Central government strategic digitalisation projects – major common challenges

The audit shows that at least 120 of the 722 completed projects have not fully achieved the set aim and purpose. Among these, 31 projects have been discontinued without delivering the intended results, while 86 projects have delivered an IT solution that does not fully meet the set objectives, according to the government agencies’ own evaluations. However, the Swedish National Audit Office notes that a majority of the implemented projects have not been evaluated, which impedes assessing overall objective fulfilment. Costs for the discontinued projects have amounted to SEK 1.6 billion. The majority of these are large and expensive projects from government agencies with essential services, such as the Swedish Transport Administration, the National Board of Housing, Lantmäteriet (the Swedish mapping, cadastral and land registration authority) and Svenska kraftnät (the Swedish National Grid). The Swedish National Audit Office considers that this may reduce public confidence in central government administration.

About half of the projects covered by the audit have exceeded their budget, schedule or both and, in most cases, with relatively substantial deviations from the original plan. These problems persist, despite having been highlighted in a previous audit by the Swedish National Audit Office, and in several analyses by the Swedish Agency for Digital Government and the National Financial Management Authority. These problems are present at virtually all government agencies, regardless of project size. However, they are particularly prominent among government agencies with essential services and in large projects. The Swedish National Audit Office notes that budget overruns and delays are often due to deficiencies in:

• the government agencies’ work to plan and manage the projects
• skills supply
• requirement specifications in procurements.

These shortcomings have had negative consequences for both the government agencies’ own operations and the central government’s ability to achieve the digitalisation objectives. At the same time, it is difficult to assess the extent to which the budget and schedule overruns have led to greater benefit in these projects, as a relatively large number of projects have not been evaluated.

The Swedish National Audit Office notes that many government agencies chose to pursue their own procurements without using the existing framework agreements procured by the Legal, Financial and Administrative Services Agency. At the same time, problems of delayed or failed procurements are one of the main reasons why digitalisation projects are delayed or more expensive than intended. These problems are partly due to deficient requirement specifications.

Currently, none of the support agencies offer comprehensive support in specifying requirements when procuring IT services. We also note that there is a risk of unjustified deviations from the Legal, Financial and Administrative Services Agency’s framework agreements, which in turn can lead to a waste of resources. The reasons for such deviations submitted by government agencies to the Legal, Financial and Administrative Services Agency are often limited and generic, which impedes the Agency’s assessment. Furthermore, the Agency does not have any mandate to hinder a government agency that chooses not to use the framework agreements even though it should do so.

Lack of IT skills is a major challenge for both government agencies and companies. Our audit shows that one-third of strategic digitalisation projects have been affected by such a shortage. In some cases, unforeseen skills shortages have required government agencies to procure IT consultants during the course of a project, resulting in increased costs and delays. The Swedish National Audit Office notes that the government agencies’ work in this respect has not been sufficiently proactive. Many government agencies do not have a strategic plan for their IT skills supply, despite having relatively numerous and costly digitalisation projects. As the need for digitalisation increases, it is important that government agencies work strategically to address skills needs in both the short and long term.

The Swedish National Audit Office notes that a clear majority of government agencies have not systematically worked on realising benefits in their strategic digitalisation projects. In many cases, important elements of the benefit realisation process are missing, such as cost-benefit calculation, benefit-risk analysis, operating cost estimation, zero measurement and evaluation of realised benefits. This is often the case because government agencies lack resources or relevant procedures.

The Swedish National Audit Office assesses that shortcomings in benefit realisation, in particular the evaluation of the benefit achieved, impair government agencies’ ability to monitor and improve project effectiveness. At the same time, it will be difficult for the Government to monitor objective fulfilment of government agencies’ digitalisation efforts, and thus to effectively steer them towards the goal of digitalisation of public administration and the overall objectives of digitalisation policy. The Swedish National Audit Office notes that the Swedish Agency for Digital Government provides supporting materials and coordinates a network for matters concerning benefit realisation, but that these efforts have limited impact on the agencies’ work. We consider that stronger policy instruments are needed to promote progress.

Furthermore, the Swedish National Audit Office assesses that government agencies have not sufficiently benefited from collaboration with others to make their strategic digitalisation projects more effective. Government agencies have collaborated or requested experience from other agencies in only 27% of the self-initiated projects. Almost 40% of government agencies have never collaborated on their digitalisation projects, despite the fact that other central government actors may possess important experience from similar projects. In addition, many government agencies do not have procedures to identify opportunities for collaboration. Other obstacles include regulatory restrictions, shortage of resources and differing priorities among government agencies.

The Swedish Agency for Digital Government works to promote collaboration by coordinating network activities and recommending collaboration as the first choice. Collaboration occurs mainly on a voluntary basis, for example through eSAM and Sunet. However, many government agencies do not participate in these initiatives. The Swedish National Audit Office assesses that further efforts are needed to develop forms of collaboration with clear structures for information coordination and exchange of experience between the government agencies.

The Swedish National Audit Office notes that the support agencies do not offer support for individual digitalisation projects, but that efforts are rather focused on cross-sectoral digitalisation. Previously, the Swedish Agency for Digital Government had an expert group with the task of providing 20 government agencies with individual support for digital investments. However, the Government discontinued the group in 2021 and focused the Agency’s support on general cross-agency digitalisation. According to its instructions, the Swedish Agency for Digital Government has produced knowledge resources and digital services within Sweden’s digital infrastructure (ENA). However, the Swedish National Audit Office’s overall assessment is that this support has a limited impact on the government agencies’ work on strategic digitalisation projects.

Furthermore, the Swedish National Audit Office assesses that Swedish government agencies do not currently have the same conditions for effective digital investments as government agencies in other Nordic countries. In these countries, there are central government actors that provide government agencies with support for digital investments tailored more to their needs.

The Government has ambitious objectives for its digitalisation policy, but has not set any monitorable targets for the government agencies’ work on digitalisation. Neither has the Government systematically followed up on the government agencies’ digitalisation efforts, which often involves implementing digitalisation projects. Digitalisation issues are rarely addressed in agency dialogues, and few government agencies are required to report back on their IT development. Neither are there any joint discussions on digitalisation issues between the ministries with sector-specific responsibility and the Ministry of Finance, which has cross-sectoral responsibility.

The Swedish National Audit Office assesses that shortcomings in the Government's management causes the central government to lack a comprehensive picture of digitalisation efforts. Therefore, it is difficult for the Government to assess overall objective fulfilment, and to determine whether changes are needed in its management or other measures to achieve the objective of digitalisation in public administration and the overall objectives of digitalisation policy.