The next big step for Saudi Arabia

March 13, 2018
Gianmario Pisanu
Gianmario Pisanu

By Gianmario Pisanu

IN 2015, the Kingdom of Saudi Arabia launched Vision 2030, an ambitious reform plan aimed at diversifying the economy by moving away from oil and encouraging the development of stronger private and public sectors. The plan streamlined and centralized decision making to ensure better coordination among ministries and implemented a distributed program management model to monitor execution.

Looking at the typical pattern of government reforms, Saudi Arabia has accomplished important milestones in a relatively short period of time: the direction has been set, the public administration has aligned and communication channels have been put in place. The vision’s realization now rests on the commitment and operational capabilities of Saudi government entities.

Implementation, the nemesis of planners

Experience shows that implementation is the most critical step in the policy cycle, where gaps between desired and actual outcomes are either created or avoided. Even mature administrations can get it wrong, as demonstrated by the technical issues encountered during the implementation of the US Affordable Care Act in 2013. On the other hand, good execution can bring about great results. A perfect example of this is the flawless implementation of the Hartz labor market reform in Germany between 2003 and 2005, which resulted in a drastic drop in unemployment.

The success of a reform program’s execution is driven by many factors we can broadly group into two families: people and processes.

People factors embrace elements such as effective communication, which means that objectives need to be clear enough to provide direction and flexible enough to adapt to the reality on the ground, and civil servants buy-in, where officers need to understand and share the policies without feeling personally threatened by measures like budget cuts or headcount reductions.

Process factors include availability of the right talent, sufficient financial resources and an efficient bureaucratic structure. In other words, an operational framework is needed at individual agency level to drive policy execution across core government functions, like the optimization of delivery channels or services consolidation, and support functions, like strategic sourcing or workforce development.

Saudi Arabia’s next step

The implementation process will demand a tremendous effort from the Kingdom’s public sector, grown accustomed over time to abundant resources and little pressure to deliver, to the detriment of its efficiency and effectiveness. The next critical step for the success of the vision’s implementation is to raise the operational capabilities of government to the minimum level required to deliver the reform.

What are my processes? Who is accountable for their execution? How do I measure their performance? Do I have the right people, funds and infrastructure to deliver my mandate? If not, what do I need to get there? These are the questions public sector leaders in the Kingdom need to answer. The Ministry of Economy and Planning as well as other agencies are already moving in this direction. Once what is needed is understood, then the question becomes how to accelerate change.

To speed up execution, Saudi can create brand new fit for purpose government entities instead of focusing on upgrading the capabilities of existing organizations. This is not an uncommon approach for governments. President Roosevelt implemented the New Deal reform program creating 100 new government entities, remembered as the “alphabet soup” due to the fact that they were identified by four letter acronyms. Some of them still exist today.

Another option to achieve policy outcomes more rapidly and efficiently is to leverage platform business models. In the digital age, small organizations can touch the lives of millions. If a company like Instagram, which has merely 200 employees, can serve half a billion people every day, large and complex government agencies may no longer be needed to create public value and social impact. Governments are rethinking the way public services are delivered and funded looking at highly scalable and efficient platform champions. Will Amazon, Facebook or Expedia’s successful business models help Saudi Arabia achieve its Vision?

Digital accelerators

A platform generates value by making the exchange of information, services or things easier and less expensive. It does so by providing rules that create trust, offering the digital infrastructure and the services required to complete the exchange in the simplest way, matching supply and demand effectively through data analytics and convincing more participants to join in.

The idea of platform is well aligned with what the public sector does. From payments to licensing, from employment to healthcare, from pension to education, governments orchestrate complex service ecosystems and facilitate the transfer of value. By moving away from a traditional business approach and adopting the platform model, benefits can flow in terms of reduced time required to set up the service, less internal talent needed to manage delivery, lower investment to create and expand operations. Saudi businesses are familiar with this concept, as half of the Kingdom’s companies say that they have already witnessed the impact of digital ecosystems on their respective industries, according to a recent Accenture research.

Applying the Uber model to governments may sound like a futuristic idea, however, many public organizations around the world are already moving in this direction. In fact, considering current demographic and technological trends, the platform model may soon become the global public-sector standard, and in Saudi a powerful digital engine to propel the implementation of Vision 2030.

— The writer is managing director and Accenture consulting lead for Accenture in the Middle East and Turkey.

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