Citizen Digital Series: What Happens Behind the Scenes of Digital Transformation? With Leslie Casson Stevens

When thinking about the concept of citizen experience, what may come to mind is the direct interaction between a citizen and a government. But much more is happening behind the scenes of that citizen experience that may not be seen in that direct interaction. For example, there could be software powering the contracting that allows the interaction to happen in the first place. A lot goes into the process of the federal government’s digital transformation as well as citizen experience. To get a behind-the-scenes look at that process, Eric spoke with Leslie Casson Stevens—industry advisor for the U.S. federal market at SAP, an enterprise solution software provider. Casson Stevens provides her insights on the role of digital technology in citizen experience, the challenges of having federal agencies as customers, and how funding technology in the government should change.

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Eric Egan: Everyone, welcome to Citizen Digital, an ITIF web series where I speak with experts in the United States and around the world to explore how digital technology can improve citizen and customer experience.

I'm Eric Egan, the policy fellow for digital government at ITIF, and with me today is Leslie Casson Stevens, Industry Advisor for US Federal Market at SAP, an enterprise solution software provider. So Leslie, thanks for joining.

Leslie Casson Stevens: Thanks for having me, Eric.

Eric Egan: So, I thought we'd just start with you sharing a little bit about yourself and how you came to work in the space.

Leslie Casson Stevens: Sure. So, I am an accountant by training. I started my career in public accounting and moved into management consulting, and in that role I got my first exposure to working with the government and ended up implementing financial management systems in several government agencies, which ultimately led me to taking on the controllership at The Smithsonian Institution, and then moved to SAP when SAP decided to enter the US federal space. So, I came on board to be essentially a subject matter expert on what the software would need to be able to do to meet the requirements in the federal space. I've been here ever since.

Eric Egan: Yeah, yeah, you come with a wealth of experience. So yeah, I'm curious, given SAP's history as providing more of what you would think of as back office solutions in government, I'm curious to get your definition of what citizen or customer experience with government looks like, particularly in the role that digital technology plays in that experience and how you think about that, especially from the SAP perspective.

Leslie Casson Stevens: Well, when you say the term citizen experience, I think a lot of us tend to think about a direct interaction between a citizen and a government, and actually there's all kinds of things that are part of that citizen experience that may not involve that direct interaction. For instance, having the roads and trails in the national park maintained in a safe and usable way is contributing directly to citizen experience.

So citizen experience and digital technology, there are so many ways that digital technology has an impact on that experience for the citizen, that may be all the way from things like doing contracting. So if I'm in a hurricane and FEMA provides me a temporary home, there's a contract behind the scenes making that happen. The government worker who is out there providing assistance, there's a system back there somewhere paying them. So, citizen experience really is impacted all the way back through the back office.

Eric Egan: Yeah, yeah, that's a great point. That's totally true even when you're talking about citizen citizens kind of the everyday person, but certainly if you apply that to a customer experience broadly, I mean, federal customers are everything. It's businesses, it's other federal agencies, it's other state and local agencies, so there's so much there that the headlines mostly stick to filing your taxes and Medicare-

Leslie Casson Stevens: Right. The states for sure are one of the biggest customers of the federal government. A lot of our federal tax dollars flow to the states and ultimately make their way to the citizen.

Eric Egan: Yeah, no, very true. We'll probably talk a little bit about that at some point today. So yeah, many of our listeners are federal service providers, and so one of the questions I wanted to ask was how you go about thinking of federal agencies as your customers? How do you go about tapping into those customer needs in a manner that supports their missions? As we were saying, maybe several steps removed, but indirectly all effectively citizen needs as well?

Leslie Casson Stevens: Well, the first and most important thing that I do personally and many of us do is to listen, listen and understand. That's a big part of my job, is to try and understand what the government agency is trying to accomplish and how digital technology can be applied to that problem.

It can be a challenge, and I really learned this from my time at The Smithsonian. Government employees are very risk-averse. They want to do the right thing, they don't want to break any laws. They want to make sure nobody gets sent up on Capitol Hill to answer for something that went wrong.

So it takes encouragement both from the outside provider like us at SAP who may have an alternate way to accomplish the same end, and it also takes internal advocates inside the government that have the courage and the tenacity to help their employees realize that it's okay, right? It's going to be okay to do something a little differently.

But that's again, back to listening and understanding. Then I have to translate that back to SAP on the other side of the equation to make sure that they understand why certain things have to be the way they are, and why that enables the government to carry out its mission.

Eric Egan: Yeah, and you were hitting out a point there around the risk-averse nature of governments and cultural issues that are not really conducive to working in the digital era, and it kind of leads me to my next question. I mean, at SAP you have a unique perspective of having really ... I mean, you do so much even in the commercial space as well, but working at the different levels of government in the United States.

What are some of the major challenges and barriers to digital transformation? Maybe this is from the perspective of being a service provider even just broadly. So you hit on a few there, be kind of risk-averse and when emerging technologies come so quickly and government needs to react faster than they are, how do you manage those kind of challenges or the challenges that you see when you work with government?

Leslie Casson Stevens: Yeah, there are challenges in many areas. Certainly the culture is one, although I feel with the new generation coming in, they're more accustomed to working with technology, they're more accustomed to turning on their phone and having something and how they interact with it change overnight without training and without notice in essence. So I think that as that younger digital native generation becomes more and more of the workforce, that some of that culture will begin to evolve.

Some of the other challenges are the funding mechanisms. So if a corporation wants to invest in digital technology to improve their ability, their profitability or whatever, they can make a decision to make a capital investment, and they have mechanisms to fund that. Whether that be borrowing or issuing stock, there's a lot of avenues that they have to make that investment.

Eric Egan: Yeah.

Leslie Casson Stevens: Our federal agencies don't have that ability. They need to go to Congress and ask for the money, and that can be a three to five year process. Given the pace of change, you can see how that can be problematic. Once that funding is gotten, is obtained, then the contracting process to get the technology and the solution providers on board can be another year or more. Those contracting agreements sometimes can make it very difficult to do what I call course corrections as you move through a project.

Nobody can anticipate everything that's going to happen over the course of a implementation of a digital technology. As the customer learns, there may be different paths than what they originally anticipated that are the right way to go, and it can be very challenging to make those adjustments and do the right thing.

Eric Egan: Yeah, yeah, some great points there. One being, I mean, it's almost well-known and best practice at this day and age where if you're thinking about the way to develop digital technologies or software, in fact, you need flexibility. If you're doing it from a way that is leveraging service design and product management and those kinds of things, or agile, all the things that really the commercial sector is doing really well, they have an approach in which that has adaptability and flexibility baked in, because you just never know.

I mean, years in advance when you think that you have a solution or you need this particular type of software, by the time you start building it, things could change, the customer's needs could change. If you're forcing it along a set of requirements or a contract that you got funding for at a federal agency years ago, then you're doomed to fail. You're basically creating old software, and that's the best you could do. It's very frustrating. I think that's certainly to me one of the biggest barriers, and how do you go about changing that?

Maybe that's a second question, but another question I was curious about was something I've researched and written about lately is around The Technology Modernization Fund, and this more different approach to funding IT initiatives in the federal space that's kind of like a loan.

So it's a different avenue, you don't have to go through Congress to get even up to millions in funding, you can work through this working capital fund, that in theory you pay back, but the way that you pay back can also be flexible in terms of here's how this technology will save money once it's implemented, that kind of thing. It doesn't have to be like, you write us a check, we write you a check in five years or something.

What are your thoughts, is there should be more of that? I mean, the wording of The Technology Modernization Fund still is not ... I think at the most it's had $2 billion, which sounds like a lot, but in federal government that's spending $100 billion every year on their efforts, then that's really not that much. Should it work more like that? I guess some people might have concerns that agencies are less accountable to that kind of funding as opposed through Congress. What are your thoughts?

Leslie Casson Stevens: Right. So as a citizen, I was excited to see The Technology Modernization Fund idea come forward, number one, and actually get put in place. Where the rub is, is how it actually functions. I think there were customers of ours when we suggested, "Hey, maybe this is something you could request TMF funding for. What are your thoughts on that?" This was a couple of years ago, but there was some hesitancy from some of the agencies that had been the early awardees under the TMF, that the oversight and reporting required they felt in some cases was of greater burden than the money was worth.

So I think the idea of the TMF is awesome, because agencies are funded, particularly those that don't have a big working capital fund or whatever, they're funded on an annual basis for normal operating costs, and to get a big investment funded is really, really challenging. Yet, if they don't get it, then they end up with outdated technology, and ultimately it's going to cost the government more in terms of inefficient processes, security risks, you name it.

So, I really think there should be a means for funding technology in the government that is different from the regular appropriations process.

Eric Egan: Yeah.

Leslie Casson Stevens: The government needs to just view it as an investment that needs to be continually refreshed, and I don't think that mechanism exists very well today-

Eric Egan: Yeah. No, that's a-

Leslie Casson Stevens: Even with the TMF.

Eric Egan: Yeah, yeah. No, that's a great point and really interesting to hear, because it's just another example of a good idea, but still using outdated federal ways of working, which is like, oh, but you still need a bunch of status reports or the oversight mechanisms. There's like, well, this is just the same. We're now being constrained again in another contract where we don't have the kind of flexibility. It might as well have just been an appropriation.

Leslie Casson Stevens: Yeah, well, and I think the original idea of the repayment, that I think proved to be maybe a little naive, in that a good investment doesn't necessarily automatically reduce costs somewhere, there's a value in improving outcomes, so that repayment idea I think was a little problematic. I know they've made that more flexible and more adaptable as they've learned with that, but maybe some new ways to measure what the benefit of an investment in technology provides.

Eric Egan: Yeah. Yeah, particularly in government, right? I mean, you're not dealing with bottom lines and things, the measures of success are often intangible or very difficult to measure, because you're talking about, I mean, it could even be ... I mean, wait time I suppose in customer is measurable, but it really is hard to quantify certain ROIs when you're not just talking about money.

But I am glad that frequently at least in the TMF, those conversations of, oh, this could never have been feasible from a classic repayment scheme, it always had to be with government. The way that you think about the repayment or the ROI on these investments has to be more flexible and mission-oriented. Otherwise, I mean, that federal agency, there's so few that are revenue-generating. That's-

Leslie Casson Stevens: Right. Well, and even if they are, in most cases, those revenues aren't theirs, right? They collect them-

Eric Egan: Right. Yeah, yeah.

Leslie Casson Stevens: And turn them over to the treasury.

Eric Egan: Right. Yeah, they go to a general fund that's not even ... yeah, exactly. So I'm curious then, I mean, there were some, I guess, negative aspects here, but as someone who's worked in the space for so long, what are the positive things that you're seeing in either federal IT modernization, government digital transformation broadly? If it's funding, if it's maybe openness to change, and anything that you can point to and be like when you started X+ years ago, now I'm happy that we at least made some progress.

Leslie Casson Stevens: Yeah, no, I think there's some great things happening. If you look back to the early 2000s, at least from an SAP perspective, a lot of our customers implemented ERP software. At that point, I think the mindset in most agencies was, I need an integrator to come in here and make this commercial product mimic my existing processes.

In so doing, they customized these commercial products to the point that they became very expensive to maintain, they were very difficult to even accept new releases and upgrades from the software provider, and so they sub-optimized what that software could have done for them. I think that perspective has changed, and that's very refreshing.

We now hear from our customers that their objective will be to adopt the best practices in the software, and if that requires changing a regulation or a policy, they're expressing an interest and willingness in doing that, because they understand that they sort of customized themselves into a box in the past.

We try to encourage our customers only to customize if it's something that provides critical in a commercial world competitive advantage for you as a company, and likewise in the government, something that has a material impact on your ability to deliver on your mission, then yes, that's probably a legitimate place to customize. But if it's just because it's the way you've always done it, I think there's more willingness now to question that status quo. So, that's terrific.

Eric Egan: Yeah, that's a great one. I mean, for those of us who work in digital transformation, the idea isn't that digital transformation is an organization using digital tools, it really is supposed to be a transformation in the way that they do everything. We're really rethinking the role that digital plays in truly transforming the way they think about their business processes and everything. So it's good to hear that there is some room there, that it's not just, oh, let's use a website, or oh, let's just have a case management system or something like that.

Leslie Casson Stevens: Right, right.

Eric Egan: Let's stick to the old. Yeah.

Leslie Casson Stevens: Yeah, I think the pandemic helped us too on that front, where you had a process maybe where somebody had to walk a folder around a building or sign a paper form. I think that kick-started some willingness to change, because they had to, and and I think that has been one of those cases where they sort of jumped in and found out that the water's fine.

So, I've been excited to see across government in the finance area adoption pretty much across the board of things like robotic process automation, so I think there's more comfort now in using that kind of technology. I'm super excited to see what's coming in our products and in the industry with AI, right?

We're building it into the base business processes, and I think the introduction that the government's had with more basic RPA, it's going to make it easier for them to adopt AI being a tool that can make their jobs easier, make their employees more effective, and start taking some of the mundane work off their plates.

Eric Egan: Yeah.

Leslie Casson Stevens:

So, it's an exciting time.

Eric Egan: Yeah, that's great. Yeah. Yeah, and maybe the silver lining of COVID may be accelerating digital transformation in some ways is interesting. I know we're already running low on time, but I did want to give you some time to mention any of the ... maybe you've got some good COVID-related projects or really any impactful projects. I mean, you have a wealth of experience to pull from here, from anything that you want to share or you think's worth highlighting given the conversation we've had.

Leslie Casson Stevens: Okay, thanks. So I think one of the things that we've seen in commercial industry, and not as much in government, but in some cases, that when you can deliver an end-to-end business process in a technology platform without having to go in and out of multiple systems, you can adapt much more quickly, you can be more effective.

We saw that in the pandemic with one of our customers at the Centers for Disease Control and Prevention. They had a system in place for probably at least 15+ years, that the supply chain system that SAP technology is underneath that, that supported the childhood vaccine program in the US. So, this was the purchase and distribution of all the childhood vaccines that were government funded.

When the need came to distribute the COVID vaccine, they were able to quickly expand that system. They didn't have to do a whole lot of work to enable the distribution and control of the COVID vaccines across the country. You probably didn't hear anything about it, which is great, because it worked. We were able to get in and help them stress test to make sure it was going to work before they flipped the switch. But that one I think is a great example, from the order mechanism all the way through to the inventory and distribution, it worked very well.

That's an interesting case of where the government also relied on its industry partners, not just us for software, but the McKessons of the world who distributed the product or the pharmaceutical manufacturers. So, it was a great example of how technology can respond quickly to a critical situation.

Eric Egan: Yeah, yeah, absolutely. It's also a good example of something we were talking about at the beginning of our conversation, which is the ways in which so much is happening behind the scenes process-wise, technology-wise to deliver for people, for citizens. Even if it seems like, as you were saying, that system, VTrckS, is operating totally behind the scenes, no one receiving a COVID vaccine will know what it is there-

Leslie Casson Stevens: That's right.

Eric Egan: But it's so critical to the supply chain of getting these. As someone who worked at Texas at the state and local level as a service provider like yourself, the way that we were able to adapt to ... the state of Texas had existing immunization registries, they had a provider portal. They had these different mechanisms in place that they had to quickly change and adapt. One of them when I was at Deloitte was creating a new vaccine allocation and ordering system that worked with VTrckS in order to get those.

So, it's just interesting this ecosystem of collaboration between industry partners and government that can happen very, very quickly. So we know that it's possible, the level of adaptability and digital transformation can totally take place. Again, as we said, kind of a silver lining to COVID.

Leslie Casson Stevens: Yeah, no, there were definitely some good things that came out of it.

Eric Egan: Yeah.

Leslie Casson Stevens: They're gearing up now to take on the new RSV vaccine, so-

Eric Egan: Yeah.

Leslie Casson Stevens: Yeah, it's exciting, and there are all kinds of opportunities like that. We have another program that distributes the supply chain for the food aid that the US provides both to all the school lunch programs across the country. The food aid that the US provides internationally goes through a system that handles like the VTrckS from soup to nuts of ordering the demand coming in, the commodities being procured and distributed.

Eric Egan: That's very cool. Literally soup to nuts too.

Leslie Casson Stevens: Yeah.

Eric Egan: Okay, so I guess my last question is kind of a standard question, and you kind of hit on it a little bit when you're talking about AI and RPA, but what most excites you about digital experiences in government, service delivery moving forward? This could be on the more obvious citizen-facing side, or it could be a lot of what may be happening behind the scenes that SAP sees.

Leslie Casson Stevens: I think the promise of the technology and now also of the cloud. So we're all experiencing the world moving to a cloud framework, and that delivery model really has the potential to, I think, allow the government to do its job more effectively, because our systems are under attack every day and the skills that are needed to protect them are hard to find and in high demand. There's a core competency that the cloud providers have to carry out that security role, that then the government doesn't need to take that burden on and can use its own resources and focus them on activities that help them deliver on their mission.

The other thing the cloud I think really brings to the table is agility and continuous innovation, that for the funding and contracting and all these other reasons we've discussed, a lot of that goes away when you're in the cloud in a SaaS type solution where the solution owner makes sure that product stays up-to-date, that it's maintained in a way that allows it to take updates and adapt new innovations. So, I think that is going to have a real impact for the government and its ability to adapt technology and innovate.

Eric Egan: Yeah, no, it's a great point and it kind of makes sense from SAP's point of view, right? You're able to see the level of cloud adoption happening on the private sector that's paying such dividends. For a lot of folks, I mean, cloud has been around for a while, but the government is still very much behind in its adoption.

Leslie Casson Stevens: Well, it actually allows us to get better bang for our own investments, because with the old on-premise world, we were maintaining, and still do, many, many versions of our software under many different operating models. So all that investment now can be repurposed into innovation as we move to delivery through the cloud, so I think it's good for everyone.

Eric Egan: Yeah, absolutely, and a great point. All right, well, I believe that's all the time we have for this episode. I want to thank Leslie again for joining us, and for our audience, don't forget to subscribe to ITIF on YouTube for other great videos covering a wide variety of topics in tech policy. And thanks and goodbye.

Leslie Casson Stevens: Thank you.