Press Meet Up

Digital transformation – road toward modern society

Digital transformation is more important today than ever, both for the modernization of the public sector and for the standardization of the private sector, which must follow global trends. It is important to always keep in mind that digital transformation, as complicated as it sounds, is not quantum physics but a vital need of all participants in society in order to improve both the quality of business and the quality of life of citizens.

Digital globalization, which is a consequence of the continuous development of information technologies, affects the reorganization of society and the global economy, the transformation and emergence of new professions, and the creation of a faster and more efficient system. For this reason, digital transformation must be continuous and imperative. It is obvious that a lot has been done in Montenegro to establish a framework for electronic business (legal, strategic, and institutional), and to implement key e-Government projects (electronic fiscalization, eID…), but our system still does not reflect this and the question arises – why this dysfunctionality?

The process of digital transformation must be accompanied by the building of digital skills. There is a large digital gap both among the younger population and among the entire population when it comes to the use of ICT technologies, therefore it is necessary to start from education and introduce the learning of ICT and digital skills within all levels of the education system, in order to have staff, not only with the mastery of digital skills but ready for a job market that is crying out for individuals of this profile.

According to the compass presented by the European Union through the vision and path of digital transformation until 2030, four key points have been recognized – the development of skills, the existence of safe and sustainable infrastructure, the digital transformation of business, i.e. the economic sector as a carrier of economic development and the digital transformation of public administration with the goal of 100% of public services being digitized.

The mentioned segments cannot be viewed independently, because together they form a complex whole, aimed at establishing a value system that will create a society in which citizens will be in focus, respecting basic rights such as freedom of choice, inclusivity, guaranteeing security, all with the aim of increasing participation and sustainability.

In the past two decades, a large number of laws and by-laws concerning the regulation of the field of digital transformation have been passed in Montenegro, which is mostly harmonized with the legislation of the European Union. However, although the principles of action are clear and normatively defined in theory, the application in practice is different.

For numerous permits and paperwork, you still need to physically go to the counter, most often in the famous “Limenka”. The time spent waiting for the necessary documents is usually measured in hours, and if we multiply all that by the number of individuals and legal entities that go through this process every day – we get an irretrievably lost unlimited amount of a key resource – time, and therefore money.

 Public administrations of advanced, technologically developed countries are increasingly opting for functioning models that are aimed at citizens and the economy, to optimize processes, and simplify and harmonize the provision of services with the real needs and expectations of citizens and the economic sector. Everyday communication between citizens and the public administration is inevitable, it requires time that we sometimes don’t have, and it often entails additional costs. Digitization of services and their personalization makes it easier for citizens to access services, making services more efficient, which indirectly increases the effectiveness and efficiency of public administration at all levels.

Digitization of public administration achieves a higher level of accessibility to services, provides an opportunity for additional education of officials who will support citizens, ensures a high level of public service standards, increases the percentage of trust in institutions, and no less importantly – increases transparency and improves efficiency institutional reforms.

The most advanced ways of providing public services today are those based on the principle of the “One Stop Shop” system. The model implies that more services are provided through a single electronic portal or a single administrative center – which ensures the satisfaction of citizens, with faster and more efficient closure of bureaucratic processes.

The fact is that the digitization process cannot include all members of society and that there will always be a certain number of citizens, but also the type of services that must be implemented directly. However, what can be done in the aforementioned situations is to foresee the aforementioned during the optimization of services, that is, to enable that in such situations we always have trained officers available who can help in the realization of requests.

What has been implemented in Montenegro so far and why are the processes stalling?

We mentioned that in the previous period the normative framework concerning the application of digitization in business, i.e. the digital transformation of the business to start services from anywhere and optimize the business processes of all participants, both the public administration that provides services and citizens who have to provide public administration service.

To exercise rights within several services – such as, for example, exercising rights to certain social benefits, a set of documents issued by another public administration institution is required. Such situations are not only demanding for service users, but also an additional burden for employees, and they also represent a risk when it comes to data protection. All of the above occurs as a result of the lack of interoperability, which in our country, although normatively recognized, is the burden of the citizens because in practice – it is almost not used at all.

The first thing that should be abolished in the existing sequence of steps is the submission of documents issued by the public administration – to relieve citizens and speed up the process of processing requests as much as possible. Citizens would recognize such a procedure as the state’s concern for their needs, saving money and time that is unnecessarily wasted in lines in front of the counter.

The question arises – if the normative framework exists, what slows down the process in practice?

The reason why the process of digitization, primarily about citizens, is late – lies in the definition of the priorities of decision-makers in this sphere.

If we compare public administration services on the scale of digitization with those provided by banks, telecommunications companies, and the like – it is clear that the users of these services do not have a problem with digital skills, that is, that the services are used, which confirms that when the public administration decides everything possible digitize, the digital divide will not be a problem, but the processes must be accelerated.

In support of this thesis, we will share the example of Estonia – a global leader in the digitization of public administration. Today in Estonia, it is not possible to complete digitally only three services – marriage, divorce, and purchase of the real estate. You can successfully carry out everything else electronically! To reach this degree of digitalization, a clearly defined process is necessary, which is enabled by the application of modern technologies in the implementation of public administration services and these activities have a high priority status.

Estonia – an (un)achievable example?

Time behind us has shown that the problem lies in inadequate coordination of digital transformation activities. Following the EU road map of digital transformation until 2030, which clearly shows four key elements for the realization of the digital transformation process (digital skills, digital infrastructure, digital transformation of business and public administration), we in Montenegro must improve these four areas and their coordinate the development institutionally by establishing a body of the Government of Montenegro, whose head should be knowledgeable about opportunities in the field of digitization of public administration, norms, state of information systems, postulates of digital transformation, etc.

In addition to clearly defined institutional competence in the field of digital transformation, it is necessary to form a coordinating body composed of government representatives, managers of information systems of public administration bodies, and representatives of the ICT community.

The complete process of digital transformation would have to be supported by the prime minister, to define a set of priority activities with a precisely defined action plan for realization with his full support through the synergistic action of all participants in the process. When defining priorities, it is necessary to take care that those services that burden the citizens the most – are prioritized, and to grade the others based on a detailed review of the services provided at the local and state level. Support from the prime minister is an important prerequisite, but not a guarantee of success if the operational team that will be the engine of effective digital transformation is not headed by an experienced professional, who knows our system, and barriers well and who has already participated in the digitization process. Successful European countries indicate that it is necessary to gather professionals within a special institution, e.g. Digitization agency that will be the operational body and guarantor of the success of the concept of Digital Montenegro.

The activities were started in 2019, and the system has been officially in production since the beginning of 2021, when the possibility of visualizing accounts using the fiscal service began, while mandatory fiscalization began on June 1, 2021.

Electronic fiscalization also limits the possibility of irregularities, bearing in mind that the Revenue and Customs Administration registers and approves each fiscal account before the end of the financial transaction. This implies the complete openness of all segments of the system, which have been publicly published with examples of program code for basic functionalities – which has significantly facilitated IT companies’ work on the program solution used by tax authorities.

An additional value of the electronic fiscalization system is the content of the invoice, which is standardized to include all items – that is, all individual products and services that taxpayers provide or sell so that the Revenue and Customs Administration has a comprehensive database, which will be of key importance in the collection process. taxes, control of product turnover and imports, inspection supervision, etc.

The registration of taxpayers for fiscalization is done completely electronically and not a single taxpayer had to physically come to the Revenue and Customs Administration to regulate the beginning of the fiscalization of accounts.

The example of the electronic fiscalization of traffic showed us how one service improves the development of the digital society as a whole, primarily the use of electronic identification, signatures, and seals, as well as all additional services aimed at the development of electronic business. Changes in the introduction of fiscal invoices for cashless payments are especially evident, bearing in mind that in the previous period, there was no obligation to issue fiscal invoices, as was the case with cash payments. Fiscalization of invoices and sending data from invoices electronically to the Revenue and Customs Administration are a step towards introducing electronic invoices to customers, following the VAT Act and regulations governing electronic business. The amount and types of data that the Revenue and Customs Administration is now collecting potentially has enormous value and that additionally increases the value of such a digital solution.

The pandemic has accelerated the digital transformation of societies. This is confirmed by the fact that all analyzes in the field show that digital companies were more productive, innovative, and successful than “non-digital” ones during the pandemic because they used the opportunity to accelerate their digital processes. According to research by the European Investment Bank, among companies in the EU, 26% have not invested in digital transformation, while on the other hand, 61% of companies in the EU have already adopted advanced digital technologies. During the pandemic, digitization was crucial for survival, and it is now what has become the “new reality” that we all need and must adapt to to survive in the market, and ultimately it is essential to accelerate the economic growth of our country.

As an example, we cite the conclusions of the European Investment Bank on the progress of European countries in different segments of digital transformation: in 2021, Finland and Malta were the two most digital countries, followed by Denmark, Austria, the Netherlands, and Sweden – the Czech Republic by the use of advanced digital technologies, Finland by digital infrastructure and the application of formal strategic business monitoring, which is an indicator of management practices, Austria for the adoption of digitization during the coronavirus pandemic, Cyprus for investments in software and data and Sweden for investments in employee training.

Montenegro must follow the transformation trends of EU countries as a guide on how to make the best use of its already started digital processes and which way to move. As we stated at the beginning, investing in digital skills at all levels, raising awareness of the importance of digital transformation, opening funds and finances for the development of digitization at the Government level, and connecting the public and private sectors on projects to develop local digital systems and interoperability are the key to further development towards the successful realization of the digital transformation of our country.

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