Digitalization of public administration: When does optimizing public administration make more sense than modernizing it?

🏢 Companies in Germany have an average of around 200 contacts with public administration per year, and this number is constantly increasing. This multitude of interactions often leads to significant bureaucratic costs, especially when administrative processes are not fully digitized. Reducing bureaucracy is therefore one of the top three issues for businesses, at the state, federal, and EU levels.

However, when it comes to reducing bureaucracy, the legislative power and the suffering authorities and administrations are getting in their own way:

In Germany, the digital transformation of public administration was primarily initiated by the Online Access Act (OZG), passed in 2017, which aimed to implement digital access to administrative services by the end of 2022. It received broad support in the Bundestag in February. Today, however, a majority in the Bundesrat surprisingly rejected the bill. The necessary user-friendly online portals and common standards have so far (as of early April 2023) only been partially implemented. In light of the sluggish progress of administrative digitization in Germany, the digital association Bitkom is calling for a legal entitlement to digital administration in the revision of the Online Access Act. Meanwhile, a new version of the Online Access Act (OZG 2.0) has been introduced. It has passed through all stages of the legislative process, and the bill was ultimately rejected by a majority of the Bundesrat on March 22, 2024. It is to be renegotiated (as of June 2024).

There is a clear need to fully exploit the efficiency potential of digital administrative solutions for the German economy. The task is to promote and implement efficient digital administrative processes for businesses. The question arises as to when administrative optimization is more sensible than a complete administrative modernization.

🔍 Administrative optimization vs. administrative modernization

Administrative optimization means analyzing and adapting existing processes to make them more effective and efficient. This can be achieved by introducing specific digital tools to simplify and accelerate individual steps. Examples include electronic document management, automated appointment scheduling, and the digitization of form processes. These measures are often faster and more cost-effective to implement than a complete modernization.

Administrative modernization, on the other hand, involves a more comprehensive redesign of administrative processes. This could mean the introduction of entirely new systems and technologies that revolutionize existing structures and ways of working. Modernization projects are generally longer-term and require greater investments in new technologies and staff training.

✨ When is administrative optimization useful?

In situations where existing processes already function relatively well and specific bottlenecks have been identified, optimization can be the most efficient solution. Minor adjustments and the integration of digital solutions can often bring about rapid improvements without requiring major structural changes. This is particularly suitable for specialized administrative tasks where clear problem areas can be identified and addressed in a targeted manner.

For example, introducing a digital form system in a department heavily reliant on paper documents can significantly reduce processing times and error rates. The use of electronic signatures or the automation of decision-making processes can also offer crucial advantages.

🔄 When is administrative modernization necessary?

A comprehensive modernization is necessary when existing systems and processes are so outdated or inefficient that minor adjustments can no longer bring about any noticeable improvement. Often, existing structures are no longer able to keep pace with the demands of the modern digital economy. In such cases, a fundamental overhaul of the entire process landscape is required.

One example of this could be the complete implementation of a digital platform for all of a company's administrative interactions. This would mean that companies could handle all interactions with government agencies digitally on a central platform – from application submission to processing and approval. Such systems require extensive integration of various administrative departments and a redesign of existing workflows.

💻 The potential of digital administration

The full potential of digital administrative processes lies in their ability to increase transparency, efficiency, and user-friendliness. Harmonizing and standardizing processes reduces misunderstandings and errors, leading to faster and more reliable results. This allows companies to save resources and focus more on their core tasks.

For policymakers and administrative authorities, this means examining legislative developments early on and promoting solutions that bring tangible benefits to businesses. Political efforts must aim to identify and eliminate or adapt hindering regulations.

🤝 Practical implementation through cooperation

Another important aspect is the collaboration and exchange of knowledge between all stakeholders involved in the digitization of public administration. By leveraging specific knowledge about the needs of businesses, administrative processes can be implemented pragmatically and effectively. This requires close cooperation between public administrations, business associations, and the companies themselves.

The provision and application of a range of digital administrative solutions in collaboration with other partners is crucial. This can range from the use of shared digital platforms to cooperative development projects to create tailored solutions that meet the specific needs of businesses.

🔧 Use of digital technologies

Both administrative optimization and administrative modernization have their place, depending on the specific circumstances and challenges. Short-term optimizations can bring about rapid and cost-effective improvements, while long-term modernizations are necessary to enable profound structural changes. Combining both approaches can help make public administration in Germany more efficient and business-friendly.

The consistent use of digital technologies and close collaboration among all stakeholders can achieve the goal of a lean and efficient administration that meets the needs of the economy. Early and targeted political support plays a crucial role in the successful implementation of these strategies.

📣 Similar topics

• 📊 200 administrative contacts per year: How companies suffer from bureaucracy
• 💼 Digital instead of paper: German companies demand efficient administration
• ⚙️ Administrative optimization vs. modernization: The best strategy for Germany
• 🌐 Digital administration: A must for Germany's economy
• 🔄 Fast and cost-effective: Advantages of administrative optimization
• 🏢 Reducing bureaucracy costs: How digitalization can help
• 📉 Unlocking efficiency potential: How digitalization relieves the burden on companies
• 💡 Cooperation as the key: Administration, business and politics working hand in hand
• 🤝 Cooperation for streamlined administration: Germany's path to the future
• 💻 From paper to platform: Efficiency through digital administration

#️⃣ Hashtags: #AdministrativeDigitalization #BureaucracyReduction #AdministrativeOptimization #AdministrativeModernization #DigitalAdministration

Why it's difficult for authorities, towns & municipalities: Administrative optimization and modernization for urban & rural areas – Image: Xpert.Digital

Public administrations are subject to strict regulations, laws, and bureaucratic processes. This serves to ensure transparency, accountability, and fairness and equal treatment. This strict regulation can slow down modernization processes. Businesses often have more flexibility and can react more quickly to market changes. They operate in a regulated but more dynamic environment, which allows them more room for innovation and adaptation.

More about it here:

• Under strict regulations and limited scope: The challenges of public administration

🏢 The decision between administrative optimization and administrative modernization depends on various factors, including the current needs, resources, and objectives of the administration. Here are some situations in which one of the two strategies might make more sense:

🔍 Administrative optimization

When it makes sense:

1. Short-term results are needed

When rapid improvements are needed to increase efficiency or solve urgent problems.

2. Limited resources

When resources (financial means, personnel, time) are limited and no major investments in new technologies or profound changes are possible.

3. Existing structures

If the existing administrative structures are essentially functioning well, but minor inefficiencies or process bottlenecks exist that can be resolved through fine-tuning.

4. Introduce best practices

When it comes to improving existing processes by introducing proven methods and procedures, such as those described by KAIZEN (continuous improvement).

More about it here:

• KAIZEN: Continuous improvement and change in public administration

🔄 Administrative modernization

When it makes sense:

1. Long-term and sustainable improvements

When fundamental and long-term changes are sought in order to be prepared for future challenges.

2. Technological upgrade or conversion

When outdated IT systems and technologies exist that need to be replaced by more modern and efficient solutions.

3. Structural problems

When there are major structural deficiencies that cannot be remedied by optimization alone and profound changes are necessary.

4. New requirements

When new legal requirements or societal expectations of the administration exist that necessitate the introduction of new processes and technologies.

🌟 Administrative Optimization vs. Administrative Modernization: A Guide

🚀 When deciding between administrative optimization and administrative modernization, the specific situation and objectives of the authority, municipality, town, city, or state play a crucial role. Here are some further aspects that should be considered in the decision-making process:

1. Timeframe 🕰️

• Administrative optimization: Ideal for short-term improvements and quick wins. Existing processes and structures are analyzed and optimized to achieve efficiency gains.
• Administrative modernization: Suitable for long-term projects involving profound changes and upgrades. These projects typically require more time for implementation and adaptation.

2. Resources 💡

• Administrative optimization: This generally requires fewer resources, both financial and human. Existing structures and technologies can often continue to be used.
• Administrative modernization: Requires extensive resources, including investments in new technologies, training, and possibly external consulting.

3. Goals and Results 🎯

• Administrative optimization: Aims at rapid and measurable efficiency improvements, such as shorter processing times or reduced operating costs.
• Administrative modernization: This aims to fundamentally renew public administration and make it sustainable in the long term. This often includes the introduction of new technologies, the restructuring of organizational structures, and adaptation to new legal requirements.

4. Technological requirements 🖥️

• Management optimization: This typically leverages existing technologies and improves their application. It may also include minor technological upgrades.
• Administrative modernization: Often requires the implementation of new technical systems, such as modernized IT infrastructures, automation solutions, or e-government platforms.

5. Structural changes 🏗️

• Administrative optimization: Usually no or only minimal structural changes. The focus is on process improvements and efficiency gains within the existing structure.
• Administrative modernization: Often, sweeping structural changes are necessary to adapt the administration to modern requirements. This can include a reorganization of departments and tasks.

6. Resistance and Change Management 🌐

• Administrative optimization: Generally encounters less resistance because it involves incremental improvements. Change management is important, but often less intensive.
• Administrative modernization: Higher potential for resistance, as profound changes often meet with skepticism. Comprehensive change management is essential here to ensure employee acceptance and participation.

🔍 The choice between administrative optimization and administrative modernization should therefore be carefully made based on the specific needs, resources, and goals of the respective institution. A thorough analysis of the current situation and a clear definition of the desired results are essential.

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