An Ecosystem Governance Lens for Public Sector Digital Transformation: A New Zealand Case Study

Introduction

‘Digital transformation’ is rapidly disrupting economies, societies and how governments operate. The transformation rhetoric equally applies to governments and the public sector alongside its popular reference in private organisations (Mergel et al., 2019). The public sector is being forced to rethink how it serves its constituents alongside demands for efficiency, service quality, simplicity, transparency and accountability. Information and communication technologies (ICT) have long been transforming government services. However, we now increasingly discuss advances in artificial intelligence applications, big data, blockchain and sensor technologies, enabling faster and more personal government services to individuals, altering cities’ infrastructure, and the role of government capabilities (Benbunan-Fich et al., 2020; Gil-Garcia et al., 2018).

However, digital transformation is fundamentally complex, as it is not only the specifics of the technology but the increasing interdependencies between this technology and the socio-organisational components of people, relationships, culture and organisational structures (Ivančić et al., 2019; Simmonds et al., 2021; Verhoef et al., 2019). Simultaneously, transformation requires extensive multi-sectoral network cooperation. These issues are seen as magnified in the public sector driven by stakeholders’ plurality and complex decision‐making, accountability systems and the fundamental complexity of the diverse operations of government (Rose et al., 2015; Simmonds & Gazley, 2018). Coherent reform and transformation demand fundamental change to organisational structures, capabilities, governance and processes. As Mergel et al. (2019) argue, there is a need for systematic empirical evidence about how public administration approaches digital transformation.

This chapter focuses on this need to understand governance as the means of coordination necessary to support the development and implementation of digital transformation. Systems thinking approaches are increasingly recognised as needed for proper governance approaches to avoid the typical gaps and overlaps driven by silo-based and vertical-thinking, connecting the digitalisation of the public sector to broader public sector goals and agendas. As the basis of a system’s thinking approach, this chapter applies an ecosystems lens, fore fronting multilateral technological, social and cognitive interdependence (Autio & Thomas, 2019), to an embedded case study of digital transformation in the New Zealand Public Sector. Ecosystems are distinguished from other socio-organisational structural arrangements by the nature of their governance and coordination challenges (Autio, 2021), which are fundamentally directed towards achieving alignment and mutual agreements among the members having definite positions and flows among each other (Adner, 2017).

The chapter intends, firstly, to contribute to calls to address the combined sociotechnical interactions and governance issues present in digital transformation in government (Castelnovo & Sorrentino, 2018; Henning, 2018; Mergel et al., 2019; Vial, 2019), through applying an ecosystems lens (Nambisan, 2018; Nambisan et al., 2019). Secondly, the chapter aims to contribute to understanding governance mechanisms that influence ecosystems' alignment and resulting outcomes in the context of digital transformation programmes in government (Autio, 2021; Autio & Thomas, 2020). In deriving these contributions, the chapter poses the following research question: how do governance mechanisms enable digital transformation in the public sector ecosystem through the alignment of sociotechnical ecosystem components?