For the second consecutive year, NASCA and McKinsey & Company partnered to produce The Business of Running State Government Operations survey on key issues affecting CAOs today. 

The survey results on digital government showed there is widespread acceptance of the value of digitization. Many of those states, however, report mixed success in implementation and states face challenges in increasing utilization of digital tools within their agencies and throughout their state governments.

This paper explores the CAO’s role in driving digital adoption, as well as innovative and exciting steps being taken to accelerate the use of digital tools.

• Key Recommendations:

  The report is intended to provide a robust set of data and insights governors, legislators, and business leaders can use to compare state practices and inform forward-looking strategic decisions. 

  • CAOs are uniquely well-positioned to accelerate digitization statewide, some tools include agile procurement processes and cross-agency collaboration.
  • The most successful digital transformations are based on a dynamic digital strategy. Only 60% of states have a digital strategy.
  • When the CAO oversees IT (50% of states), one of the defining factors in the success of a digital transformation is whether it has a knowledgeable change leader, such as a chief information officer (CIO) or chief digital officer (CDO).
  • Where CAOs do not have a clear view of the statewide digital strategy, they need to push for more awareness, particularly to ensure budgets and policies are in line with objectives.
  • CAOs prioritize improved quality and customer experience above cost savings in gauging the success of digital initiatives. CAOs should also consider reduction of risk to the state.
  • Only one-third of CAOS have formal mechanisms in place for digital collaboration across departments. For large digital projects such as ERPs, states may find it helpful to have a process in place to staff a cross-agency project management office.
  • Given states place a lower priority on digitizing administrative processes than citizen-facing services, CAOs must develop a business case for innovative digital approaches.

  The road map to digitization:

  To increase digitization, CAOs must develop innovative approaches that enable them to overcome implementation barriers such as budget and capacity constraints and low organizational prioritization.

  1. Strong top-down decisions can promote alignment and increase organizational focus on digitization.
  2. Increased use of data analytics can help identify opportunities for further digital investment, as well as initiatives that can be deprioritized due to a lack of clear outcomes.
  3. Improving citizen experience through digital tools can help promote demand for digitization in government, leading to broader statewide commitment to digitization.
  4. Building digital skills throughout state government can help overcome capacity-related barriers to digitization and promote enthusiasm for digitization among employees.
  5. Finally, CAOs are working to shift behaviors and mind-sets in their organizations and states to create a more dynamic digital culture.