Government agencies around the world are under internal and external pressure to become more efficient by integrating digital technologies and processes into their daily operations.
For many public sector organizations, however, digital transformation has been bumpy. In many cases, agencies are trying to streamline and automate workflows and processes using outdated systems development approaches. These methods make it more difficult for direct connections between citizens and governments via Internet systems. They also prevent IT organizations from quickly adapting to ever-changing system requirements or easily combining information from disparate systems. Despite the emergence of productivity-enhancing technologies over the past decade, many government institutions continue to cling to old and familiar ways of working.
A few, however, have succeeded in shifting mindsets internally, getting rid of outdated approaches to developing new processes and systems, and creating new ones. Above all, they have embraced new techniques such as agile development and succeeded in accelerating digital transformation in key areas of their operations.
The Danish Business Authority is one such organization. This agency is responsible for registering companies doing business in Denmark. With the global economy faltering in 2009, he decided he could no longer maintain a largely manual check-in process. He believed that replacing mailed paper forms with a simple online process was crucial to keeping the country’s economy buoyant. Specifically, a new digital registration process would show domestic and foreign companies that doing business in Denmark is easy, help the government track money laundering and better identify companies that have failed to report. income or paid taxes.
Initial efforts to build the digital check-in system were stymied by the agency’s traditional waterfall approach to systems design and development. But the project gained momentum in 2011, when the IT organization deployed an agile approach to systems development: accepting new system requirements late in the development process, providing software for parts of the system at an early stage to resolve design bottlenecks and have a team of business people and software developers, rather than throwing requirements over the wall between functions.
By 2014, the system was nearing completion, and by 2015 the number of listings requiring agency support to complete had dropped from 70% to 30%. More broadly, the registration system has helped Denmark rank among European countries by helping new businesses get started. How did the Danish agency go from waterfall to agile? This article describes the stages of the agency. The story provides important lessons for government agencies that need to build critical digital systems.
Restarting the systems development approach
The Danish Business Authority sought to overhaul its business registration system in 2009, using the same waterfall approach to systems development it had used for years. The waterfall method is so named because a plot of its steps looks like a series of waterfalls, from requirements gathering to process analysis to coding and so on. The development team cannot proceed to the next stage until they have completed the previous one.
But in 2011, this approach was not working. The system planning team struggled to identify complex and ever-changing requirements. Team members were only part-time involved in the project; each had other systemic priorities. This dynamic has contributed to long decision cycles, even for minor issues. Meanwhile, big decisions could take weeks to make because senior agency officials had other priorities and because the issues to be resolved were so complex. The team was mired in analysis paralysis.
A new chief executive was appointed to lead the agency in 2011 and has become a catalyst for change. One of his first priorities was to get the digital recording project back on track. The review of the initiative by the CEO and the leadership team revealed the potential benefits of developing agile systems, especially if the development approach was based on seven essential elements: customer focus; strong governance and rapid decision-making; a computer architecture allowing progressive evolutions of the system; a clear roadmap for system development comprising small, manageable projects; an organization that embraces agility and the processes that support it; use of several partners, rather than relying on just one or two; and a culture of trust.
The agile approach has proven to be much more effective than the waterfall method. Focusing on customer needs, for example, gave project team members clearer priorities and a common vocabulary. Initially, the digitization program had largely focused on the agency’s internal registration requirements and less on those of Danish companies that would use the system. This all changed as part of the agency’s agile development approach. Rather than forcing companies to enter registration information into 14 different systems, for example, the agency designed a single system, which saved companies considerable time.
In a significant governance change, the responsibilities of the CIO were reshuffled so that this executive could devote more time and attention to the digital initiative, and the CEO also became a member of the project governance team . The project team held weekly meetings to discuss their progress, which kept the multitude of sub-projects on track as issues were continuously monitored. These weekly sessions, chaired by the CEO, allowed the project team to bring outstanding issues to the table and resolve them much more quickly.
The agency also introduced a more flexible IT architecture for the registration system, dividing the system into more than 30 components. New features could therefore be implemented and released piecemeal, rather than all at once, reducing the risk and complexity of implementing system changes. The architecture also required a single database, eliminating the need for agency staff to manually re-enter information from one database to another. There is now a “source of truth” with all information about a company stored in one place. Additionally, internal and external users (companies looking to do business in Denmark) all see the same interface. There is a general atmosphere of collaboration: the members of the digital recording project team include business and IT professionals, as well as vendor staff. They are located in one place, which reduces the risk of miscommunication and allows team members to speak up early and often.
The digital recording system is already having a substantial impact. For example, the average time taken to resolve customer issues over the phone fell from 16 minutes to 5 minutes, and the time taken to train new employees fell from five months to one month. Additionally, the system has helped Denmark maintain its image on the world stage. The World Bank compiles an index on the ease of doing business in 189 economies. In 2016, Denmark ranked third on the ease of doing business list, behind two countries outside of Europe (Singapore and New Zealand).
Government system specifications are a rapidly changing target today, and many traditional systems development approaches simply cannot keep up with such rapid changes. In this environment, an agile approach to design and development can help government and other organizations transform their operations to facilitate digital technologies and introduce major efficiencies and service improvements for citizens.
Download the full report on which this article is based, From Waterfall to Agile: How a Public Sector Agency Successfully Changed Its System Development Approach to Go Digital (PDF–904 KB).