Organizational Barriers for Government Digital Transformation: A study of Dutch local government

(1)

Organizational Barriers for Government

Digital Transformation

A study of Dutch local government

Name: Michael Vos

Student number: 1738593

Master track: Public Administration: International and European Governance University: Leiden University

Thesis supervisor: Dr. S.N. Giest

(2)

1

Introduction

The world has seen a radicle change in the way that we communicate and process information on almost every front since the introduction of the internet. Digital technologies open a world of possibilities. Personal computers (PC’s) replaced the typing machine and were placed in almost every household. Around 2007, the first modern smartphones were introduced and are now a necessity for functioning in our daily lives. Anno 2018, being stuck at a desk behind a PC is no more the default way of working. With different devices using cloud technology, people work mobile and are no longer bound by place nor time. It goes without saying that the world and the way people work within it, has changed rapidly. We will only experience more and faster change with the promise of new technologies such as Artificial Intelligence (AI), Big Data Analytics and Quantum Computing. The same goes for the way that governments function as an organization and how they interact with citizens and other stakeholders. It is not even thinkable anymore to have a functioning government without the use of digital technologies.

This change is also being felt by the people who work in government organizations. A study by Deloitte (2015), including 1.200 government officials from 70 countries, found that three out of four government officials feel that digital technologies are disrupting the public sector. Employees in the public sector at almost every level of government work with (new) digital technologies. However, the same study reveals that 70 percent of the same group feels that the public sector lacks behind compared to the private sector in terms of digital capabilities. Another recent study by techUK (2017) shows that more than half of the civil servants in the UK government believe that a lack of IT-skills is the largest barrier for more technology adoption within government. This shows that digital transformation for government organizations can be challenging.

This challenge is also felt in The Netherlands. The Dutch ‘Studygroup Information Society and Government’, in their advisory report ‘Make it happen’ (Studiegroep Informatiesamenleving en Overheid, 2017), states that Dutch governmental organizations lack behind when it comes to digitization. This is a relatively recent report about the state of digitization in Dutch government organizations, but it is still relevant today. The report explains that the government needs to redefine its role in the information society and that the digital transformation of the government needs to be accompanied by organizational change. This thesis will make a contribution to this challenge by focusing on the organizational aspects of this digital transformation.

Digital transformation requires organizations to adopt new (digital) technologies. This thesis will focus on the adoption of new technologies within government organizations, specifically within Dutch municipalities. The following research question will be central to this study: ‘How do

organizational barriers affect the adoption of new technology within municipalities?’ The main

goal of the research is to explain whether and how organizational factors affect the adoption of new technology within government. In short, it focusses on uncovering the underlying mechanisms of the effect of possible organizational barriers on the adoption of new technology.

(5)

4 To answer the research question, four Dutch municipalities will be chosen as the cases for this research. The data from these cases will be collected by using semi-structured interviews as the main source of data collection, complemented with supporting documents from the organizations about the digitization of the respective municipalities. The transcripts of the interviews and the documents will be coded and analyzed by using comparative analysis methods.

Relevance and context

During the last two decades, many studies about governments’ use of technology focus on digital services to citizens and the adoption of technology by the citizens themselves. This covers only the digital front office and services of the government towards its citizens and excludes the necessary digital back office of the government. For example, a study from Savoldelli et.al. (2014) focusses on the barriers of the adoption of e-government services by citizens. Another study by Meijer (2015) expands the scope by focusing additionally on the barriers of adoption on the side of the government. But again, this study is still limited to the services towards citizens, specifically on a collaborative system between the police and citizens in The Netherlands. During the last decade, more research has been focused on the use of technology within the government itself because of ‘criticisms to e-Government for not making any structural changes and by focusing on

the operational aspects instead of on strategic changes’ (Janssen et.al., 2013, p. 2). This critique

on e-Government will be discussed in more detail later in the theory chapter. This thesis will add value to the e-Government literature, by focusing on the use of technology within government itself.

The results of this study also have the potential for governments to understand how their organizational structures affect the progress of the digital transformation of governments. As shown in the examples earlier in the introduction, governments seem to lack behind in term of digital capabilities. The practical relevance of this research in the Dutch context is even stressed by the Dutch ‘Make it happen’ report mentioned earlier. It is especially relevant for the Dutch municipalities. Not only because the focus of this thesis is on Dutch municipalities, but also because of the recent decentralization of former national competences towards municipalities which creates even more challenges for these government organizations.

Substance of the thesis

This thesis will be divided into several chapters. First, the theory that will form the basis of this research will be discussed and concluded with the conceptual framework. After this, the research design chapter will start with the operationalization of the theoretical concepts followed by the case selection, the methods of data collection and -analysis, and the validity and reliability of the research design. Third, the results of the data collection will be presented for each case. Fourth, the results of the data collection will be analyzed based on the theoretical framework by using comparative analysis. Finally, the conclusion will briefly summarize the thesis and end with a reflection on the research.

(6)

5

Theory

During the last few decades, many articles have been written about the use of internet and communication technologies (ICT’s) by governments. These technologies have become more and more important and we have become more aware of its impact on individuals, (government) organizations and society. An increased understanding of this has also led to the development of different theories of the use of ICT’s by governments. The most common term for the use of digital technologies by governments is ‘Electronic Government’ or ‘e-Government’ (Grönlund & Horan, 2005). However, as this research area developed, other terms have been proposed by different authors. One of these terms is ‘Transformational Government’ or ‘t-Government’ (Janssen & Estevez, 2013). Although there is a difference in the names of the concepts, transformational instead of just electronic, it is sometimes hard to tell the exact difference between the meanings of the concepts. One of the reasons for this is that both terms have many definitions. These definitions do not always provide enough clarity to determine the differences between the two different terms and how this impacts the practice. Without going too much into detail by providing a thorough theoretical discussion, which requires a separate theoretical study, I will outline the differences between the two concepts which will be used as a theoretical bases for this thesis.

As described in the introduction, the main research question is how do organizational barriers

affect the adoption of technology within municipalities? To answer this question, it is necessary to

investigate how organizational barriers, or organizational factors in general, relate to and affect the adoption of technology. This will be done by outlining the differences between the aforementioned concepts of e-Government and t-Government in which t-Government includes the importance of organizational factors to be able to realize digital transformation in contrast to e-Government. This difference is the core of the theoretical basis for this thesis.

This chapter will be divided into several elements based on the main research question. First, the theoretical scope will be limited to what is understood as ‘technology adoption’ within the thesis and on what phase of adoption this thesis will focus. Second, the basis of the broad theories related to technology within government will be discussed. Here we can see a shift from Electronic Government (e-Government) to Transformational Government (t-Government). Consequently, the theoretical differences of the terms and their practical implications will be outlined. Fourth, the organizational barriers of adoption that this thesis will focus on, will be identified and further explained. To wrap up, the findings of the literature will be concluded.

(7)

6

Adoption of technology

Technology is a broad word and thus entails a large number of different kinds of technologies. The focus in this thesis will be on digital technologies which includes software and hardware. For example, new IT-systems such as office tools, cloud services and data-analytics tools used within the organization will fall within this category. Also, new devices like laptops, tablets and smartphones fall within the scope of this thesis.

Now that the term technology is defined, the term ‘adoption’ will be discussed. As stated at the beginning, the main question of this thesis is: ‘How do organizational barriers affect the adoption

of new technology within government? The word ‘new’ is added to this question because it refers

to new technologies which were not previously in place or used within the adopting organization. Another term which can be used for this is innovation. ‘Innovation’ is also a broad concept. A relevant definition for this thesis is provided by Damanpour and Schneider (2006). They define innovation at the organizational level as the adoption of a new product, service, process, technology, policy, structure or administrative system. What is also added to this, is that the innovation should be new to the adopting unit. To further clarify, this means that it does not necessarily has to be the latest, state of art technology but it only has to be new to the adopting organization or unit. This definition will also be used in this thesis.

Damanpour and Schneider (2006) explain that there are three phases of the adoption of innovation; 1) initiation, 2) adoption decision, and 3) implementation. During the initiation phase, the organization identifies problems or challenges within the organization and becomes aware of the possible innovations that can solve these problems or challenges. Members of the organization evaluate the suitability of these different innovations and then propose its adoption. After this, during the adoption decision phase, the proposed innovations are evaluated by the top of the organization from different perspectives. At the end of this phase, the decision whether to adopt an innovation or not, will be made. After the adoption, the implementation phase starts. In this last phase, the innovation will be put into use with the goal to become ‘a routine feature of the

organization’ (Damanpour & Schneider, 2006, p. 217). This, in general, is how Damanpour and

Schneider describe these phases.

This thesis will only focus on the first two phases. This is because the interest is in the possible barriers that prevent the adoption of new technologies (innovations). Following the phases as described above, this means that this includes the phases before the implementation of a technology. So, these barriers can present itself in both the initiation phase as during the phase of decision-making. Some technologies may not even be proposed because of certain barriers, or the top of the organization sees possible barriers which lead to the decision to not adopt a new technology.

(8)

7

e-Government

While governments started to adopt more technology, the term Electronic Government (e-Government) was introduced in the literature during the Internet Boom in the 90’s (Grönlund & Horan, 2005). Because of the vast amount of existing literature, it is inevitable that multiple definitions of e-Government exist within this literature meaning that there is no single definition (Janssen & Estevez, 2013, Meijer & Beckers, 2015). As described before, digital technologies are widely used in all kind of processes and thus also by governments. Because of this, the term e-Government can be used for many digital technologies and processes. I will discuss some of the most common definitions to illustrate the broad range of the different definitions and their area of application. After this, I will try to formulate some of the common grounds of the definitions to provide a clear description of the term e-Government. It is important to note that the goal of this thesis, and in particular this literature discussion, is not to establish a new definition of the concept. This section is purely to show the differences between the different concepts about the use of digital technologies by and within governments.

In 2003, the Organisation for Economic Co-operation and Development (OECD) published a study called ‘The e-Government Imperative’. In this study, the OECD defines e-Government as following: ‘the use of information and communication technologies, and particularly the Internet,

as a tool to achieve better government’ (OECD, 2003, p. 11). This definition is formulated in very

broad terms and covers a vast range of IT’s and areas of usage. Better government can mean a better governmental organization because of more efficient and effective internal processes, or a better government because it is able to provide more transparent services and information to its citizens.

In a study about the utilization of e-government, Carter and Bélanger (2005) focus on the increased accountability by governments to its citizens by using, among other things, electronic services. This study focusses mostly on the aspect of ‘providing services’. This includes the provision of services to citizens, businesses and other governments. According to these authors, ‘E-government

is the use of information technology to enable and improve the efficiency with which government services are provided to citizens, employees, businesses and agencies.’ (Carter & Bélanger, 2005,

p.6). This definition, again, focusses on information technology that is used by the government towards its external environment in order to provide services more efficiently. However, the addition of employees suggests that the organization itself also plays a role in e-Government. Carter and Bélanger (2005) further explain that technology allows agencies to reduce costs and improve efficiency, while citizens are better served. This shows that the internal working of the governments’ organization is indeed relevant, but the study further focusses only on the intention of citizens to use e-Government services.

Another more recent study from Meijers and Bekkers (2015) on the use of technology by government, stretches the theory a bit further. They argue that e-Government views citizens largely as consumers. They propose that e-Governance, in contrast to e-Government, views citizens and

(9)

8 other stakeholders as coproducers which stresses the changing role of the government itself. According to Meijers and Bekkers, ‘e-Governance is about using technologies to position

government in an external network with citizens and stakeholders to cooperate in the production of policies and services’ (2015, p. 199). Although this study also focusses on the provision of

(electronic) services to the external environment, the authors argue that government itself must also change. This means that in addition to the barriers on the citizens’ side to use e-Government services, barriers on the governments’ side also need to be considered. These barriers can stand in the way of e-Government or e-Governance implementation.

Dukić et.al. (2017, p. 525) define Government in a similar way as previous definitions: ‘(..)

e-government can be defined as the use of ICT, and web-based technologies in particular, to improve government performance and enhance the quality of services provided to citizens and businesses.’

This definition also suggests that the goal of e-Government is to improve the provision of services by using technology. However, the authors stress that other aspects than only technology itself, are also import. These include, among others, organizational, cultural and institutional aspects. The definitions of e-Government vary in the way of how they are formulated, but they do have some common grounds which show the central ideas of e-Government as a theory. The most obvious shared factor is that they all rely on technology to reach a better government. This ‘better government’ is defined in many of these definitions as being more efficient and effective in delivering services to other stakeholders such as citizens and businesses. Although some of the articles do mention organizational factors as being relevant for the implementation of e-Government, the main focus is on simply adopting and using technology which modernizes government and as a result improves the delivery of government services and internal processes. In the next section, I will broadly discuss the term ‘transformational government’ as mentioned in the beginning of the chapter, to outline how it differs from e-Government.

t-Government

As the research in the field matured, a new theory was introduced: Transformational Government, or t-Government. T-Government is a response to e-Government because the latter was criticized because it focusses solely on the operational aspects instead of the necessary strategic and structural changes (Janssen & Estevez, 2013, p. 2). In this sense, t-Government can be seen as a transformation of the organization instead of only the modernization of it according to the e-Government view. This is because it recognizes the importance of change within the organization in order to adopt and use technology to create a better or more modern government. This already shows that t-Government has a different approach than e-Government. The next paragraphs will discuss more extensively the concept of t-Government and how it differs from e-Government. Just like Janssen & Estevez. (2013), Savoldelli et.al. (2014) also see a shift in the literature of e-Government from focusing on technological and operational issues to more broadly defined organizational, cultural and institutional issues. This shows that adopting new technologies is not

(10)

9 just about the technology itself but is also affected by organizational factors. This shift of focus and the importance of organizational factors is shared and recognized by a wide range of authors within the literature. For example, in their study on the effect of management capacity on government innovation, Kim and Lee (2009) also found that ‘organizational characteristics matter

in the adoption and implementation of innovation’. Despite the use of different definitions of the

term t-Government, the contrast with e-Government is clear.

Many of these authors recognize the importance of these other factors outside of the technology itself in order to transform governments with the use of digital technologies. Dwivedi et.al. (2012, p.13) argue that this transformation also involves ‘changing the structures, operations and most

importantly, the culture of government.’ These authors, whilst reviewing e-Government research,

also found that failed e-Government initiatives focused too much on front office processes without reconsidering back office processes. According to Dwivedi et.al., organizations often encounter ‘red tape’ and bureaucracy. This again illustrates how t-Government, with an additional focus on the underlying organizational factors, differs from e-Government with its focus on front office processes and service delivery.

Eynon and Dutten (2007) also formulate a similar argument. They note that technology ‘cannot be separated from social and organizational change’ (2007, p.226). In their argument, these types of change are often required to reach the potential of the use of technologies. The argument of these authors is a critique on the frequent emphasis of e-Government on solely the substitution of analog processes and objects of the government organization, such as paper, with digital versions. This ‘substitution approach’, as Eynon and Dutten (2007) describe it, ignores the wider possibilities of technology and how it impacts organizations. This means that governments should also rethink the organizational structures to make optimal use of technologies. In short, attention to organizational transformation is necessary to realize t-Government.

As stated before, the goal of this literature discussion is not to determine what definition is the best way of describing ‘Transformational Government’ but to find the most suitable description for the research question of this thesis. Using a single description provides clarity to the reader and to the researcher and urges the latter to focus the scope of the research. Weerakkody et.al. (2011, p. 321) provide a clear definition that captures the concept of t-Government and its differences in contrast to e-Government:

‘T-Government is the ICT-enabled and organization-led transformation of government operations, internal and external processes and structures to enable the realization of services that meet public-sector objectives (…)’.

The core here is that t-Government is only reached with the use of digital technologies together with organizational change. This illustrates the difference between the focus of t-Government and e-Government in a clear way.

(11)

10

Organizational change

When comparing the concept of e-Government with t-Government, the main differences become clear. E-Government draws on the idea that the modernization of government is a result from adopting new digital technologies. This in turn improves the delivery of government services and internal processes, or government performance. Technology, in this case, leads to organizational change. This view on the role of technology within organizations can be described as deterministic, commonly known as technological determinism. In contrast with this view, a t-Government perspective argues that in addition to the adoption of new technologies, organizational change is also necessary to ‘transform’ the government.

Nograšek and Vintar (2014, p.109) explain that this view ‘regards ICT as an equal and

co-dependent variable in relation to other organizational elements such as people, structures, processes, etc.’. Both technological and organizational factors thus enable digital transformation.

The authors Luna-Reyes and Gil-Garcia (2014) identify two different views on the role of ICT’s within an organization. One of these is the technological deterministic view as discussed above. An opposite view argues that social groups determine how they use technologies and give different meaning to these technologies. This is what these authors name social determinism. The third view is a unified view. This view acknowledges the importance of technological factors as well as social and organizational factors. Not only is digital transformation driven by these separate factors, technological and organizational factors also affect one another. (Luna-Reyes & Gil-Garcia, 2014). This unified view complements the description of t-Government by Weerkakkody et.al. (2011). Government transformation is, according to this description, ICT-enabled and organization-led. This suggests that the adoption of technology itself is not only affected by technological factors, such as if a technology meets the necessary technical requirements, but also by organizational factors.

Following this unified view and the t-Government concept, technology is thus not the one-way key driver of transformation, but the transformation requires organizational change too. In addition to this, the adoption of technologies is also affected by organizational factors. However, it is not entirely clear how organizational factors affect this adoption. Most of the literature, as mentioned in this chapter, only focus on the need for and influence of organizational change on the transformation of government. Only empirical evidence can uncover the details of this relationship between these variables.

Barriers of adoption

As elaborated earlier in this chapter, the underlying premise of t-Government is that both technological- and organizational factors influence the adoption of technology which in turn leads to the digital transformation or modernization of government organizations. Following this, the degree of technology adoption can thus be driven or obstructed by these factors. Certain

(12)

11 technological or organizational barriers can influence decision-makers to either adopt or refuse to adopt technology.

Different authors have identified categories of such barriers to the adoption of technology in public sector organizations. Veenstra et.al. (2011) identified four different categories of barriers;

governance-, organizational-, managerial-, and technological barriers. Bekkers and Tummers

(2014) also found barriers on four different levels in their systematic review of the literature on innovations in the public sector; the environmental-, organizational-, characteristics of the

innovation, and individual/employee level. Although the authors in the literature identify different

levels or categories of barriers, they have great similarities.

As mentioned earlier in this chapter, t-Government differs from e-Government because it takes into account organizational factors in addition to technological factors. Thus, t-Government considers both technological barriers and organizational barriers. Technological barriers are related to the technology itself. Examples of these barriers are security threats and incompatibility (Veenstra et.al., 2011). In this thesis, the category of organizational barriers will also include factors related to the managerial- and employee level as identified by, among others, the authors above. This is because they are related to the organization itself and is thus an organizational barrier. As shown by the authors above, there are also barriers which are not necessarily tied to the organization itself but rather to its environment. Examples of these barriers are media attention and public pressures (Bekkers & Tummers, 2014, p.18).

As described earlier, this thesis will only focus on the organizational barriers to the adoption of new technologies. The focus is to identify in practice the theoretical difference between e-Government and t-e-Government, and thus the focus on organizational barriers. The next part of this chapter will cover in more detail the different organizational barriers as identified in the literature.

Organizational barriers

IT-skills and -knowledge

Newly adopted technologies within the public administration will and must be widely used by the employees within the organizations in order to be effective. Only by using these technologies they will contribute to the improvement of the organizations’ performance. Therefore, the IT-skills and -knowledge of these employees are an important factor in the adoption of these new technologies. The decisionmakers of adoption may choose not to adopt a certain technology if employees do not have the skills and knowledge to work with it. Dukić et.al. (2017) argue that the success of public administration transformation largely depends on this factor because ‘people are the most

challenging component of e-government’ (p. 33). They further state that the skills and knowledge

of employees will be even more necessary in the future. The reason for this is because of the rapid development of technology and the growing reliance on technology within the public sector. Carter and Bélanger (2005) also stress that technology and innovation can be perceived as complex by people within the organization.

(13)

12 IT-skills and -knowledge are thus necessary on different levels. Certain technologies, such as workplace applications, are to be used widespread across an organization. A general lack of skills and knowledge among the organization’s employees can be a reason not to adopt these technologies. However, when an organization lacks skills and knowledge on the level of the IT-department responsible for the decision-making and adoption of technology, it could be a barrier for adoption of technology in general.

A reason why governments often must deal with this challenge, is that they directly compete for personnel with the private sector (Ebrahim & Ihrani, 2005). The people with the skills that are necessary for coping with new advanced technologies is known to be scarce. Public sector organizations often have less resources to attract this type of personnel than in the private sector.

Organizational size and capacity

Bekkers and Tummers (2014) also found that organizational capacity and size are often discussed barriers in the literature. Fernandez and Wise (2010), found that the effect of organizational size on innovation is debated on in the literature. On the one hand, large organizations can become rigid and thus oppose innovation and change. On the other hand, the authors found that other researchers argue that the size of the organization positively affects innovation. This is because larger organizations are more complex which increases ‘the quantity of alternatives and solutions

to unique problems facing the organization and its members’ (Fernandez & Wise, 2010, p. 982).

This means that the complexity increases the need for technical solutions to solve the problems of the complexity. Naranjo-Gil (2009) found in his study about the adoption of technical and administrative innovations in public hospitals that organizational size does have a positive effect on the adoption of technical innovations.

Another reason why organizational size affects the adoption of technology is because larger organizations often have more budget available. This means that they have greater access to recourses needed to adopt technologies (Naranjo-Gil, 2009). This is especially the case for costly technologies. Because larger organizations have more resources, Fernandez and Wise (2010, p. 983) also argue that they are thus more likely ‘to absorb the costs of failed innovations’ than smaller organizations. These arguments are also recognized by Moon and Norris (2005). They state that IT-related financial support increases the adoption of innovations and increases the willingness to take risks because the organizations can carry the costs of the technologies.

Silos and stovepipes

Another organizational barrier has to do with the institutional structure of governments. Bannister (2001) has studied the ‘silo’ or ‘stovepipe’ problem within public administrations. These silos refer to the existence of unintegrated and diverse information systems within an administration. One of the reasons that Bannister gives for this existence is that information systems within public administration are frequently driven by the current political need or lobby and overrides long-term strategic IT plans. Bannister further argues that, consequently, many IT-managers lack the ability to resist these political pressures and that interdepartmental rivalries and the unintegrated state of

(14)

13 public sector systems also strengthen the development of silos. The result is ‘an IS structure where

separate systems are independently developed for specific purposes’ (Bannister, 2001, p.71).

Giest (2017) also addresses the effect of institutional complexity, because of the existing silos, on the development of technology and data. She argues that the stove-piped structure prevents civil servants from sharing information and consequently hinders the development of technology. This could especially be the case for technology that is data-driven. The availability of diverse and large data(sets) allows for more technological solutions and thus for further development. Consequently, when departments or units within an organization cooperate and share their data(bases), thus not working in silo’s, more possibilities to adopt data-driven technologies arise.

Another reason for why these silo’s or stovepipes within government can come into existence, is because of the ability of agencies or departments to act autonomously and independent (Gil-Garcia & Pardo, 2005). When departments use this autonomy to independently organize the procurement and adoption of technology, silos are created or strengthened. However, autonomy does only lead to the creation of silo’s when departments act independently. Autonomy does not rule out the possibility that departments do work together despite having great autonomy.

De Tuya et.al. (2017), in their study on local governments in the state of New York, also stress that a lack of IT-alignment hinders the innovation of the government. This lack of alignment is caused by working in silos and thus not by working together as mentioned above. The authors found that IT is often not incorporated in the organization’s strategic planning. More specifically, they found that not involving IT in the strategic planning makes ‘it more difficult to plan for major

purchasing decisions’ (De Tuya et.al., 2017, p.7). This means that the lack of this strategic

planning which includes IT, negatively affects the adoption of technology in the government organization.

Managerial attitudes

In addition to the existence of silos, Bannister (2001, p.66) also finds that the culture in public administration is usually one of risk aversion. Since new technologies are often a catalyst of change within organizations, the adoption of new technology clashes with the culture. Since decisions are often made by the managers of organizations, the decisions of technology adoption by managers can be influenced by the culture within the organization. In their empirical study on the effect of managerial attitudes towards e-government adoption within municipalities, Moon and Norris (2005) found that the innovativeness orientation of managers matters for the adoption of technology. Their research shows that when the managerial culture of a government is more innovation oriented, meaning that efforts are made to change old practices, the more receptive it is towards new technological innovations and initiatives. Kim and Lee (2009) found similar evidence of the effect of positive managerial attitudes towards technology and an IT-leaders’ willingness to take risks, on the adoption of technology.

(15)

14 The innovative orientation of managers is thus an attitude that is more likely to lead to the adoption of new technologies. In contrast, a negative attitude towards innovation can have a negative effect on the adoption of new technologies. Meijer (2015) describes that managers or senior staff can also feel threatened by technological innovation. The main reason for this fear is because innovation can lead to changes in their work and that of the organization. Torugsa and Arundel (2017) also recognize this risk-aversion in especially the public sector. One of the reasons for this is that in contrast to the private sector, in general, the costs of investments are almost certainly measurable and can be traced back to decisions made by individuals but the potential benefits are not (Torugsa & Arundel, 2017, p.901). This also contributes to the possibility of a risk-averse culture within a government organization.

In addition to the managerial attitudes, Kim and Lee (2009) also found a positive effect of the active engagement of IT-leaders in the organization’s management on government innovation. In their research, De Tuya et.al. (2017) also found that IT-leaders play a critical role in the adoption of technologies. This research focusses on local government and the role of the Chief Information Officer (CIO). The authors note that giving the CIO a broader role and more responsibilities, results in higher value for government. In addition to this, Tuya et.al. (2017, p.6) note that the involvement of the IT-department in the decision-making process and the representation of this department at the highest levels of the organization, also creates value for the organization because it ‘could provide more knowledgeable decision-making and investment in IT’. The argument that these authors make is thus similar to the results that Kim and Lee (2009) found in their research.

Conceptual framework

So far, this chapter has theorized that the Transformational Government (t-Government) approach differs from Electronic Government (e-government) because it acknowledges not only the role of technology in creating a modern government but also the role different organizational factors that can influence the adoption of technology. The adoption of technology can be divided into three different phases (Damanpour and Schneider, 2006). This thesis focusses on the second phase of adoption which is the phase in which the decision whether to adopt a technology (or innovation) or not, will be made. Four different organizational factors were identified that are prominent in the literature: 1) IT-skills- and knowledge, 2) organizational size and capacity, 3) silo’s/stovepipes, and 4) managerial attitudes and leadership. These factors can affect the decision-making of adoption and thus influence the digital transformation of the government.

As described earlier, the research question of this thesis is ‘How do organizational barriers affect

the adoption of new technology within government?’. The conceptual framework that I will use in

this thesis is as following. The organizational barriers, as identified above, affect the decision-making whether to adopt a technology and thus possibly hinder the digital transformation of a government organization. This research will only focus on the barriers of organizational size & capacity and the managerial attitudes & leadership. The reason for this is twofold; 1) it is only possible to focus on a small set of independent variables in a small-N research and, 2) these two

(16)

15 variables are best measured with the method of data collection in this research. This will be explained in more detail in the research design chapter.

This leads to the following two hypotheses:

Hypothesis 1: The organizational size and capacity affects the adoption of technology. Hypothesis 2: Managerial attitudes and leadership affect the adoption of technology.

The effects of the organizational factors on the adoption of technology, as formulated in the hypotheses above, is mediated by the decision-making within the organization. This means that the possible effect of the factors will occur through the decision-making process of the adoption of technology as explained in the paragraph of the phases of adoption earlier in this chapter. The next chapter will explain the research design of the thesis. The research design will also include the operationalization of the organizational factors in order to measure them in the selected cases.

(17)

16

Research design

The previous chapter explained the difference between the t-Government and the e-Government approach and how organizational factors, in addition to technological factors, play a role in achieving t-Government. Two different organizational factors were identified that are prominent in the literature for which two different hypotheses were formulated. This chapter will elaborate on the research design that is used for this research. The first part of the chapter will explain how the two barriers will be operationalized to be able to measure them. After that, I will explain what research design will be used and which selection of cases, consisting of municipalities, has been made. In the third part of this chapter, I will go into the details of the methods of data collection and the methods used for the analysis of the cases. The chapter will conclude with a discussion of the validity and reliability of the research design.

Operationalization

This part of the chapter will focus on the operationalization of the theory. Before the organizational factors and their effect on the adoption of technology can be measured, it is necessary to further specify their concepts. This will be done by following the structure of concepts as defined by Toshkov (2016) in his book on research design in political science. First, the concepts need to be further operationalized by identifying their extensions based on the existing literature that is used in the previous chapter. These extensions will be used as the indicators for the organizational factors (the concept).

Based on the findings in the literature, the below table specifies the two different organizational factors and their indicators as stated in the hypotheses. This selection does not include all the organizational factors in the literature because it is only possible to test a small amount in a small-N case study. Therefore, the barriers of size & capacity and managerial attitudes & leadership will be used to study the cases. The choice for size & capacity is important because only this can be measured before doing the interviews. The size of the municipalities can be measured by looking at the number of employees. The managerial attitudes & leadership are best measured by using interviews because the indicators for this concept are mostly based on the perception of the respondents. The case selection paragraph will provide a more extensive explanation.

(18)

17 Table 1: Operationalization of the independent variables

Category Concept Indicator

1. Organizational size & capacity

(Bekkers & Tummers, 2014; Fernandez & Wise, 2010; Moon & Norris, 2005; Naranjo-Gil, 2009)

1.1. Administrative size 1.1.1 Organizational size 1.1.2 Personnel size (in fte) 1.2. Budget size for IT

2. Managerial attitudes

(Bannister, 2001; Kim & Lee, 2009; Meijer, 2015; Moon & Norris, 2005; Torugsa & Arundel, 2017; Tuya et.al., 2017)

2.1. Managers perception of new technology

2.2. Innovative orientation of managers 2.2.1. Managers show commitment to drive innovation

2.2.2. Technological innovation is a priority for the organization

2.3. Organization/IT-leaders have a strategy/vision document on digitalization 2.4. IT-leaders’ engagement in higher management

2.5. IT-leader shows commitment to drive innovation

Table 1 includes the operationalization of the independent variables as formulated in the hypotheses. The operationalization of the dependent variable, the adoption of technology, will be included in the next paragraph. The indicators in the table above are based on the findings of the literature used in the previous chapter. The concepts and indicators will be used to analyze the collected data. This means that the occurrence of the indicators in the collected data will indicate the existence and effect of the barriers in the decision-making on the adoption of new technologies. I will explain the method in more detail later in this chapter.

Design and case selection

The main reason for selecting municipalities instead of other government organizations, is because municipalities are better suited to be compared. Municipalities are very similar in terms of their competences and have the same responsibilities towards their citizens, regardless of their size. This is not the case when, for example, ministries are compared. So, municipalities are suitable for comparative research designs. The reason for choosing municipalities based in The Netherlands is practical in nature. This research design requires the use of interviews which makes the location of where the research will be conducted (The Netherlands) an important consideration for also choosing cases within The Netherlands. As will be explained later in this chapter in the validity and reliability paragraph, selecting municipalities from the same country also helps in isolating the causal relationships as formulated in the hypotheses from other possible competing factors.

(19)

18 This thesis will be based on a most similar small-N comparative design (Toshkov, p.266). A small selection of four Dutch local governments (municipalities) will be made. It is necessary to have some degree of differentiation between the selected cases in terms of the independent variables. It is difficult to measure beforehand both the independent variables; 1) organizational size & capacity and, 2) managerial attitudes & leadership. This is because there is no publicly available data on, for example, the managerial attitudes and leadership within Dutch municipalities. However, what can be measured upfront is the organizational size of the municipalities. The organizational size can be measured by looking at the size of the administration in terms of the number of personnel (in FTE’s). It is also possible to select on the basis of the digital maturity rates of the municipalities. The digital maturity of a municipality can be taken as a proxy for the degree of technology adoption. The degree of technology adoption is the dependent variable in the main research question. The logic here is that the degree of technology adoption correlates with the maturity of digital service delivery.

For this thesis, I will select four municipalities based on the administrative size and the maturity of digital service delivery. Data on the administrative size can be found in publicly available information as provided by the municipalities in their yearly reports. The website

https://waarstaatjegemeente.nl, created by the Association of Dutch Municipalities (Vereniging Nederlandse Gemeenten, VNG), provides a dashboard which shows many types of data about Dutch municipalities. One of the data categories is ‘service delivery and digitization’. This category includes scores, determined by the VNG based on a score system (VNG, 2018), about the maturity of digital service delivery towards citizens and businesses. The average of the scores for citizens and businesses give a clear view on the digital maturity of a municipality. The rates for the selected cases are displayed in table 2 on the next page. Again, this will serve as a proxy for the dependent variable of the main research question: the adoption of new technologies by the municipalities.

The selection will include two municipalities of large size and two municipalities of medium size. Because there is only a handful of large municipalities in The Netherlands, and all have a high percentage of digital maturity, the two medium sized municipalities will include one with a high percentage- and one with a lower percentage of digital maturity. Table 2 illustrates in more detail the selection of cases for this study. It must be noted that the table does not include the names of the municipalities. This is to ensure the anonymity of the respondents. If the names of the municipalities were to be included, the names of the respondents can easily be found by connecting them to the titles of the respondents.

The tables 2 and 3 show in more detail the specifics of the design. Table 2 shows the, slightly rounded (also to ensure anonymity), size of the selected municipalities in terms of personnel and the average scores for the digital maturity rate.

(20)

19 Table 2: Selection of cases

Administrative size (in fte) Digital maturity

Municipality A ~10.000 ~93%

Municipality B ~7.000 ~97%

Municipality C ~1.200 ~69%

Municipality D ~1.200 ~88%

Table 3 illustrates the research design in more detail. The two independent variables, as formulated in the hypotheses, are included in the table as well as the confounding variable of external national legal and political pressure. The confounding variables will be explained later in this chapter under the validity and reliability paragraph. This design is a most similar systems design with a selection of different outcomes (Toshkov, p.267). It takes into account both the independent and the dependent variable in the selection of cases.

Table 3: Most similar systems design

A B C D

Independent Variables Main explanatory variable: Organizational size & capacity

Large Large Medium Medium

Possible confounding variable: National (external) legal and political pressure

NL* NL NL NL

Other possibly causally relevant variable: Managerial attitudes & leadership

? ? ? ?

Dependent Variable Digital maturity rate (proxy for adoption of technology)

93% 97% 69% 88%

* = The Netherlands

The variance in the independent variable of administrative size gives the possibility to analyze its effect on the adoption of technology. As explained above, it is not possible to keep into account the variance of the other independent variable of managerial attitudes & leadership upfront. However, some other confounding factors are accounted four with this selection of cases. This will be explained in more detail in the reflections on the research design.

(21)

20

Method of data collection

Two different types of data collection will be used to test, and possibly complement, the findings of the theory chapter in the context of the Dutch local governments: 1) semi-structured interviews with respondents from different layers of the organization, and 2) document analysis with, for example, documents of high officials stating organizational goals, internal documents on procurement procedures and public information on the websites of the municipalities. The interviews will be the main source of data collection and the additional documents, if available, will complement the findings. Individuals will be interviewed based on their role within the decision-making of the adoption of new technology. It is necessary that the selected respondents have a role in the adoption of technology. This is because the interest of the thesis is to find which organizational factors affect the adoption of technology and how they affect these decisions. The decision whether to adopt a certain technology is made by the decision-makers and thus by the individuals within the organization that are involved in the decision-making process. To make sure that the findings of the different cases can be compared, the level of the interviewees within the hierarchy of the municipalities must be as similar as possible. This means that two employees of every municipality will be interviewed. For every municipality, the CIO, if applicable, will be interviewed including another employee in the IT-department. This will ensure that the findings can be compared across cases. By selecting respondents from the different layers of the organization, the results will also be more versatile. This is especially important since the interviews will also go into the role of the CIO or IT-leader and the higher management. By only interviewing the CIO or others from the higher management, the results can possibly be biased. A list of anonymized respondents per case including their position in the organization will be included in appendix 2.

Method of analysis

Toshkov (p.116) distinguishes between the unit of observation and the unit of analysis. In this research, the unit of observation in this research is on the individual level of the respondent because the main source of information will consist of semi-structured interviews. However, the final analysis will be done on the organizational level of the municipality which makes this the unit of analysis. For this research, a comparative design will be used for the analysis in which the comparison will be made across cases to find a causal explanation for the difference in outcomes as illustrated in table 3. The goal here is to provide a detailed analysis and understanding of the causal mechanisms of the organizational barriers on the adoption of technology.

The key concepts and their extensions, as shown in table 1, can be easily linked to the collected data. A respondent in an interview can, for example, state that one of the described extensions is a common reason for not adopting a new technology. In the documents, a high official can for example state that there is currently a lack of IT-resources which blocks further digitalization. The findings of the data collection will be measured by using the method of coding (Swanborn, 2013). By using the concepts and the indicators as identified in table 1, the transcripts of the interviews

(22)

21 will be coded. This means that every occurrence of a concept or indicator will be labeled with the corresponding label. This method gives the possibility to quantify the qualitative data of the transcripts. However, this is only accurate to a certain extent because the context in which the phrases are said is likely more important than the mere accumulation of coded phrases. The results of the coding will then be compared across the individual cases.

Validity and reliability

By selecting four Dutch local governments for this study, several external confounding factors will be accounted for. This is important for this type of research design because small-N comparisons can only work if the hypothesized casual relationships are isolated from confounding factors and other influences (Toshkov, p.260). First, the four municipalities are all affected by the same national political system and thus by the same political pressure or absence of pressure. Another factor that will be accounted for, is the legal framework in which the municipalities must operate. All municipalities are subjected to the same national laws. A third factor is the availability of technology. Government organizations often buy technologies offered by the market. By selecting cases from the same country, the design of the research makes sure that all municipalities have access to the same technology. A logical downside of a small-N selection of local governments from the same country is that the results are hard to generalize not only beyond the country but also beyond the local governments themselves. However, this does not affect the value of the results because the goal of the study is not to explain cases outside of the selected cases. The results can, of course, be tested on other cases inside and outside of The Netherlands.

Because the data collection includes the interviewing of individuals, the respondents will be informed about their rights and the methods in which their input will be kept save and anonymous. To ensure anonymity, the names of the respondents and the municipalities will not be disclosed in the research. A list of anonymized respondents per case can be found in the appendix 2. The respondents will sign an informed consent form before the interview which includes the option to put further restrictions on the interview. The recording of the interview and the corresponding transcript will be stored in a secure location, will not be shared and will be deleted after the thesis is finished. The respondents will also have the option to reread the transcripts in order to provide clarity or to be able to opt-out. In addition, when content of documents or websites of the municipalities are used, the source will not be sited since this will directly show the name of the municipality and thus makes it easy to uncover the names of the respondents. This is important because ensuring anonymity also increases the reliability of the answers of the respondents.

(23)

22

Results

This chapter will provide a clear and structured overview of the gathered data from the semi-structured interviews and the supporting document as described in the research design. The results will be presented, structured in accordance to the research questions and the theoretical framework. The presented results will be concluded with a small summary per municipality. This will consequently serve as the basis for the analysis in the next chapter. As explained is the research design, the municipalities will not be displayed by name for the sake of anonymity. Because the interviews were taking in Dutch, the quotes of the interviews will be first displayed in Dutch followed by a translation in English. This contributes to the accuracy of the reporting of the results since some concepts are bound to the Dutch context and need to be translated while maintaining the nuance.

Municipality A

Context

For municipality A, the process manager innovation and an advisor in the innovation team of this municipality have been interviewed. This municipality is a large sized municipality with a high digital maturity rate of 93%. The organization is divided into six clusters. One of the clusters is responsible for the support of the entire organization of the municipality and its management. Innovation and IT falls within this cluster together with, among others, finance and procurement. Municipality A has no distinctive CIO role. This means that the responsibilities of this role fall under the director of innovation, information and research. Despite having no distinctive CIO, municipality A has its own innovation team with the task of driving innovation within the municipality.

Organizational size and capacity

The IT-organization of municipality A falls under one of the clusters and is not a separate organization that falls outside the structures of this clusters. Despite this, according to a respondent, all the IT-functions are centralized under finance within the organization.

One of the larger changes on the technological side for municipality A, regarded the IT-infrastructure when migrating to new workspaces. One respondent notices that legacy forms a problem here because many components of the infrastructure need to change with a new system. An example for a new system given by this respondent is the because a technology supplier does not support the old anymore which drives the need to move to a newer system.

NL: “Maar tegelijkertijd hebben we, zeker in gemeenteland, een woud aan toepassingen en

applicaties en datasets, access databases, noem het maar op, die toch wel weerstand vormen voor zo’n verandering.”

(24)

23 EN: “But at the same time, especially in municipal context, we have a forest of applications,

datasets, access databases, you name it, that form resistance to such a change.”

The website of municipality A states that the migration to the new workspaces resulted in a large number of applications not able to work with the new systems. Because of this, the municipality started a project of which the goal was to solve these legacy problems. This enables the organization to adopt new IT-systems and to move the applications to the new systems.

Another example that was given of interdependencies that form some challenges, is a new application which gives citizens the possibility to report problems such as litter within the municipality. According to a respondent, applications like this work much better when the internal processes of the municipal organization are automated. Understanding the interdependencies and the context in which such an application is adopted is important. One respondent states that the bureaucratic nature of the municipal organization leads to the division of tasks within silo’s. NL: “Alles in onze bureaucratie is zo logisch mogelijk in een bestaande blijvende en stabiele

omgeving, maar zijn heel moeilijk beweegbaar in een veranderende omgeving. En zeker een grote organisatie heeft er nog extra last van.”

EN: “Everything in our bureaucracy is as logical as possible, in a constant and stable

environment, but these are hard to move in a changing environment. And especially a large organization has additional problems with this.”

This respondent also states that this creates many interdependencies within the organization which makes change even harder. In addition to this, the respondent explains that change is also hindered by the people that need to move with the change. This is especially the case when these people value the ‘old’ more than the ‘new’.

Municipality A also has a digital experiment center. According to the website of the municipality, this center creates the possibility to test applications and to investigate how these before they are implemented.

Managerial attitudes and leadership

As stated before, municipality A has no CIO. Despite this, the municipality has its own innovation team. One the main goals of this innovation team, as discussed broadly by both respondents, is to change the organization and the culture of the municipal organization. To the question of how to describe the role of the innovation team, one respondent answered the following:

NL: “Een hele vrije rol met behoorlijke uitdagingen waarbij de grootste denk ik is om van een

gemeentelijke organisatie die heel bureaucratisch is en gericht is op exploitatie, prestatie, controleerbaarheid en voorspelbaarheid (..), naar een organisatie gaan die ook naast de basisstructuur kan vernieuwen in omgevingen, contexten en economieën die flink in verandering zijn.”

(25)

24 EN: “A very free role with considerable challenges, the biggest I think is to go from a municipal

organization with a very bureaucratic focus on exploitation, performance, controllability and predictability (..) to an organization that can also in addition to that basic structure, renew itself in environments, contexts and economies that are changing considerably.”

When this respondent was asked how the role of the director relates to the innovation team, the respondent explains that the director mostly lets the team work independently.

So, one of the biggest tasks of this innovation team is to change the organization itself to make sure that it can adapt itself to these changing environments. Both respondents stress that the biggest change that is necessary to drive innovation, is the change from an organization where the main goals are expressed in specific results, to an organization where the focus in on learning, exploration and experimentation. The respondents explain that when an organization is largely focused on concrete results, experiments are avoided because there is no value given to the learning and exploration part of innovation.

Both respondents state that the innovation team, including its goals, was stimulated by the director of the cluster. When asked where this change in culture was initiated, one respondent answered the following:

NL: “Dus de directie heeft dondersgoed in de gaten dat de wereld aan het transformeren is. De

directie heeft dondersgoed in de gaten dat er een aantal grote instrumenten die wij vanuit de bureaucratie toepassen, kennelijk helemaal niet meer zo goed werken.”

EN: “So, the directors know well that the world is transforming. The directors know well that

many large instruments that we apply from the context of the bureaucracy seemingly do not work as well as before.”

The director of innovation and information, who is also responsible for the tasks that otherwise a CIO would perform, reports to one of the ‘concern directors’. This means that the director for innovation is not part of the higher decision-making bodies of the organization. One of the respondents explains that because of how the municipality is organized, the higher management teams are mainly policy content orientated which means that a CIO must put the technology related topics on the table:

NL: “De CIO moet voortdurend de urgentie van wat er op dit moment op het gebied van informatie

gestuurd werken, van informatietechnologie, en wat voor impact het heeft voor de organisatie, om die geagendeerd te krijgen. (..) End at gaat niet werken als je de CIO te laag positioneert in de organisatie.”

EN: “The CIO must constantly try to get the urgency of what is currently happening in the field of

information driven work, of information technology, and what kind of impact this has on the organization on the agenda. (..) And that will not work when you position the CIO too low within the organization.”

(26)

25 Although municipality A has no CIO, the respondent adds that the director of innovation does have its own organization to help to create ‘the mass’ for creating the urgency for these issues within the broader organization.

Despite this, one respondent explains that there is high involvement from the higher management of the municipality:

NL: “Ik denk dat dat er in [gemeente A] een hele grote betrokkenheid is als het gaat om aandacht

voor IT, data en informatie gestuurd werken, voor meer de technische kant van de ontwikkelingen die om ons heen plaatsvinden.”

EN: “I think that there is large involvement in [municipality A] when it comes to IT, data and

information driven work, for more the technical side of the developments that surround us.”

Although the involvement of the higher management is there, both respondents state that it is important for the top of the organization to be more knowledgeable about IT and what is needed on the IT-side for the municipal organization. One of the concrete actions of the innovation team to create more knowledge, is the organizing of trainings and education. One of the goals in, in the words of a respondent, is to connect the higher management with its more abstract thinking with the operational personnel with the more specific knowledge of technology:

NL: “Want als je te hoog in de organisatie terechtkomt dan weet je uiteindelijk niet meer wat

eronder in die organisaties eigenlijk gebeurt. En dat wordt allemaal uitgefilterd naar boven toe, dus je krijgt nogal een scheef beeld van hoe de werkelijkheid in die organisatie zit.”

EN: “Because when you go to the top of the organization, then you eventually don’t know what

exactly happens at the bottom of the organization. And that is filtered towards the top, so you a crooked image of how the reality is within the organization.”

Municipality A also has a digitization agenda for the municipal organization which is written in coordination with the top of the organization. This agenda is mainly focused on the tactical and operational aspects that will be developed for municipal organization and in which the required resources for these developments are defined.

Summary municipality A:

Organizational size & capacity

The IT-organization of municipality A is centralized within one of the six clusters, the ‘management and concern support’. The IT-part of this cluster has its own director and the municipality does not have a distinct CIO-function. Because the municipality has a large organization, it also has a separate innovation team. What came forward in the interviews was that there are still dependencies in the IT-infrastructure and applications which provide resistance to change such as in the case of the migration to the new workplaces. One respondent notes that this is also because of the bureaucratic nature of the municipal organization leading to a siloed structure

(27)

26 and that especially larger organizations have this problem. To tackle the problem of applications not able to move with the new IT-systems, the municipality started a project to solve these legacy problems which give the possibility to adopt new IT-systems. In addition to the IT-organization, the municipality also started an experimentation center for new innovations and technology. Managerial attitudes & leadership

Municipality A has no CIO but instead has a director responsible for, among other topics, innovation and information provision. In addition, the municipality has its own innovation team. The respondents explain that the role of this team is very free which gives the team the freedom to independently work within the organization to drive innovation. One of the biggest challenges that respondents see for the innovation within the organization, is the culture and the way the organization is organized in a bureaucratic manner. In the eyes of the respondents, an organizational culture primarily focused on results will avoid taking risks and thus hindering innovation. Although the innovation team tries to change the culture within the organization, the respondents note that the higher management of municipality A is involved in innovation. This is also shown by the fact that the innovation team was stimulated by the directors and the involvement in creating the digitization agenda for the municipality.

Organizational Barriers for Government Digital Transformation: A study of Dutch local government