4. Organisation Level
4.1 Overview
Digitization challenges at organization and government levels require separate treatment due to technical and political considerations.
Although the term "Whole-of-Government" may seem reasonable, a GovStack approach recognizes that public sector modernization is not a single national project. Rather, it consists of hundreds or thousands of initiatives undertaken independently but in a planned manner across all levels of government. These initiatives are driven by public administration organizations, and their success depends on their capabilities. Therefore, we must approach digital transformation at the organizational level.
Digital transformation of the public sector on an organizational level depends on the availability of national digital infrastructure:
The Digital Governance model mentioned in section 2.5 highlights the need for a national digital infrastructure and a set of capabilities to support the digitalization of public services.
4.1.1 Public vs Private
Digitalization of the public sector requires significant change management of processes, skills, awareness, and legal basis, and must align with legal mandates and government-wide policies.
First, public sector operations differ from the private sector in terms of organizational needs and the requirement to strictly adhere to business rules that arise from legislation and administrative regulations.
When a private sector organization aims to transform a particular aspect of its operations, the first crucial step is to establish a clear business case and obtain the necessary resources for its implementation. Once these are in place, it becomes possible to make a reasonably accurate prediction of the timeline for completing the transformation.
In the public sector, implementing similar transformations may require approval at different levels of the organizational hierarchy. Legislative changes may be difficult to pass, budget allocation may be uncertain and take a lot of time due to rigid annual budgeting procedures.
In the public sector, digital transformation has wide-ranging implications that must be considered holistically as part of any reform that involves change management:
Rules and regulations might need updating to enable digital options; and facilitate the realization of human rights in the digital domain, which in turn will increase users’ trust (citizens, stateless persons, and foreign nationals residing in the state) in the platforms.
Institutional roles may need realigning.
Staff skills and culture will need transitioning.
Citizens expect seamless services but lack an understanding of government roles and responsibilities.
All these aspects should be considered and planned for a successful transformation.
4.1.2 Functional Similarities
Organizations in the public sector share basic functions but differ in their mandates. For example, registrar functions, document management, and case management are similar across all domains but can vary in detail.
This similarity allows the use of common building blocks for different needs while aligning procedures in specific aspects. Similar administrative functions may have different procedures, so technical solutions must align with governance and legal frameworks.
A comprehensive study of service and system design must be conducted before any building block can be deployed.
4.1.3 The Role of Legislator
Often, implementing a desired innovation is hindered by outdated or overly strict regulations. This highlights the importance of having effective policy and regulatory frameworks in place that can facilitate and encourage modernization and innovation. The qualitative aspect of a state digital transformation is linked to ensuring that the transition to a proactive, citizen-centered state incorporates human rights.
4.1.4 Horizontal Cooperation
Ministries and agencies today are quite independent and will remain such for the observable future. They are acting based on different legal acts, which might have different legal requirements for data processing and management.
When changes affect multiple ministries, communication should go through the highest level of the chain of command, such as ministers or the Cabinet of Ministers. It would be beneficial if a central coordinating body for digitalization was situated near the centre of the government. Even if lower-level cooperation is possible through the legislative framework, it is still more time-consuming than activities within a single organization.
The whole-of-government strategy does not imply that the entire government is a single organization. Rather, the strategy and goals should encompass the whole of government. Innovation and deployment of solutions will still happen within specific organizations that have received a designated budget.
4.1.5 Digital Organisation
In traditional public administration, critical capabilities of digital transformation and digital service delivery are missing.
Those capabilities should be presented in the following areas:
Management & Architecture
Digital Services
Data-driven decision-making
Digital Co-creation
In the sections below, we describe the capabilities and maturity level required for the digital transformation of a public sector organization.
4.2 Management & Architecture
4.2.1 Management
Digital organisations differ from traditional public sector organisations and, as such, require different management practices for successful functioning. This does not necessarily mean that managers need to have a computer science degree or similar qualification, but rather that management practices should be adapted to consider the significant digital infrastructure present in the organisation. Process management, operational costs, and risks are also different in digital organisations, and therefore, staff skills need to be adjusted accordingly. Additionally, stakeholders in digital organisations are also distinct, and management practices should reflect this.
Who decides?
First among them is the widespread belief that digitalisation is a task for the IT department of a given organisation. Decision makers delegate the challenge to the technical department, whose primary task often is to take care of IT hardware, software, and connectivity and who administers the internal network if it already exists. These are all necessary tasks; however, the digitalisation challenge is about changing the business processes, which is a management-level task.
Thus, a digitalisation project should be owned by the management. It is their business processes that would undergo change.
How are changes done?
The next challenge is integrating a digitalisation project into the organisation's broader administrative framework. It is insufficient to provide funding for its implementation; there must be communications to departments responsible for legal issues, PR, HR, etc. IT departments are of a technical nature, and often, they are not accustomed to communicating with stakeholders. This can put the project under additional strain.
It is crucial to analyse and address change management issues on an organizational level to identify and solve cross-cutting issues beyond the implementation of a technical solution and reduce inevitable tensions that arise with the adoption of new ways of doing business.
In the context of such change management, it is essential to understand that while the private sector can align everything with the goals defined by leadership, government organizations must follow rules often reflected in laws that are not easily changeable, adoptable, or ignorable.
How is communication done?
There are clear steps that management should implement to advance change management on an organisation level.
Create a vision statement in human language, i.e. not just bullet points but what the goals are and how different users would benefit from the digital project that is planned to be implemented.
Get approval from the top-level leadership, including whenever necessary on a political level.
Create events to talk about it, preferably in a semi-formal environment that allows anyone to express their reactions because the pain points for implementation would come out of this.
Approach key middle-level managers separately to recruit them to be supporters of the project.
Institute clear communication protocols between the digitalisation project and legal, HR and PR departments to avoid non-IT related misunderstandings during the implementation period.
When necessary, agree on training and awareness events.
Map potential stakeholders outside the given organisation and seek to engage them in a similar fashion.
All these actions are the responsibility of the organization's management and not the IT department's area of expertise or responsibility.
Chief Digitalisation Officer (CDO)
In every public sector organization, there should be a Chief Digital Officer (CDO) who is part of the top management. The CDO should have a strong background in business and digital transformation to combine these practices and support strategic management toward more effective digitalization.
4.2.2 Architecture
An organisation in the digital age is not merely a social construct. It is, as before, a well-structured entity comprising of people, policies, and an internal culture. However, it is also a complex technological system that involves new operational methods and inherent risks. To manage such a techno system effectively, one must clearly understand its elements, roles, and dependencies.
Knowledge gained from development projects alone does not suffice to comprehend an organisation's resulting technology landscape. Hence, it is crucial to practice systematic organisational architecture management to gain visibility.
Architecture is an abstract description of a system's entities and the relationship between those entities 13. Only if you have an up-to-date organisational architecture description can you plan maintenance costs, seek potential business process improvements, design service-level quality monitoring systems, etc.
4.3 Digital Services
Service delivery is done differently in digital organisations compared to traditional public service deliver
Where is business value from digital?
Governments worldwide are embarking on digital transformation journeys to enhance efficiency and service delivery. Yet, optimising government transactions goes beyond merely digitising documents and constructing IT systems.
Digital transformation requires a comprehensive strategy that encompasses legislation, regulations, institutional agreements, workforce capabilities, and a shift in cultural mindset.
Business value from the transformation can be achieved only if the whole operating model is adequately adopted for the digital era.
Early agreements and collaborations can speed up digitisation. Laws must support digital governance principles. Again, a phased roadmap is essential for successful implementation.
Is it Digital-first?
To streamline transformation, there is a pressing need to modernise overarching public procedural laws that define general rules for public administration, organisations, and officers. Instead of amending laws for each individual organisation and procedure, a holistic public procedural law can set the foundational principles vital for a digital public administration.
On the regulatory spectrum, digital data and documents should be accorded the same validity and protection as their paper counterparts. For instance, electronic signatures and documents should be legally equivalent to handwritten signatures and paper contracts. By updating laws to embody these digital equivalence principles, the pace of modernisation can be accelerated.
Uniform cybersecurity and data protection standards for government systems should be established.
How do we get Digital Literacy?
Promoting digital literacy among public officers and citizens is paramount in today's digital age. As governments and public institutions transition towards complete digitalisation, it's essential that both public officers and the general populace are well-equipped with the knowledge and skills to navigate this new digital landscape. Here are some training activities, with examples, that could be beneficial:
Digital Literacy Workshops for Public Officers
Scenario-based Training: Use real-life scenarios to demonstrate the implications of complete digitalization. For instance, a simulation could show how a digital system might streamline the approval process for a public project, highlighting both the advantages and potential pitfalls.
Hands-on Computer Training: Offer courses on essential software and tools that public officers might use in their daily tasks, from data analysis tools to project management software.
Digital Etiquette Seminars: Educate officers on the dos and don'ts of digital communication, emphasizing the importance of clarity, brevity, and respect.
Mindset Shift Sessions: Organize sessions focusing on digital transformation's benefits, addressing common fears and misconceptions. Explain the user-centric approach to service design and illustrate how it differs from the traditional officer-centric approach.
Cyber Hygiene Seminars: Offer seminars on basic cybersecurity practices, such as how to recognize phishing emails, the importance of regular software updates, and the dangers of public Wi-Fi.
Executive Digital Bootcamps: Organize intensive training sessions covering digitalization's strategic implications, ensuring that top-level decision-makers understand the broader impact on the organization.
Cybersecurity Tabletop Exercise for Top Management: These exercises simulate cyber incidents in a controlled environment, allowing management to test response strategies and improve decision-making processes without the risk of real-world consequences.
Human rights in digital era and the digital transformation of law Seminars: Train politicians and legislators in new knowledge areas of digital law transformation and governance; ensure that the strategic legal vision for a digital state is citizen-centered and takes into account the context of modern technologies (generative artificial intelligence, Industry 4.0, Web 3.0) and their impact on human rights.
Digital Literacy Workshops for Citizens
Hands-on Sessions: Organize practical sessions where citizens can set up their digital profiles, learn to recognise secure websites and practice safe online behaviours. Additionally, the sessions can include workshops aimed at building trust in digital platforms. This will help ensure that citizens are aware of their digital rights and understand how the government is working to implement them.
Digital ID organisation and Authentication Workshops: Use simple, relatable examples to explain concepts like digital tokens, two-factor authentication, biometric verification, and password management.
Change Management Programs
Feedback and Discussion Forums: Create platforms where public officers and citizens can voice their concerns, ask questions, and provide feedback on the digital transition.
Digital Champions: Identify and train enthusiastic individuals about digital transformation to act as role models and assist their peers in adapting to new technologies.
Regular Updates and Communication: Ensure that all stakeholders are kept in the loop about upcoming changes, the reasons behind them, and the benefits they'll bring. Ensure that all stakeholders consider the priorities of implementing human rights in the digital era in new governance systems.
By implementing such training activities, governments can ensure a smoother transition to digital platforms, with a workforce and citizenry that are skilled, confident, and comfortable in the digital realm.
The change management programs and training are instrumental in fostering this cultural metamorphosis.
4.4 Data-driven Decisions
Often, digital transformation is perceived as a project of implementing some technology. However, it is an activity which is enabling more efficient data management. So, the focus should be shifted from the technology to the question, what can we do with new data? That will help us adopt a data-driven approach to thinking and decision-making.
Adopting a data-driven decision-making approach involves integrating data usage into business processes at all levels of an organisation.
Here's a step-by-step guide on how an organisation can start with data-driven thinking:
Define clear objectives that align with the overall business strategy for effective data-driven decision-making.
Develop a data strategy for crucial decision-making.
Implement data governance policies and assign data management responsibility.
Upgrade data infrastructure to handle various types and volumes of data. Use data warehousing, data lakes, and other relevant technologies.
Collect and integrate relevant data from internal and external sources for a comprehensive view.
Establish data quality standards and processes, and regularly clean and validate data for accuracy and reliability.
Train employees to enhance data literacy and teach decision-makers how to use and interpret data.
Deploy analytics tools that fit your needs and offer advanced capabilities.
Define and track KPIs that align with objectives, and establish benchmarks for performance measurement.
Encourage data-driven decision-making culture and reward contributors.
Ensure leadership commitment to data-driven culture.
Lead by example in data-driven decisions.
It is recommended to start with small, manageable projects to showcase the value of data-driven decision-making. By doing so, your organisation will learn from successful projects and improve your approach. Further on, iterate and improve continuously by evaluating data-driven processes, learning from successes and failures, and refining your approach.
By following these steps, organisations can gradually shift towards a more data-driven decision-making culture, leveraging insights to enhance efficiency, innovation, and overall business performance.
4.5 Digital Co-creation
The digital transformation of one organisation is more efficient and has a higher chance for success if it is done within the existing local digital ecosystem. Such an ecosystem should include experienced local developers, successful private digital companies, and existing national digital infrastructure. Like that, the engagement of the whole society in the public sector's digital transformation is vital.
The following is the list of critical areas that directly impact the transformation's success.
Budget
Budget allocation to public sector organizations is done in parliament or similar institutions. Thus, the business value of digital transformation initiatives should be explained to the public. Without that, politicians will not be able to allocate resources.
Acquiring resources for a significant initiative usually involves obtaining funds from the annual state budget, which has a planning phase 9-10 months before the beginning of the next financial year. A solid business case must be prepared to apply for budget funds, and decision-makers must be convinced of the initiative's feasibility. This process can take 2-3 years before funds are received for the idea you got today. Also, financial rules often prevent transferring funds to the following year, causing potential delays and unspent budgets.
GovStack policy recommendations are:
Multi-year budgeting with in-year transfer authority
Dedicated budgets for enterprise-wide platforms
Outcome-based budgeting models
Exceptional models like "Digital First" funds
Donor-based funded projects should have state budget commitment for long-term sustainability and maintenance.
Procurement
The public procurement process often hinders the selection of optimal technology vendors and solutions for digital systems.
The first obstacle is the lack of capacity to identify innovation areas and design feasible projects that can bring tangible results for citizens and businesses. The GovStack attempt to analyse best practices and materialise such practices into architectural building blocks will help overcome that.
The next issue is overly prescriptive contracts, and low-risk vendor choices lead to a lack of innovation.
GovStack policy recommendations are:
Flexible procurement methods like pre-commercial procurement
Outcomes-based requirement definitions
Engaging innovative local SMEs/start-ups
Joint procurement across agencies
Project decoupling into smaller logical components and making project into a framework contract with multiple vendors
IT Project
Many digital government projects fail (20/80) to achieve expected benefits and are plagued by time/cost overruns. Key challenges are the lack of technical capabilities, poor risk management, and weak governance.
GovStack policy recommendations are:
Start small and build organisational capacity iteratively.
Robust project governance frameworks.
Stage-gate models with agile iterations.
Government-shared services for technical capabilities.
Reusability and customizability to match business process.
Staffing should follow the definition of work processes: First, one should identify the needs for a process or activity and then hire people to execute that. One should not just “put people to organisational unit boxes”.
Maintenance
When acquiring an IT system, the initial cost typically accounts for only 10% of the overall Total Cost of Ownership. Once the system is implemented, it becomes an asset that helps achieve business objectives and is integrated into the organisational digital infrastructure. That also increases complexity and creates dependencies. Therefore, it is important not only to allocate 15-20% of the initial cost for annual maintenance, but also plan for decommissioning the system after 5-7 years, when its technological fitness will degrade.
GovStack policy recommendations are:
Central shared services for common applications
Improve architecture management practices.
Legacy modernization programs
Develop business continuity programs and manage operational risks.
4.6 Organisational Taxonomy
During PAERA preparation, we analysed public administration organizations of several countries using EA techniques. We identified key business services and the required processes for those services. Additionally, we identified the applications needed to support the business processes. Complete information about the outcomes of this analysis is in Annex 1 in section A1.2 below.
An important observation from this analysis is that despite a seemingly large variety of organizational types in the public sector, it is possible to categorize them into three major types:
The Policy Development Unit is responsible for developing and implementing policies. A typical example is a different ministry.
The regulatory Agency is responsible for regulating specific sectors of the economy. A typical example here is Data Protection Authority, Business Licensing Authority, etc.
A state authority with a complex set of responsibilities and several performance outcome areas. We refer to such organisational type as a Service Delivery Authority. A typical example here is a tax department, police department, etc.
We know that international government functions Classification COFOG identifies 10 government functions, which are further divided into 69 functions. For every function, there are several institutions on different levels of a public sector structure. Like that, there are hundreds and thousands of different institutions even in middle-sized countries. However, from the automation point of view all them can be generalised into 3 abovementioned types.
Following is a brief description of those types (for details see Annex 1 in section A1.2 below). To describe those organizational units, we use Business Canvas’s format.
Policy Development Unit (PDU)
Function: Responsible for policy analysis, development, and monitoring.
Value Proposition: Policy development, legislation maintenance, stakeholder communication.
Customer Interface: Engage with demographic groups, economic agents, NGOs, and international organizations.
Strategic Partners: Parliament, government, media, industrial unions.
Required Applications: Document Management, Content Management, Analytics, and other general office automation tools.
Regulatory Agency (RA)
Function: Implementation and enforcement of regulations in specific functional area.
Value Proposition: Policy implementation, license management, supervision of licensees.
Customer Interface: Engage with economic agents and communities.
Infrastructure: Compliance management, digital service delivery, risk management.
Strategic Partners: Related MDAs, media, and industrial unions.
Application Architecture by main business functions:
Forms & Procedures Design: User-friendly forms and automated workflows.
Application Capturing & Processing: Efficient application lifecycle management.
Payment & Refund Processing: Secure financial transactions.
Decision Management: Transparent decision-making processes.
Inspections Management: Efficient inspection scheduling and compliance tracking.
Legal Affairs & Litigation: Management of legal documents and cases.
Service Delivery Authority (SDA)
Function: Complex service delivery with extensive customer interaction.
Value Proposition: Policy enforcement, compliance monitoring, public awareness.
Customer Interface: Engage with economic agents and communities.
Infrastructure: Performance management, service delivery, IT management.
Strategic Partners: Responsible PDU, related MDAs, media, industrial unions.
Application Architecture by main business functions:
Registration & Profile Management: Secure user registration and profile management.
Customers & Users Management: Comprehensive user management and support.
Online Learning & Training: Interactive and accessible learning environment.
Customer Accounting: Efficient transaction and account management.
Compliance & Enforcement: Monitoring and enforcing compliance.
Data Management: Advanced data services for transformation and monitoring.
After creating application architectures for different types of organizations, we realized the following:
PDU requires a general office automation environment, which is similar to what knowledge-based service providers in the private sector need.
RA requires everything that PDU needs, plus a basic digital service delivery platform.
SDA requires everything that RA needs, but at a more robust and industrialized level.
By integrating these architectures and identifying reusable components, we can create functional building blocks that accompany infrastructural building blocks. This integration can help public administration achieve greater efficiency, standardization, and service delivery responsiveness, benefiting citizens and stakeholders.
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