Administration at its limit: Why cheap IT austerity plans are costly

German administration is heading with open eyes towards a critical system failure. Experts from NExT, a network focused on public service, and the DigitalService of the Federal Government warn of this in a policy paper published on Monday in the "GovImpact" series. By 2030, it is expected that one million positions in the public sector will remain unfilled, as demographic change hits authorities with full force.

According to the analysis, this increases budget and cost pressure. At the same time, more and more tasks remain undone. In this escalation, digitalization has been promising the moon for years – efficiency gains, cost savings, and a more modern state experience. But reality often looks different. With their analysis, the experts challenge common reform approaches and show why real efficiency requires much more than just the red pen or a few new algorithms.

The authors identify three fundamental strategies with which the public sector is currently trying to master the crisis. The first and arguably riskiest path is across-the-board resource cuts even before the actual value chain begins. When digital budgets are slashed and positions are cut, it may save money on paper in the short term. But the need for transformation does not disappear. On the contrary: the remaining employees lack the capacity to fundamentally improve processes because they are drowning in day-to-day operations.

This brain drain often leads to the need to hire expensive external consultants to painstakingly fill the resulting gaps. This can ultimately even drive up costs.

Treating symptoms instead of researching causes

A second, more modern-looking approach starts at the end of the chain: Here, technological layers such as AI or Robotic Process Automation (RPA) are applied to existing, often outdated processes. This provides quick relief for monotonous tasks and shortens processing times, as pilot projects for housing benefits show. However, this approach quickly reaches technological limits. The authors warn that such solutions in e-government only combat symptoms and, in the worst case, cement dysfunctional legacy systems.

These "technical debts" must be paid off expensively later when the underlying infrastructure inevitably requires fundamental renewal. Furthermore, the experience for citizens often remains poor, it is stated. They continue to have to grapple with complicated language and unclear responsibilities.

According to the expertise, the only sustainable solution lies in a profound improvement within the value chain itself. This means consistently tidying up the administration's engine room, rather than just downsizing it or superficially expanding it. Investments must flow into modern existing systems, clear standards, and an intuitive user experience. Only when data is captured and networked in a structured way from the outset can media breaks be avoided and processes be proactively designed.

Examples such as the digital property tax declaration or automated electricity tax relief already show that this works. Such solutions are already saving millions in bureaucratic costs today.

Unlocking the Digital Dividend

According to the paper, in order for this "digital dividend" to be realized across the board, ossified structures in the legal and financial sectors must be broken up. Current budget law often stands in the way of modernization. Costs often arise in one place, while the benefit occurs in another department or at another level.

Here, the initiative calls for a comprehensive cost-benefit analysis. Similarly, personnel law must be reformed: Currently, managers are often rewarded for the size of their apparatus. This creates little incentive to streamline processes through digitalization. Real digitalization in the public sector is therefore not just an IT project, but a political task of shaping. It requires the courage to abandon inefficient traditions in favor of a future-proof administration.

(wpl)