Public Sector Leaders Show Signs of Embracing Need for Change

Michelle Remo, “Big 4″ observer
March 06, 2012 /

More public, than private, sector leaders are willing to change business operations to deliver cost efficiencies, according to KPMG.

A higher proportion is also inclined to increase public/private sector integration and ensure their organisation is ready for major business changes.

KPMG’s annual survey of 3,000 senior executives suggests that public sector bosses have accepted the need to adapt, in the face of ongoing publicity about reduced funding and budget cuts:

almost two-thirds (63 percent) identified the need to ‘change business operations’ as a hot topic for concern – compared to just 43 percent in the private sector

28 percent are looking to seize opportunities for greater interaction between the public and private sectors

as many as 1 in 3 (32 percent) are also in the process of preparing their organisation for changes to the way they operate, a figure that compares to just 1 in 4 elsewhere (25 per cent).

However, only 22 percent in the public sector see ‘improving cash and working capital management’ as a critical priority and a mere 9 percent are ‘embedding sustainability in their business model’.

These are surprising statistics, given 40 percent of public sector respondents also believe that deficit reduction measures will have made a major contribution to improving efficiency and effectiveness within 5 years.

Alan Downey, partner and head of KPMG’s UK public sector practice, says: “Deficit reduction and the need to restore public finances to health hang over the public sector, so it is encouraging to see a thirst for change. Our survey results certainly suggest that public sector leaders are more cost conscious than their private sector counterparts, and more willing to contemplate major changes to their business models.

“It may be a timing issue as the private sector has already faced up to the cost challenge and is moving on to other issues, whereas the public sector is only just embarking on what is likely to be a long period of austerity. Whatever the cause, one thing is clear – namely that there is more to be done if the public sector is to really succeed in a changing world.”

The data goes on to show that 19 percent believe their organisation is adapting to take into account changing customer and stakeholder behaviour – a figure that is marginally higher than that for industry as a whole (18 percent). More (13 percent) are also likely to react to regulatory change than their counterparts in other sectors (10 percent).


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