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Adopting 'Open Innovation'
Strengthening governance and capabilities will not only improve existing content and services but also help lay the foundation for pursuing Web 2.0 technologies. A shift from a "publishing" to a "sharing" mind-set -- one that embraces user participation -- must happen within government agencies.
Some agencies across the globe are leading the way. One high-profile example in the United States is the District of Columbia's "Apps for Democracy," a contest to encourage developers to create applications that would give residents access to data such as crime reports and pothole repair schedules. Forty-seven applications were created in 30 days. Hiring contract developers would have cost approximately $2.6 million, whereas the cost of running the contest was a mere $50,000. The US government has also shown a willingness to accept outside innovation. For example, it adopted software code developed by a nonprofit organization for USAspending.gov, a database of government grants and contracts. The government had initially estimated that it would cost $10 million to create the database and $2 million a year to maintain it, but it adopted the code developed by OMB Watch to run FedSpending.org, which had been funded through a $334,272 grant.
Elsewhere in the world, a European health authority has developed, with our support, an information architecture that allows health care providers to access aggregated data and build tailored applications to improve clinical care. In another example, the South Korean government's "ePeople" site invites civil petitions online (for example, policy suggestions or corruption complaints), moderates online discussion of submitted petitions, and reports back on its decisions.
Moreover, governments can use Web 2.0 technologies to break down barriers between and within organizations. For example, the US intelligence community has created Intellipedia to share information among previously unconnected organizations, while the US Food and Drug Administration employed Web 2.0 tools to better engage and capture the knowledge of its internal experts.
How can the shift in mind-sets be achieved to enable Web 2.0 initiatives such as these across more government agencies? Agency leaders, both line-of-business and IT, must embrace third-party innovation and participation. They must communicate the benefits of these efforts, encourage risk taking, and enhance the capabilities of their staff to implement these initiatives -- for example, by ensuring that they have both the "soft" skills to manage informal networks of partners and the "hard" skills to connect government data with external systems.
To reinforce these mind-set shifts, agencies must reward externally sourced innovation as much as they reward producing applications and content internally, the way P&G has done. A well-known advocate of open innovation -- that is, sourcing innovative ideas from outside an organization -- P&G CEO A. G. Lafley set the tone from the top when he publicly announced the goal to have 50 percent of P&G's innovations come from outside the company.
From a technology standpoint, achieving the benefits of open innovation and participation requires IT security systems and policies to ensure that public systems are appropriately protected. Many of these systems and policies have already been developed and are being used in the private sector to balance the estimated return on investment with the probability-adjusted risk of loss (tangible and intangible) from a security risk.
To embark on the journey to the next level of e-government, public-sector organizations should begin by estimating the cost and time required to achieve their agreed-upon business goals, taking into account realistic user adoption rates, usage, and impact on other channels (for example, reduction in paper-based forms). Agencies should then ensure that their governance models emphasize line-of-business accountability and develop a plan to address capability gaps, particularly in areas such as Web analytics and usability. Based on a comparison with successful innovators in the public and private sectors, they should also assess their technological and organizational readiness to open data and systems to outside developers and to use participatory Web 2.0 tools. By taking these steps, agencies will begin charting their path to the next horizons of e-government.
Jason Baumgarten is an associate principal in McKinsey's Seattle office; Michael Chui is a consultant in the San Francisco office.
This article was originally published in McKinsey Quarterly, www.mckinseyquarterly.com. Copyright (c) 2009 McKinsey & Company. All rights reserved. Reprinted by permission.
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