Digital transformation will not come from companies or technology. It has to be driven by citizens

It might not even occur to you these days, but the Covid pandemic has helped make a number of technological solutions a common part of our lives. Online video calls, the ability to collectively manage files remotely, plus lots of other specific tools for various fields. Yet the one place that progress does not seem to have reached is Czech state administration. There is far more talk about digital transformation than there is action. How come? This is precisely what Milan Sameš, CEO of Aricoma, the largest IT player on the Czech market and central Europe region, ponders in this interview. According to him, digital transformation is merely a consequence. First of all, we need to see some major legislative changes and a shift in how we think.

I’ll start a few months back. How was Covid affecting your business? Were you seeing any greater interest in any specific solutions?

At the beginning, in Czechia, we saw a wave of retrofitting with technologies that enabled us to work and communicate remotely, but it was only small. Most companies already had the equipment; they just dusted it off and did as much as possible to improve their means of collaboration. Things were a little different in state administration, as it is different by nature. People stayed at home, but remote work wasn't particularly being promoted, so employees then went back to the office and kept on as before. I think this is what state administration is about; most of us would probably like a leaner civil service, but they probably wouldn’t want to see it working under a home office scheme.

The idea of digitalising state administration is a traditional one, as old as the civil service itself, and something that is talked about all the time. The administration is trying to go digital, sometimes with greater or less success. Unfortunately, however, we also went through a period here in the Czech Republic when nothing further was done about it for 10 years. We did a great job of launching the Czech Points (network of assisted public administration centres where every citizen can obtain all the information on the data kept on him or her by the state in its central registers), for example, but then there was nothing; it was not a priority for the government. And unfortunately, sadly I would say, IT has come to be seen as an ugly field that causes problems and ups the costs of contracts, which is one of the biggest media injustices I know.

Where did that originate?

IT has a problem in that large projects very often fall short in terms of time, quality and budget, and that’s a fact. However, that’s true of both the government and the commercial sector. This is due to the obsession with mega projects; contracting authorities have not learned how to split contracts into smaller, more manageable one. When anyone assigns a huge project, they can’t describe it in its entirety at that moment. What’s more, a project like that takes some time, during which it naturally transforms, bringing the need for changes and thus raising the price. In my view, that’s how IT came to be seen as being too expensive and contracts being overpriced, although I can say with a clear conscience that’s not the case 99 percent of the time.

Is there any way to prevent that? As it won't work any better without cost control.

It must become a real and authentic political priority. Not just for the current government, but for any. There must be a sincere effort to simplify things before digital transformation starts to make sense. But the idea that today you can program a complex company with complex processes and the world will become a better place definitely won’t work. This is because the digital transformation of state administration is not about IT; in fact, IT is the very least of it. It’s about legislation, processes and only then, in third place, about IT. 

Let’s break that down then. Does the legislation work, is it set up right?

In Czechia, we have the legislation of a democratic state, but rather than simplifying things, we make them more and more complex. This is not the fault of a specific government, but is down to the general management of the state over the last 20 years. Ideally, the digital transformation of state administration should help to simplify the state and make it more approachable for citizens. But when you’ve got, let’s say, a certain banal state act that takes up 56 pages of forms, you won’t not get anywhere even with digitalisation. You need the legislation and processes to enable it to be on a single page. All in all, digitalising processes in the current state administration is a Sisyphean task.

But even so, can it somehow be resolved?

The state as such must really want to make things simpler and there must be a political consensus. And it is also up to us citizens to put pressure on the current and future government, insisting that we want things to be simpler. If you look at the state, for example, the costs associated with state administration, regardless of which government, the costs of it are increasing, as are the number of employees. Yet at the same time, we need a relatively lean state administration.

That, however, will need a lot of negotiations and energy, and no offence, but it's probably not a sexy enough topic for people to start striking in the squares. 

Exactly. It makes me feel a little bit of civic grief. The technology really isn't the point here; it's not about that. Consider, however, that when you introduce a modern information system in a company, it’s because you want to make it faster and more streamlined. Yet first of all you also have to clean up and simplify the way in which you work.

Is there any way to suppress this? Are we waiting for some super-enlightened government?

A super-enlightened government must first be elected by super-enlightened citizens. In our case, the entire political system is a democratic one, thank God, one that reflects the will of the citizens. When it becomes a priority for citizens, when they understand that a simpler state is better than a more complex one, then it really will happen.

Do you have an insight into the markets abroad? Is it different elsewhere?

I think it's a little bit better in Scandinavia, but generally not by a great deal. Unfortunately, the increasing costs of state administration can be seen in all Western European countries.

What is your role as companies in all this?

It is our duty to keep pointing out where the process needs to start. That digital transformation is not about programming something, but is far more about changing three key components – the legislation, processes, and only then underpinning it with technology. We need to simplify the tax system, but it would take a while to list all the others that need the same. It is, of course, the responsibility of us all – fortunately, the state is there for all of us. I'm just saying that it can’t be brought about by technology alone. Paradoxically, it can even make it more expensive. What good will it do us if you digitalise lots of things in state administration now and hire thousands more civil servants? The will of the citizens also has to be taken into account, that we don’t all want to sort things out via our mobile phone. But I don't want to be overly harsh. There are a great many capable people working in state administration; we are constantly addressing them about this topic and we’ll never give up. 

Are companies doing it better?

The competitive ones are, yes.

So can we use the term "run the state like a business" in this context?

I am extremely sceptical about this. The state cannot act like a commercial enterprise; the state must behave correctly and fairly towards the needy. In my view, a healthy state administration is fair, at a reasonable cost; it provides its citizens with comfort and security, and that’s not possible in the world of commerce. And I even think it’s good that some things do go more slowly in state administration. You don't want to change the state every year; that wouldn’t lead to anything good.

 

BIO: Milan Sameš

Graduated from the Czech Technical University in Prague, with a degree in electronic computers and mathematical informatics. He is a member of the generation that "brought" computers to the Czech Republic. He has worked at Nokia Networks and LogicaCMG, among others. As CEO he headed the Czech Oracle and then the European side of Ness Technologies. He then founded his own company, truconneXion, although he no longer plays an active role there, as he has been the CEO of Aricoma Group since 2018. Sameš is involved in the startup scene, acting as a mentor for nascent technology companies.

About the Aricoma Group

The Aricoma Group is currently the largest IT company in the former Czechoslovakia. It includes two major brands - Aricoma and Qinshift. It is now focusing on seeking new acquisitions in Germany, Austria, Switzerland and Scandinavia.

"Consider, however, that when you introduce a modern information system in a company, it’s because you want to make it faster and more streamlined. Yet first of all you also have to clean up and simplify the way in which you work."

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