Trends and Challenges for the Public Sector
Public sector organizations globally are faced with unprecedented challenges. Budgetary pressures and a growing demand for financial accountability, combined with changing public expectations of public sector services require new approaches and solutions. Regional, national and supranational bodies across the world are therefore seeking to adopt new processes, techniques and technologies to increase process efficiency, reduce costs, improve transparency and encourage greater accountability.
Corporations and other private sector organizations have achieved proven success in driving down costs by increasing efficiency and processing capacity by implementing best practices in financial management. Today, public sector organizations are under pressure to deliver the same successes.
Streamlined procurement and expense management practices, centralized treasury, cash and liquidity management and building centers of excellence in financial shared services all contribute to substantial efficiency gains, increased processing capacity, reduced costs and improved performance. Public sector organizations can leverage these techniques and solutions to deliver services, reduce costs and eliminate unnecessary bureaucracy. By doing so, borrowings can be reduced and more funds directed towards front line services that have a positive impact on beneficiaries.
Citizens and businesses are demanding ever-higher levels of accountability and transparency from public sector organizations and NGOs. Every unit of currency paid in tax or donations needs to be justified and rigorously accounted for to maintain public confidence and create trust. This requires robust processes and systems that are closely integrated both internally and externally to avoid the risk of error and fraud, detailed financial information and a robust reporting framework to provide information in a timely and accurate way.
Demonstrating accountability does not only extend to financial processing. Public sector organizations and NGOs also need to manage their financial and operational risks effectively to avoid the attrition or loss of funds through error and fraud, foreign currency exposures, and rising interest rate costs. Public sector pensions threaten to create huge overheads for current and future governments unless best practices in asset and liability management are established. Organizations with surplus balances need to consider how this cash is invested to minimize the risk of loss of capital, in the case of failure of the counterparty, whilst also avoiding the negative effects of inflation on surplus cash.
With growth stalled or slowing in many parts of the world, governments and central banks are tasked to find ways to stimulate their national economy and create attractive opportunities for investment. This requires innovative approaches to private sector partnerships, infrastructure financing and creating favorable conditions for foreign investors.
Moving beyond the domestic economy, governments, through their ministries of foreign affairs and embassies, and development NGOs, are working across the world to achieve their diplomatic, trade and development objectives. From disaster recovery planning to long term funding, foreign currency risk management and payment requirements in multiple currencies and locations, these organizations are seeking to minimize risks in many of the world's most volatile locations whilst ensuring cash flow security and efficiency.
Governments and public sector bodies cannot simply improve the efficiency and accountability of their activities by enhancing their internal processes, this needs to extend to every interaction they have with citizens. As technology advances, citizens' expectations of the services they require increases, and the means by which they receive them increases as well. Similarly, public sector organizations have an obligation to keep citizen information secure and prevent misuse of information or abuse or services through identity fraud.
Governments, city authorities and government agencies are therefore embracing mobile technology, cards and digital channels to deliver services efficiently, cost effectively and conveniently, and leveraging new techniques in formerly labor-intensive activities such as identity management and document processing. By doing so, they develop greater trust and satisfaction amongst citizens and beneficiaries of services, accelerate document and payment processing whilst reducing costs and increasing security.