A new System Dynamics model to improve internal and external efficiency in the paper digitization of Italian Public Administrations Nunzio Casalino1, Stefano Armenia2, Carlo Maria Medaglia3, Silvia Rori4
Abstract: In this paper, we developed a new System Dynamics model in order to identify the benefits arising from the digitization process in the Italian Public Administration. Our study initially describes the problem in terms of the underlying structural relationships among the variables that constitute the system. A systemic approach allows introducing many “soft” aspects of the problem that reveal themselves as crucial ones and provides a rich analysis that shows how issues brought by social and psychological factors may become a great obstacle to organizational change. In particular, our analysis has focused on the interaction between the “world of citizens” and the “world of the administrations”, in the domain of the 8101 Italian Municipalities. By means of the System Dynamics approach, it has been possible to study the structure of the system both from a qualitative and quantitative point of view. The study has allowed identifying public management policies and management leverages that may constitute the main variables on which the Italian Public Administration can act in order to improve its internal and external efficiency and in order to confer an added value to the services being offered. Keywords: Public Management, Policy Making, Decision Support Systems, System Dynamics, Complex Systems, Digital Organizations
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Università degli Studi “Guglielmo Marconi”, Dipartimento di Scienze Economiche ed Aziendali, Roma, Italy,
[email protected] 2 CATTID, Università degli Studi di Roma “La Sapienza”, Roma, Italy,
[email protected] 3 CATTID, Università degli Studi di Roma “La Sapienza”, Roma, Italy,
[email protected] 4 CATTID, Università degli Studi di Roma “La Sapienza”, Roma, Italy,
[email protected]
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1. Introduction E-government represents the process of Public Administration “computerization” that, together with organizational change actions, allows dealing with the documentation and with digital procedures supported by ICT (Information & Communication Technology) in order to optimize the government agencies activities and to offer the “customers” (citizens and enterprises) a better service. Therefore, it regards the adoption of technological resources meant to optimize, by means of a fast information exchange, the inner and external relations of the administrative engines and to improve, through a greater speed and flexibility in distribution, the supply of services to the citizens. Egovernment constitutes a wide process of innovation that involves both the inner administrative lawsuit and the logical external relations, thus representing a multidimensional trend that has revolutionized the way by which Public Administrations work. A positive correlation exists between the progressive diffusion of the technologies in the Public Administration (PA) and the increment of collective social-economic welfare. This relation between PAs and ICT demonstrates an unavoidable change in today's society: the development of ICTs and their consequent adoption in Public Administrations allow improving the offering of public services to the citizens and, at the same time, to save money and make a more efficient management possible. Italy is in a position of delay in comparison with other European Countries, and most of the Italian Administrations’ critical issues are connected to the adoption of Internet by administrations and citizens. The “e-gov 2012 Plan” document represents a fundamental governmental action for the digital (and economic) future of our country. In a context of economic crisis, the e-gov 2012 Plan, faces, within the Lisbon strategy, the problem of digital divide between Italy and the more advanced countries and focuses on the goal for the administrations to improve their efficiency and effectiveness. In particular, the e-gov 2012 Plan relies on a previous act named “Codice dell’Amministrazione Digitale” (CAD, or Digital Administration Code) in order to focus the attention and the innovation on four main aspects: quality of the public administration, web 2.0 technologies, adoption of on-line services for the citizens and customer satisfaction. Thus, innovation by means of ICTs means to challenge what is new, to change the organization, to re-engineer processes: in such a context, it is clear that digital
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technologies play an important role5. In general, innovation cannot proceed without heavily relying on technological aspects: various technology types have determined a new way to think, to create, to make. During the course of industrial history, technological progress has in fact impacted the physical component of any economic activity rather than on the component concerning with the ability to elaborate information. Strictly connected to the concept of e-government, is the topic of paper reduction and document digitization that represents the focused actions of the Italian Government to resolve the problems and issues connected to paper usage: these are basically related to data access and transmission, high costs for moving and searching documents, as well as problems related to physical space usage, management costs and times. The topic of digitization has a remarkable effect on the entire administrative system and its longestablished culture since it impacts the whole way to work in Public Administrations. For these reasons, the document digitization is a topic that drained a growing attention from public regulation bodies and agencies, and will likely produce a deep change, by far today still under development, of the way to work of private and public organizations. 2. Problem setting and previous research E-government is a multidimensional phenomenon that has revolutionized the way to work in the Public Administration: it regards the adoption of technological resources to try to optimize6, by means of a faster information exchange, the internal and external processes of administrative units as well as to improve, through a greater rapidity and flexibility in their sharing, the service supply to the citizens. The European Union has contributed and still contributes to the development of this process with specific initiatives that confirm an interest to the propulsive value of the new technologies. Among the most important guidelines, it is worth to mention the following ones: • e-Europe 2002 Action Plan; • e-Europe 2005 Action Plan; Morecroft, J.D.W., Sterman, J. (2000). Modelling for learning organization. Productivity Press, Oregon. Sterman, J.D. (2000). Business Dynamics - System thinking and modeling for a complex world. Irwin McGraw Hill, Boston.
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• i-2010 EU Strategic Framework. The development of e-government in Italy represents a continuous effort towards the adoption and accomplishment of European strategic lines and objectives, ultimately pointing at the establishment of the so-called Information Society. Italy has implemented European directives mainly by developing several actions which focused on the accomplishment of two main outcomes: on one side, the definition of a framework including support laws and rules, and on the other, the implementation of a series of investments at a central administrative level, at regional level and at a local level by promoting projects which have been co-financed by the government. The simplification of administrative processes goes back up to the first ‘90s, when public administrations started getting interested in regulations directed to the improvement of service quality for the citizens. Furthermore, today in our country the technological reform matches with a federalism process: the authority to innovate is therefore delegated to Regions, Provinces and Municipalities, all trying to improve their services for the citizens. At present, the general goals of the Information Society in Italy are the following: • increase on-line services for citizens and enterprises (Electronic ID, National Service Card, Digital Signature); • Human Resources and people empowerment (by means of a better knowledge of ICTs and training courses, also supported by e-learning); • greater efficiency and effectiveness for Public Administrations (i.e.: by adopting e-procurement services, digital procedures, certified e-mail, etc.); • Transparency (with the possibility for the citizens to track the state of their authorizations, records and documents); • Quality (thus improving “citizen satisfaction”). The digitization process represents a remarkable example of “change” in Public Administrations, from both an organizational and a managerial point of view, all supported by ICT adoption. The concrete goal of the digitization process is the progressive reduction of the paper documents managed by the Administrations and the proportional and progressive increase of the digitized documents together with the replacement of supports traditionally used to store administrative documentation. The 4
introduction of specific tools like the official adoption of the digital document, certified electronic mail (PEC), electronic ID card (CIE) and national services card (CNS), represented part of the internal change of the Italian Public Administration. The “digital document” is the “IT representation of acts, facts or data legally relevant” (Art. 1, car. P, CAD); it is valid under any term of law and it can satisfy the same requirements of the paper document. The IT document offers significant advantages for the Public Administrations, since it allows faster training and communication, it can include multimedia and it can be more easily managed and archived. The digitization of documents thus represents the fulcrum of change in Public Administration because it is from it and into it that the different administrative actions diverge and converge. The Certified Electronic Mail and the Digital Signature also represent examples of tools that overcome the “weakness” of their protection by introducing the concept of the legal validity of the information exchanged. The law about digitization helped defining the concept of information protocol management as the generalized adoption of digital documents and the electronic management of administrative processes; with an information protocol, in fact, there is a better search capabilities, more availability of information, increased security and a great reduction of spread times. The documental management system was conceived in order to simplify the life of citizens and the working activities by making all documents available with less time, space and costs. The goal of the Document Management System (DM) is quite ambitious and covers the whole life-cycle of a document in an organization, from its creation to the sharing between customers, eventually passing through flows of approval. All these tools represent the most important means of a radical administrative transformation that involves the more general digitization process which thus, as a substantial change about the way of working inside Public Administrations, ultimately allow for significant advantages in terms of costs, times and human resources7. By all this, we thus see how the paper documents can be replaced from full electronic ones without necessarily breaking any term of law: today, the Italian normative system 7
Senge, P. (1992). The Fifth Discipline. Bantam Doubleday Dell Publishing Group, New York.
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in fact allows administrations to digitize and, therefore, dematerialize documents with large benefits in terms of efficiency, savings of space, economies of scale in their management and savings of time in terms of information search and data recovery. The Paper Digitization experience has been previously considered under multiple points of views. At CNIPA, several activities of search and analysis of the governance policies regarding the digitization process in Italian Public Administrations8 have been carried out. By means of the System Dynamics methodology, the issue has been studied with two different approaches. The first approach has been based on a technical experimentation for the definition of models to support possible decisions for managing the digitization process and considering the effects of exogenous phenomena in the Public Administration. The second one was on the other hand based on the aspect of the distribution of “new technologies” and on the problem of the size of digital archives. 3. Dynamical Hypothesis and qualitative modelling The main object of this paper is to examine, through the use of the System Dynamics methodology, how the digitization of documents inside Public Administrations represents a new perspective, for the “digital administration”, that can bring great benefits. System Dynamics is a methodology fit to understanding the behaviour of complex systems over time. It deals with internal feedback loops and time delays that affect the behaviour of the entire system. What makes using system dynamics different from other approaches to the study of complex systems is the use of feedback loops and stocks and flows. These elements help describe how even seemingly simple systems sometimes display baffling nonlinearity. Originally developed in the late 50s to help corporate managers improve their understanding of industrial processes, system dynamics is currently being used throughout the public and private sector for policy analysis and design9. Casalino, N. (2008). Gestione del cambiamento e produttività nelle aziende pubbliche. Metodi e strumenti innovativi, Cacucci Editore, Bari. 9 Robert A. Taylor (2008). “Origin of System Dynamics: Jay W. Forrester and the History of System Dynamics”. In: U.S. Department of Energy's Introduction to System Dynamics, October 2008. 8
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System dynamics is an aspect of Systems Theory as a method for understanding the dynamic behaviour of complex systems. The basis of the method is the recognition that the structure of any system - the many circular, interlocking, most of the times timedelayed relationships among its components - is often just as important in determining its behaviour as the individual components themselves. Examples are chaos theory and social dynamics. It is also claimed that because there are often properties-of-the-whole which cannot be found among the properties-of-the-elements, in some cases the behaviour of the whole cannot be explained in terms of the behaviour of the parts, nor in terms of their linear composition. The key elements of system dynamics models are feedback, accumulation of flows into stocks, non-linear relationships among the many variables defining the complex structure of the system, and time delays. In this case, the start point of our analysis was the explicit distinction between the environment of Public Administration and the world of citizens, which allowed studying both the internal phenomena of the two realities and the interactions between them. On the administration side, the document management process has been considered, in order to analyze how an acceleration in the “computerization” of Public Administrations may not only influence the adoption of tools like the Electronic Certified Mail (ECM) and the Digital Signature (DS), but also the overall amount of internally managed digital documents and, consequently, the archiving cost savings and the “unit production” costs (the cost to produce each single digital document). From the citizens side, it has been analyzed how the IT literacy of the chosen target. as well as the familiarity with internet and with on-line services offered by Public Administration, is an important variable in order to reduce the national digital divide (especially if compared to other European countries). Since a shared view of this issue is not established yet, we considered giving a realistic representation of such a complex problem also by means of a quantitative analysis. The digitization process, in fact, implies a deep change in many aspects of the PA, both technological and from the point of view of the tools needed to accomplish all the activities, till even to the whole redefinition of document management systems. These aspects, together with the inevitable obsolescence of the technological supports (a
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document might not be readable tomorrow when the device reading the support becomes obsolete), clearly show how the digitization problem is not a simple issue, and must be described by means of proper tools of analysis. The aim of the model is to explain how the digitization (also known as “dematerialization”) process is able to bring considerable benefits to Public Administration and how this phenomenon may spread in the current context. It was however necessary to recur to some hypothesized behaviour and/or function for some of the systems variables; such hypotheses have been validated by domain experts and considered as totally realistic. The main assumptions on the model made during our description of the problem concern the following aspects: a percentage of financial availability for ICT public spending is used to improve marketing with the intent to make aware citizens to use on-line services and consequently, to use digital services offered by Public Administrations there is a stark distinction between the PA’s workers and citizens: we do not consider the situation in which the two variables coincide Our analysis also includes a few elements that until today were not yet considered in the available literature on this problem, like the word-of-mouth effect, whose effects on the technical digitization process are hard to forecast without a system analysis; according to our approach and systemic view of the problem, those variables are crucial to understand the various behaviours of the system. According to the System Dynamics approach, the model has been built starting from a qualitative causal map, which describes the main relations and interconnections between the various parts of the system. This map is represented by an oriented digraph G(V,E), where the vertex set V represents the variables, while the edges set E represents effects (positive or negative) that a particular variable causes on the next linked one. Each causal link is described by an algebraic sign, which is intended to mean either a direct (positive) or inverse (negative) proportionality between each couple of elements. The cycles appearing in the graph are called “causal feedback loops”, and they may be either Reinforcing Feedback Loops, pushing the system towards instability, or Balancing
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Feedback Loops, which tend instead towards a stability of the system. To further clarify, when a variable indirectly influences itself (that is, through other parts/variables of the system) we can identify a feedback loop. Also, a red oriented link represents a direct (positive) relationship, while a blue oriented link represents an inverse (negative) relationship. The causal map is the starting point before creating a stock and flow model. Stocks are accumulators that constitute the state and memory of the system: in fact, their values aren’t calculated instantaneously (since they are accumulated), thus creating an implicit delay effect in the system. Every stock gets modified by Flows which can increase (Inflows) or decrease (Outflows) the stock level value 10. A representation by means of the above mentioned feedback loops, works quite well to analyze the context surrounding the document management procedures. At the end of the simulation of the model that we will introduce in the next sections, it will be then clear which policies must be implemented in order to make the new technology successful, and which advantages might be obtained through its use. Like already pointed out, while formulating the problem we built a causal relationship diagram (CLD) that is an oriented di-graph that connects the investigated variables through some directly or inversely proportional causal relationships. The creation of the causal map of the system under investigation was carried out by incrementally joining previously constructed smaller causal maps, which represent smaller sections of the system. The overall causal loop diagram is showed in Figure 1. Though in our analysis we chose to explicitly distinguish between two different “worlds”(the Public Administration and the citizenship side) and notwithstanding the fact that the two sectors appear as graphically separated, it is of course impossible to think of one sphere independently of the other one since may of the variables on one side directly or indirectly influence variables on the other side and vice-versa. On the citizenship side, aspects like the IT literacy of citizens, internet use capabilities, network broadband size, and general aspects regarding the use of on-line services are considered. This last aspect directly influences the world of Public Administration: the Burns, J.R. (2002). A component strategy for the formulation of system dynamics model. In: 20th International Conference System Dynamics Society.
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use of on-line services offered by the PA, in fact, increases the number of digital documents that the PA will have to manage while the use of physical desks will continue to increase paper documents. These availability of services and IT infrastructures, as well as the quality of the offered service, all contribute to positively influence the satisfaction of the citizens and, therefore tend to increase the interaction with Public Administration over time, thus further increasing the use of digital services in a virtuous cycle. On the Public Administration side, aspects of the documental flow have been taken in consideration, both for digital documents, recorded documents (documents that are given a protocol number when being officially received by the administration), digitally archived documents, as well as also aspects concerning the skills of PA employees and ICT infrastructures.
Fig. 1 The overall causal loop diagram
Studying the influence map in a higher detail, it was possible to identify some feedback cycles. The cycles identified with the letter “R” are positive or auto- reinforcing cycles
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and are represented by a red curved arrow, while the cycles identified with the letter “B” are negative or auto-balancing cycles and are represented by blue curved arrows. Cycles are also numbered in order to easily track them and for easiness of reference during the analysis. The first reinforcing feedback R1 (Figure 2) shows that if the on-line interaction between PA and citizens increases then the citizens computer knowledge grows and, consequently the Internet usage produce an increment of the number of hits to the PA websites. In this way it increases the use of on-line services and, consequently, the amount of users of such services. This brings over time to an increment of digital documents in the PA and, therefore, of recorded documents both in traditionally way and in ASP11 mode, thus reducing the average unit cost of document production; and in such a way also increasing the perception of the advantages of an alldigital PA.
An application service provider (ASP) is a business that provides computer-based services to customers over a network. Software offered using an ASP model is also sometimes called on-demand software or software as a service (SaaS). The most limited sense of this business is that of providing access to a particular application program (such as customer relationship management) using a standard protocol such as HTTP. The need for ASPs has evolved from the increasing costs of specialized software that have far exceeded the price range of small to medium sized businesses. As well, the growing complexities of software have led to huge costs in distributing the software to end-users. Through ASPs, the complexities and costs of such software can be cut down. In addition, the issues of upgrading have been eliminated from the end-firm by placing the onus on the ASP to maintain up-to-date services, 24 x 7 technical support, physical and electronic security and in-built support for business continuity and flexible working.
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Fig. 2. R1: Cycle of influence about the use of online services by citizens on the cost savings of protocols for the Public Administration
The auto-balancing feedback B1 (Figure 3) evidences how the on-line interaction between PA and citizens leads, through the Internet usage and the number of hits to the PA websites, to an increment of the on-line services with a consequent growth of the digital documents and, therefore, of recorded documents. In this way it increases the usage of on-line services, leading to a growth in the users of such services. This leads to an increment of the digital documents and, therefore, of archived digital documents as well as to a need to increase the recording rate. In this way, the dimension of digital archives grows but the contained costs of managing digital archives with respect to physical ones make it possible to obtain cost savings.
Fig. 3. B1: Cycle of the use of online services by citizens' savings on storage costs for the Public Administration
Figure 4 shows that while the on-line interaction between PA and citizen increases, also the citizens IT literacy (basically computer use, also influenced by external factors like school and/or previous learning) tend to increase and, consequently Internet usage will spread among citizens. This will carry to an increment of the number of hits to the PA websites that will in turn increase accesses to on-line services. A fraction of potential users of on-line services, not satisfied from the online experience, will likely continue to access traditional desks in order to use PA services, thus increasing the average service-
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time of such services and consequently reducing. the quality of the offered service (quality is inversely proportional to the average service-time).
Fig. 4. R2 Cycle of the increase of computerization for citizens
Figure 5 shows how the PA digitization allows for a better online service offering. PAs will be able to offer more services to the citizens, thus increasing the relationship between the two worlds.
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Fig. 5. B2 Cycle cost savings of digital archiving
A greater interaction will in turn produce an increment of the overall documents inside the Public Administration (endogenously and exogenously created) that will cause the need for a greater document recording rate and, consequently, an increase in the size of the digital archives. However, costs for digital archiving and management grows less in comparison to the cost of paper document archiving and management, and this aspect will make the Administration aware of the advantages introduced by the new digital technologies, which will thus go forward on its road to innovation. To innovate however also means for an administration to be able to improve its IT infrastructures and devices (which in this study we meant in terms of the percentage ratio between total employees and available personal computers) as well as properly training employees on ICT skills. In general, a digitally enhanced (also in terms of the skills of its employees) public administration is more able to offer (better) services to citizens, thus improving and increasing the interaction between the two “worlds”. This in turn produces an increment of instances and requests being made by citizens towards the public administration and thus an overall increment in documents that have to be managed by the PA. Such documents have to be recorded when they “enter” the administration and a part of them get recorded internally while some part gets recorded as an outsourced service (in ASPmode). Recording documents in ASP-mode introduces a cost saving aspect, which thus impacts again on the perceived advantage for the administrations derived from the digitization process.
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Fig. 6. R3 Cycle of the increase of savings in average unit costs of production of protocol ASP documents
4. Model construction The causal map built and analyzed so forth, only constitutes a qualitative description of the system. The spectrum of possible behaviors due to the peculiar composition of the structure of the system is surely restricted to main archetypical behavior classes, but an important element, the complexity and non-linearity of some relationships, may still lead to an infinite set of possible system behaviors. So, there is a need for testing model behaviors by testing its inputs and relationships among variables and checking whether the resulting behaviors are in line with the initial base assumptions and hypotheses (our initial mental models on the system). In order to perform such evaluations, we need to make our model quantitative, by transforming it in a Stock & Flow Diagram (SFD), and defining all variable equations, their initial values and parameters in the model. Then we will be able to simulate our model in order to test our assumptions, which, again, were: • a percentage of financial availability for ICT public spending is used to improve marketing with the intent to make aware citizens to use on-line services and consequently, to use digital services offered by Public Administrations • there is a stark distinction between the PA’s workers and citizens: it was not considered the any situation in which the two variables coincide Thus, after our previous analysis by means of causal relationships diagrams (CLD), we went on by organizing the CLD into five, possibly self-consistent, subsectors, in order to build a model which according to our initial assumptions ought to be as close to the real system organization as possible, thus describing both Public Administration’s internal dynamics concerning the digitization process and the evolutions of the innovation diffusion through the citizenship, as well as analyzing the main relationships between these two main “worlds”. Moreover, we defined which variables in our first qualitative model may be represented by stocks and their associated flows, and tried to identify which variables in the model may induce a high sensitivity in the model, that is those variables whose change, even small, may induce a great change in the behavior of the whole model. Also, by identifying among them the management leverages, it would be possible to test strategies by means of policies which aim to improve the system’s performances.
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Testing strategies by means of a simulated model could thus help in finding out which policies may optimize the system’s behavior, which ultimately consists in implementing a decision support system. Starting from the CLD and our initial assumptions (see par. 3), we incrementally passed from a CLD where stocks and flows were identified and drawn, to build the Stock & Flow diagram (SFD) of each sub-sector (thus also checking the incremental behaviors of the sub-models). Also, the identification of points of delay in the system is a key element to the understanding of the overall behavior of the system, since their presence contribute to a more difficult and complex understanding of cause-effect relationships (generally speaking, it is usually harder to find out which cause has determined a certain effect when the cause is far in the past). After simulating and evaluating the behaviors of each sub-model, we went on with the
construction of a wider model were links among the various sectors were identified and new feedback loops created (thus in turn generating completely new dynamics). Just to give an idea of the initial part of this long and complex (thus out of the scope of this paper) modeling process, we show a SFD concerning a peculiar sector of the main model and we point out the feedback loops created by the relationships among the variables in the model. In Figure 7, we show how the adoption rate of online/digital services, influenced by the contact rate based on the word-of-mouth effect among users, tend to increase the level representing the current/actual users of online services, thus in turn increasing the probability of a successful contact by means of word-of-mouth (that is, the probability that a potential user gets convinced by an actual user when the latter positively talks to the former about the services he’s using). Also, the adoption rate is modified by the effects of marketing expenses (thus in turn increasing the possibility that a “non-digital” user may incidentally come to know about the new technology and possibly get interested to it and ultimately adopt it), which is basically a share in total PA provisions for ICT expenses: this added effect is to raise the adopting users more sensitively.
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Fig. 7. Example of feedback in the model of the use of online services
A feedback loop allows the establishment of a retroaction from the stock of Actual Users to the adoption rate, which “drains” from the Potential Users, by means of a contact ratio (the auxiliary variable in-between, on the path from the stock to the rate driving its inflow), which is influenced by the relative values of the two stocks. The increase of Actual Users will in turn influence the number of requests to the administrations and thus the interaction between administrations and citizens. Such behavior leads to a greater and better interaction between the public administration and the citizens, the latter tending to increase over time their competences concerning the use of those online services offered by the administrations. Overall, as said, the implemented model includes five main processes/sub-sectors: 1. the document flow in PA 2. the model of the adoption of ECM and DS by small Public Administrations 3. the model of improving the quality of offered services 4. the model of interaction between PA and citizens 5. the model of the adoption of online services by citizens.
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We will now cover these sub-models in further detail. In sub-model 1 (documents flow in PA), the main variables are the dimensions of the archives, the total amount of paper documents, the recording rates (considered both as the internal recording rate as well as an external recording, or in ASP-mode which is an external service), the archiving rate and the flow of incoming digital documents, and all of them were used to quantify the cost savings for the PA. Specifically, by considering constant values for archiving costs, and by multiplying them by the number of archived digital documents obtained in the simulations we evidenced a cost saving over time while paper archives gets reduced in size by digitization and while digital archives increase in size. In particular, sub-model 1 shows how the digitization of documents will lead to interesting cost savings for the Public Administration. The stock representing the amount of paper documents inside the Public Administration is incremented both by a flow of paper documents produced endogenously to the PA and by a flow of paper documents originated by the access of citizens to physical counters in non-digital public offices, in order to use public services. The total amount of paper documents gets digitalized over time and such a flow, together with the flow of endogenously produced digital documents increases the stock representing the total amount of digital documents inside the PA. From here, a percentage of digital documents gets “archived” without being first recorded and given a protocol number. Also, a percentage of those recorded, gets recorded by means of an external service (the so called, and previously mentioned, ASP-mode). Costs are thus reduced due to the reduction of physical archives as well as to the savings due to digital documents recording in ASP-mode (that is, by decreasing the costs for internal recording).
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Fig. 8. The submodel of the document flow in PA
In sub-model 2 (adoption of ECM and DS in Public Administration) we used a Bass Model, purposely modified for this case, where the rate of adoption is the probability of interaction between administrations who already use the technology and those who could potentially use it (see Figure 9).
Fig. 9. The submodel Bass for PEC and FD adoption by administrations
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Sub-model 3 (improving the quality of offered services) represents how, by increasing the quality delivered by employees of the Public Administration while offering their services, the customer satisfaction tends to grow in time. The quality of services increases due to a better ICT training for public employees in small administration as well as due to better ICT infrastructure (initially represented as the ratio of the number of PC per 100 employees), and thus ultimately influenced by the percentage of skilled employees in the public administration. Under this view, the customer satisfaction increases when citizens perceive an increase in the number of skilled public employees as well as an increase in the accessibility and usability of online services (thus including also the important factor of better ICT infrastructures – i.e.: broadband).
Fig. 10. The submodel of service quality
Sub-model 4 (interaction between the Public Administration and citizens) represents the point of contact of the two worlds. It models the PA on the side of service-offer and the citizenship on the side of service-demand. The level representing the intensity of the interaction is fed by two flows, one representing the offering of online services from the Administrations and the other representing the demand for online services, both also influenced by the availability of broadband and internet connectivity. The demand and interaction, by means of ICT
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alphabetization and internet familiarity, also contribute to define the general “digital divide” of the population.
Fig. 11 The submodel of interaction between citizens and PA
Last but not least, sub-model 5 (adoption of online services by citizens) is based again on a Bass Model, modified to represent the mentioned behavior. As mentioned at the beginning of this paragraph, the adoption rate of online/digital services, influenced by the contact rate based on the word-of-mouth effect among users, tend to increase the level representing the current/actual users of online services, thus in turn increasing the probability of a successful contact by means of word-of-mouth (that is, the probability that a potential user gets convinced by an actual user when the latter positively talks to the former about the services he’s using). Also, the adoption rate is modified by the effects of marketing expenses (thus in turn increasing the possibility that a “non-digital” user may incidentally come to know about the new technology and possibly get interested to it and ultimately adopt it), which is basically a share in total PA provisions for ICT expenses: this added effect is to raise the adopting users more sensitively. Moreover, we added an outflow representing those users that didn’t find themselves comfortable with the new technology and thus go back to “non-digital” services use.
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Fig. 12. The submodel of Bass for online services
5. Policy scenarios & simulation results As a first test, we have put the model under the so-called condition of “simulation stress”, in order to extract realistic and acceptable values for them. The time window considered for our simulation scenarios is set to five years. After a few warm-up simulation runs, the values for the input variables were defined as the following ones: • Paper document archiving cost: € 18,00 • Digital document archiving cost: € 9,00 • Average unit costs of production of paper documents: € 1,8 • Average unit costs of production of digital documents: € 0,9 • Percentage of marketing expenditure: 3% - 5% • Percentage of employees who follow ICT courses: 50% -70% • Administrations using ECM and DS: 5245 Municipalities • Administrations not using ECM and DS: 2856 Municipalities As said, the starting assumptions used in the description of the model are concerned with the differentiation of public employees from citizens and with the percentage of
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financial availability for ICT marketing by Public Administrations (representing the intention to make citizens aware of the need to use online services and consequently to use services offered by the Public Administration). The output variables that we chose to examine are: number of current and potential users of on-line services adoptions by word of mouth and adoptions due to the marketing effect savings in average unit-cost of document production and archiving quality of provided services customer satisfaction increase in Public Administrations using ECM and DS Thus, with reference to the initial assumptions, we considered three different scenarios: • use of online services by citizens • Public Administration cost savings • use of ECM and DS 5.1 Use of online services by citizens With reference to our initial assumptions (see par. 3), we first checked for the behavior of the population using on-line services. The population has been initially sub-divided into users already using online services and users non using online services. Word of mouth
+ Use of online services
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+ Potential users of on-line services
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+ Current users of on-line services
Fig. 13 The simulation of the use of online services by citizens
By means of a contact rate mostly influenced by the word-of-mouth effect, those already using such services influence, over time, users who did not use online services, and the overall behaviour displays a logistic growth/decay for the two related stocks.
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Figure 13 shows the causal map for the use of online services by citizens and the simulation results associated to the behaviour of the system, which is in line with the Bass-model typical behaviour.
Quantitative results are the following: the number of current users exceeds the number of potential users during the fourth year at the end of the fifth year of the simulation more than 45% of potential users chose to use the services online Also, in this scenario, we evidenced how one of our initial assumptions, the marketing expenditures by the PA meant to sensitize citizens towards the adoption of the use of online services, is a fundamental aspect of the model. In fact, the marketing effect, together with the word-of-mouth effect, contributes to the increase of online services users, and in particular, has the effect to speed up the process. So, the graph in figure 14 shows the causal map for the use of online services by citizens, highlighting the influence of the word of mouth effect and the so-called "marketing effect" which enhances the perception that users have about online services.
“Marketing effect” for the PA on-line services Word of mouth
+ +
+
Use of online services
+ Potential users of on-line services Current users of on-line services
+
Fig. 14 The simulation on adoptions by word of mouth effect and adoptions of marketing effect
Quantitative results are the following: the adoption drivers act with a very different magnitudo adoptions due to word of mouth far outweigh the adoptions due to the marketing effect
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5.2 Cost Savings By analyzing the system’s behaviors, we were able to infer that the increment in the use of digital documentation in the Public Administration leads to cost savings in terms of document production and archiving, partially due to a major use of internal digitization, as well as of ECM and DS, and partially due to an increase in the use of online services from the citizens. In fact, while digital documents increase over time, it is possible to reach economies of scale that have far better ratios than those concerning paper documents, since archiving and production costs tend to increase far less than in the paper case, thanks to the use of new technologies, as also the costs of document recording tend to decrease thanks to the use of the ASP-mode recording. The graph in figure 15 shows the causal diagram relative to the impact of the size of digital archives and the number of documents recorded in ASP-mode on the average unit cost of document production and archiving.
+
-
Perceived benefit to the PA
Cost savings for archived documents
Digital documents storage costs
+
Size of digital archives
Average unit costs of production of documents
-
ASP protocol documents inside PA
Fig. 15 The simulation on adoptions by word of mouth effect and marketing effect
Quantitative results are the following: savings on storage costs are achieved much faster than savings on average unit costs of production of documents 5.3 ECM and DS adoption We also simulated the outcomes due to the use of ECM and DS by the analyzed administrations. The system initially took into account the ration of the number of municipalities already using ECM and DS (2856) to the number of those ones not using such tools (5245). 25
The graph in figure 16 shows the causal map and the behavior of the use of electronic tools such as Electronic Certified Mail and Digital Signature.
-
Potential administrations with PEC and FD
+
Use of PEC and FD
+
Current administrations with PEC and FD
+
Fig. 16 The simulation of the adoption of PEC and FD by the Public Administration
Quantitative results are the following: the number of PEC and FD current documents exceeds the number of potential documents by the end of the first year the end of the fifth year of the simulation over 75% of potential documents have become PEC and FD generated documents 5.4 Managerial leverages Once the system state has been defined, we needed to identify possible managerial levers on which the public administration could act (policies) to “guide” the evolution of the innovation process. In this context, we proved the existence of two main control leverages, which are: • the percentage of marketing expenditure: this can be directly managed by the Public Administration that, within the limits, may bring to a greater awareness to the use of on-line services provided by the PA; • the percentage of employees who follow courses in ICT: this can be directly managed by the Public Administration either by hiring people already skilled on ICT aspects or by training them internally. Some simulation results will be reported in the following and in particular the variation of the chosen input (in the charts, current) will be compared to the standard scenario (in the charts, reference). 26
5.4.1 Percentage of marketing expenditure The first management leverage to be used is the one related to the percentage of marketing expenditure, with a variation from 5% to 7% of the input value. Among the most interesting results, the graph in figure 17 shows an increase in the value of the share of expenditure in ICT by the PA for marketing and, then, in the awareness of citizens: there is a significant change in the rate of adoption of online services by users who get informed and interested in using the new services.
Fig. 17 Rate of adoption of online service
Quantitative results are the following: By the end of the fifth year, over 48% of potential users have become current users compared to previous 45% The most significant changes in the value of marketing expenditures are related to cost savings for the Public Administration.
Fig. 18 Savings in average unit costs of production and storage costs with the 1st lever management
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Quantitative results are the following: variation of +0.25% savings in average unit cost of production variation of +0.20% savings in storage costs 5.4.2 Percentage of employees who follow ICT courses The second managerial leverage is introduced by the percentage of employees who follow courses in ICT, which has been considered to be varying from 50% to 70%. Among the most interesting results is the one relating to the rate of ECM and DS adoption; the graph in figure 19 shows how to an increase in the percentage of employees who follow courses in ICT, corresponds a significant change in the rate of adoption of certified electronic mail and digital signature.
Fig. 19 Rate of adoption PEC and FD
Quantitative results are the following: By the end of the fifth year, over 89% of documents have become currently ECM and DS generated documents, compared to the previous 75%. By increasing the percentage of employees who follow courses in ICT, there is a significant change in the rate of the services offered by the Public Administration which, in this new scenario, thus has more human resources able of delivering such services.
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Fig. 20 Rate of the services offered by the PA
Quantitative results are the following: increase of +28% of services offered on the web compared to the baseline scenario Even in this case, the most significant effect of the variation in the percentage of employees who follow courses in ICT is related to cost savings for the Public Administration.
Fig. 21 Savings in average unit costs of production and storage costs with the 2nd lever management
Quantitative results are the following: variation of +1.03% savings in average unit costs of production variation of +0.70% savings of storage costs 5.4.3 Both management levers The most significant scenarios have emerged, however, by implementing both management leverages. 29
Fig. 22 Level of interaction PA - citizens with both levers management
As an indirect result of the increasing of the variables related to the expenses for marketing from the government and the percentage of employees who follow courses in ICT, it can be seen that the interaction between PA and citizens will grow more strongly than in the baseline scenario. Quantitative results are the following: increase of 5.6% compared to the basic documents
Figure 23 Flow of digital documents arriving with both levers of management
By increasing the interaction between PA and citizens and with the increase of other variables, such as the adoption of ECM and DS, the flow of digital documents entering into the Public Administration consequently increases.
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Figure 24 Rate of protocols and storage.
Quantitative results are the following: percentage change compared to the scenario without implementation of the policy of +5.6% documents/month. Assuming the above management policy, there is an increase, as already mentioned, of the flow of digital documents on arrival and, consequently, a higher rate of protocol and a major rate of document filing. Figure 25 shows as implementing both policies, the Public Administration can save significant costs. The results obtained are as follows: variation of almost +1.3% savings in average unit costs of production variation of +0.9% savings of storage costs
Figure 25 Savings in average unit costs of production and cost of storage management with both levers.
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We also report results for the savings in storage costs due to the use of digital documents instead of paper documents and for the savings on the average costs of production of digital documents due to recording in ASP-mode. Table 1. Savings in the cost of storage and in average unit costs of production of documents
average unit costs of
Time
cost of storage (€)
Time
2009/01/01
0
2009/01/01
0
2010/01/01
1.054.012,97
2010/01/01
398.510,43
2011/01/01
7.337.007,72
2011/01/01
2.216.152,69
2012/01/01
20.418.682,75
2012/01/01
5.005.948,37
2013/01/01
40.667.728,24
2013/01/01
8.288.606,73
2014/01/01
68.913.115,89
2014/01/01
12.035.753,75
production (€)
With the use of digital documents, the cost savings for the Public Administration is growing from year to year. Table 2. Trends for savings in the cost of storage and in average unit costs of production of documents
Time
cost of storage (€)
Time
average unit costs of production (€)
2009/01/01
0
2009/01/01
4
2010/01/01
1.054.339,68
2010/01/01
398.641,08
2011/01/01
7.344.947,14
2011/01/01
2.218.902,18
2012/01/01
20.471.374,75
2012/01/01
5.022.167,28
2013/01/01
40.882.112,64
2013/01/01
8.348.202,47
2014/01/01
69.539.831,75
2014/01/01
12.192.170,10
The results in Table 2 were obtained following the implementation of two management leverages: the percentage of marketing expenditures and the percentage of workers taking ICT courses. The related variables have been changed, respectively, as explained above, from 5% to 7% and from 50% to 70%. The simulation shows that, downstream of the implementation of both policies mentioned, there is a significant increase in the cost savings to the PA, especially with a variation of almost +1.30% savings in average unit costs of production and +0.90% savings of storage costs. In conclusion, the model
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created provides a scenario, intended as a key systems model, which considering both exogenous variables endogenous variables that reconstructs the dynamics of the context of dematerialization allowing to understand the its functioning and the various influences. Also, it is a tool for decision support for assumptions of future scenarios or different combinations of variables. 6. Summary and overview The analysis aims to be a study of the phenomenon of the dematerialization through the methodology of System Dynamics. The system chosen to be examined is formed by the world of the public administration, (the central point for modernization and for the implementation of e-government), and from the world of citizens, stakeholders and users administrative innovation. The system was initially studied by a qualitative point of view through the establishment of causal maps consisting of direct or inverse causal links between the variables involved. After drafting the causal map and its validation, the following step was the realization of the associated simulation model. The fundamental assumption of the description of the model is about the percentage of funding available for ICT by the PA for the marketing intended as making aware the citizens about the use of online services and, consequently, about the use of services offered by the PA on the web. Another hypothesis was to divide the employees from the citizens. The identification of the "managerial levers" can in some way, guide the model towards a better situation aiming at the optimization of the system through analysis and through the use of a support decision software. The study revealed how the variables on the percentage of the expenses for the marketing by the government, and the percentage of workers taking ICT courses represent the managerial levers. Indeed, the simulations obtained by changing those data showed significant trends in the related graphs. The simulations led to define a significant savings for the Public Administration matching against an investment in at least one of the managerial levers used. In a context in which it is clear the situation of digital divide in Italy compared to other European countries, it is needed to invest in marketing intended as making people aware of the online services provided by public administration, and beside that investing also in human resources to employ in the public structure in order to increasingly improve and optimize the internal work.
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7. Conclusions and future research The study carried out revealed that the dematerialisation is a major challenge for the benefits that the government can realize. Although it represents only a small improvement that can be implemented in the reengineering of administrative processes, it is a goal that could be achieved quickly. Dematerialisation, for its cross-cutting is present in many aspects of the public system and that is why it is necessary to operate with even more significant policy aimed at raising awareness of the use of the public computerization. The number of documents inside the Public Administration is increasing, either because they are produced internally or because of relations with the users. Beside that, in the public administration there is a huge amount of documents produced and printed in many copies producing more and more paperwork. This issue involves questions of document management and storage that, in turn, implies considerable criticism related to both economics and logistic systems. The introduction of a fully computerized document management system can lead to significant improvements inside the Public Administration, with the computerization of administrative processes, in fact, you can get great savings both in time and in economic terms. We have seen how, the study revealed that there are at least two variables on which the public administration should "leverage" to optimize its internal structure, and consequently derive all the possible benefits. First, it is clear as the public awareness plays a key role in the scheme. In the E-Gov Plan 2012 it can be seen that among the many goals there is an innovation in terms of services for citizens coming to the "customer satisfaction". To achieve this, it is necessary that citizens use the online services and, in particular, the services offered by the Public Administration. Regarding this issue, the Plan E-Gov 2012 highlights how the digital divide between Italy and other European countries is alarming. This is the reason for which the Public Administration should invest in this crucial aspect to make the citizens aware towards the use of the services provided online. Secondly, the inclusion of employees with ICT skills inside the Public Administration emerged as another innovation key.
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In particular it results that the change in workers taking ICT courses is a key variable for the sensitivity of the system, in fact, introducing workers able to " digitize" leads to significant savings and, consequently, significant benefits for Public Administration. The greater is the presence of staff able to contribute building a digitized public administration and the greater, therefore, is the satisfaction of the users who use public services delivered via the web. Furthermore, the internal document management, thanks to qualified personnel, is consequently optimized. It is worth to underline that the benefits from the process of dematerialisation of paper material within the Public Administration are obtained mainly for large quantities of documents. For small amounts of material to be scanned, the investments made in infrastructure necessary for the process of dematerialisation can’t be recovered. In a final analysis, it all once more come down to a very simple concept: the Break Even Point must be met to recover the investment and, consequently, start deriving the benefits of innovation. Dematerialisation thus arises as a path of innovation of government, through a process of efficiency and transparency, allowing big savings in time and in direct and indirect costs in terms of efficiency of administration. Also, thanks to our System Dynamics model, as an approach to the analysis conducted, it was possible on one hand to understand how the reality influences the dynamics of today's management of dematerialization and on the other hand to understand how the current decisions of implicit type may characterize the future development of Public Administration. It is also essential an approach based on the simulation in order to model the reality and, consequently, react in advance. To meet the challenge and to change the way we think it is necessary to innovate; scientific and technological essence of innovation is especially conceptual and it is necessary, more and more, to look beyond our own horizons.
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