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Cloud Computing and Customer Experience in the Public Sector

Government agencies have been working on modernization for a long time, but it has been an ongoing challenge, because when systems are updated, they almost immediately become legacy.

Keeping up with evolving technologies and expectations has created a constant pressure on the public sector because businesses run very large, complicated, systems with limited resources to update them more frequently. However, in the past year, that has changed. In 2020, we saw many governments respond almost overnight to Covid-19 challenges, rolling out digital services for contact tracing, quarantine management, unemployment claims, and much more. Things that once took months or years were done in days or weeks. This rapid pace of innovation was enabled by digital cloud platforms—commercially delivered solutions providing secure, prebuilt components that are nimble enough to accommodate both private and public sector needs. The primary benefit for government agencies is that these platforms allow them to participate in an ecosystem that is regularly updated and constantly evolving to keep pace.

Technology is not a silver bullet to a complex issue, however. Culture and skills are a big part of modernizing. More than that, it’s about thinking differently—having a beginner’s mind. Government departments and agencies are structured from the inside out, and that’s typically how they deliver services. Shifting to an outside in, customer-first mindset where they prioritize those they serve and organize their practices and service delivery around those customers builds trust. And we know trust is the currency of government.

In addition to digital cloud platforms and cultural shifts, security has to be a fundamental priority when reimagining processes and introducing new technologies. It’s table stakes for any kind of program that serves the public. New technologies often spur questions about privacy and data-sharing. It’s essential to communicate the context of how the data will be used and obtain consent from the owners of that data. When it’s used to provide contextually relevant, timely, and personalized services, governments can build trust with their platform and organization. People will extend the ability to use their information when they see it is being treated respectfully and in a way that is to their advantage. Bringing this thoughtful and sensitive approach to data-gathering can power a virtuous cycle that can earn trust from more and more constituents.

There was a time when the public sector didn’t think of those they served as their “customers,” but we’ve crested past that point. Now it’s really about understanding their needs and using refreshed processes and technology to embrace the art of the possible in a way that goes beyond what governments have been able to do in the past. We see trailblazers at the front of the curve inspiring other organizations by demonstrating what can be done within the right set of circumstances. It really doesn’t take a huge organizational shift to propel better customer experiences. It only takes a small number of people with vision, skills, and passion to make a difference and ignite a broader momentum within an organization.

To learn more about how to meet intensifying demands for streamlined digital services and developing a customer-first mindset, read the latest Innovation in Government Report.

Cloud Computing and Customer Experience in the Public Sector

Government agencies at all levels face unprecedented pressure to deliver services and meet mission objectives—all while laboring under the constraints imposed by the Covid-19 pandemic, legacy systems, funding challenges, and stringent data-protection requirements. Citizens, with their expectations shaped by private-sector innovation and their urgency intensified by the physical, emotional, and financial toll taken by the pandemic, are demanding that government respond to them with the same speed, efficiency, and accuracy they’re accustomed to experiencing with their favorite e-commerce companies.

The Covid-19 pandemic in particular has tested government agency capabilities as never before. At the federal, state, and local levels, civil servants have devoted untold hours to ensuring that their people and systems could handle the rise in remote work and remote interactions with constituents— and still deliver a satisfying customer experience (CX).

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“Nothing stops around here, to be honest with you,” says Mia Jordan, chief information officer (CIO) of the Federal Student Aid office at the U.S. Department of Education. And thanks in large part to the department’s investment in cloud-based technologies, including a customer relationship management (CRM) platform, she adds, “we’re on 24/7, and we’re able to be very responsive.”
Like the Federal Student Aid office, other agencies have demonstrated that by embracing digital service delivery, cloud-based or otherwise, they can act quickly and with impressive agility, relying on a single source of truth for the data they need to deliver a high-quality customer experience. Intent on improving CX—a top five priority of 57% of the 91 government respondents to a recent global survey of nearly 1,100 executives by Harvard Business Review Analytic Services—those agencies have retooled their operations and fine-tuned their systems at breakneck speed. “We did things in weeks and months that normally would have taken months and years to do” before the pandemic, says Dave Catanoso, director, cloud solutions office, at the U.S. Department of Veterans Affairs (VA).

There is a lot riding on agencies’ modernization initiatives. Failure to meet citizen expectations risks eroding faith in government agencies and undermining their delivery capabilities. But by expanding their reach and capabilities through the cloud, government agencies and departments at all levels have been able to close the technological gap with the private sector to deliver service that, at their best, can rival the customer-centricity of leading private-sector companies.

To achieve that level of customer-centricity, publicsector departments and agencies are bringing data-centered capabilities to bear on constituent outreach and engagement, while taking pains to protect their data and comply with complex regulatory requirements. Some of the most effective agencies prioritize specific digital capabilities, including relationship management, case management, collaboration, integration, and data insights. A growing number of government bodies are gaining experience in applying artificial intelligence to their operations. Many are testing chatbots as the initial use case,1 pulling together the CX enhancement through a CRM platform that straddles the agencies’ legacy systems and administrative platforms.

This Harvard Business Review Analytic Services white paper examines the opportunities and challenges of delivering public services efficiently and effectively. Further, it explores how a comprehensive view of and approach to CX across government agencies and departments can democratize data, inform decisions, and enable governments to successfully design, fund, and deliver services responsive to the needs of the populace. Such services range from high-quality health care to emergency response to financial assistance to transportation networks—and well beyond.

Delivering for Employees and Constituents Alike

Governments at all levels and across the globe, from North America to Europe to the Asia Pacific region, have established and expanded policies to promote digital government within recent decades. In 2009, for example, the U.S. government issued the Open Government Directive, which ordered federal agencies to use technology to be more transparent and effective.2 The Obama administration followed up in 2011 with the publication of its Federal Cloud Computing Strategy, which mandated that federal departments and agencies adopt a “cloud-first” policy.

The philosophy behind those and similar policy initiatives in other countries and regions was summed up in the Canadian government’s “Seventh Report of Prime Minister’s Advisory Committee on the Public Service” in 2013: “A digital population cannot be well served by an analog government.” The U.S. federal government is backing its cloud-first policy with increasing investments year over year. FIGURE 1 To make those investments bear fruit, government organizations will need to pivot to promoting data-sharing—while maintaining high levels of security and compliance—across levels of government. The aim: to innovate new services, develop a clearer picture of agency capabilities and capability gaps, and reach underserved populations. Failure to take advantage of the opportunities for better governance enabled by digital technologies and channels, warns the Organization for Economic Cooperation and Development (OECD), “could mean an accelerated loss of trust in government and a perception that it is out of touch with societal and technological trends."
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Today, the trend toward cloud-based government service delivery is increasingly evident around the globe and across all levels of government, though there are wide disparities in digital maturity levels. More mature municipalities, such as the Lewes District Council in the UK, use cloud-based collaboration software to enable, for example, social workers and private-sector psychiatrists to work together on a mental health intervention and share data in real time within a secure environment.5 In Singapore, the government is using an AI-enabled traffic control system to adjust the timing of stoplights to optimize traffic flow and minimize idling time.6 And the South Carolina Department of Education is taking a page from the e-commerce playbook and leveraging student profiles to offer teaching instruction that is tailored to the individual student.7 These are just a few examples of public-sector organizations that are leveraging the cloud’s expandability, pay-as-you-go cost structure, and flexibility to make progress on their top priorities.

The Harvard Business Review Analytic Services survey asked executives to name their top five business priorities for the year ahead. Improving customer experience (57%), increasing organizational agility (51%), and increasing workforce flexibility (49%) were among the most frequently cited for government respondents. FIGURE 2

Covid-19 has shone a light on the importance of workforce flexibility in particular. The Los Angeles County Metropolitan Transportation Authority (LACMTA) learned how the cloud could support workplace flexibility within days of March 11, 2020, when the World Health Organization declared the coronavirus a pandemic. “We were able to provide services to our internal staff who had not worked from home before and enable them to engage, maybe not at a hundred percent level, but almost at full capacity,” says Bryan Sastokas, the agency’s CIO. Analytics, meanwhile, helped LACMTA reroute bus lines and alter schedules to handle demand patterns that changed abruptly with the plunge in work-related commuting and to improve service to underserved areas.
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The transportation authority has also leveraged its CRM platform to ensure that the agency is delivering consistent, reliable messages to riders about service changes, safety measures, and other crucial information, and with relatively little strain. “It didn’t cause us much anxiety to meet that demand [for accurate information],” Sastokas says, “because we made a heavy investment in CRM to provide that service. It’s our bread and butter.”

The New Mexico Department of Workforce Solutions (NMDWS), for its part, linked its CRM to a telephonic solution to set up a virtual call center almost overnight in response to the pandemic. “We needed to modernize our call center operation, and we didn’t want to wait six months,” says Sue Anne Athens, CIO of NMDWS. When the state government closed most of its offices in March 2020, she says, “we were able to shift staff home. A lot of other organizations weren’t able to do that.”

Cloud-Powered Innovation in Covid-19’s Shadow

In the pandemic’s early days, governments raced to adapt to the new demands that the crisis placed on their IT systems. Governments moved quickly—in two weeks or less in many cases—to leverage their existing web presence to disseminate Covid-19 information to the public.

Beyond informing the public about the pandemic, agencies have leveraged the cloud to develop new services at speed without having to bolster their on-premises technology stack. “The VA has always prided itself on delivering timely services to all our veterans,” says the VA’s Catanoso, “but as the cloud has come online, it has enabled us to more rapidly introduce technology solutions and provide innovative features to our customers. We have one major application that, in the past, was introducing enhancements at best once every quarter. Now we’re releasing things every two weeks with new features, new functionality.”

As that comment suggests, the cloud also cuts the time to market of new solutions. “The biggest savings [from migrating to the cloud] might be not so much from a monetary perspective but in your time to market. Being able to spin up a desire from a customer into a new service, being more agile, is definitely a cost savings because I don’t have to put that much effort, labor, [or] design into providing a solution,” says LACMTA’s Sastokas.

Catanoso agrees that the value proposition for cloud has as much to do with delivering higher-value services and more nimble operations as with cost savings. Savings are “not normally a main objective to go to cloud, because, while less spending is important, the speed of innovation, the functionality we can offer the veteran, or more reliable service or better disaster recovery or higher security are all considerations as well,” he says.

The Covid-19 crisis has been a real-life, real-time stress test of the public sector’s digital service-delivery capabilities. The cloud has enabled agencies to adapt to the constraints imposed by the pandemic to rapidly transition to remote work and meet increased demand for government services. For example, the cloud has enabled the VA to increase its network bandwidth and computing capacity to support a ten-fold increase in its remote workforce almost overnight. Externally, the cloud has enabled the VA to rapidly scale up its telehealth services capacity to handle the expansion of telehealth appointments for veterans from 10,000 a week to more than 200,000.

Similarly, at NMDWS, “the week of March 9, 2020, we had about 9,600 people certifying for our unemployment system,” says Bill McCamley, the department secretary. “In late June, we had over 150,000.” Handling that sudden surge in applications “wasn’t easy by any means,” says department CIO Athens. “But we were able to continue to improve that system” and meet the myriad of other challenges raised by the pandemic.

Barriers to Better CX and Greater Cloud Adoption

Although many public-sector organizations recognize the need for better CX, they are hampered by everything from funding shortfalls to a shortage of digital skills among their workforce to outdated technology—operations at the Federal Student Aid Office, for example, still depend to a considerable extent on a 47-year-old mainframe.

Those organizations still working with legacy infrastructure have a long list of agenda items to address before they can advance their digital maturity. Change management is at the top of the list for many. Colorado state Deputy CIO Julia Richman sees changing government executives’ and employees’ mindsets as the first priority. “You no longer can be a passive consumer of technology,” she says. “You need to really understand how technology will support and drive your business.” The change in mindset has been accompanied, and possibly accelerated, by the move to remote work. “That shift to what’s in the office versus what’s in my computer is a really interesting culture change,” she adds.

This new perspective raises important strategic questions for government agency executives. “Our governor is really focused on increasing agency accountability and ownership of its technology,” Richman further explains. To a growing extent, agency heads are expected to “understand their technology portfolios. Where do we want to go with these systems? That is a foundational shift in government in general, I would say.”

True culture change also requires government executives to distinguish between expenses and investments, and to consider the potential step-changes in efficiency and effectiveness that digital technologies can bring about. “It’s important to not get bogged down in bean-counting,” says Catanoso. “Sometimes you have to make a paradigm shift. You have to maybe make an investment up front before you can realize the long-term cost benefits.”

Governments must also prioritize protecting constituents’ privacy and data security if they want to earn and keep the public’s trust, which public-sector managers cite as a top three motivation for improving CX. FIGURE 3 “We’re very serious about security,” says NMDWS’s Athens. “I’m a little bit more comfortable now in moving to the cloud, because a lot of the information on our CRM comes through APIs [application programming interfaces], which add an extra layer of protection. There are a lot of things you can do [with a CRM] to maintain the security of your data.”

To overcome the reluctance of some citizens to part with personal data, governments must not only keep the information secure, but also demonstrate that government services are delivering value in exchange for the data they collect from citizens. The OECD has stressed the need for governments to be “transparent about the data they collect, and clearly demonstrate the value of the resulting products and their collection efforts.”8
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Much of the data that citizens share is put to work training machine learning and AI systems. As adoption of AI gains momentum—for example, with the use of AI in “smart” hospitals to analyze medical tests and recommend treatments, which Japan is exploring9—government entities will also need to ensure the transparency of its algorithms to guard against the risk of bias. In its report, the OECD urges governments to open up the algorithms used in the public sector to automate decision making and include multiple stakeholders in algorithm development—a recommendation followed by tax authorities in France when they disclosed the source code they use to calculate taxes owed.
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Governments also need to be transparent about their data governance policies and ensure accountability for the security of their systems. “You have to be sure cybersecurity and compliance are woven throughout your systems, from infrastructure to platforms to how your citizens are inputting their information and how that information is protected,” says Jordan of the Federal Student Aid Office. “You want that designed in and not bolted on later.”

Opportunities Awaiting the Public Sector

As cloud technologies take root across agencies, the U.S. federal government has pivoted to advancing data-sharing across levels of government, as mandated in the Foundations for Evidence-Based Policymaking Act of 2018. The aim: to innovate new services, develop a clearer picture of agency capabilities and capability gaps, and reach underserved populations. The VA, among other agencies, has already established a data-sharing platform. “We are putting in place API capabilities that would make our data accessible to those who are authorized to access it,” says Catanoso. “That has been stood up in our enterprise cloud to provide API access to VA data.”

But governments must also be mindful of both legal and technological constraints on data-sharing. “Our ability to share [data] internally within the state, as well as with other states, is easy by using the cloud,” Athens says. “However, it is also challenging due to the federal regulations associated with much of that data.”

As government service provision becomes ever more data intensive, the talent gap will become an increasingly urgent issue for the public sector. For example, “there are some basic skillsets that have evolved over time, like analytics,” Jordan says. “I may need more advanced analytics capabilities to be able to use some of the tools we have.” Although governments in most cases can’t match the salaries offered in the private sector, they can appeal to other concerns that motivate people to work in public service—such as the well-documented desire among younger workers to make a difference in the world. Further incentives include the opportunity to work on some of society’s most critical challenges, including climate change; racial, social, and economic inequality; and health care delivery.

In addition, some agencies have a built-in advantage in the competition for talent—and in the customer-centric thinking that’s at the heart of CX improvement. At the VA, for example, a majority of employees are also customers of the agency. “We’re a workforce that is almost 60% veterans,” Catanoso says. “And even more of our workforce comes from military families or has friends that are serving. So, we really think about our friends and families and ourselves as veterans as we’re developing services to deliver.” Catanoso also notes that his office sees a lot of applicants for cloud-related jobs, who are looking to acquire 21st-century skills—and a sense of purpose. “In addition to tools like user-centered design, agile methodology has enabled us to work more closely with our end customers,” he says, “which really motivates our workforce because they feel much more connected to the mission of serving veterans.”
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Government agencies can bring that customer-centric outlook to some of their most intransigent CX challenges, such as personalization, frictionless interactions, and anticipating citizen needs. Like e-commerce companies that tailor their offers and promotions to customers based on their buying histories, the cloud offers the public sector an opportunity to personalize services to citizens based on their online profiles. Governments can reduce friction by enabling single sign-on for interactions with multiple government departments, as some more digitally advanced countries have done. The cloud also makes it possible to enable citizens to bring up a single, 360-degree view of government as easily as government can bring up a single, 360-degree view of the citizen. After all, says NMDWS Secretary McCamley, “people would prefer not to have to go to 15 different websites” to do their business with the government.

A cloud-based CRM platform can power predictive analytics, too. One compelling use case is to apply predictive analytics to anticipate citizen needs based on life events such as the birth of a child, the loss of a job, or an extended illness. The government of New Zealand, for example, offers a tool it calls SmartStart, which enables new parents to access a broad range of government services for parents and caregivers through a single portal.10
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The Power of Experience

Driven most recently by the Covid-19 pandemic, governments at all levels have accelerated their digital initiatives and leaned heavily on their cloud-based assets. As they have gained experience, they have learned to draw on the power of the cloud to amplify the capabilities of their legacy systems. Those added capabilities are just one of the benefits the cloud can deliver. Accelerated innovation and time to market are among the others.

But while governments also work to ensure that their technologies promote citizen inclusion, accessibility, and fairness, it’s important that they remember that government’s ultimate purpose is to serve human needs humanely. “As we’re talking about these applications, we in government have to understand that we can’t just use technology to fix the situation in this cold, impersonal manner,” says McCamley. “When the pandemic hit, people were scared. It was important for us to understand that we were dealing with people with feelings and expectations, and the technology had to help us allay not only the fear about their benefits as a whole, but their emotional situations. Technology can’t be the whole answer.”


1 Deloitte Center for Government Insights, “Government Trends 2020,” 2019.

2 The White House, “Open Government Directive,” 2009.

3 The White House, “Federal Cloud Computing Strategy,” 2011.

4 OECD, “Recommendation of the Council on Digital Government Strategies,” 2014.

5 Forsyth, Liz, “How Human Service Providers are Achieving Digital Transformation,” KPMG, 2017.

6 William Eggers and Thomas Beyer, “Government Trends 2020,” Deloitte Center for Government Insights, 2019.


7 Forsyth, “How Human Service Providers Are Achieving Digital Transformation,” 2017.

8 OECD, “Embracing Innovation in Government,” February 2017.

9 William Eggers and Thomas Beyer, “AI-Augmented Government: Climbing the AI Maturity Curve,” Deloitte Insights, 2019.


10 New Zealand Government, “SmartStart,”
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