June 22, 2006 15:48 ET

Public Sector Leaders Plan Fundamental Change, Driven by Budget Pressures and Focus on Innovation, According to IBM Study

WASHINGTON, DC -- (MARKET WIRE) -- June 22, 2006 -- In a study by IBM Global Business Services, more than 100 global public sector leaders see enormous budget pressures as the key driver forcing their organizations to dramatically enhance capabilities and organizational models in order to better deliver public services. Respondents included senior level civil servants, leading educators and health care executives.

These pressures are forcing new approaches to delivering more effective public service such as competitive sourcing, public-private partnerships, shared services and vouchers. In addition, new strategies such as revolving funds, competitive grants, and pay-for-performance are evolving to address a variety of challenges facing the public sector today.

The second theme to emerge focused on collaboration. While public sector leaders agree with their commercial colleagues that collaboration is important, they also identified a gap in their execution versus their priority. And while that gap was less pronounced in public sector, government leaders could greatly benefit from sourcing more new ideas from the outside and increasing the depth and scope of collaboration with others, especially citizens and constituents.

To that end, they believe a shift is underway from 'inform, consult' to 'engage, collaborate' where more organizations have begun using face-to-face and on-line approaches to better provide constituent services. According to one respondent, "Governance is instilling in staff a citizen/customer-centric approach. Our culture and behavior must change to align with this philosophy."

While leaders clearly agree on the importance of integrating business and technology, the third theme to emerge highlighted the difficulties and challenges involved in successfully implementing technology. In public sector, almost 90 percent of respondents agree that the integration of business and technology drives successful innovation, while 49 percent said they had mastered this critical element. Contributing to this disappointing performance are technology turf wars and legacy systems which continue to limit collaboration; and a shortage of experienced project managers which is slowing business modernization efforts. In addition, independent budgeting of the two areas sets up silos from the beginning, making the coming together of agendas, resources and outcomes even more challenging. In making this point, one public sector leader commented that, "We need to understand public expectations and see technology as an important enabler."

"It's very clear that public sector leaders today are looking at new kinds of innovation to drive substantial organizational change and better deliver constituent services," said John Nyland, Managing Partner, IBM Global Business Services, Public Sector. "It's about understanding how to translate senior level commitment to innovate around business models, or an operational process, or management behavior -- and to deliver innovative solutions that impact performance."

The IBM Global CEO Study 2006 is based on in-person interviews with more than 750 of the world's top business and public sector leaders. It is the most comprehensive CEO-level study of its kind and is intended to provide a comprehensive view of the planning agenda of business and public sector leaders for the next 2-3 years.

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