Executive Thought Leadership

European Public Sector

The European public sector is faced with significant pressure to more efficiently deliver citizen services and simultaneously make their services available online. With a spectrum of forthcoming public sector initiatives, including the European Commission's eEurope 2005 Action Plan, organizations must choose the technology, staff, and process investments they believe will help them most effectively meet pending mandates and increase overall organizational productivity.

Europe has become a global leader in e-government, and public sector organizations are focusing on improving the quality, scope, and cost of delivering citizen servicesll in an environment of increasing budget scrutiny.

Public sector organizations are investing their efforts to help increase the productivity of specific organizational activities. But which investments yield the greatest improvements? What investments will help an organization reach its specific goal? Where should public sector organizations focus their finite budgets and resources? In an attempt to answer these questions, Cisco Systems sponsored Net Impact: Europe eGovernment - From Connectivity to Productivity, a study of European public-sector practices and productivity conducted by Momentum Research Group.

The study surveyed almost 1500 business and technical decision makers in various government and healthcare organizations in eight European countries. The survey found that organizations were able to improve productivity considerably simply by adhering to a few essential principles. The more principles they followed, the greater their productivity gains from three to seven times the productivity gains recorded by companies of similar size and industry.

Overall, findings from Net Impact: Europe eGovernment supported the primary hypothesis that organizations investing in and aligning their process re-engineering, networked applications, and network infrastructure achieve significantly greater productivity. The Net Impact study found that organizations with the greatest productivity improvements in citizen services do the following:

• Invest in network functions beyond the minimum needed to support current applications
• Change or re-engineer business processes before deploying new applications targeted to increase efficiency
• Automate business processes with Internet applications and integrate them with other service functions
• Ensure that organizational culture is focused on improving processes and delivery of citizen services
• Implement measurement systems that track operational performance

Surprisingly, 80 percent of organizations that implemented these principals did so not to reduce costs, but rather to accelerate the speed of operations, enhance citizen services, and improve citizen satisfaction. As the Net Impact research shows, service response times, breadth of services, flexibility, and innovation have a greater effect on the public sector's cost-benefit analysis than only reducing costs.

Organizations that applied these principles also achieved significant cost savings, particularly when they took steps to re-engineer business processes prior to introducing new applications. Under these circumstances, organizations realized a cost savings of 20 to 30 percent over 12 months, more than double the savings achieved when processes were re-engineered after applications were deployed.

The Net Impact study revealed that European public sector organizations also faced obstacles to achieving productivity through networking. Results found that organizational and employee issues present by far the biggest perceived barrier to future productivity growth. Resistance to change, lack of worker training, and lack of support from leadership were cited among the strongest obstacles.

The results are clear. The Net Impact: Europe eGovernment study shows that public sector organizations are achieving significant productivity improvements by investing in processes, re-engineering Internet business applications, and sophisticated network infrastructure.

As we move into an increasingly global economy, the importance of public sector services continues to increase. Whereas people have limited mobility between countries, corporations and capital do not. The public service infrastructure of a country is a major component in the cycle of productivity that generates economic growth and increases in living standards.

Targeted research is one way for countries to identify opportunities to differentiate their services. Cisco conducts business in more than 100 countries throughout the Europe, Middle East, and Africa region, and is committed to assisting public sector organizations with increasing overall productivity and succeeding in their quest to effectively serve their citizens.

Net Impact found that organizations with the greatest productivity improvements:

• Invest in network functions beyond the minimum needed to support current applications
• Change or re-engineer business processes before deploying new applications targeted to increase efficiency
• Automate business processes with Internet applications and integrate them with other service functions
• Ensure that organizational culture is focused on improving processes and delivery of citizen services
• Implement measurement systems that track operational performance