For years, councils have been forced to try and fit a round peg into a square hole, doing more with less. The advent of AI, and in particular generative AI, has led to an increase in local authorities turning to the implementation of artificial intelligence (AI) to improve operations and services.
But before diving into AI, it is crucial for local authorities to understand how prepared they are for AI adoption.
Following on from his session at ‘AIvolution: Procuring Tomorrow’, the latest event held by the CPO Advisory Forum, Trustmarque’s Simon Leuty explains how councils can understand their readiness and the opportunities available to public sector stakeholders.
How Quickly is The Use of AI Growing?
AI is on course to become the fastest-growing area of IT-related spend over the next decade. According to Gartner, spending by organisations on AI software will grow to £233 billion with a compound annual growth rate (CAGR) of 19.1% by 2027.
Over the next five years, annual market growth will accelerate from 17.8% to reach 20.4% in 2027. During this time, generative AI software spend is predicted to rise from 8% of all AI software spend in 2023, to 35% by 2027. No organisation is expected to remain untouched, and that includes local government. But how do councils assess their readiness for AI? It begins by looking inwards.
Step 1. Assessing Organisational Culture
Like most change initiatives, understanding readiness for AI begins with assessing the organisational culture. Traditionally, local authorities have focused on cost and revenue growth with limited flexibility for innovation.
However, AI adoption requires a culture that embraces change, innovation, and adaptability. Staff at all levels, along with suppliers, will need to be ready to adopt and foster a culture that supports experimentation and learning from failures.
Moreover, implementing AI raises ethical concerns, necessitating an evaluation of whether the organisation is prepared to address issues such as fairness, transparency, and bias in AI decision-making processes. Ensuring that the organisation’s values and ethics align with these principles is essential for the successful integration of AI.
Step 2. Evaluating Infrastructure and Compliance
Next, local authorities need to assess their infrastructure and processes to ensure readiness for AI implementation. This includes evaluating data management capabilities, security measures, and resource availability.
Assessing infrastructure involves ensuring that the necessary skills and resources needed for successful deployment are available, and if not, that the organisation adequately considers the potential need for external expertise. With expertise likely to be thin on the ground, councils will likely seek to buy in expertise initially, then pivot to a hybrid model, ‘growing their own talent’ where they can and using suppliers to provide specialised support and systems.
Furthermore, compliance with regulations around data privacy and citizen protection is crucial, especially in the public sector. Local authorities will need to align their AI use with existing regulations and ethical standards, with suppliers providing compliant and secure AI solutions.
Step 3. Explore The Likely Use Cases
AI offers a myriad of use cases for public sector organisations, such as in procurement, citizen services, data analysis, and resource allocation.
In order to build confidence, organisations should explore the many AI use cases, and implement frameworks that align with their specific needs and goals, aiding AI adoption and allowing for careful, strategic planning. By doing so, they can leverage AI to streamline processes, improve decision-making, and enhance overall efficiency.
For example, there are many different use-cases for AI within procurement teams; Spend Analysis, Supply and Selection, Contract Management, Demand Forecasting, Risk Management, Chatbots, Automated Purchasing, Negotiation Simulation, and Fraud Detection.
AI can offer fully digitised contracts, searchable contract portfolios, commercial and contract optimisation, and renewals management services. These capabilities can transform procurement operations, standardising approaches and making them more efficient and transparent.
Suppliers who can develop AI solutions that meet these use cases and address specific needs and challenges faced by local authorities can provide significant value and become embedded into council processes.
Step 4. Addressing Risks, Challenges and Ethical Considerations
AI comes with significant ethical considerations such as ensuring strong data protection and security, preventing breaches, and addressing bias in AI models used.
For example, AI solutions must ensure fairness and security, especially when managing sensitive data such as health records and financial information. The potential for bias in AI models and the need for transparency and explainability should also be carefully considered.
Transparency and explainability in AI decision-making processes are crucial for understanding how decisions are made and avoiding potential biases. Additionally, third-party risks must be evaluated, and proper safeguards implemented to mitigate potential liabilities.
Council leaders should also take a systematic approach to identifying AI risks by examining each category of risk in each business context; Privacy, Security, Fairness, Transparency and Explainability, Safety and Performance and Third-party risks. By systematically addressing these aspects, local authorities can ensure they are well-prepared to adopt AI technologies, maximising the benefits while mitigating potential risks.
Failure to comply with ethical and legal considerations will open councils up to potential liabilities and unwarranted risk. Better to ensure responsible AI adoption from day one, and suppliers who can deliver AI systems that allow local authorities to uphold these values and help them navigate these challenges stand to benefit. The decision to adopt and implement AI should be guided by a thorough understanding of the potential benefits and risks, along with a clear strategy for integrating AI into operations, ensuring responsible and ethical use.
Step 5. Utilising Frameworks and Assessment Tools
So, you should now understand the main areas to consider – but how do you start to assess your readiness more practically?
Frameworks and assessment tools can help local authorities understand their readiness for AI. Gartner’s AI Value Curve as a useful model which can help organisations recognise their current readiness, set their ambition, and plan for success.
AI readiness is essential for the successful evaluation, investment, adoption, and value realization of AI solutions. Without readiness, maximum value is unlikely to be realised.
Internal assessments, using simple questionnaires, can evaluate strengths and areas for improvement. By evaluating key factors and leveraging industry frameworks and tools, local authorities can make informed decisions about AI adoption and implementation.
Exploring Existing AI Solutions and Platforms
Understanding readiness for AI and the opportunities available requires a comprehensive assessment of organisational culture, infrastructure, compliance, and potential use cases.
Local authorities and suppliers can explore existing AI solutions and platforms tailored to their needs. For example, the Register of Commercial Tools may offer services for comparing rates and pricing on national procurement frameworks. Suppliers should highlight their AI solutions that align with these frameworks, demonstrating their value in improving public sector services.
Evaluating existing AI solutions and platforms involves assessing their suitability for addressing specific business challenges and opportunities. Transparency, explainability, security, fairness, and performance are critical considerations when selecting AI solutions and platforms.
A Word of Caution
There will be significant value gains available to councils from the adoption of AI. However, a major challenge will be how to measure these value gains. This represents one of the main reasons organisations are not fully committing to AI. While deployment is increasing, it still represents deploying ‘some’ AI, indicating the early maturity of these technologies. Value realisation is key to reinvestment.
Nevertheless, while AI readiness may present challenges, the potential benefits in terms of efficiency, innovation, and citizen services make it a worthwhile endeavour for both local authorities and their suppliers to explore.
