I was astonished to receive a report from the Institute for Government, telling us how digital public services will save £46bn.
Leave aside my frequent criticisms of Universal Credit (‘digital by default’), where I have explained why the service will never work in a digital mode, except to say: why didn’t the authors have anything to say about why this digital ‘flagship’ is failing? Do they really think, as they imply, that public services are akin to Amazon, Uber and Google?
Unfortunately the public sector has no rudder of profit. So they should listen carefully to what private sector organisations have discovered by jumping on the bandwagon; how it has driven costs up and had a deleterious impact on customers. As a result, these companies have completely changed the way they tackle the design of digital services.
First off: why are we doing this? Again, leave aside the marketing blurb from the big consultancies that says ‘everyone is doing it, you’d better catch up’, ‘you don’t want to be a blockbuster’ and ‘people expect to be able to do everything on their smartphone’. The true answer: because digital channels are cheaper.
Well they are if they work, but all too frequently they haven’t worked. The first sign, as ever when any service is ineffective, is an incredible rise in the volume of failure demand – as customers are pushed down the digital channels, more and more call the service centres because the digital service isn’t helping them get what they want.
This startling realisation – shockingly big numbers – opens private sector leader’s minds to the problem.
Unfortunately, recognising the problem isn’t the same as understanding how to solve it.
Typically people jump to these assumptions: failure demand is a cost (correct), the types of failure demand should be counted and investigated, in order to assign causes, and customers’ behaviour also needs to be changed.
Plausible but wrong. Failure demand is a signal of ineffectiveness; you won’t get far by blaming people or processes. The current rush to digital is not, as is often argued, like getting customers to change their behaviour to using ATMs instead of going into branches. In any event, ATMs worked for customers. Why?
The signal is telling us that the services, whether digital or not, aren’t working, are ineffective. The solution is to redesign the services. When you do that, failure demand drops like a stone and you get a massive increase in capacity. Happy days.
As we got to work with leading financial services organisations on this problem, we found the first step had to be repairing many newly-created digital services. Why spend millions building a ‘mortgage tracker’ digital app when the focus ought to be designing a mortgage service where the customer would never have cause to get in touch?
Only by understanding customer demand can you begin to understand where digital services can work for customers (as ATMs did) and where you’ve created digital services that are institutionalising failure demand or created services that simply will never work with customer demands.
The latter takes me back to Universal Credit. Digital media are useless at dealing with high variety demands. Yes, this means some of the newly-created digital services have to be abandoned. But easy to do when it comes down to a simple choice: stick with a costly endeavour that isn’t working for your customers and is driving your operating costs up, or solve the problem by making the service effective in a non-digital way.
When you get over the repair work you can move on to the question of method: how are these new digital services being designed?
Typically teams of designers, software engineers and big consultancy suits, costing eye-watering amounts, have been dreaming the services up, taking things the organisation does or could do and developing digital ‘solutions’. Something few people know is that as much as 80 per cent of the coding that gets done never gets used (but you still pay for it).
But the bigger problem is that the method is ‘IT first’. We help them adopt a method that puts IT last. Only when you understand demand in customer terms with knowledge about its context, its variety and its predictability can you then set about designing a service that works and then, lastly, you can consider what of this can be digitised.
It’s not about changing customers behaviour to make them comply with our ambition to cut costs, it’s about changing the way we serve customers. Effective services = happier customers and lower costs. And that’s the thing, focus on cost and your costs go up, focus on value and you drive costs out.
Given the importance of this topic I would encourage you to come along to a special event, where leaders of financial services organisations will talk about the above. It ought to matter to everyone who is investing heavily in going digital.
Laurence Cox says
You might also want to look at how HMRC has set up the self-assessment tax form in its online version. I went online last year and found it much worse than filling in a paper form.
“Digital media are useless at dealing with high variety demands. Yes, this means some of the newly-created digital services have to be abandoned. But easy to do when it comes down to a simple choice: stick with a costly endeavour that isn’t working for your customers and is driving your operating costs up, or solve the problem by making the service effective in a non-digital way.”
However, if the needs of a sufficiently large proportion of the customers/service users are fairly straightforward then dealing with those via a digital route may be sensible and cost-effective while leaving the more complex stuff to be handled manually.
The 80-20 rule – getting 80% of the benefits from 20% of the costs. If there is a large variety of demands and stupid bosses want a digital system to cover them all then the system is doomed to failure through sheer complexity.
Paul Griffiths says
So, digital services are bad, except when they are facilitated by your consultancy.
John Seddon says
Gratuitously rude. But not so.