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Defining the Essentials of the Public Sector Industry

Objective

After completing this lesson, you will be able to define industry characteristics, challenges, and opportunities faced by a business in the Public Sector industry.

Introduction to the Public Sector

Are you ready to transform the way public sector organizations operate? In this course, you'll discover how SAP solutions can drive efficiency, transparency, and innovation in government and public services. Get ready to learn best practices and equip yourself with the knowledge to make a significant impact. Let's dive in and start making a difference!

The public sector encompasses a broad range of services and activities, balancing multiple, often conflicting goals while being accountable to a digitally connected and critical citizenry.

Without a deep understanding of the public sector's unique needs and challenges, you may struggle to understand the value of SAP solutions.

The public sector is the part of the national economy that provides basic goods and/or services that either are not or cannot be provided by the private sector.

It includes international, federal/national, state, local government, their agencies and corporations.

The public sector is a sub-industry of the broader public services industry, which include other sub-industries including defense and security, healthcare, postal and higher education and research.

Characteristics of the Public Sector

Let’s explore the fundamental characteristics that define the public sector, highlighting the unique aspects that shape its operations and objectives.

	Industry of Industries Wide variety of services and activities.
	Multipurpose Balances different, often conflicting goals and interests.
	Carefully Steward Taxpayers Money Naturally risk averse.
	Deliver Public Value Success is measured by the political, social, and financial return on investment.
	Decisions Driven by Political Powers In addition to the consideration of cost optimization and delivered outcomes.
	Accountable to the Critical Citizenry Digitally connected with many (sometimes conflicting) needs and expectations.

Key Public Sector Activities

Governments and public sector organizations deliver services and outcomes, categorized into five main areas. Let’s dive deeper into the details.

As you have learned by watching the video, public sector organizations are responsible for a broad range of services. Governments and public sector organizations organize themselves to deliver services and outcome.

Graphic Explaining the main areas of the public sector, as mentioned in the video before.

Important Personnel in the Public Sector

There are various important roles to consider when engaging with the Public Sector.

Politicians
These are Members of Parliament/Congress and cabinet members. They are formally elected to represent the people within their respective constituencies (electoral districts). Key responsibilities of Members of Parliament/Congress include: serving the best interest of their country and doing what is right and necessary for the honor and safety of their country, and to represent the best interest of their constituents. Members of Parliament/Congress are mostly involved in debating, driving, and overseeing policy formulation, amendments, and creation within their respective countries.
Senior Bureaucracy
These are very senior personnel within public sector departments who are charged with overseeing the attainment of the strategies and goals defined by their relevant departments – in this capacity, these senior Personnel report directly into the Minister/Secretary of their respective portfolio.
Public Servants and Management
These are the personnel that execute the plans of public sector organizations, aligned to the strategies as defined at the Ministerial/Secretarial level, which ultimately roll up into the agreed government priorities and policies. These personnel typically include Chief Financial Officers, Chief Information Officers, Heads of Departments, and so on.

Photos of the described Personnel.

Levels and Tiers of Government

Typically, there are Three levels of government. Yet anomalies can occur from one country to the next.

The Federal or National government exists to govern the entire country and typically includes:

Federal Government
The Federal or National government exists to govern the entire country. It typically includes five divisions: Presidential Executive Office, Departments, or Ministries, Independent Executive Agencies, Independent Regulatory Agencies, government Corporations.
State Government
The State or Provincial is designated all powers that are not given to the federal or National government. It typically includes three branches: Executive branch, Legislative branch, Judiciary.
Local Government
State governments confer authority on local governments to deal with specific issues through state or provincial made legislation. It is typically organized into four main layers: County, Provinces, Councils; Townships; Municipalities; Special districts.

Summary

Governments and public sector organizations are responsible for maintaining law and order, ensuring equality, providing services, stabilizing the economy, regulating labor, collecting taxes, protecting the environment, and promoting global prosperity, using a people-first approach, efficient resource management, and data-driven decision-making.
The public sector aims to serve citizens, ensure safety, and support the economy through taxes, security, social programs, and legal matters, using data-driven policies, efficient finance management, and effective service delivery.
Public service organizations risk political irrelevance, face funding competition with limited new revenue, manage significant spending (15%-50% of GDP), and exhibit diverse spending approaches according to OECD data.

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