Queensland Treasury’s four pillar smart transformation

In an increasingly digital world, Queensland’s Treasury department felt it either had to renovate or replace its technology, taking a compliance-first mindset.

The path it has taken has allowed the department to provide more digital services to the state’s taxpayers. It’s also elevated staff from the more mundane, manual process tasks and afforded them the opportunity to do more interesting work.

“The world, our ecosystem, as well as taxpayers’, staff and government’s expectations are changing, and our transformation project allows us to meet those expectations,” says Queensland Treasury deputy commissioner Simon McKee.

The transformation comes under four strategic pillars. The first and most important is culture and leadership. “Without a change in culture and mindset, nothing can be achieved,” McKee says, adding that has involved exposing the management team to disruptive thinking.

Research backs up how important culture is in achieving a successful transformation journey. A Gartner survey from 2018 indicates 41 per cent of chief operating officers believe the biggest blocker to change and transformation is culture.

The second pillar involves process redesign. Queensland Treasury has partnered with the Queensland University of Technology to learn more about what taxpayers, industry and staff need from Treasury, to allow it to redesign processes to better meet their needs.

Says McKee: “What they want is to access our systems securely at a time of their choice, on a device of their choice. They also want to know why we’re collecting their data, how we’re storing it and how this benefits them.”

The third, most ambitious pillar is the digitisation of Treasury’s systems, involving 46 initiatives across three years, of different sizes, complexity and risk. The end goal is the migration of its systems to a secure data centre in which only government tenants are allowed.

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McKee says data is critical for this pillar. “It’s at the heart of everything we do. We want to be able to use that data for our transactional and external systems. It gives us a very stable core. We have a really strong data warehouse and we’ve cleaned and de-identified our data, which is a challenge for many organisations. Our data hub now orchestrates the data and we have an analytic cloud, which allows almost Google-type searches of all our data holdings across our transactional systems. But it’s very simple to use.”

So far, Treasury has delivered 31 of its 46 initiatives on time and on budget. “We have another seven in flight, with the remaining ones to be delivered by 30 June next year,” he adds.

The fourth pillar is workforce strategy. Treasury has sought advice about how to shape its workforce towards 2023 when the transformation project is slated to be finalised, after which time the department will hand over to an innovation team.

“The idea is to be able to leverage all this beautiful technology we’re delivering,” McKee explains. “It’s about shifting our current skillset and ensuring job security. In the past we routinely received queries about whether machines will replace people’s jobs. Now people want to know how machines will help people do their job.”

The exciting new technologies Treasury is implementing includes machine learning, which can predict with more than 70 per cent accuracy when a land tax payer may default on their debt. This was previously a challenge for Treasury, given 20 per cent of the state’s land tax payers don’t pay their debt on time, whereas just 2 per cent of other taxpayers don’t pay their tax on time.

Machine learning can help predict potential land tax defaulters. Getty.

Thanks to the ability its new technologies deliver to identify people who are likely to default on their land tax bill, Treasury can now proactively remind taxpayers to pay their land tax bill through digital tools such as SMS messages or email. It can also invite them to consider a repayment plan or give them other options so they don’t default.

“This benefits taxpayers as it reduces the risk of them defaulting and then paying a fine. It also benefits the government as it gets more revenue earlier to fund essential services,” McKee says.

The next step to improving Treasury services and the citizen experience was understanding the reasons why some taxpayers were defaulting. This required a platform where taxpayers could give continuous feedback about their interactions with the Treasury. By combining the citizen experience data (X-data) with existing operational data (O-data), the Treasury can create a holistic picture of service delivery and generate actionable insights into how to improve.

This allowed the Treasury to bridge experience gaps by understanding what led to negative sentiments and why citizens were unable to pay their obligation on time. As a result, the Treasury changed its approach and began proactively offering financial assistance and support to those in need, before they had defaulted.

Treasury is expecting a substantial return of $200 million from this project, the cost for which is $80 million. It also supports the state government’s goal to deliver responsive governance, which benefits taxpayers.

Says McKee: “It’s all about building an intelligent Treasury department and we’re on track to achieve that.”

This article first appeared on the Australia Financial Review.