From Technology to Leadership and Operating Models – 5 Steps to Productivity in the Public Sector

Artificial intelligence and data offer unprecedented opportunities to improve productivity. In the public sector, improved productivity can mean that experts have more time for demanding tasks as routine work is automated. Customers, in turn, may experience the change as smoother and better services.

Despite investments aimed at productivity, results too often fall short. This phenomenon is known as the productivity paradox: even significant investments in technology do not necessarily lead to improved overall productivity, and productivity may even decline.

The reasons are human and structural. Benefits are lost if old processes are simply digitised without renewing operating models, or if freed-up resources are not consciously directed to more demanding work.

Sitra has compiled a productivity-driven renewal model (summary in English) to address precisely this challenge. The model is a practical tool for the management of ministries, agencies, wellbeing services counties, and municipalities. It helps ensure that investments in data and AI deliver on their promises.

So how does the model work?

5 Steps to a Productivity Leap

The operating model is not a technology project, but above all a management tool. It consists of five phases that tightly link the renewal to the organisation’s strategy and finances:

1. Define Goals and Metrics

Everything starts with a management decision: what will be changed, by how much, and in what timeframe? The renewal is given clear key performance indicators (KPIs) and baseline levels. The aim is not just to fine-tune the process, but to significantly improve the value delivered to the customer and cost-effectiveness. 

2. Ensure Preconditions for Renewal

Success requires clear responsibilities and the right capabilities. It must be agreed who does the work and who bears the final responsibility for decisions. In addition, data quality and common principles must be ensured so that solutions can be scaled across unit boundaries. 

3. Plan How Benefits Are Created

This is the phase where technology meets everyday work. By analysing value streams, unnecessary delays and manual steps that can be replaced by automation are identified. The most important thing is to concretely plan how resources are shifted to higher value-added work. 

4. Lead Implementation

Static project plans are replaced by a decision-making model that responds to results. Whether the chosen model is agile or aims for scaling up, implementation is managed in a regular cadence on a weekly and monthly basis. If results are not achieved, there must also be the courage to stop the project.

5. Realise Benefits and Accelerate 

Productivity benefits are not real until they are visible in the budget or personnel planning. In the final phase, it is ensured that productivity benefits are incorporated into financial planning and freed-up resources are directed to new, more impactful tasks.

The Public Sector as a Driver of Business Growth

The effects of productivity-driven renewal spread from the public sector to the wider economy and businesses. For example, faster permit processes and the use of data also support business growth and competitiveness. 

And when Finnish growth companies developing AI solutions gain domestic references, these solutions can also be exported to other countries. 

The Operating Model Is a Central Part of Sitra’s Funding

The newly published operating model is part of Sitra’s broad work, which aims, together with partners, for a significant productivity leap in the public sector through data and AI. At Sitra, the work is led by the Public Sector Productivity Programme, which accelerates renewal with funding, management training, foresight information, and other expert support.

The operating model is directly linked to Sitra’s funding. We require organisations applying for funding to set goals and metrics, and to commit to realising benefits according to the model. You can find open funding calls on our website.

Ultimately, renewal is about daring to lead change. Technology is a servant that, when used wisely, enables better availability and quality of public services in the future as well.