority levels, and in the event that the person does not have the necessary authority, sends an email that the authorization is invalid until the course has been taken. Then, when the course has been taken, a second chain of emails needs to be sent, so that the payment can be made.
This goes to the heart of the difference between procedures and systems. Procedures simply provide evidence that something has been done. Systems ensure that what should have been done has. In a properly designed system the end event taking place proves that all the intermediate steps happened.
Sometimes reconciliation to external data is necessary to ensure that all the transactions have been correctly recorded. For example, in an accounting system the bank reconciliation checks that all transactions in the cash book appear in the bank statement, and all the transactions appearing on the bank statement have been recorded in the accounting system, and that any differences can be explained. Without the reconciliation there’s no guarantee that all transactions have been recorded.
Without these systems and complementary controls IT can’t change anything.
Sometimes IT makes things worse. Take the reply-all button. People who work in government will tell you that two days away from the office will result in an inbox with hundreds of emails. Fighting the tide becomes the dominant task on return to work. That’s hardly productive.
Many of governments inefficiencies can be also attributed to the complexity of the management structures and unbridled ambition.
There far to many layers of management and matrix structures, where people at lower levels are accountable to two or more bosses, are a norm. The inefficiencies that matrix structures create are the reason why business schools teach that they should only be used as a last resort.
The ambition that runs rampant in government creates a situation where bad news is concealed to avoid the possibility that it will taint a golden career. Schumpeter in his article “Fail often, fail well” describes how Alan Mulally, on taking up his tenure as Ford CEO, discovered that although the company was in crises, executives were unable to admit to having any failures. Once managers learned to admit that things were going wrong, and to invite help, the company turned around, and was the one motor manufacturer that did not require rescuing in 2008 when all the others were bailed out.
Having seen some well written fiction in government reports makes this correspondent believe that the same medicine would go a long way towards making public institutions a lot more efficient.
Government must work smarter, and when that happens, IT will help.