Private cloud-based integrated business service for public institutions

Suwon City, a municipality in South Korea, has streamlined its 12 public institutions by establishing a private cloud-based integrated business service. This boosts work efficiency by providing quality services without constraints on specialized personnel and server room operating environments. Integration of common tasks ensures data transparency and cost-effective operations.

Innovation Summary

Innovation Overview

What problem the innovation solves or what opportunity was taken advantage of :
Suwon City has 12 public institutions in various fields that organically collaborate and utilize the city’s budget. Due to the aging information system of these institutions, the problems caused are as follows:
- Constant service complaints and demanding budget due to replacements
- Demanding high costs for system establishment when creating new public institutions
- Delays for data verification caused by the manual handling of organizationally connected tasks

To solve these problems, Suwon City, under the leadership of the agency head, has been innovating its working methods by integrating private cloud-based services through the following legislation and public competitions since 2019:
- Led the government’s Cloud First policy by enacting the Cloud Computing Act (2019)
- Piloted a private cloud-based integrated service for budget and accounting utilizing an open cloud platform in 2020 through the Public Competition of Private Cloud Flagship organized by the Ministry of Science and ICT
- Conducted a consulting for cloud-based digital innovation in the public sector in 2021 based on expert opinions on expanding services for the adoption and use of advanced private clouds

What the innovation is, Objectives or goals of the innovation, Who benefited from the innovation :
Suwon City pioneers innovation by integrating business services across public institutions, aiming to reduce workforce and operation costs, enhance work efficiency, and ensure data transparency, which will benefit both Suwon City and public institutions.

How is the innovation envisioned for the future?
The integration of services conducted by multiple agencies can not only lay a structural foundation to cope with constant changes in the work environment but also standardize work during these changes, allowing it to improve functions immediately. This is not a simple service establishment project used only by one institution but a fully integrated information service model utilizing an open cloud platform applicable to all public institutions nationwide.

For example, how will it be institutionalised in its current context?
Tasks are standardized and grouped according to each institution’s nature of work. The central government, utilizing a private cloud, provides integrated services for these tasks, allowing any public institution to access a digital work environment without the need for independent information service development and operation.

Innovation Description

What Makes Your Project Innovative?

Suwon City leads the country in cloud-based business integration, enabling public institutions to handle tasks uniformly.

This groundbreaking project achieves:
- The country’s first integration of common business services rather than simple infrastructure integration;
- Multiple agencies jointly utilizing infrastructure resources and SW services
- Real-time monitoring of budget and accounting data and derivation of new services
- Joint utilization of infrastructure resources and SW services by multiple organizations
- Immediate response to work changes through an open cloud platform

Goals of these innovations include:
- Reducing workforce and operation costs through joint utilization of resources
- Transparent budget management via real-time monitoring of budget and accounting operations
- Maximizing work efficiency by providing standard business services
- Securing data transparency through the digital transformation of work

What is the current status of your innovation?

Starting with a public competition, Suwon City established services for 12 public institutions and completed digital transformation milestones:
- In 2021, expanded personnel, service, and payroll services using Suwon’s own budget
- In 2022, converted integrated Enterprise Resource Planning (ERP) for budget, accounting, personnel, service, and payroll, and established groupware (e-document, webmail, messenger, etc.)
- In 2023, completed digital transformation by converting groupware for all 12 institutions in Suwon

This standardized integrated business service innovation improves the business processes by:
1) Automating tasks previously manually handled through systematically connected digital transformation
2) Enabling a single functional improvement to be applied to multiple institutions through join software utilization

Innovation Development

Collaborations & Partnerships

This service innovation was initiated by a private-led development project organized by the Ministry of Science and ICT through a public competition.
It results from a synergy of Suwon City’s administrative needs, the central government’s impetus for digital informatization projects, and the service innovation challenges posed by private developers.

Users, Stakeholders & Beneficiaries

Suwon City and public institutions benefit from improved satisfaction through enhanced convenience and communication channels.
- Collaborative services such as webmail and messenger
- Access to quality information services extended to new institutions and those lacking relevant experts
Service providers (companies) can develop common processes applicable to other institutions, fostering business expansion.

Innovation Reflections

Results, Outcomes & Impacts

This innovation garnered the 2020 Best Local Finance Practice Award, securing the national first prize for quality improvement and cost savings worth KRW 11.7 billion.
*KRW 10.9 billion resulted from the joint utilization of infrastructure resources and KRW 800 million from work efficiency due to cloud and service innovation
Recognition for digital service innovation using the latest IT led to the award of excellence for open cloud platform utilization in 2022.
- Jointly applied changes to the government e-document distribution system without additional costs
- Simultaneous response to web environment changes, such as web-based service restrictions
- Batch application to services in response to law changes

Challenges and Failures

User institutions have encountered resistance during the transition to integrated business services, as listed below:
- Pressure of real-time processing for institutions accustomed to manual work
- Uncertainty about accommodating various administrative demands for institutions with various users
To prioritize the use of integrated services, informatization budgets for business services funded by institutions were controlled. Despite resulting complaints, this measure aimed to prevent duplication of expenses and promote the project.

Conditions for Success

Key success factors included the effective use of incentives and controls, along with consistent quality improvement, which enabled us to continuously promote and experience the value of service innovation that promptly responds to new changes in the work environment:
- Incentives covering service operation expenses at the municipality level of Suwon City
- Collaborative efforts between supervisory departments and strict deterrence against handling undigitized data
- Digital transformation prioritization for smaller organizations
- Continuous user feedback for service quality enhancement
This approach significantly contributed to the success of the three-year service conversion project.

Replication

This case, featured in the Report of Realization Plan for the Digital Platform Government of South Korea, stands out as a successful digital transformation in the public sector, setting the path for the Digital Platform Government. International recognition as a digital transformation role model was achieved through the IDC Future Enterprise Award.
- Awarded first prize for regional informatization in Gyeonggi-do, proving the best practice of administrative service digital transformation
- Inclusion of Suwon City’s case in the Realization Plan for Digital Platform Government, establishing it as a model for nationwide expansion
- Winner of the IDC Future Enterprise Award for Digital Innovation (Domestic, International)

Lessons Learned

Achieving innovation in administrative services is time-consuming, driven by evolving consumer demands. Institution leaders must show interest in responding to these changes, and legislative shifts and technological advancements should align with the evolving environment.
Leadership is crucial, requiring someone to take the lead and continually present the issues. In addition, the transformation of administrative services necessitates a gradual, step-by-step sharing and persuasion process with appropriate responses to resistance against the changes.

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