Digital transformation at scale – Denmark

In July of this year, Denmark was announced as the top-ranking country in the United Nations E-Government Survey. Compiled over two years, the survey looks at the ability of its 193 member states to effectively deliver public services via digital channels in a manner that is accountable and inclusive.

This is not the first time the Danish government’s digital transformation efforts have been lauded, having been awarded the same title in 2018 along with their number one ranking in the EU’s 2017 and 2018 Digital Economy and Society Index (DESI). In 2018 Denmark also topped the International Digital Economy and Society Index, which compares the digital economy performance of EU member states with non-EU countries, using a similar methodology to the DESI.

By all accounts, Denmark is the global leader in digital government. How the country has accomplished this is a noteworthy example of achieving successful change at scale. At the turn of the millennium, barely 40% of the population in Denmark had household internet. Today, almost 90% of its citizens interact digitally with public authorities annually, resulting in both efficiency and budgetary gains.

Successful change starts with a defined need

In a world where citizens have become accustomed to the benefits of digital transformation in their roles as consumers, it is no surprise that they expect the same benefits when interacting with public services. Compared to the advances in online banking, queueing for service in a public ministry building seems almost archaic. The potential to create a more citizen-focused public sector has made digitisation unavoidable and played a big part in fuelling the momentum of change.

When the Danish government embarked on its journey of digital transformation almost two decades ago, the efforts were largely driven by a need for smarter spending, however. Facing the same demographic challenges as many modern countries, Denmark had identified the need for efficiency in the public sector, to ensure sufficient resources and support for those most in need.

More recently, the Covid-19 pandemic has highlighted the need for a public sector that can continue to function effectively despite the restrictive measures caused by a crisis of this nature.

“We have a coherent digital infrastructure and a wide range of digital solutions, which means that teaching, doctor visits, municipal case processing and other public services could to a large extent continue despite the closure of society,” said Rikke Hougaard Zeberg, Director-General of the Agency for Digitisation.

Establishing a clear vision and goals

The Danish government’s transformation goal is best described as “digital by default”.

The 2020 United Nations E-Government Survey report cites Denmark’s focus as being on “central ICT infrastructure that links the national government agencies, local government and municipalities to common services and a range of initiatives”.

More explicitly, the guidelines for transformation were defined by the government as:

  • Trust and security should form the foundation of digital transformation in Denmark’s public service
  • The use of these digital services must always be easy, fast and of high quality
  • The digitisation of the public sector must provide the conditions for growth

Ensuring the capability to change

The first of those aims, building on a foundation of trust, has been the primary enabler for the level of transformation witnessed in Denmark. According to Zeberg, the key to the country’s success lies in this trust between citizens and government.

”In Denmark, the public sector plays a very important role in all citizens’ lives and we have a great deal of openness and a lot of interaction with the public sector,” she says, adding: 

 ”That’s why we also have a high degree of trust in the public sector and that trust is one of the fundamental things when it comes to digitisation and the digital services that the public authorities present to the citizens.”

Confidence in the system and the people surrounding it makes the exchange of essential, confidential information between citizens and the public system possible. This confidence allows the country’s significant connectivity infrastructure to then form a platform upon which public service solutions can be built.

Because, if trust is the foundation on which Denmark has built its success, then its high degree of internet penetration is the framework. In 2019, 94% of households had internet access, with 89% of Danish citizens using the internet daily.

Citizens who might struggle to gain access or make use of these digital services are catered for with resources funded by the very savings resulting from the increased efficiency of digital public services. Assisted digital services are available in council buildings and public libraries and the result is an uptake of roughly 70%. This is also seen in the uptake by people with little to no education (60%) being much higher than that of countries like the UK (10%).

The journey to success

Denmark’s process of transforming its public sector started almost two decades ago.

The country took its first step towards digital transformation with the creation of the Electronic Signatures Act in 2001. This followed a 2-year research process and nine Digital Signature pilot projects. These pilot projects led to the creation of a framework agreement on the delivery of qualified certificates which came into effect, along with the Electronic Signatures Act, on 1 October 2001. The aim was to increase usage of digital signatures in the market, but failed to do so due to four primary hurdles:

  • The costs of using the available solutions were high compared to the low number of online services able to handle the Digital Signatures
  • Citizens had to pay for their Digital Signatures
  • Handing over of a Digital Signature required personal attendance and hardware solutions
  • A lack of standardization and poor interoperability between solutions

In 2002 the government took steps to break down these hurdles with an EU tender to find improved business models that would work with existing suppliers’ applications and infrastructure, as well as a process of standardization for Public Certificates for Electronic Services (OCES).

The desired outcome of the tender was the creation of a system which would allow citizens to use only one certificate for all interactions across various public departments – providing access to state, county, and municipal services. Private businesses needed to also be able to benefit from the infrastructure that was established.

The process of standardization was done in consultation with both the public and private sectors, to ensure buy-in from the start.

The results were OCES certificates which did not require personal attendance when handing over and were software-based – massively reducing the associated costs. These certificates served as a guarantee of the identity of the holder and enabled trusted communication between authorities, companies, and citizens. Issuing and use of these certificates were to be governed by certificate policies, which would also define a minimum level of security.

On 27 December 2003, it became mandatory for Danish citizens and companies to have one bank account assigned as a NemKonto or Easy Account. This account is used for all payments from public institutions, such as salaries, insurance benefits, tax refunds, welfare subsidies, pensions, student loans, etc. To process payments into this account, public authorities need only know the recipient’s Personal Identification number (CPR). This makes the processing of payments from the state faster, simpler, and more cost-effective.

In 2010, NemID (Easy ID) replaced the existing Digital Signature as a common secure login for interacting with public services. NemID combines a user ID and password with One-Time Pin (OTP) private keys for a two-factor authentication system.

The Agency for Digitisation was established in 2011, to drive government policies on digitization. Sitting within the Ministry of Finance, its responsibilities include the implementation of digital aims set by the government and the renewal of the country’s welfare using digital technology in the public sector.

This was followed in 2014 by the introduction of the mandatory digital post act by the Danish Parliament. This made it compulsory for all citizens (above the age of 15) and businesses to be able to receive Digital Post from public authorities. This is made possible by Borger.dk, the national online portal to all public sector services. Accessed via a NemID, the platform’s core offering is free receipt and storage of digital post. Senders pay to send mail via the service and any correspondence received through this channel is considered as legally binding as printed contracts and documents.

Successful change at scale

Denmark’s transformation of its public sector has focused on a centralization of basic infrastructure, so that its various departments and members can make cost-effective use of common services to the benefit of the Danish people.

The result of these efforts is a higher uptake of digital public services than any of the other 36 member states of the Organisation for Economic Co-operation and Development (OECD). Application for maternity benefits, for instance, boasts a digital uptake of 100%. Registration for primary and lower-secondary education has an uptake of 97% and application for state pensions is at 95% – proving that the system functions for citizens of all ages, not just the young and digitally-savvy.

The digital transformation of Denmark’s public sector saves the government an estimated 300 million euros per year and case processing time has been reduced by 30%. Transparency in ministries and organizations has increased 96%, further enriching the trust required for the process to work. Positive feedback strengthening the system.

The country’s digital ambitions have affected all levels of government, including state ministries, agencies, public sector institutions, as well as municipal and regional administrations. The digitization of public services also extends to executive institutions like schools, universities, hospitals and more.

What’s next?

Current goals for the project are to further improve access and usability for the “digitally challenged” such as the elderly and persons with disabilities, as well as improving the levels of security in the system. The NemID system’s security, in particular, has come under fire in the past as the system is a known target for cyber-criminals, shutting itself down in response to a distributed denial-of-service (DDoS) attack in April 2013 – resulting in the unavailability of many critical services including internet banking.

Key takeaways

  • The foundation for successful digital transformation is trust in the system from those expected to use it
  • A portion of the gains resulting from increases in efficiency are invested back into the system to further improve it
  • Involving affected partners in the transformation process ensures greater buy-in
  • A phased approach allows for correction of steps before adding the next layer
  • Digital transformation can work for all demographics, not just the young and digitally-savvy

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