Balancing the Digitisation Cost-Benefit Equation
Local governments are all too familiar with the need to conduct a thorough cost benefit analysis of any major investment they wish to undertake. When it comes to digitisation – an inherently expensive exercise – a thorough cost-benefit analysis is even more critical, to gain a true insight into the benefits than can be realised as a result of an up-front investment.
According to Harvard Business School¹, there are many positive reasons an organisation might choose to leverage cost-benefit analysis as a part of their decision-making process. Advantages of cost-benefit analysis include the fact that it is data-driven; it can make decisions simpler and it can uncover hidden costs and benefits.
As councils move to increasingly digitise their operations and the services they provide to their constituents, the financial cost of these measures continues to be a challenge to be grappled with.
There’s no denying that digitisation comes at a significant cost – but it’s critical that this cost is measured against the benefits and opportunities to gain a true picture of the ultimate bottom line.
The benefits of digitisation
There are a number of benefits that come with digitisation in local government. Many of these come with a financial net gain; while others will have benefits that are less tangible, but important to the community and people working in the local government environment.
Benefits largely centre around productivity and efficiency. Digitisation allows council services to be redesigned and modernised so that they can be delivered in a more efficient way; it allows for faster, more convenient and mobile interactions with constituents; and it also has a critical role to play as a driver for more sustainable councils, through things like reduced paper usage and improved mobility.
But other benefits which are just as important include the ability to personalise interactions with constituents, creating a positive engagement experience; and the ability to create a smooth, free-flowing and more efficient working environment for employees, leading to enhanced employee satisfaction.
Weighing the costs against the benefits
Like many things, measuring the costs of digitisation is the easy part – it is measuring the ultimate financial benefit of a suite of digitisation works that can be the difficult part.
There are a number of frameworks under which to conduct a cost-benefit analysis, but generally the steps are as follows:
- Establish the goals and objectives of the endeavour
- Identify the costs and benefits – from direct costs and benefits, to things like opportunity costs and intangible and competitive benefits
- Assign a dollar value to each cost and benefit
- Tally the benefits and costs and compare
When looking at a cost-benefit analysis for undertaking a digital transformation in the local government environment, it’s important to take the time to correctly assess and understand the value of each and every benefit.
One Deloitte study of the economic benefits of digitising customer transaction services alone for Australian federal and state government departments found that while the combined costs of such an undertaking would be around $6.1 billion, the total benefits would be around $26.6 billion, resulting in a $20.5 billion net benefit.
An investment in the future
The reality is, the technologies that enable councils to digitise certainly have a material cost. They are complex solutions that require an up-front investment to implement but the benefits from a well-considered program of work will be very significant.
Take a solution like Salesforce for example. While well-known for its customer relationship management (CRM) capabilities, Salesforce can do much more when it comes to digitisation in the local government space.
It’s cloud platform can allow councils to automate workflows, operate call centres, undertake marketing, provide portals and interactive forms for citizen engagement, manage inspectors, investigators and field workers all whilst boosting efficiency. Salesforce can also track, analyse, and report environmental data to help reduce carbon emissions and drive sustainability.
In the ACT, Transport Canberra and City Services are implementing a wide-ranging Customer Service Request Management system with a focus on optimally triaging a wide range of incidents or issues coming in from ACT citizens.
In the UK, Peterborough City Council is implementing a similar solution which seamlessly connects staff, customers and information via a core platform that supports multiple engagement channels.
The implementation is not only improving the quality and efficiency of local services, but cost efficiencies created through the implementation have enabled council to address a budget shortfall of £25 million².
One of the best ways to ensure Salesforce is effectively integrated into council operations is to work with an implementation partner experienced in Salesforce, but also experienced in operating in the council environment.
ProQuest Consulting is one Australian provider that has experience working with local governments to bring their data and systems together, enhancing what a council is able to achieve for its residents.
ProQuest Consulting is already working with Transport Canberra and City Services and WorkSafe ACT to realise their digitisation journey through Salesforce.
“Local governments are only just beginning to scratch the surface of what they can achieve in terms of digitisation by utilising the Salesforce platform,” ProQuest Chief Executive Officer, Aymeric Zito, said.
“Having worked with a number of local governments on their Salesforce implementations, we’ve gained a unique insight into exactly how the platform can streamline operations, modernise the workforce, and enhance the relationship between council and constituent.
“We’re excited to continue working with councils to bring their digitisation journey to life; and help them realise the benefits that come with a Salesforce investment.”
If you’d like to understand more about how your council can harness the power of digitisation to improve business outcomes, and deliver services to your citizens, the team from ProQuest Consulting are here to help.
This was brought to you by Monkey Media – councilmagazine.com.au/balancing-the-digitisation-cost-benefit-equation/