Global technology trends and their implications for governments

1 Global technology trends and their implications for government © Copyright Hewlett-Packard Development Company, L.P.

Global Technology Trends and their Implications for Governments An HP Viewpoint Paper

November 2011


Contents

Introduction 3

Trend 1: Consumerisation 4

Trend 2: Cloud computing 6

Trend 3: Connectivity 8

Trend 4: Analytics 10

Conclusion 12

About HP

HP is the world’s largest technology company and the global leader in government IT. The company has more than 40 years’ experience in this market sector and employs in excess of 20,000 people working in support of more than 200 IT services clients in governments around the world.


Introduction Since mankind fashioned the first flint axe, technology has always driven social, economic and political change. History is littered with such examples: iron tools changed agricultural practice and lead to population growth. Steam technology powered the first industrial revolution and electricity the second. More recently the telephone, radio, television and jet engine have each left their mark on the way that humans communicate, travel, work and play. With each new technology, governments have had to consider the implications for their countries and their citizens. When to embrace, when to regulate? When to intervene in markets and when to stand back? How to harness the benefits of innovation whilst mitigating the inevitable negative consequences?

Although amplified by the current global economic backdrop, many governments are facing long term financial challenges. An aging and growing population, increases in levels of government expenditure as a proportion of GDP (up on average from 25% to 35% over the last 40 years for OECD countries) against a backdrop of falling corporate tax rates (down on average from 40% to 30% over the last 30 years) and continually rising expectations by citizens of the nature of public services are all contributing to a sustained crisis in public finances. It is increasingly untenable for governments to adopt a process of incremental change in the face of these challenges – they will have to innovate.

Despite the increasingly well-established roles of government and agency Chief Information Officer (CIO), Information technology is now too important to be left to the IT department. Many technologies are now so pervasive that they are driving change in every aspect of human lives and are shaping the environment in which governments operate. Government CEOs, not just CIOs, need to understand these technologies and the possibilities they create for transformational change.

This paper presents four global trends in Information and Communications Technology that HP believes are of such significance to that they warrant attention from government Chief Executives.

Figure 1 From healthcare to homeland security, education to emergency response and welfare to warfare - Information Technology underpins almost all of the activities of a modern government.

The trends we discuss are:

Consumerisation – how the consumer market for PCs, mobile phones and other portable electronic devices has surpassed the business market as the main driver of innovation in Information Technology and has led to the creation of a global market for online services and Social Networking.

Cloud Computing – a transformation in the way large-scale computing power is provisioned, away from expensive, inflexible, customised and dedicated facilities towards a “pay as you go” utility model, that in turn is driving profound change in the economics of running organisations of all types, enabling new business models and creating opportunities for economic growth.

Connectivity – the increasingly ubiquitous availability of the Internet, both as a business and a consumer tool, and how changes in the underpinning technology will enable an ever-increasing range of devices and physical objects to be connected to and monitored by the Internet, including the earth itself.

Analytics – how new analytical technologies allow the large datasets generated by online activity to be processed to extract meaning, leading to more informed strategy, better policy making and above all, optimised operational performance.

“Technology made large populations possible; large populations now make technology indispensible.”

Joseph Wood Krutch, 1893 – 1970. American naturalist, writer, conservationist and critic


Trend 1: Consumerisation

IT and Consumer Electronics Converge Ten years ago most people had more sophisticated IT facilities at work than at home. This has now been reversed. Consumer devices are now frequently both more capable and less expensive. This trend is referred to as “consumerisation” and is leading to a rapid convergence between the IT and consumer electronics industries. The rise of smartphones, domestic use of PCs, Internet-connected games consoles and tablet computers has turned personal computing devices from corporate tools into affordable, fashionable consumer goods.

The consequences of these changes are threefold. Firstly, the consumer market has overtaken the business market as the primary (though far from only) source of innovation in IT. As a result consumer expectations are starting to have a significant impact on the demands placed on corporate IT functions, both by an organisation’s customers and its workforce.

Second, mobile devices are increasingly the dominant platform for Internet access. In the UK over a quarter of adults (27%) and almost half of all teenagers (47%) now own a smartphone. The proportion of those in low income groups with mobile phones is more than twice as high as those with PCs .1 This growth is not just a phenomenon of industrialised countries. At present Africa has more than half a billion cellphones, but only a very small portion of them are smartphones. By 2015 it’s predicted that there will be 850million mobile phones in Africa and nearly 128m will be able to access the Internet.2

Third, a global market has emerged for online services. The biggest or fastest growing corporations in many sectors are now software companies3: Amazon in bookselling, Netflix in video rentals, Skype in telecoms, Google in advertising, Linkedin in recruitment, Apple and Spotify in music and so on. It is in this vein that social networking services have emerged. At the time of writing Facebook has more than 800 million users and Twitter 200 million. The Chinese social networking site Tencent QQ claims 813 million users. By starting to offer in one place a range of online services that used to require visits to many different Internet sites (such as games, photographs, videos, email and messaging) social media companies have become consumer platforms in their own right.

1 Research by the office of the UK telecoms regulator, Ofcom http://media.ofcom.org.uk/2011/08/04/a-nation-addicted-to-smartphones/ 2 Informa Telecoms and Media 3 Marc Andreessen - Why software is eating the world, Wall Street Journal, 20th August 2011

Though Facebook’s founder has downplayed the role that his company’s service played in the Arab Spring, there seems little doubt that social media helped catalyse the protests and enabled participants to publicise events with each other and the outside world.4 That dissident blogger, Slim Amamou was appointed as a Minister in the interim government in Tunisia following the ousting of President Zine al-Abidine Ben Ali speaks volumes. But it is not only in countries which lack a functioning democratic system that the impact of social networking on politics has been felt. The success of President Obama’s Internet fundraising before the 2008 election is well trailed. Facebook’s general election coverage in the UK in 2010 is credited as establishing the first ‘two-screen election’ (TV and Internet).5 And in a move considered radical, the Northern Ireland assembly used Twitter to announce the results of the “D’Hondt” process for allocating ministerial portfolios and allow online discussion of the outcomes following the elections in May 2011.6

As people become increasingly adept at using these devices and services at home, they are increasingly unwilling to take a step back when they come to work. They want to take advantage of the technology with which they are familiar at home so they can be as productive, mobile, connected and informed in their working lives. They also expect to be able to uses these technologies to interact with their government, both as users of services and to participate in the democratic process.

How can governments address consumerisation? The most obvious benefit of this trend is its power to change the way IT facilities are provided for the workforce. UK government departments spend between 2.5% and 40% of their external IT spend on desktop computing7. By allowing staff to use their own computing facilities (a trend often referred to as “Bring Your Own Device” or BYOD) organisations are able to reduce costs and improve productivity. The US Veterans’ Agency has already announced plans to introduce a BYOD scheme in the near future 8.

4 “Facebook’s Arab spring role ‘overplayed’, says Zuckerberg” http://blogs.ft.com/fttechhub/2011/05/facebook-eg8/ 5 Facebook 2010 General Election Campaign http://www.holmesreport.com/casestudy-info/9482/Facebook-2010-General-Election-Campaign.aspx 6 NI Executive D'Hondt picks unveiled on Twitter http://www.bbc.co.uk/news/uk-northern-ireland-13397686 7 Cabinet Office: Departmental Business Plans http://www.dpm.cabinetoffice.gov.uk/news/department-business-plans-updated 8 VA CIO: Personally Owned Devices OK http://www.govinfosecurity.com/articles.php?art_id=4203

“The old paradigm of separate consumer and professional lives is over. People want a seamless, secure, context-aware experience at home, at work, at play or on the road.”

Leo Apotheker, former CEO of HP.


Figure 2 The PC as fashion item: Some of HP’s current products include the Mini Laptop, featuring covers by designer Vivienne Tam, and the Envy Laptop, featuring Beats Audio by rapper Dr Dre. Creating products with consumer appeal has become an essential part of the Information Technology industry.

Research by Citrix Systems has discovered that 44% of firms already have policies in place to support BYOD and 94% expect to do so by mid 2013.9 When combined with Cloud computing (see below) BYOD makes an asset-free IT function possible.

Clearly the impact of consumerisation goes much further than its ability to change how organisations provision IT. Away from the more dramatic uses of social media as illustrated above, the trend has a more mundane but no less transformational contribution to the work of government. In 1992 UK Prime Minister John Major launched his “Citizen’s Charter” as an attempt to raise the standard of public services by allowing people to voice their opinions by telephone. The initiative was a failure, but in many ways was a radical step ahead of its time. Enabling participation in public service delivery is now seen as a core component of Open Government and mechanisms such as Major’s “Cones Hotline”10 have been to a large part rendered redundant by social media. These services provide a public channel for individuals to broadcast their discontent (and sometimes approval) to institutions and politicians, and to campaign with like-minded individuals with whom they otherwise would have no opportunity to engage. Informal research by HP suggests that government organisations around the world are embracing social media in four key ways:

• Encouraging participation in the political process

• As part of service delivery (by, for example dispelling myths, addressing complaints and pushing communications in support of areas such as human services, public safety, consumer affairs and taxation)

9 Survey of 700 companies in seven countries, August 2011 http://www.citrix.com/English/NE/news/news.asp?newsID=2317099 10 A centrepiece of Major’s Citizens’ Charter, the cones hotline was launched in 1992 and allowed citizens to enquire about roadworks where traffic cones appeared to have been deployed for no reason. Though intended as a mechanism to make public services more accountable and citizen friendly it came to be seen as petty, ineffective and a waste of money, and was quietly dropped in 1995.

• To gather customer insight

• Internal collaboration and communication

Challenges of consumerisation One of the reasons innovation has flourished in the consumer market is that the barriers to entry are lower. Corporate customers typically demand higher levels of security, robustness and stability in product lifecycles than domestic users. These are all issues that, whilst far from insurmountable, must be actively managed when embracing BYOD policies.

Social media presents an educational challenge to both citizens and public servants alike – the permanent record it creates changes the nature of the relationship between the parties.

But ultimately, the most significant challenge implicit in consumerisation is that it drives organisation to change the way they think about technology. The days of asking “what technology can I use to solve my business problem?” are gone. The question should be “given that all my customers have this technology, how can I take advantage of it?”

Questions for government chief executives In order to test their government or organisation’s readiness to exploit this trend, HP believes leaders should ask themselves these questions:

• How could a “Bring Your Own Device” policy reduce costs and improve productivity for my organisation?

• Am I actively managing my organisation’s use of social media to engage with service users and opinion formers?

• Is the development services that exploit mobile technology part of my organisation’s business strategy?

• Is my organisation’s use of technology radical enough to meet citizen’s expectations in terms of the cost to serve or nature of the services provided?


Trend 2: Cloud computing

Information Technology as a utility Cloud computing describes the provision of large-scale IT resources on a utility basis, as opposed to the traditional use of heavily customised and dedicated facilities. Whilst this is in practical terms a straightforward concept, its consequences are profound. Cloud computing can be compared, as American computer scientist John McCarthy predicted back in 1961, to other public utilities such as the telephone or electricity grid.

Comparison with electricity supply provides a good illustration of the nature of the change and the benefits of Cloud computing. Before the birth of the electricity generating industry, any enterprise needing power had to invest in and run facilities, such as a steam engine or generator. These were inflexible, inelastic and did not scale easily. When Nikola Tesla’s work on Alternating Current during the mid-19th century made possible the transmission of electricity over long distances without loss , centralised generation rapidly overtook local facilities as the dominant model, and indeed this change is credited as a key enabler of the second industrial revolution. As electricity became more widely available the uses to which it was put changed dramatically. Appliances such as the washing machine and vacuum cleaner freed women from domestic chores and allowed them to enter the workforce. Clean urban mass transit and street lighting changed our cities, and so on.

When any facility, be it electricity, telephony or computing, is provided as a utility, consumers only need to pay for what they use. Consumption can scale up and down in line with demand without the need for capital expenditure and it becomes possible to switch suppliers easily and quickly in pursuit of improved terms. The Cloud model therefore has the effect of making the amount of computing resource available to any given organisation both infinite and infinitely variable.

Cloud platforms can either be shared with other customers (the “Public Cloud”) or where higher levels of security, resilience or performance are required, can be dedicated to a single enterprise (a “Private Cloud”). Both models change the “art of the possible” with regards to which business processes can be automated and how this can be achieved. For example, it becomes much easier to conceive a viable case for the digitisation of cyclical processes where demand for IT capability varies significantly over time or is unpredictable (such as delivering examinations or processing annual tax returns). It can also enable entirely new business models.

Using Cloud platforms organisations can offer sophisticated business solutions on a “pay as you go” basis with almost no capital costs. By removing financial and technical barriers to growth and distribution (using the Internet), businesses embracing Cloud can compete more easily in international markets. Companies such as Facebook, eBay, Amazon and LinkedIn are all examples of the transformative power of Cloud on business models in the consumer space. The challenge for governments is to find ways of exploiting Cloud to change the ways that their businesses operate.

How can governments exploit Cloud? Many government Chief Information Officers are already starting to embrace Cloud. The US Federal Government announced a “Cloud First” policy in February 2011, and the UK’s Cloud procurement in the autumn of 2011 received nearly 400 expressions of interest in just a few weeks. Inevitably the current economic challenges facing many governments have tended to focus attention on the direct cost reductions associated with migrating existing applications onto a Cloud platform. Such a move can reduce operational IT costs by up to 50%.

Whilst this reduction is clearly worthwhile, in the longer term Cloud computing will have a much greater impact by enabling innovation in government services. As such, the business impact of Cloud is a topic with which government chief executives and policymakers should concern themselves. Cloud removes IT from organisational silos, drives use of standardised solutions and makes it easier to expose Information Systems outside of the organisation, to partners, suppliers or customers. These changes have a dramatic impact on how organisations can collaborate, operate common processes and share data – removing many of the traditional barriers to “joined-up” government and driving both openness and participation.

Cloud offers the possibility for countless areas of government to use common systems. For instance, the Integrated Intelligence Pilot, or I2P, is a cross-agency Cloud effort in the United States that allows users on the Intelligence Community’s classified network to run queries across agencies. “Instead of taking data from CIA-specific or NSA-specific repositories, or FBI or DIA, you’ll be able to query via the cloud into those organizations and ask, ‘do you have information that meets this question?’, and they’ll be able to say, ‘yes or no,’” according to National Security Agency CIO Lonny Anderson11.

11 “NSA Reveals Cloud Plans” April 2011; available from http://www.readwriteweb.com/enterprise/2011/04/the-nsa-is-moving-towards-a-cl.php

“If computers of the kind I have advocated become the computers of the future, then computing may someday be organised as a public utility just as the telephone system is a public utility... the computer utility could become the basis of a new and important new industry.”

John McCarthy, 1927 – 2011, American Computer Scientist, speaking in 1961

“Cloud computing is a model for enabling convenient, on-demand network access to a pool of configurable computing resources (e.g. networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

The United States National Institute of Standards and Technology (NIST) definition of Cloud Computing


Figure 3 A rack of blade computers supporting Cloud services in one of HP’s datacentres

Other examples of potential cross-agency collaboration enabled by community clouds include social services agencies that collaborate to assist individual citizens and families using integrated assessment frameworks and case management; and economic departments that use the same data sets and have a common need for peak-processing and high-performance computing.

Challenges of Cloud Computing No new technology is ever a panacea and Cloud computing is no exception. The changes it drives raise several concerns that governments must address if the associated economic benefits are to be harnessed:

• In a Public Cloud model, users do not always know where their information is stored, raising issues of custodianship and data protection.

• Moving data away from dedicated facilities into the Cloud can raise concerns over information security (often offset by comparison with the poor security of the in-house facilities they will replace).

• Exploiting Cloud computing, like any utility, is principally a matter of achieving economies of scale. This raises questions about the role of the centre, budgets, the most appropriate procurement models to adopt and how these are governened on a cross-government basis.

• Large-scale adoption of Cloud changes the role of the IT department and its relationship with suppliers. The disciplines of Service Integration and Management take on a new level of significance.

Finally, exploitation of Cloud computing demands access to high-speed broadband, and the scale of

the datacentres involved in delivering Cloud services places significant demands on electricity grids for power and cooling. Enabling provision of this type of infrastructure should be a concern of governments wishing to drive adoption of Cloud or encourage the growth of Cloud providers in their economies.


• Has your government or organisation considered how it could use Cloud to deliver services in different ways, for example by collaborating with other departments, citizens and businesses?

• Does your government or organisation possess the necessarily skills and knowledge to understand, communicate and exploit Cloud?

• Does your government have an appropriate plan to deliver the infrastructure necessary to allow public and private sector organisations and citizens to exploit Cloud computing?

• Are the ways in which your organisation classifies and uses information presenting a barrier to the adoption of Cloud computing?


Trend 3: Connectivity

Everyone and everything online, everywhere Consumerisation and the development of Cloud computing have only been possible because of the dramatic increase in penetration of affordable fixed-line and mobile internet connectivity. In December 1995 the global number of Internet users stood at 16million.12 By June 2011, this number had reached 2,110 billion. One third of the world’s population is now online. In the last five years, developing countries have increased their share of the world’s total number of Internet users from 44% in 2006 to 62% in 2011. Internet users in China represent almost 25% of the world’s total.13

Notwithstanding its potential to embrace more of the world’s population, the transformation enabled by the Internet is far from over. Increasingly its growth is driven not only from reaching more users, but from the ever more diverse range of devices which can be connected to it. These include both new end-user devices, including phones, tablets, televisions, cars and computers embedded in domestic and industrial equipment as well as sensors that can detect heat, light, sounds and movement.

Increasingly, these new connected devices are “context-aware”, they incorporate GPS (Global Positioning System) technology to understand where they are, and this, together with information about who the user is, can be used to target the delivery of information and services accordingly.

Anyone who owns a smartphone or tablet will also be familiar with the way that the display can reorient itself to align with the direction in which the device is being held, or how games can be controlled by tilting it from side to side. This is possible because the device contains an accelerometer which detects movement. More sensitive sensors such as those developed by HP’s MEMS (Micro Electro Mechanical Systems) group can measure motion and movement up to 1,000 times smaller (sufficient to measure a heartbeat). By linking many such sensors to the Internet, collecting the resulting data and then storing and processing this using Cloud computing, a whole range of new applications for IT become possible. The ultimate manifestation of this trend is for everything to be capable of being connected to the Internet, including the Earth itself.

This capability exists today and is at the heart of HP’s “CENSE” (Central Nervous System for the Earth) project. In 2010, HP announced that Shell oil would be the first customer for this technology, which it will use to support seismic exploration activities in

12 International Data Corporation www.idc.com 13 International Telecommunications Union http://www.itu.int/ITU-D/ict/facts/2011/material/ICTFactsFigures2011.pdf

the search for new oil reserves.14 As new sensors, including those which mimic taste and smell, become available, the potential will widen further. HP expects to pilot other uses for CENSE within the next three years and make them commercially available within four.

How can governments harness connectivity? Opportunities for governments to exploit developments in connectivity fall broadly into three categories. The first is to make greater use of mobile Internet devices for those processes involving field-based personnel, such as social workers, healthcare professionals, the police or armed forces. In particular where these rely on two-way flows of information, mobile technology offers the opportunity for a more personalised service.

Staff can be equipped with technology that allows them to do their job, wherever they are and without the need to return to base. They can be routed between locations more effectively, and if required, their progress can be monitored. Transactions can be closed out electronically as a “first time fix” and services can be personalised by drawing on centrally-held data to inform customer engagement. By giving mobile workers more flexibility, they can be more productive and real estate costs can be reduced.

The second opportunity arises from the new modes of communication enabled by ubiquitous connectivity. Online chat is starting to supplant both email and the telephone as many consumers’ preferred method to interact with businesses, and has application in government’s engagement with citizens too. By telephone, a call centre agent can handle only one call at a time. Using online chat, not only can an agent multiplex (handle more than one client at a time) but the experience can be made richer by incorporating pre-built responses to common problems or links to pictorial or video aids, and barriers of language, accent or geography are easier to overcome. To the generation brought up with text messaging and social networking, this method will become as natural as the telephone is to older generations.

The third set of opportunities arises from the use of sensors. Any process involving physical objects, whether movable or not, has the potential to benefit from embedded intelligence.

14 Shell and HP to Develop Seismic Sensing Solution http://www.hp.com/hpinfo/newsroom/press_kits/2010/sensingsolutions/index.html

“The Internet is the first thing that humanity has built that humanity doesn’t understand, the largest experiment in anarchy we have ever had.”

Eric Schmidt, Chairman of Google


Figure 4 HP’s MEMS sensor can detect movements as small as ten femtometres (one billionth the width of a human hair). It is 1,000 times more sensitive than accelerometers used in the Nintendo Wii, Apple iPhone or a car’s airbag system and is based on the same piezo-electric technology used in the company’s inkjet printers.

The energy consumption of buildings can be monitored in real time and managed to lower costs. Supply chains, such as those found in defence logistics or the provision of consumable products to hospitals can be monitored and optimised. The built realm, such as roads, bridges and rail networks can be monitored to allow proactive maintenance. Transport systems and the networks that control traffic management can be monitored to spot emerging problems and trigger responses (such as variable speed limits) that improve flow. As the capabilities of mobile devices and sensor technology converge further, other applications will be possible. For example, a personal device containing an accelerometer sensitive enough to detect a heartbeat or blood pressure could have huge benefits in the delivery of automated or remote healthcare, detecting the early signs of a stroke or other disease or allowing an elderly person to live in their own home whilst remaining under the supervision of the healthcare system.

The number and capability of connected devices is increasingly such that the day is approaching when the question will no longer be “how can this data be acquired?” but rather “what can be done to make use of the data once it is?” Developments in connectivity change the boundaries of government. The edge is no longer the office, or a call centre, but the street, or people’s home. Connectivity helps government become more collaborative and more proactive.

Connectivity Challenges As the statistics on Internet penetration and smartphone takeup suggest, encouraging many citizens to become connected is not a significant problem. But even in developed nations there is a proportion of the population who have yet to use the Internet. There are nearly nine million Britons who have never been online, four million of whom are amongst the most disadvantaged in society. This is

to a certain extent a generational problem which the passage of time will solve - three quarters of those who have never been online are over 75. Nevertheless, “Digital Exclusion” still presents an immediate problem – a third of disabled people in the UK have never been online.15

So the challenge for governments is how to make sure that the power of connectivity (and by implication, the other trends described in this paper) does not simply pass by those who rely most on public services. This requires effort to encourage the rollout of high-speed broadband, in particular in rural areas that are not priorities for investment by telecommunications providers. It also demands programmes of education and support for those unable to become connected on their own.

Questions for government Chief Executives? In order to test their government or organisation’s readiness and capability to exploit this trend, HP believes leaders should ask themselves the following questions:

• How could mobile workers deliver better services and become more productive if they were equipped with better access to real-time, context-aware information?

• Where could intelligence be embedded in physical equipment to reduce costs and improve outcomes?

• What expectations might citizens and businesses have of new ways in which they might interact online with government?

• How could energy, transport, consumable or other costs be controlled through the use of real-time information?

15 RaceOnline2012 http://raceonline2012.org/about-us


Trend 4: Analytics

Meaning-based Computing Analytics may not at first glance appear to constitute a significant trend, after all searching for meaning in large data sets is arguably the problem which the first computers were invented to solve. However, three factors are combining to expand the potential for analytical technologies across government.

The first is the near exponential growth in the volume of electronically stored data. The proportion of data held electronically increased from 25% in 2000 to 94% in 200716, a year which saw the total volume of stored data on earth estimated at 295 exabytes.17 This figure is estimated to be doubling roughly every three years. Some of this increase has arisen from the digitisation of records previously kept on paper; from government or business activities, the conversion of printed or recorded works into electronic format and the on-line activities of consumers uploading media and blogging. Much however is generated automatically, as described in Trend 3 – Connectivity.

The second factor is the continuing expansion in the computing power available to process these large data sets. Moore’s Law,18 whether by dint of scientific foresight or self-fulfilling prophecy has continued to deliver a doubling of the computing capability available at a given price point every two years for the last half century, and the power of Cloud computing now makes this capability more accessible than ever.

The third factor contributing to the increased potential of Analytics is the development in capability of commercially-available software tools. Over the last decade and a half, these have evolved from straightforward data warehousing and records management products to embrace an ever-widening set of capabilities. They include data mining, predictive modelling, statistical inference, pattern matching, regression and sequence analysis and text search. Such technologies allow organisations to conduct real-time decision making about the most appropriate intervention or response to a given situation, and can dramatically improve operational performance and productivity.

A further consequence of the explosion in stored data is the commercial availability of “off the shelf” databases of personal data in most countries, for example from Credit Reference or Consumer

16 The world’s technological capacity to process information. Science, April 2011. http://www.sciencemag.org/content/332/6025/60.full 17 One exabyte (1EB) is one quintillion bytes, or one billion gigabytes. 18 Moore's Law: “the number of transistors that can be placed inexpensively on an integrated circuit doubles approximately every two years“ has held true since first postulated in 1965 and looks set to remain valid at least until the end of the decade.

Marketing organisations. HP’s experience suggests that private sector organisations are much more likely than their public sector counterparts to incorporate this data into their processes. Such sources are usually both more accurate and refreshed more regularly than data collected directly by government agencies, both because citizens are less wary of providing data to commercial organisations and tend to do so more frequently.

The potential to analyse such large volumes of electronically stored data can in itself enable technologies which were once the stuff of science fiction. One such example is Google’s translation software that works by searching for a pre-existing translation of a word or phrase in hundreds of millions of pairs of electronically stored documents which have already been translated into different languages. The records of national and global government organisations have proven to be some of the best source material for this system, including Canadian Hansard, the records of the European Parliament and more than 200 billion words of the United Nation’s records in its six official languages.

Analytics underpins and in some cases, defines many of the most successful companies. Amazon’s book recommendations; Tesco’s Loyalty Card and Internet shopping schemes; Google’s PageRank and AdSense; and UPS’ logistics processes are all enabled by this technology. Such is the potential ROI from exploitation of analytics that it was one of the few areas in which HP continued to see clients investing during the nadir of the global financial crisis in 2008. Experience from commercial organisations suggests that well-executed investments can pay back within as little as six months.

How can governments exploit analytics? Governments have traditionally relied heavily on analytical resources to support policymaking and reporting, and in many cases have become adept users of technology to support these processes. However, this analytical capability tends to work in a purely reactive way.

In comparison to many commercial organisations, HP believes that governments are often under-invested in analytical technology to support the operational side of their activities. Much of the investment in digitally-enabled government services has largely automated rather than add intelligence to processes. Whilst commercial organisations do exploit Analytics in support of corporate planning, they derive much greater benefit when the technology is applied to the operational side of their businesses. Potential applications of analytics in government organisations therefore include those functions common to both public and private sector organisations, such as application and eligibility processing, fraud detection, debt collection, contact management, marketing, compliance and security.

“Firms that adopt data-driven decision making have output and productivity that is 5-6% higher than what would be expected given their other investments and information technology usage.”

Brynjolfsson, Hitt and Kim, "Strength in Numbers: How does data-driven decision-making affect firm performance?", MIT, December 2011


Figure 5 HP’s StorageWorks XP family of network-addressable storage. Devices such as these now hold more than 94% of all the stored information on earth

Many government organisations have done work to try and minimise the numbers of “unnecessary contacts” that they have with citizens (either face to face or by telephone), but very little work has been done on identifying ways of adding value to those contacts which do take place. Integration of Analytical technologies into branch, call centre and online government services would allow a more tailored and personalised response, and deliver the improved outcomes from customer contact which private sector organisations enjoy.

As well as improving operational performance another potential benefit of Analytics in government is enabling a more proactive approach to service delivery. For example analysing internal and external data sets could allow social services organisations to identify “at risk” children, healthcare organisations could identity patients likely to require re-admission, or who are in danger of suffering delayed discharge from hospital due to their domestic circumstances (so called “bed blocking”). Pre-emptive intervention in such circumstances is nearly always both more effective and cheaper than reactive responses.

Challenges in adopting analytics Analytical software is not expensive, and the payback timescales can be short. Of course its implementation is not without its challenges. HP’s experience is that its use in government is typically complicated by the following factors:

• Any process which leads to an increase in storage or capture of data about citizens and their activities can be politically sensitive, and lead to accusations of “big brother” politics and the rise of the database state.

• Improved use of analytical technology often leads to situations where benefits accrue in a different part of government to that which must make the investment, complicating the development of business cases and benefits realisation.

Ultimately, addressing either of these challenges is a matter of political will and an ability to sell the upside in terms of improved operational outcomes and productivity.

Analytics is not in itself a strategy. As with any information technology, successful exploitation can only be achieved if deployment is supported by changes in culture, behaviour and processes. Using data to drive interaction with citizens also requires good quality data if it is to succeed, demanding complementary investment in data cleansing and maintenance alongside technology implementation.


• Is your organisation exploiting analytics to add intelligence to its interaction with citizens and improve operational performance?

• Are there ways in which analytical technologies could help drive proactive rather than reactive interventions in your field?

• Are there additional data sets that could add additional analytical capability to operational decision-making in your organisations?


Conclusion Like many technological innovations, these trends have not arisen in isolation from each other, rather as we have seen, they are inter-dependent. Cloud computing would not have become a reality without developments in very large-scale computing architectures driven by the need to support global businesses such as Amazon or eBay. These businesses would not have been able to grow to this scale without Internet connectivity enabling them reach hundreds of millions of consumers without building a store in every high street. And consumers would not be buying laptops, tablets and smartphones in their millions if they did not offer a range of new opportunities for entertainment, education and commerce not available via other channels.

It is arguable that many of the macro political pressures that governments are currently experiencing have arisen as a result of the trends described in this paper. Citizens’ expectations of greater transparency, more participative democracy, improved collaboration between government agencies in more open delivery models, greater choice and flexibility, and more personalised services have all been influenced by the impact of technology on media and commerce during the last twenty years.

As well as being co-dependent, when taken together, these technologies are multiplicative in their combined effect. Metcalfe’s Law (originally used to describe telecommunications networks but more recently also used to describe the impact of the Internet and the services accessible from it) states that the value of a network is proportional to the square of the number of connected users. As the number of connected users on the networks underpinning the trends described in this paper starts to encompass a significant proportion of the population of the earth, the power that these technologies have to drive change is almost unquantifiable.

Like any technology, those we describe in this paper have the potential for negative, as well as positive, consequences. Some of the challenges implicit in each trend individually have been outlined above. In the same way that their benefits are amplified when taken together, an ever more significant reliance on Information Technology will inevitably also drive a multiplication of their detrimental effects.

As technology increasingly underpins commerce, the operation of our critical national infrastructure and the work of governments, the threat from cyber criminals has become a major and very real concern. The permanent record and light-speed transmission of information associated with online activity are rightly driving concern about privacy and digital rights.

And whilst the growth in take up of these technologies has often been close to exponential, there are many people who, for a number of reasons, are either unable or unwilling to take advantage of them – often those most reliant on government services. Digital exclusion presents a significant barrier to exploitation of these trends, even in the most developed countries and is a challenge which commerce alone will not solve.

In this document we have often sought to draw parallels between the way in which the private and public sectors are embracing Information Technology. Doing so can provide a good indication of where governments can look for ideas. But such comparison does not provide the full picture of governments’ obligations in the face of these changes. They must both reflect and direct their societies’ use of technology.

Guttenberg’s invention of the movable type printing press is credited as playing a key role in the renaissance, the reformation and the scientific revolution; events that spanned 300 years of human development. It is only just seventy years since the first commercial computers and twenty since the first commercial use of the Internet. Whatever history comes to call the revolution spurned by modern Information Technology, its impact has only just begun to be apparent.

About the authors

James Johns is Director of Strategy for Public Sector in HP UK and Ireland. With a background in software development, consulting and business development he has more than 25 years experience in the technology industry in both the private and public sectors.

James can be contacted at [email protected] or on +44 (0) 7790 493971

David Rimmer is the leader of the Global Government Industry practice for HP Enterprise Services. With a background in strategic consulting, systems implementation, and process improvement, he has extensive experience in helping government organisations meet today’s challenges.

David can be contacted at [email protected] or on +44 (0) 7790 490827

“The value of a network is proportional to the square of the number of connected users.”

Metcalfe’s Law. Attr’ to Robert Metcalfe, 1946- , American Electrical Engineer, co-inventor of Ethernet and founder of communications technology company 3com, acquired by HP in 2009.

“Technology is a queer thing. It brings you great gifts with one hand, and it stabs you in the back with the other.”

CP Snow, Baron Snow of the City of Leicester, 1905 – 1980. Former Civil Servant and British government minister, speaking to the New York Times in 1971.