“The digital transformation has only just begun”

The road to digital transformation is long, and there are many pitfalls. Especially in the public sector, explains Gideon Mekonnen Jonathan in his PhD thesis. Photo: Åse Karlén.

25 years ago, Netflix was a company that rented out DVD movies. Physical discs were packed in envelopes and mailed to American homes. Today, Netflix is a multinational company with a completely different business model and reach. Subscribers all over the world consume movies and series, and Netflix also produces its own material.

“Netflix is an example of a company that has succeeded in its digital transformation. They have added new customer value and changed the market”, says Gideon Mekonnen Jonathan, who presented his PhD thesis at the Department of Computer and System Science (DSV) in May, 2023.

The majority fails

But not all organizations are so fortunate. In fact, some 70–80 percent of all projects that are supposed to lead to digital transformation fail. And public sector projects have the highest failure rate.

The reason behind this lies in their organizational culture, Gideon Mekonnen Jonathan explains. Public organizations are naturally less risk-taking and change-oriented. They work for the good of society and must adhere to stricter regulations, for example around integrity, security and procurement.

Many stakeholders are involved, which can make the decision-making processes lengthy. Conditions may change because of political decisions. And it is not certain that managers in the public sector can hire the skills needed for a digital transformation.

“All of this adds up and explains why public organizations often fail in their digital transformation”, says Gideon Mekonnen Jonathan.

Skatteverket has changed its organization radically

But there are exceptions. Skatteverket – the Swedish tax agency – is one.

“Skatteverket has changed its organization radically with the help of digital tools. They have simplified complex processes and offer citizens new services.”

“The agency has introduced electronic identification so that users can access the services wherever they are. Lead times have been shortened and the tax agency shares relevant information with other agencies.”

Risk-taking and flexibility are key factors

Jonathan has identified a number of factors that influence digital transformation in the public sector. His findings concern both internal factors relating to the organization’s structure, culture and agility, and external factors in the organization’s environment. Leadership is of great importance.

“You need to have a culture where risk-taking is encouraged, and where communication is open and transparent.”

“How flexible are the employees? Can they work with new, digital technology? Do they have to spend a lot of time on administration? Are they allowed to collaborate and network across departments? These are all important factors”, says Gideon Mekonnen Jonathan.

Sweden has come a long way

Organizations also need to have functioning external communications, for example with IT suppliers and other agencies.

“In a global perspective, Sweden has come a long way and we have political support for digital transformation. But at the same time – the digital transformation has only just begun! Much remains to be done in the public sector”, says Gideon Mekonnen Jonathan.

A longer version of this article is available in Swedish

Text: Åse Karlén