Implementation of digital transformation in a public entity Kolwani Star Mokhabela Student number: 0307464X Supervisor: Ms Ayanda Magida A research article submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfilment of the requirements for the degree of Master of Business Administration Johannesburg, 2023 Protocol number: WBS/BA0307464X/477 i DECLARATION I, Kolwani Star Mokhabela, declare that this research article is my own work except as indicated in the references and acknowledgements. It is submitted in partial fulfilment of the requirements for the degree of Master of Business Administration in the Graduate School of Business Administration, University of the Witwatersrand, Johannesburg. It has not been submitted before for any degree or examination in this or any other university. Kolwani Star Mokhabela Signed at Johannesburg On the 28th day of February 2023. ii ABSTRACT Public entities strive to have digital transformation in their organisations; they strategise and organise themselves; however, they face challenges with implementation. This study aims to investigate the progress that one South African public entity (PE) has made towards digital transformation, the processes followed in implementing, unpack the challenges and recommend strategies that any public entity can use for better future implementations. A qualitative methodology was followed using semi-structured interviews conducted on a sample of fifteen participants within the public entity who are role players or have participated in digital transformation processes from executives, management and project team members. A thematic analysis of the data was made. Conclusions and recommendations were made around the capabilities and challenges of the public entity, integration of processes, performance measurement, IT skills and overall motivation for employee engagement and adoption of digital transformation and how all these phenomena have a close interaction with each other to achieve a better chance of success on future DT implementations. Key Words: Digital, transformation, IT, systems, SCM, implementation, systems, public entity, processes, Finance, PMO iii ACKNOWLEDGEMENTS I would like to thank the public entity that gave me permission to conduct my research within their organisation. In particular I extend my gratitude to the 15 participants that supported me, my CFO and FPM that allowed me time to pursue this study as well as sacrificing their time for guidance, interviews and encouragement. This journey would have not started without my sister Khensani Xivuri for throwing in a boost of confidence. For coming in for study marathons besides me and moral support towards all submission deadlines. I thank my parents for the cheering and being the best role models; “what you start, you must finish” My dad (2022). Thanks to my Supervisor Ayanda Magida and all my personal critics for your time and guidance. I acknowledge my lovely family; Nsuku, Ndzhaka and Ndzala, for your independence and allowing mommy to do this without a single day of whining. My husband Floyd Mokhabela for the support, cheering, love, care and understanding throughout my studies. He made the mountain feel lighter throughout the journey, MBA is certainly not a marriage breaker. Last but not least, sisi Mpho for stepping up to deputy mom, the coffees and deadline countdowns. iv SUPPLEMENTARY INFORMATION Nominated journal: Journal of Enterprise Information Management Supervisor/Co-author: Ayanda Magida Word count †: 19790 Supplementary files: Appendix A – Participant Information Letter Appendix B – Informed Consent Appendix C – Permission to Conduct Research in the public entity Appendix D – Research Instrument: Schedule of interview questions Appendix E – Ethics Clearance Certificate Appendix F – Data Analysis † Including abstract references, etc. v TABLE OF CONTENTS DECLARATION .......................................................................................................... i ABSTRACT ................................................................................................................ ii ACKNOWLEDGEMENTS ......................................................................................... iii SUPPLEMENTARY INFORMATION ........................................................................ iv TABLE OF CONTENTS ............................................................................................. v LIST OF FIGURES ..................................................................................................... x LIST OF TABLES ..................................................................................................... xi LIST OF ACRONYMS .............................................................................................. xii CHAPTER 1: INTRODUCTION ................................................................................ 13 1.1. Digital Transformation Programmes ........................................................... 13 1.2. Study Context ............................................................................................. 13 1.3. Purpose of the Study ................................................................................. 14 1.4. Problem Statement ..................................................................................... 14 1.5. Research Questions ................................................................................... 15 1.6. Assumptions ............................................................................................... 15 1.7. Delimitations ............................................................................................... 15 1.8. Significance of study .................................................................................. 16 CHAPTER 2: LITERATURE REVIEW ..................................................................... 17 2.1. Introduction ................................................................................................ 17 2.2. Digital Transformation ................................................................................ 17 Overview ............................................................................................................... 17 2.3. Digital Transformation implementation ....................................................... 17 2.3.1. Digital Transformation in Public Entities .............................................. 17 2.3.2. Reframing Digital Transformation ........................................................ 18 vi 2.4. Challenges of implementing Digital Transformation ................................... 19 2.5. Opportunities within successful Digital Transformation .............................. 20 2.6. Strategies for successful Digital Transformation implementation ............... 21 2.7. Analytical Framework ................................................................................. 23 2.7.1. Conceptual framework ........................................................................ 23 2.8. Chapter Conclusion .................................................................................... 24 CHAPTER 3: RESEARCH METHODOLOGY .......................................................... 25 3.1. Research approach .................................................................................... 25 3.2. Research design ........................................................................................ 25 3.3. Population .................................................................................................. 26 3.4. Sample and Sampling Method ................................................................... 26 3.5. The Research Instrument ........................................................................... 27 3.6. Procedure for data collection ...................................................................... 27 3.7. Data Analysis and Interpretation ................................................................ 27 3.8. Quality ........................................................................................................ 28 3.8.1. Trustworthiness ................................................................................... 28 3.8.2. Credibility ............................................................................................ 29 3.8.3. Transferability ...................................................................................... 29 3.8.4. Dependability ...................................................................................... 29 3.8.5. Confirmability ...................................................................................... 29 3.9. Ethical Considerations ................................................................................ 30 CHAPTER 4: ANALYSIS OF STUDY RESULTS .................................................... 31 4.1. Introduction ................................................................................................ 31 4.2. Overview of the study sample .................................................................... 31 4.2.1. Relevance of the empirical data .......................................................... 32 4.3. Themes of the study ................................................................................... 33 4.4. Implementation of Digital Transformation by the public entity .................... 35 4.4.1. Digital disruption of industries and company’s digital transformation .. 35 vii 4.4.1.1. Industry digital development ........................................................ 35 4.4.1.2. Digital transformation within the public entity ............................... 36 4.4.1.3. Key drivers of Digital transformation ............................................ 36 4.4.2. Implementation of digital transformation in the public entity ................ 37 4.4.2.1. Key role players & Critical processes ........................................... 37 4.4.3. Measuring capacity and implementation of digital transformation ....... 38 4.4.3.1. Organisation capacity to implement digital transformation ........... 38 4.4.3.2. Organisation progress with digital transformation ........................ 39 4.5. Challenges faced by the public entity during the implementation of Digital Transformation ...................................................................................................... 40 4.5.1. Workforce Challenges and Customer Adaptability .............................. 40 4.5.1.1. Employee availability and engagement ........................................ 40 4.5.1.2. Digital competence management ................................................. 40 4.5.1.3. Customer ability to adapt to digital transformation ....................... 41 4.5.2. Organisational IT competency in digital transformation ....................... 41 4.5.2.1. IT competency to implement transformation ................................ 41 4.5.2.2. IT Skill set and integration of IT processes in digital transformation ..................................................................................................... 42 4.5.2.3. Organisation capacity to scale up in the digital transformation .... 43 4.6. Changes required within the public entity to successfully implement Digital Transformation ...................................................................................................... 43 4.6.1. Company changes required and implemented for digital transformation ............................................................................................................ 44 4.6.1.1. Changes in strategy ..................................................................... 44 4.6.1.2. Change in internal processes ....................................................... 44 4.6.1.3. Changes in investments for digital transformation ....................... 45 4.6.2. Managing organisational changes for digital transformation ............... 46 4.6.2.1. Measuring performance and maturity levels towards digital transformation ................................................................................................ 46 4.6.2.2. Ensuring adaptation and embedded changes .............................. 46 4.6.3. Digital transformation outcome impact on the public entity ................. 47 4.6.3.1. Changes/Impact on internal and external processes ................... 47 viii 4.6.3.2. Impact of channels of services and offering customers vs Intended benefits ..................................................................................................... 47 4.7. Strategies that can be adopted within the public entity to successfully implement Digital Transformation ......................................................................... 48 4.7.1. Establishing key partnerships .............................................................. 48 4.7.2. Sourcing external partnerships for digital organisational transformation . ............................................................................................................ 48 4.7.3. Incentivising active internal engagements of employees and Change Management ..................................................................................................... 49 4.7.4. Strengthening IT competencies to lead Digital Transformation ........... 50 4.8. Chapter Conclusion .................................................................................... 50 CHAPTER 5: DISCUSSION OF RESULTS ............................................................. 51 5.1. Introduction ................................................................................................ 51 5.2. Implementation of Digital Transformation by the public entity .................... 51 5.2.1. Digital disruption of industries and company’s digital transformation .. 52 5.2.2. Implementation of digital transformation in the public entity ................ 52 5.2.3. Measuring capacity and implementation of digital transformation ....... 53 5.3. Challenges faced by the public entity during the implementation of Digital Transformation ...................................................................................................... 54 5.3.1. Workforce Challenges and Customer Adaptability .............................. 54 5.3.2. Organisational IT and customer adaptability to digital transformation . 55 5.4. Changes required within the public entity to successfully implement Digital Transformation ...................................................................................................... 56 5.4.1. Company changes required and implemented for digital transformation ............................................................................................................ 56 5.4.2. Managing organisational changes for digital transformation ............... 57 5.4.3. Digital transformation outcome impact on the public entity ................. 57 5.5. Chapter Summary ...................................................................................... 58 CHAPTER 6: CONCLUSION ................................................................................... 59 6.1. Introduction ................................................................................................ 59 ix 6.2. Conclusion ..................................................................................................... 59 6.3. Recommendations ..................................................................................... 60 6.3.1 Summary Recommendations .............................................................. 63 6.4. Study Limitations ........................................................................................ 65 6.5. Areas for Future Study ............................................................................... 66 REFERENCES ......................................................................................................... 67 LIST OF APPENDICES ............................................................................................ 77 Appendix A – Participant Information Letter ............................................................. 78 Appendix B – Informed Consent form ....................................................................... 80 Appendix C – Permission to Conduct Research in the public entity ......................... 81 Appendix D – Research Instrument: Schedule of interview questions ...................... 82 Appendix E – Ethics Clearance Certificate ............................................................... 84 Appendix F – Data Analysis Network Maps .............................................................. 85 Appendix G – Supporting data to Recommendations ............................................... 93 x LIST OF FIGURES Figure 2.1: Digital Transformation Framework .......................................................... 24 iFigure 5.1: Digital Transformation Framework with sub-dimensions ........................ 51 Figure F.1: Implementation of Digital transformation in the public entity .................. 85 Figure F.2: Measuring the capacity and implementation of digital transformation .... 86 Figure F.3: Workforce challenges ............................................................................. 87 Figure F.4: Public entity’s IT and customer adaptability to digital transfer ................ 88 Figure F.5: Public entity changes required for digital transformation ........................ 89 Figure F.6: Managing the public entity’s changes for digital transformation ............. 90 Figure F.7: Digital transformation outcome impact on the public entity .................... 91 Figure F.8: Strategies that can be adopted within the public entity to successfully implement Digital Transformation ............................................................................. 92 xi LIST OF TABLES Table 4.1: The speciality and relevant experience of the participants in Digital transformations ......................................................................................................... 32 Table 4.2: The research questions, sub-themes, and themes of the study .............. 33 i Table 6.1: Best practice recommendations for DT .................................................... 63 xii LIST OF ACRONYMS CFO Chief Financial Officer CIO Chief Information Officer DT Digital Transformation DTI Digital Technology and Information Committee FPMO Finance Programme Management Office GMIT General Manager Information Technology HR Human Resources ICT Information Communication Technology IT Information Technology KPI Key Performance Indicator OT Operational Technology PE the Public Entity SCM Supply Chain Management SLA Service Level Agreements BU Business Unit/s 13 CHAPTER 1: INTRODUCTION 1.1. Digital Transformation Programmes Digital transformation (DT) involves integrating digital technology into every area of an organisation, changing how it functions and delivers value to customers. It is still a developing field, especially in the public sector (Gong & Ribiere, 2021). Gruman (2016) defines DT as using digital technologies across business and society. According to Westerman et al. (2014), DT dramatically improves enterprise performance or reach using technology. A culture shift also forces organisations to question existing quo, experiment and accept failure (Kitsios & Kamariotou, 2021; Shreya, 2022). Meijer (2015) emphasises the role of individuals in public entity transformation, social constructions, behaviours, attitudes, and cognition of individual actors in transformational change, and how their behaviours affect systems they are involved in. This covers how they affect change and how individual interests, attitudes, perspectives, and local and institutional settings affect public administration (Mergel et al., 2019). 1.2. Study Context Heavin and Power (2018) say most companies need DT to survive. Hence, in 2020, a public entity's finance team reassessed its strategy and decided to create a Finance Programme Management Office (FPMO) to house and see to the delivery of Digital transformation necessary to improve PE's Finance processes. The FPMO was established in consideration of one of PE's values of “spirit of partnership” with key business partners embedded within the FPMO. This approach was also supported by one of the Project Management Body of Knowledge (PMBOK) principles of Project Integration Management, considered as the principle that holds a project together, ensuring proper coordination of various elements and processes across inter- dependant departments. 14 1.3. Purpose of the Study This research aims to obtain an in-depth understanding and assessment of the implementation process that a public entity undergoes when implementing its DT programme. This includes assessing the progress and identifying key challenges that PE faces and to present strategies to aid PE’s successful implementation of DT. According to Zachari (2022) and Vial (2019), this study answers a call from the body of knowledge on how public administrations define DT in their day-to-day operations, how they approach implementing DT projects, and what can be done to improve the likelihood of success. 1.4. Problem Statement In 2013, PE's finance BU launched the "Chief Financial Officer (CFO) Programme" alongside PE's IT department (IT) which was a 5 year strategy to implement several digital systems to address various finance process issues and this CFO programme has resulted in years of delays; Company PE, The CFO IT Programme Report, Unpublished confidential document (2013). According to Heavin and Power (2018), many phenomena are responsible. This study examined the issues that caused years of delays and failed implementation rollouts. In 2020, the FPMO was established, creating a space to track progress towards DT with much dedicated focus to fast-track implementation; Company PE, FPMO Maturity Assessment Close out Report, Unpublished confidential document (2021). Cichosz et al. (2020) found that the complexity of the system and processes, lack of skills and resources, technology adoption, resistance to change and data protection are the five main challenges in implementing DT. Ivančić et al. (2019) established seven dimensions of DT being; strategy, people, organisation, customer, ecosystem, technology, and innovation. Vamvakidis (2018), on the other hand, identified that cross-functional information communication technology (ICT) utilisation, cross- functional re-skilling and the integration of the business and IT strategy as being the main pillars of a successful DT. This research, therefore, expands on the real-life experiences of implementation of DT, specifically within the context of public sector processes, policies and leadership, to systematically unpack what phenomena 15 contribute to the hindrances and success factors and propose solutions that can contribute towards better implementation. 1.5. Research Questions 1) How does the public entity implement Digital Transformation? 2) What challenges face the public entity during the implementation of Digital Transformation? 3) What changes are required within the public entity to successfully implement Digital Transformation? 4) What strategies can be adopted within the public entity to successfully implement Digital Transformation? 1.6. Assumptions DT programmes, specifically in public entities, have challenges in implementation, which leads to slower progress against fast-paced technological advancements in the industry; and SCM, Finance environment and IT processes in public entities of South Africa are governed by similar regulatory frameworks and therefore face similar processes. 1.7. Delimitations Delimitations were made in the selection of the interviewees, limiting to not more than two interviewees representing a particular area of implementation. According to Jahja et al. (2021), qualitative research concerns individuals’ perceptions of reality based on the use of purposive sampling. Delimitations have also been made in the choice of topic, limiting the exploration to implementation challenges; deliberately excluding the strategy formation of the DT programs, as strategy development has not proven to be a challenge in PE, but implementation is. The exploration of implementation is delimited to aspects of leadership, people, technology, processes, SCM processes used to source systems and implementation partners and project management processes. Although greater emphasis is placed on implementation, the report does touch on change management and funding aspects as these are key enablers to transformation. 16 1.8. Significance of study The expected benefits of DT are known, and entities have shown a willingness to transform by incorporating DT into their strategies, but there is little literature on how these transformations are implemented, especially from a public sector perspective (Ahn & Chen, 2022; Mergel et al., 2019; Papavasiliou, 2020; Vial, 2019). This qualitative study examines PE's transformation journey. It evaluates current implementation methods based on stakeholders' past project implementation experiences. To identify accomplishments, obstacles, gaps, and weaknesses and all phenomenon that has slowed implementation. SCM processes, senior management assistance in execution, personnel skill and capacities, infrastructure, and operational environment and culture enablement are examined. The research takes a comprehensive approach to major implementation issues to comprehend the numerous phenomena at play in the public realm methodically, unpack them separately, and analyse whether they are interrelated. This helps identify significant themes in the issues faced to be resolved and offers strategic methods that could improve implementation in the context of public sector entities. The study presents a holistic picture of PE's challenges; the paper proposes recommendations to drive the turnaround. This could provide a better chance of success for PE as it embarks on a DT journey. This contributes to the growing body of knowledge related to implementation and also specific to the public sector. Benefits could be derived by other public entities to perhaps avoid common pitfalls with recommendations to direct their efforts appropriately in their DT journey. 17 CHAPTER 2: LITERATURE REVIEW 2.1. Introduction The digital age has presented public entities with new obstacles and opportunities. The public sector is transforming due to digital technologies impact on their cultural and organisational components. Even though many academics have examined DT phenomena, the public sector and the elements that either inhibit or enable DT have received much less attention. This literature review looks at research that exists by other researchers and provides business cases for implementing DT programmes in public entities. 2.2. Digital Transformation Overview Mergel et al. (2019) observed that DT in its fullest form results in the creation of entirely new business models that replace existing ways of delivering services, such as the taxi services now delivered by any ordinary driver using Uber as a service to connect to clients via a mobile phone app. According to Porter and Heppelmann (2014), advanced digitalisation capabilities can provide scope for “new functionality, higher reliability, greater efficiency, and optimization opportunities” to increase the value delivered to customers (Porter & Heppelmann, 2014:82). According to Heaven and Power (2018), DT is envisaged as a solution to organisational challenges of efficiencies and effectiveness. With this understanding, DT is at the core of the Finance strategy as the finance team in PE is continuously seeking improvement areas, striving for cost- effectiveness and process efficiencies in all finance processes to remain agile and efficient as a key strategic support business unit while driving value for the customer. 2.3. Digital Transformation implementation 2.3.1. Digital Transformation in Public Entities Kraus et al. (2022) highlight the rise in publications dedicated to DT in business and management publications and demonstrate the infancy of the DT body of knowledge in a developing country context and also from a public sector point of view (Hai et al., 2021; Ries et al., 2018). For decades, public entities have utilised technology to 18 modernise the public sector (Johansson, 2022). Over the past five years, many developing nations have asked for World Bank assistance to construct more sophisticated DT projects (Cem et al., 2021). These programmes promote public entity efficiency and enhance the accessibility and quality of service delivery, strengthen government-to-citizen and government-to-business communications, improve governance and oversight, and modernise key public entity processes (Curtis, 2019; Danielsen et al., 2022; Sichaanji, 2022; Tangi, 2021). The pandemic caused public entities to accelerate DT (Agostino et al. 2021) and to combine two distinct DT methodologies (Norling et al. 2022). In 2020, public entities across the world reduced their emphasis on organisational capacities and increased their emphasis on technical capabilities – in response to social distancing requirements (Pittaway & Montazemi, 2020). However, in 2021, those same entities changed to a strategy that placed greater emphasis on organisational capabilities and less on technological capabilities (Norling et al., 2022). This switching demonstrates the dynamic nature of the interplay between organisational and technological capabilities due to changes in the business environment (Gangneux & Joss, 2022). 2.3.2. Reframing Digital Transformation Jonathan (2020) provides a systematic approach to DT, which provides an understanding of multiple aspects that are interconnected, and need to be managed simultaneously; Strategic objectives, Operational excellence, Operational architecture, Business case development and Solutions selection. All aspects are interconnected initiatives organisations must manage simultaneously (Modiba, 2020). This is consistent with research analysis done in the logistics industry by Cichosz et al. (2020). Their analysis found that there were five main areas of challenges that the logistics industries face when implementing DT programs; (1) complexity of the logistics system and underlying processes, (2) lack of resources and skill, (3) technology adoption, (4) resistance to change and (5) data protection. Both studies conclude that the critical success factors of DT are not limited to technology, and neither is resistance the top barrier. However, other phenomena are at play simultaneously, which may overtake these and lead to implementation failure. 19 Ivančić et al. (2019) established seven dimensions of DT, enabling us to identify seven dimensions of DT – strategy, people, organisation, customer, ecosystem, technology, and innovation. Vamvakidis (2018) identified cross-functional ICT utilisation, cross- functional re-skilling and the integration of the business and IT strategy as the main pillars of a successful DT. These findings were confirmed by Pittaway and Montazemi (2020) and Ahn and Chen (2022) in PE’s context. 2.4. Challenges of implementing Digital Transformation Strategy challenges highlighted from literature is when top management is not on the same page. it makes it difficult for lower management to agree on prioritisation and how progress will be measured, however with clearly defined opportunities, the problem it solves and how the organisation will rearrange itself around the envisaged solution upfront (Schneider & Kokshagina, 2021; Zachari, 2022). On issues of capabilities for scaling up, Sutcliff et al. (2019) explains the divide between the digital capabilities supporting the pilot and the capabilities available to support scaling it. Remedial actions are to seek external capabilities to close this gap, nurture the pilots in-house, and build digital capabilities for ramping up right from the beginning (Sutcliff et al., 2019). Tsolkanakis (2022) called these barriers structural barriers, including lack of managerial and political support, lack of available skills or a shortage of personnel. He also noted the increased organisational complexity and lack of coordination among the different BUs as key structural factors inhibiting the operationalising of a digital pilot. Most barriers that stand in the way of a transformational attempt in a public entity are typically cultural in origin (Aidanpää & Sjöberg, 2021). More specifically, the majority of the obstacles discovered can fall into two categories: resistance to change and bureaucratic culture (Nwozor et al., 2022). Tsolkanakis (2020) found fear of innovation, a lack of internal leadership, internal dissatisfaction about the status quo and expected benefits for the additional work. Therefore particular attention needs to be given to the change management processes, particularly as it relates to all the people who will need 20 to adopt, implement and use the requisite digital interventions as well as overcoming bearocracy in implementation processes and decision making, Organisational restructuring is centred on middle management, however, while upper management regulates the level and rate of change, middle management is responsible for implementation (Paavola, 2020). One may therefore conclude that middle managers constitute the lynchpin of digital change. In a “digitally changed” organisation, middle management's administrative and leadership responsibilities are expected to undergo a radical transformation (Hyvönen, 2018). As they transition from directing and controlling stable processes and people in the middle of the hierarchy to managing resources and connecting people in the middle of networks, middle managers must adopt a new mindset (Zuiderwijk et al., 2021). In the digital era, middle managers must encourage, enable, and coach their employees using digital tools. They are thought to facilitate the organisation’s DT (Paavola, 2020). However, middle managers are frequently least likely to promote change due to their innate risk aversion, lack of entrepreneurial spirit, and strong adherence to functional routines. In addition, middle managers’ “sandwich” position between senior management and the operational level can make them susceptible to stress. How can middle managers be expected to propel DT forward? Entities must review their middle managers' digital abilities and literacy (Jonathan, 2020). How familiar are they with digital technologies, social media, the cloud, and other such developments? The reality is that middle managers may be unable to perform their coaching and leadership responsibilities if they struggle with technology themselves (Modiba, 2020). 2.5. Opportunities within successful Digital Transformation In PE study, Ndou (2004) found that developing basic infrastructure is important to capture the advantages of technologies and communications tools to implement eGovernment (Ndou, 2004). ICT infrastructure requires telecommunication and computer equipment; education on E-readiness and ICT literacy are also necessary to benefit from eGovernment applications (Jonathan, 2020). In the Gyandoot project, the poor infrastructure facilities and lack of education on the infrastructure were major problems encountered in developing and implementing the project (Ndou, 2004). 21 Without the necessary technology, DT efforts will lag expectations (Norling et al., 2022; Tangi, 2021). Despite the high failure rates and the need for additional research, DT in the public sector, particularly in the context of poor countries, is rarely explored (Mu & Wang, 2022; Syed et al., 2022; Tangi, 2021). While there is research on the effectiveness of DT in the public sector, studies on the causes of failure in the public sector of developing countries are uncommon (Zachari, 2022). Thus, failure studies in this setting might offer a unique perspective and the chance to gain fresh insights as lessons are learnt. Syed et al. (2022) study confirmed the relevance of common failure factors in the context of DTs in developing country’s public sectors contexts, such as senior management’s involvement, communication, shared vision, technology awareness, staff resistance, employee skillsets, rigid bureaucracy, empowerment, and stakeholder engagement. The findings also explained novel context-specific features (e.g., inter-department conflicts and lack of trust in the Implementation department). In developing nations, public entities must thus put in place procedures to overcome difficulties with leadership, culture, organisational characteristics, and department- specific issues (Pittaway & Montazemi, 2020). The research conducted by Syed et al. (2022) reveals that the primary focus should be on enhancing leadership competencies since this can either exacerbate or mitigate the issues associated with the other components. 2.6. Strategies for successful Digital Transformation implementation Public entities have encountered difficulty with DT, but the Covid-19 pandemic has hastened the changeover (Tangi, 2021). While legacy architecture and infrastructure remain difficult, people’s mentalities are frequently the greatest obstacle (Pittaway & Montazemi, 2020). Any DT programme must prioritise delivering real, value-creating outcomes for PE and the public. A clear DT plan has proven to be a barrier for the public sector. Due to several variables, such as ineffective risk management; difficulty in attracting, keeping, and developing people; slower governance processes; and less 22 pressure to provide minimum viable products, public sector ventures are more likely to surpass initial cost and time projections. Through this literature review, many important strategies have become apparent that may assist the public sector in delivering initiatives that benefit the customer while increasing productivity and efficiency. See list in Table G.2. When designing digital strategy, PE must account for the desires of customers and clients (Kitsios & Kamariotou, 2021; Shreya, 2022), and care must be taken to hire qualified candidates who meet the current skill needs (Davenport & Westerman, 2018; Meyerhoff Nielsen, 2019). Similarly, the budget for research and development of DT systems should be sufficient/increased (Gong & Ribiere, 2021; Manda & Backhouse, 2017). Leaders must also prioritise participating in seminars and conferences concerning DT (Zachari, 2022). The strategy must be practical by developing corporate policies that support DT (Benjamin & Potts, 2018; Schneider & Kokshagina, 2021). The suggestion is made to consult other businesses that have effectively adopted DT for guidance (Kraus et al., 2021; Jonathan, 2020). While some advocate for the bold abandonment of old technologies and adoption of DT (Agostino et al., 2021; Johansson, 2022), leaders are cautioned to maintain two parallel systems when experimenting with DT (Agostino et al., 2021). As all these changes are happening, it is important to maintain open communication channels between IT and other departments (Papavasiliou, 2020; Syed et al., 2022). Another key factor is creating an R&D team for DT systems (Goh & Arenas, 2020; Nadkarni & Prügl, 2021) with the caveat that providers of DT solutions are selected with care (Cem et al., 2021). PE and technology department must enhance the cybersecurity of e-systems (Mergel et al., 2019) and use data analytics to improve firms’ existing digital systems (Goh & Arenas, 2020; Hai et al., 2021). It is also important to develop digital solutions that are interoperable with other digital systems (Ahn & Chen, 2022; Reis et al., 2018). From a cultural stance, leaders need to convince employees to be receptive to DT (Norling et al., 2022; Zuiderwijk et al., 2021) and develop the capacity to identify and conceive DT methods (Gangneux & Joss, 2022; Press et al., 2021). Leaders must be adaptable to garner employees’ support (Kraus et al., 2022). This will also have 23 positive effects on the people who are expected to adopt digital technologies. Further, leaders are reminded to properly instruct staff on applying DT technologies (Danielsen et al., 2022; Tsolkanakis, 2022) and enhance the capacity to quickly adopt emerging digital business technology (Brown & Brown, 2019; Sichaanji, 2022). In internal company DT initiatives, the customers are the internal employees, and it is important to secure their buy-in. Two factors include using successful digital technology that practitioners truly desire (Cichosz et al., 2020; Gomez-Trujillo & Gonzalez-Perez, 2021) and developing user-friendly digital systems (Nwozor et al., 2022; Sutcliff et al., 2019). 2.7. Analytical Framework DT is frequently cited as a key strategic tool for firms seeking to compete, innovate, and expand in the current market. However, as more and more companies in the private sector adopt digital technologies, redefining customer experiences and having a significant impact on people’s expectations for instantly accessible information, buffet-style service delivery, and limitless configurability, public entities struggle to keep up. Suppose public entities are willing to develop a robust digital strategy and infrastructure that supports new technologies and high-quality digital services. In that case, they will be well-equipped to undertake DT initiatives. 2.7.1. Conceptual framework Research on developing well-founded cross-industry DT frameworks/models is still nascent (Brown & Brown, 2019). To add to the body of knowledge around this gap, a literature analysis by Bumann and Peter (2019) considered almost a hundred articles on digital transformation maturity models and frameworks. Only those from publications with peer review and where the dimensions were validated through research were chosen for further study. This produced eighteen articles in total. The relevant authors must present a comprehensive maturity model or framework for a framework to be deemed significant for the comparative analysis. In addition, the framework is required to originate from scholars or reputable organisations, such as multinational consulting firms. 24 Bumann and Peter (2019) found eighteen validated digital maturity models and frameworks that explain numerous dimensions or action areas to be considered when developing a DT plan to give management an overview of essential problems. The eighteen selected models and frameworks have 115 dimensions (six on average per model/framework). The most frequently cited ones were strategy, the organisation, corporate culture, technology, the client, and people (employees). The six highlighted dimensions/action fields provide an essential framework for the digital transformation success of enterprises, see Figure 2.1. This is the framework that was used in this study. Figure 2.1: Digital Transformation Framework Source: Bumann & Peter, 2019:25. 2.8. Chapter Conclusion During COVID-19, numerous public entities expanded their DT initiatives in response to the needs and external drivers that emerged or escalated. They have discovered that they can affect more rapid transformation than they previously believed feasible. Public entities could utilise this knowledge to commit to a more rapid DT. As public sector companies engaged in their DT, the lessons acquired over the past and strategies from literature can help them do so wisely in future, moving well beyond “doing digital” projects to “being digital” in every way. 25 CHAPTER 3: RESEARCH METHODOLOGY 3.1. Research approach This study used a qualitative mono-method to collect and analyse data (Saunders et al., 2019). This is because the research delves deeper into the challenges within a public entity currently implementing a DT program. Qualitative research answers "how" and "why" questions about complicated phenomena (Shenton, 2004). Qualitative research starts with open-ended questions, data is collected within the participants setting, and data analysis is made from statements made, which are built into general themes upon which the researcher makes interpretations and conclusions (Creswell, 2007). The study explored the implementation of DT, making qualitative research methodology the most appropriate method for this research. Exploratory investigations allow researchers to comprehend a topic and gather insights in a flexible and adaptive approach by starting with a broad focus and narrowing it down (Leedy & Ormrod, 2018). This study considered the different experiences of senior management across key processes, from SCM policies in the selection of implementation partners, project management, infrastructure compatibility and availability of technical expertise, for DT success. 3.2. Research design The type of study determines how the research design is planned. The qualitative case study design used is, explorative, descriptive, and contextual (Leedy & Ormrod, 2018). Explorative and descriptive as the intention was to find out about PEs progress towards DT and its implementation processes by exploring the multiple processes as well as across various level of seniority and participants describe the multiple phenomenas that existed based on their experiences. This study was also contextual as the DT experiences described by participants was within the context of a public sector entity but also within the context of their individual experiences and not intended for generalisation (Oates et al., 2022). Data was collected and the observations were used to inductively reveal the challenges and changes required in implementing a DT program. 26 3.3. Population This research focused on a public entity. The public entity is currently focused on implementing technological and digital changes across the organisation and continuously attempts to remain agile and efficient. The target population for this research is the employees of the public entity; specifically, the executives, management and project members involved in DT programmes will be interviewed as part of this study. This population share research-relevant traits (Guest et al., 2006). 3.4. Sample and Sampling Method Sampling is picking a subset to reflect the accessible population (Leedy & Ormrod, 2018). Purposive population sampling was used to answer the study question (Saunders et al., 2019). Purposive sampling involves a deliberate selection of people, selective experts and management and executive participants (Jahja et al., 2021). Experts from different BUs are engaged to share their in-depth DT experiences to unravel the challenges on the ground. The purposive sampling method is more appropriate for qualitative research than random sampling due to the indepth specifics required to understand the challenges; only knowledgeable and experienced individuals will contribute positively towards this. Qualitative research uses sufficiency and saturation to estimate sample size (Bryman, 2016). The saturation and sample size were determined by data quality, the study scope, issue clarity, and ease of data collection (Guetterman, 2015). A sample size of six to twelve is appropriate for purposive sampling in qualitative research (Guest et al., 2006). This study had a sample size of 15, comprised of participants selected based on their close interaction and expert knowledge of the DT programmes (Jahja et al., 2021). Qualitative research can use a small sample to obtain in-depth information, however 15 was necessary to eliminate bias and increased data wealth. Beyond these identified participants, no further new information will be obtained, this according to Jahja et al (2021) is an indication of the saturation point having been reached, in this case being fifteen. 27 3.5. The Research Instrument In order to study the experiences of PE, in-depth interviews were considered the most appropriate research instrument to abstract a wealth of experiences as witnessed by the various stakeholders involved in implementation processes (Mojtahed et al., 2014). An interview guide was followed to ensure the research questions were addressed (McGrath et al., 2019). The questions were open-ended, and in order to provide rich data, further probing to allow the exploration of all phenomena existing and to obtain individual perceptions, opinions and new insights on the various topics of discussion (Bryman, 2016; Kahlke, 2014; Ryan et al., 2007). 3.6. Procedure for data collection An email with a cover letter inviting participants to participate in this research (Appendix A) was sent out with research information, the organisational approval (Appendix C), and the main study objectives. Once the participants accepted the invitation, a participant consent form was shared (Appendix B). The Interview guide (Appendix D) was provided upfront to ensure participants could prepare for the interview. All interviews were conducted on digital meeting platforms, Teams and Zoom, as PE was operating on a hybrid working model. Permission to record the sessions was requested and obtained from participants at the start of the interview (McGrath et al., 2019; Saarijärvi & Bratt, 2021). Extracts from three sample transcripts are included in Appendix H, I and J. 3.7. Data Analysis and Interpretation Thematic analysis was used for the data analysis. Thematic analysis is a qualitative foundation used to search and identify themes or patterns in data (Saunders et al., 2019). Each interview recording was transcribed verbatim after data collection. The data was analysed and classified into systematic categories (Kleinheksel et al., 2020). The data was analysed using Creswell's six phases of data analysis (in a bottom-up method), namely organisation (step 1), re-checking (step 2), coding (step 3), creating themes (step 4), describing themes (step 5) and interpreting findings (step 6) (Creswell, 2007). 28 1. During the first step, qualitative data was generated by transcribing interviews and uploading them into a password-protected computer. 2. Next, the researcher gained a comprehensive understanding of the information and thought on its overall significance, such as the general opinions of the participants, the tone of their ideas, the overall precise meaning, and the information's reliability. 3. Following Creswell's processes for coding, where text is classified with comparable meanings (Creswell, 2007), the researcher internalised knowledge by carefully editing transcripts and noting ideas that arose while reading. After reviewing the perspectives of multiple participants, the researcher grouped comparable topics, categorised them and generated themes and subthemes for each category. Codes were given to the appropriate sections of the text the appearance of new subjects or codes were assessed. A descriptive term for each topic was given and categorised accordingly. Similarities were clustered and interrelationships formed. Next, abbreviations for each group were made and codes were alphabetised. The researcher compiled data related to each category in a single location. 4. Fourth step used coding to generate topics for analysis and description. 5. Themes were depicted and articulated using narrative passages and tables and 6. Finally step 6 analysing the real perception of what transpired and the lessons acquired based on the various answers and experiences. 3.8. Quality 3.8.1. Trustworthiness Trustworthiness requires a thorough and rigorous description of all study methods (Bryman, 2016). These are credibility, transferability, dependability, and confirmability (Lincoln & Guba, 1986). Multiple stakeholders were interviewed to ensure that the data is dependable as it provides a better representation of the opinions and not solely on individual bias or the researcher’s preconceived ideas. 29 3.8.2. Credibility Credibility, like internal validity in quantitative research, shows trustworthiness (Lincoln & Guba, 1986). The findings in this study were corroborated between participant transcripts coming from various aspects of the PE’s DT Implementation process, with the right level of seniority and experience to strengthen the results. The researcher engaged the data by analysing interview transcripts to construct a theory about the phenomena (Guest et al., 2006). The researcher accurately documented and analysed participant data to increase reliability (Morse, 2015). 3.8.3. Transferability Applicability improves transferability (Tracy, 2010). Participants are described and study process undertaken so the reader may decide if the findings apply to them (Ryan et al., 2007). The researcher also describes the research setting, sampling frame, sample size, and strategy (Kahlke, 2014). During data analysis, the researcher used exact coding to ensure descriptive findings that can be applied to similar situations and benefit future research (Morse, 2015). 3.8.4. Dependability Dependability concerns consistency (Lincoln & Guba, 1986). The researcher documented and followed a questionnaire guide consistently across all participants, documenting all research steps, decisions, analysis, and interpretations to ensure consistency. Transcripts and recordings can be audited via a trail (Tracy, 2010). The Interview guide was applied consistently across varying participants. The Interview guide can easily be repeated in another setting or Public entity. 3.8.5. Confirmability McGrath et al. (2019) say confirmability involves neutrality. The researcher must ensure intersubjective data, i.e., the data should be interpreted, not the researcher's preferences (Morse, 2015). Interpretation within the analysis is the focus here. As Creswell (2007) noted, the researcher must manage their biases towards the study. This study comprised of participants from varying fields of disciplines, at various levels 30 of management, the repetition of the same interview guide provided multi-dimensional views for comparison and wealth of data to enhance findings. 3.9. Ethical Considerations To prevent plagiarism, all authors whose works have been examined and cited have been recognised. Before conducting the research, all ethical requirements were complied with and an ethical approval from the Wits Business School Ethics Committee was acquired (see Annexure E). Written request letters were made and authorisation to conduct research were obtained (Annexure C). One of the ethical requirements in a research study is for the participant’s rights to information and data privacy. When individuals share information with researchers, the researcher must ask permission from the participant before they can share the information with anyone; as such, participants had to give consent before being interviewed (Annexure E). Participants were informed that their participation was optional and that they could withdraw at any moment, and each interview began with participants' verbal consent to record (Ryan et al., 2007). Participants were told they did not have to disclose any information if it made them uncomfortable (Shenton, 2004). Care was taken that participants’ privacy, dignity, and reputation were always respected (Bryman, 2016). Participant identities were kept confidential, with transcripts and all quotes in the final report anonymised. Recordings, transcripts and field notes were stored on a password- protected computer, and only the researcher had access. The data will be stored for five years and deleted after that. 31 CHAPTER 4: ANALYSIS OF STUDY RESULTS 4.1. Introduction The objective of this study is to explore the implementation processes and progress being made in PE’s execution of DT, unpacking the systematic challenges and gains made across entire implementation value chain, and establish a framework for any public entity that may result in better future implementations. The findings of the empirical data from the interview transcripts were analysed and presented in a particular order starting with the profile of the respondents, the relevance of empirical data, a discussion of the themes of the study, and finally, answering the research questions. 4.2. Overview of the study sample The 15 participants interviewed were from different specialities, including IT at different levels, such as IT executive manager, senior manager and other members of IT teams (Table 4.1). Interviewees from finance, included an executive, FPMO and senior finance managers. Members of SCM, change management, operations technology strategy and steering committes were interviwed . The team was diverse, representing multiple functions, and it confirmed an effective purposive sample (Leedy & Ormrod, 2018) and had relevant experience in DT see Table 4.1. 32 Table 4.1: The speciality and relevant experience of the participants in Digital transformations 4.2.1. Relevance of the empirical data The word list from Atlas.ti 22 was used to determine the relevance of data and alignment of data across all interviews with the purpose of the study. The dominant words were training, leadership, leaders, change, technology, mining, skills, future, management, and technologies. These words were prevalent across all interviews and aligned with the study. The relevance of the empirical data and interviews is essential for credibility and rigour of findings (Guetterman, 2015). 33 4.3. Themes of the study There were four research questions in the study to inductively investigate the implementation of DT within the company. A total of 243 codes were generated from the transcripts, and 24 sub-themes were generated, divided into nine themes, see Table 4.2. Table 4.2: The research questions, sub-themes, and themes of the study 34 35 4.4. Implementation of Digital Transformation by the public entity The first research question was how does PE implement Digital Transformation? Three themes answered this research question: the Overview of DT, Implementation of DT in an organisation and Measuring the capacity of DT. 4.4.1. Digital disruption of industries and company’s digital transformation 4.4.1.1. Industry digital development Most PE participants are aware of continuous digital growth, some of which has occurred internationally, in their industry, and specific towns. SMART utility concepts, satellite technologies, IT-OT convergence, and eGovernment activities using Estonia as a model were noted. Yet, some participants believed that rules were slowing digital advancement in their public institutions compared to the industry and international digital disruptions. Several participants thought the DT was developing slowly due to South Africa's climate, politics, and economy, which also affected the industry's feasibility. Yet, other participants stated that the pandemic forced industries to speed up and adapt better to DT to sustain corporate operations. Participants also found that digital development varied by industry and company. Several participants saw industrial progress, but not enough to call it DT. However, the regulatory environment is one of the contributing factors that, you know, contribute to the slow pace of digital transformation. But when it comes to digital disruption, I think pre-pandemic, there was a more relaxed approach to digital transformation. PAT2 So my perspective on, if you know, moving from an international perspective and now bringing it home to our environment, is that there has been very slow adoption, you know, from an African context point of view. PAT3 I don’t know all the details because I’m obviously not privy to everything, but with whatever small engagements I’ve had, I’ve seen that they are making a move. However, unfortunately, the level of progress is not the same within the industry. PAT4 36 4.4.1.2. Digital transformation within the public entity Most participants said there was an ongoing DT within PE; however, how the DTs manifested within the BUs differed. Some DTs included implementing systems that would automate manual activities and enhance business efficiencies. The automation of these manual activities in some BUs was ahead, mainly focused on the finance BU, leaving other departments to catch up on the DT. The finance BU had dedicated structures to drive innovation and DT within their space, which helped with the progress. At a company level, some participants felt that although there was DT within PE, the implementation of these digital systems took some time. On issues of piloting new technology, progress is seen somewhat at a small scale, and the participants felt that if the innovation hub, operational IT and the BUs communicated better, the transformation and scaling up would take place with better success and impact on service delivery that is effective and efficient. So, from an organisation point of view, there is even a committee that focuses on basically IT (Information technology) and the innovation component is there. So that committee is formed, but also lately there is, in our organisation, an appointment of a CIO. Which has been hired to manage both IT and OT. PAT5 We are running digital transformation in my space with the recent project obviously, that we have been currently doing, where we are implementing a planning tool basically for the organisation. PAT12 So, from that perspective, yes, I do think that there is an intent. However, I’m not too sure as yet how far we are with the implementation. So, as we then move into this disruptive space of digital technology and digital transformation, we cannot do it without also maintaining and improving our mandate. PAT15 4.4.1.3. Key drivers of Digital transformation The key drivers of DT from the participants' perspective mainly revolved around the business’ need to drive business objectives and goals efficiently; through automation of processes, easier information dissemination, effective cost management with transparent systems that are easily accessible and user-friendly. Other key drivers of DT were understanding the customer experience and expectations. Since finance is at 37 the centre of business operations support, some participants also felt it was a key driver for much of the DT. The external drivers of DT were politics, the economy and customer needs, which is highly depended on what was happening in society, such as the pandemic. Some of the mentioned drivers of DT were innovative technologies that addressed risk mitigation from PE’s strategy and how compliance to regulations could be implemented or automated. The last-mentioned drivers of DT was transparency because it was needed to improve monitoring and assessment or evaluation of the business. We become more time conscious in undertaking certain, you know, activities. As a result, because then you’re trying to address mundane problems, and the customer requirements, all you know, is that you need real-time information. PAT9 I think the main drivers will be, how can I put it? Automation. People want to automate. People want to bring process improvement or a better way of doing things. PAT10 We are always looking for more effective and efficient ways of doing things. So, in terms of looking for Improving effectiveness and efficiency. PAT11 But secondly, and most importantly, is lack of efficiency. If I’m putting it in a way that you understand, when a process or a system is inefficient, one has got to now look at ways to optimise and use whatever’s available out there to optimise the space and make it more efficient. PAT13 4.4.2. Implementation of digital transformation in the public entity 4.4.2.1. Key role players & Critical processes The key role players in the implementation of DT are shown in Figure F.1 in Appendix F, which contains the network diagrams underlying the analysis. Participants emphasised the role of leadership and their visibility in driving DT; however, these key role players were not all available and visible as in other BUs. Key role players perform some of the key and pivotal processes of digital implementation within PE, including the SCM and its governing processes and procedures, contract management, Investment and budget approvals and the role of BUs in setting the requirements. Although IT resonated as being the key role player to lead DT, these are the key 38 partnerships identified and participants felt a lack of integration in priorities and lack of shared KPIs and lack of joint accountability and measurement throughout all Bus for their contribution to DT as a strategic programme: • Information Technology (IT) Department – Key systems solutions providers for PE, managing the sourcing, implementation and benefits realisation. • Supply Chain Management (SCM) Department – Responsible for sourcing the systems and implementation partners. • Legal Department – Responsible for compiling Service level agreements (SLA) with service providers. • Human Resource (HR) Department – Managing people, change management and training. • Business Units (BU); Continuously seeking gaps where technology can be leveraged for process efficiency, cost effectiveness and risk and compliance mitigations using technology. You, as an executive, set the pace, you set the tone, and you set the culture. And I believe that where we are today, digital transformation is definitely needed. PAT1 I think the first one I would highlight is the supply chain. When that runs right through the middle of any project in terms of the contracts that you have to put in place to implement a new solution. PAT6 4.4.3. Measuring capacity and implementation of digital transformation 4.4.3.1. Organisation capacity to implement digital transformation Very few participants felt that PE had enough capacity to implement DT. For those who felt that they had capacity, the capacity was ongoing and exposure to certain projects gradually increased capacity as new skills was being learnt. However, the majority of the participants did not feel that PE had the capacity for DT due to mainly a lack of skills and limited resources; thus, these participants felt that there should be training, time dedicated to new projects, acquisition of new skills, availability of management and removal of bottleneck processes, see Figure F.2. 39 In varying degrees? Yes. There has been progression with regard to the implementation of digital transformation. And I’m also going to speak from, based on, the transformation initiatives I have been involved in or supporting, predominantly digital transformation or digital enhancements initiatives. PAT2 4.4.3.2. Organisation progress with digital transformation The limited capacity to implement according to most participants, was resulting in slow progress, too slow for the required pace of technological developments. Tender cancellations, outdated technology, insufficient integration, lack of inhouse skills to support and lack of pilot roll out to full scale were mentioned as causes to fail implementation. Participants cited extensive and bureaucratic SCM processes as slowing development. In certain cases, systems take years to buy and eventually technology incompatible with existing old infrastructure, causing further delays and limited beneficiation. Employees and management were also divided between DT implementation and daily tasks. DT has both benefited and suffered from Covid-19. Remote working and collaboration technologies created progress, however, limited resources, time, and most importantly lost opportunities for on-the-job skills transfer from external partners to the internal IT on projects rolled out remotely. Participants believed that PE lacked KPIs to measure DT or the KPIs were rather high-level, not specific and not dedicated to progress on DT on all strategic, tactical or operational levels. No, we don’t have any new key performance indicators (KPIs) at the moment. PAT12. I think there are, but they’re limited. Let’s look at the high level. The strategic one, you already have it. Some strategic KPIs linked to strategic pillars talk about transformation, whether the innovation hub in terms of technical information or a link to the supply chain. PAT6. 40 4.5. Challenges faced by the public entity during implementation of Digital Transformation The second research question was what challenges does PE face during the implementation of Digital Transformation? Two themes answered this research question: workforce challenges and adaptability and Organisational IT competency (see Figure F.3) 4.5.1. Workforce Challenges and Customer Adaptability 4.5.1.1. Employee availability and engagement According to participants, the general analysis on employee engagement was employees willing to participate; however, the availability of employees due to other work commitments and different priorities was low. Participants felt there was a lack of support for implementation skills. This was also exacerbated by employees being overloaded with work causing low energy and dampened innovations. The lack of availability further negatively impacted implementation milestones, such as delayed blueprint engagements and confirmations, user acceptance training and availability for training, all delaying project timelines. Participants highlighted challenges of not having the prerequisite skills to test systems thoroughly for a complete check of all possible scenarios and eventualities that can be encountered within new technology implementation. Employees definitely get involved. Need champions for each area to sell the solution and encourage engagement. PAT14 People are willing; they do get involved. However, challenges of conflicting priorities dampen the active involvement and negatively impact timelines as availability staggers out implementation. PAT2 4.5.1.2. Digital competence management Digital competence management was another workforce challenge. It was evident from the empirical data there was a challenge with digital competence, which included poor digital skills, with functions such as SCM not digitally inclined, and lack of technically savvy leadership, which makes it difficult for them to provide the necessary leadership 41 required for DT. Middle management’s lack of digital skills and complacency also hindered the adoption and ownership of the DT strategy with some participants assuming its due to fear of loss of jobs and relevance. PE also does not have a targeted or preferred technology architectural landscape which can drive desirable competencies. This lack of internal capacity and technology preferences or direction also challenges capacity building to champion the recruitment and retention of relevant skills and the channelling of relevant training programmes required for DT. 4.5.1.3. Customer ability to adapt to digital transformation The customer’s ability to adapt to DT was important as this was central to the success of DT. Employees, adapting is one element for the internal customer, but the project cannot be successful if not implemented upstream and downstream into the value chain of the external customer. What came across was that the internal customers had the potential to adapt to technology changes with minimum resistance, particularly, the younger generation. Despite this, participants also highlighted some challenges with external customers’ ability to adapt, understanding the technology and having the infrastructure for integration, such as integration into municipal systems and availability of user interphases for services to ordinary citizens. This mixed view highlighted the need for a focused, customised customer assessment of their ability to adapt to DT, and this can be done in a systematic approach and not have one size fit all for the customers. 4.5.2. Organisational IT competency in digital transformation 4.5.2.1. IT competency to implement transformation The IT department in PE plays a pivotal role in DT; therefore, the need for IT to be well- resourced with equipment, skills, and finances in order to function properly and support other BUs. A lack of these resources meant that IT could not deliver on implementation objectives and could not fully support other BUs or lead the innovation processes. Mostly IT prefers to hire consultants to ease the burden of implementation and to obtain skills that are not housed internally. The IT departments did not deliver and required assistance from external service providers as well as the digital technology and information committee (DTI) to put in more effort in implementing solutions,capacitation or acquisition of new skills into PE for the newer up coming technology in the industry, 42 see Figure F.4. However, for some participants, the IT department was fully functional, although not optimally, they were able to support other stakeholders. I think when it comes to competencies, PE is filled with a lot of intellectuals. There's high levels of competency when it comes to digital competence. But I do believe that we could do better in the IT space cause I don't believe it's leading, leading from the front, they are leading from behind. And they need to get ahead of this game. Cause ideally in a best case scenario, you want IT to be leading from the front.. PAT1 4.5.2.2. IT Skill set and integration of IT processes in digital transformation Some participants could not tell of the level of IT skill set within PE, and for those who could tell, they felt that IT did have some available skills; however, they did need support, additional new skills and training. They also felt that capacitating of new skills were slow, maybe because some were self-taught or taught over very short implemnetation periods when developers could transfer those skills. This also meant that the skills were specific to the organisational tools and that the confidence of the IT personnel in implementation would only grow gradually. A group of participants felt that there were no skills and that the skills available were insufficient to meet business needs, probably for the aforementioned reasons, such as limited resources and skills, especially for new technologies. So as I indicated, there is, you know, the organisation has identified a lack of skill, you know, capability and capacity that is not sufficient to drive or meet our requirements, let alone to drive digital transformation too. PAT9 PE had integrated processes that allowed for shared burden and increased availability of skills. According to participants, these integrated processes either did not occur across multiple business units, existed but needed to do better, or were good but needed to increase visibility. The reasons why these integrated processes were not rated as excellent by participants were due to a lack of understanding of technology by participants in these integrated processes and a lack of alignment in the processes. However, the additional concerns, such as only having integration occur through collaboration during the project cycle and operating in such a manner as if in different 43 areas and not as a cohesive team, meant that these integrated processes could not function at their optimum. Yeah, hence the challenge, I think, for us now is a lack of partnership. As we mentioned, the innovation part does innovation to tick the box, you see, not to transform the organisation. PAT10 4.5.2.3. Organisation capacity to scale up in the digital transformation Business units could monitor transformation performance and value by piloting projects before expanding them. Compliance to SCM procedures has prevented pilot roll out to full development, making performance measurement difficult. Another problem was that piloting was frequently dependent on one department, such as the Innovation Hub and SCM, excluding other stakeholders such as IT meaning that the BUs might not properly measure performance nor scale up simultaneously once piloting is successful. The pilot is usually smaller than the main scaled-up implementation project and the stakeholders are different; therefore, performance statistics may be misleading when originating from the pilot. Finally, a lack of partnerships and sluggish implementation caused low availability, which prevented BUss from effectively measuring performance. The chances are that because we have to comply with PFMA as we roll out, and also depending on the pilot contract that we have signed, I’m hoping that we are signing pilot contracts that end after the pilot and not tie us into the implementation of the bigger scale of projects we might then end up finding ourselves in the same problem that we’ve been facing of implementation. PAT15 4.6. Changes required within the public entity to successfully implement Digital Transformation The third research question addressed is what changes are required within PE to successfully implement Digital Transformation. Three themes answered this research question: Company changes required and implemented for DT, Managing 44 organisational changes for DT and outcomes that impact on the business units, see Figure F.5. 4.6.1. Company changes required and implemented for digital transformation 4.6.1.1. Changes in strategy For most participants, if not all, a change in strategy was observed within PE towards achieving DT. Most participants were aware of the corporate strategy geared towards innovation to achieve compliance and address risks; this strategy drives DT. However, this strategy change has not translated into a change in processes and policies. However, some structural changes have been observed, for example, having the Digital Technology and Information Committee introduced to oversee all digital and innovation-related activities, supported by the creation and appointment of the CIO role at an executive level to strategies and operationalise the IT and OT functions. The innovation hub was established and other BUs, such as finance, have created PMO structures dedicated to driving DT. Well, I know that we have a change to this new strategy, what is termed Innovation Risk-based strategy as this is the company’s current strategy. They have identified the need for innovation within our organisation and hence amended the strategy accordingly. PAT11 4.6.1.2. Change in internal processes Although there are clear strides in changing the strategy towards DT, the cascading of responsibilities and changes in processes aligned with the strategy were lagging. Participants highlighted key processes and role players that create dependencies between each other for the success of the implementation of DT. However, there is no coordinated effort towards prioritisation, supporting each other, lack of SLAs and lack of accountabilities between the processes. Most BUs have identified a need for automation and streamlining of processes; however, the process to get this done is not streamlined, hence the pockets of excellence in some of the progress being made and not at an organisation-wide scale. 45 The finance BU, for example, changed its ways of working by creating an FPMO, where one of the pillars is DT. This structure enjoys the benefit of dedicated resources, time and measurement of progress in a concerted manner. In the establishment of the FPMO, however, a change in approach was required to deploy partnerships across SCM, IT, HR and legal; IT has come to the party, but SCM has not. Currently, each BU is at liberty to determine its priorities, which may not coincide with IT's priorities in driving DT or SCM to source the systems and partners needed for implementation. The innovation hub in PE is also playing a critical role in testing applicability of new technology in PE such as Robotics Processing and Automation (RPA), however the lack of process alignment and prioritisation hinders a smooth transition to full scale. It is important to note that despite the lack of prioritisation and integration, some benefits were derived from the covid-19 pandemic and changes in ways of working as PE quickly adapted to remote access and more collaborative working. 4.6.1.3. Changes in investments for digital transformation It is without a doubt that DT requires investment; it is thus important that the way and approach to investment are changed and optimised to improve the success of a DT project. Participants highlighted that there is a need for a dedicated DT budget which will allow for effective implementation without hindrances. Look, I mean, I think we still have, are not really investing sufficiently around digital transformation. You know, I’m not so sure about the quantum of the work in the innovation hub. PAT3 In terms of investment levels, we’ve put quite a significant amount of investment towards digital transformation, that I would say, yeah, I think that it’s quite a significant budget and especially this financial year, I think we have even increased their budget, to fund a number of these new initiatives that the organisation has identified but we have not spent. PAT5 On the other side, when this investment is made available, planning and related competencies are required to ensure that the budget is used and the benefits are derived. This is because there was a consensus that significant budgets are made 46 available; however, its underutilisation, resulting from inefficient SCM processes, poor integration in project management, and a lack of integrated priorities. 4.6.2. Managing organisational changes for digital transformation 4.6.2.1. Measuring performance and maturity levels towards digital transformation There were various issues regarding measuring performance, ranging from not having specific, measurable KPIs at a corporate level, lack of systems in place for measuring performance towards DT in any of the Bus, to having some form of measurement tool that did not properly cover the scope of the performance objective, which rendered it insufficient. Some KPIs are specified for certain BUs and only certain levels of management. In some cases, the KPIs of the IT department were at low levels and still needed to be expanded because their pivotal role in PE was linked to various business units' performance, and yet there are no shared KPIs for these integration points. Admittedly most participants felt that their measurement systems did need to be upgraded to measure the small progress being made towards DT, but importantly to measure the attainment of the implementation objective of DT better. The public entity is embarking on an overall organisational Change Initiative, which can significantly increase the maturity levels in relation to change. This will be a process, though. It cannot happen overnight. PAT11 4.6.2.2. Ensuring adaptation and embedded changes Participants found that people were generally receptive to change management as they recognised the importance of remaining agile and adaptive to change in the digital era. Some of the reasons why this was possible were because BUs could clearly articulate the value of the service offering and personnel who could revive change champions who played a role in ensuring change, see Figure F.6. There is always hesitancy in some businesses units for change, primarily due to competing daily tasks, which could cause non-effective rollouts. There was also a note for general upskilling for participants, which could increase adaptation to change. 47 Engage the employees during the start of the project, and explain the plan; there will be few complaints; however, the culture is pro-change. Employees get excited at new plans. PAT14 4.6.3. Digital transformation outcome impact on the public entity 4.6.3.1. Changes/Impact on internal and external processes The impact of DT on the internal and external processes for some of the BUs was negligible and did not show much impact; however, participants believed that internal systems would be impacted positively for some of the BUs. There was some impact as there was a positive progression within the implementation processes that would yield the desired impact and change, see Figure F.7. The impact of covid-19 also accelerated some of the internal and external processes of PE by favouring DT. The majorly affected processes were internal processes, as they were 70% affected versus 30% of the external processes. The main internal processes affected and enabled by DT were recruitment processes, remote access to information and collaboration within PE. Increased efficiencies, reduced errors, reduced time to do work. Less time on manual papers and ensure uninterrupted supply. PAT14 4.6.3.2. Impact of channels of services and offering customers vs Intended benefits The DT end goal is meant to change PE's profitability, and revenue collection, making things easier, transparent and more efficient for the organisation. It will reduce mistakes and give the organisation a competitive advantage. Participants said that the technology must be aimed at changing the customer experience from a service provision, access to information and convenience perspective. However, some BUs felt the money spent on DT had not yet yielded the required returns. Maybe in terms of internal, it will impact a lot on internal business processes, Definitely. But as we advance, we may also see how it will impact the external business processes, especially with our customers. Imagine when we do automation, and after everything, information is available to everyone, then we just tell them, yeah, you guys owe us, Then it keeps on popping on their side 48 every single day. They're going to be annoyed and possibly pay us on time. PAT10 4.7. Strategies that can be adopted within the public entity to successfully implement Digital Transformation The fourth research question was about what strategies can be adopted within PE to successfully implement Digital Transformation. Although the analysis confirms that all aspects of Bunman & Peter (2019) Cross-industry DT Framework need to be worked on, the results highlight four key strategies, see Figure F.8; 1) Establishing key external partnerships, 2) strategies around the sourcing of external partnerships through SCM, 3) incentivising active employee engagement and 4) strengthening the IT competency as a strategic lead and driver of DT. 4.7.1. Establishing key partnerships The strategies used mostly by PE in implementing DT were external partnerships. However, as mentioned by most IT participants, PE only sources external partnerships when the requirements are unmet from internally available skills. Partnerships are also sought from an academic, research, consultative and benchmarking perspective from reputable IT knowledge hubs. The company's needs for DT highly shaped the external partnerships, and thus this was the main critical strategy for establishing partnerships. 4.7.2. Sourcing external partnerships for digital organisational transformation Some participants agreed with the external partnership strategy and highlighted that the optimum model should include a hybrid approach that includes external and internal synergies, even proposing a 70:30 for internal to external. I don’t know; there’s a best practice—a lot. A few years ago, Gartner said that most companies go for a 70-30 split, where they must be able to do 70% of the work internally, and they’ll supplement it with 30% of resources and skills from outside. PAT6 49 This was important to ensure no overdependency on the external providers, only sourcing for what is not internally available. This is important to increase the internal competency and sustainability of the DT. This is however not yet the case with PE due to a lack of technology skills such as developers internally, however knowledge transfers from external partnerships in current implementations is taking shape. Most participants, raised the challenges faced with sourcing external partners, which was regulated, time-consuming and bureaucratic. Sourcing of partnerships was also externally led by what markets perceived is the requirement and not internally led by IT pre-determined strategies. External sourcing must include software, infrastructure and support contract and these should be minimum criteria for a holistic implementation, not split apart. Other partners had no interest in PEs DT strategy and ambitions, and resulted in sluggish and weak quality implementation. but I know there's a number of bids that have gone out in an effort to improve our infrastructure as it is outdated. Take the time of bureaucracy of signing off things, so perpetually being behind. By the time implementation, the technology is three years behind. There are alignment and integration issues in the approaches. PAT13 4.7.3. Incentivising active internal engagements of employees and Change Management Another strategy for ensuring internal participation and success in DT is incentivising the employees for excellent participation and engagement in DT projects. This was not the case for many BUs represented by the participants. As a result, for some, the reward systems were either unclear or non-existent. There were mainly general awards for the whole public entity, and none dedicated to DT programmes. Recognition of participation would require measurement processes to be implemented to identify exceptional performance. We do have incentives, but that was blanket just for the organisation to reach its target on stuff like that. So, it’s not individualised. It’s not to say that I performed well on this project. PAT4 50 4.7.4. Strengthening IT competencies to lead Digital Transformation IT played a pivotal role in DT to the point where other departments relies on it for DT. On the one hand IT participants felt that the business units must be available to partner and drive implementation together with IT, leading with requirements and efficiency- seeking processes, availability and prioritisation of the project by employees for engagements, testing and approvals. On the other hand, participants from business units relied on IT. They felt that they needed IT to be more knowledgeable, be at the forefront of introducing new technology and have the skills to improve and support the business on effective implementations and seamless transitions and support to new technologies. Other participants highlighted their desire for IT to take on the lead on research, market scans, feedback from conferences introducing latest trends and being implemented. Participants also discussed the outdated technology and lack of integrated systems which needed to be established. A more structured and targeted approach to the kind of technology PE has an appetite to charter towards as a defined framework, having considered the future direction and continuously evolving road maps around ERP, architecture and infrastructure for PE. This targeted approach would channel strategies around skills acquisition and capacity-building programmes driven by the requirements of these specific technologies. 4.8. Chapter Conclusion This chapter began with a review of the relevance of participants and the empirical data collected. This first step contributes to the credibility and rigour of findings. A total of 243 codes were generated from 15 transcripts. Nine themes and 24 sub-themes were explored in line with the four research questions, where relevant/indicative excerpts from the transcripts were used to support the analysis findings. The next chapter will outline the discussion of the study results. 51 CHAPTER 5: DISCUSSION OF RESULTS 5.1. Introduction The analysis and findings in Chapter 4 are discussed in detail, and conclusions are made based on the responses' significance. The discussion unpacks the process PE undertakes to implement DT and the challenges and successes observed. These findings are compared to the literature review undertaken, and recommendations of changes and frameworks required are made for future implementation of DT by public entities. 5.2. Implementation of Digital Transformation by the public entity Bunman & Peter (2019) provides a cross-industry DT Framework which sets as an anchor for the discussion of the multi-faceted phenomina of DT implementation in a public sector. This allows for thorough assessment of DT maturity and recognition of continuous progress being made towards DT. Figure 5.1: Digital Transformation Framework with sub-dimensions Source: Bumann & Peter, 2019:31. 52 5.2.1. Digital disruption of industries and company’s digital transformation The data analysis shows that management of PE is aware and acknowledges digital disruptions within the industry; however, it came out strongly that more can be done. It is evident that PE has a strategy in place, and all intentions are aimed at innovation and to digitally transform. Despite differing opinions on where to position the strategy, literature underlines the importance of digital strategy (Brown & Brown, 2019). According to various digital transformation models, effective public entities’ digital strategies must be thoroughly documented, disseminated, and internalised by all employees (Benjamin & Potts, 2018; Schneider & Kokshagina, 2021). The approach should be updated and tested, and appropriate resources must be available (Bumann & Peter, 2019). This, however, is seen only in small pockets of excellence at PE, indicating that the approach and progress are, therefore not universally prioritised and replicated in all BUs. PE also recognises it’s need for DT primarily driven by key drivers: process improvements, building efficiencies and being cost-effective. Secondary drivers are customer and user needs, risk identification and mitigation, and the use of technology for addressing compliance matters, as PE defines it; “Innovation Driven Risk Based Strategy”. 5.2.2. Implementation of digital transformation in the public entity Leadership, IT, business unit owners and SCM are identified as the key role players in charge of processes that are integral to ensuring that PE can deliver on its DT programme. Kraus et al. (2022) confirmed that PE's attitude to new digital technologies is an important part of the digital transformation strategy. The technological dimension of DT emphasises that PE’s adoption of new tech must be collaborative and fluid and incorporate iterative approaches to technology development using modern architectures like the cloud and APIs to enhance flexibility and speed (Reis et al., 2018). Unfortunately, the participants reported that critical processes involved in implementation were not streamlined or integrated. Therefore priorities were not aligned, and no processes existed to enforce alignment, prioritisation and debottlenecking. Participants reported that it was then left to the discretion of middle management whether to prioritise and assist the IT department with its DT Programmes, e.g SCM to prioritise the award of service providers. Also, there was a lack of measures to hold support process owners accountable in case of delays and 53 lack of support from inter-dependencies. Gangneux and Joss (2022) and Press et al. (2021) emphasise flexibility to change priorities and teams when implementing DT. Legacy IT systems, frequently at the core of the IT infrastructure, limit innovation and agility in many public entities (Agostino et al., 2021; Johansson, 2022). 5.2.3. Measuring capacity and implementation of digital transformation Most participants explained why they thought PE could not implement DT. Common challenges supporting this observation were; • a lack of strategy adoption and prioritisation by senior management, • slow, cumbersome and rigid SCM process, • lack of integrated priority and approach, • lack of integrated systems based on a defined architectural landscape, • lack of latest IT skills, • lack of project management skills, • lack of dedicated resources engagement and time, • lack of incentives and rewards for the workforce, and • lack of customer impact amongst many others. With this list not being exhaustive, PE does not have a measurement system to critically evaluate and rank the challenges to measure them progressively as the hurdles are resolved. Literature und