A team of researchers, including Dr. Abebe Belay, Fikirte Zemene, Associate Professor Tewodros Getinet, Dr. Chimdo Anchala, Mr. Wondwossen Teshome and Mr. Getahun Wassie, presented their research findings on the study titled Assessing a Digital Transformation Maturity Levels: The Case of Priority Sectors in Ethiopia on June 14, 2024 at the PSI premises.
One of the research team members, Fikirte Zemene, researcher at the Policy Studies Institute, said in her presentation that the study aims to assess the maturity level of digital transformation in priority sectors in Ethiopia. Considering the increasing importance of digital technologies for economic and social progress, this timely study aims to assess the readiness and capability of key industries in Ethiopia to adopt and utilize digital tools and solutions.
H.E. Prof. Beyene Petros, Director General of PSI
Fikirte explained that the digital revolution marks a profound shift from mechanical, analog and electrical technology to today's ubiquitous digital technology. Many are now talking about a fourth industrial revolution, or Industry 4.0, which will transform the 21st century through advances in artificial intelligence, machine learning, augmented and virtual reality, the Internet of Things and big data. This rapid technological advancement is dramatically changing the way companies create, deliver and capture value and provide value-added services to users. In the public sector, this digital transformation goes beyond e-government and the digitization of paper-based processes and is leading to a fundamental redesign of services and processes according to the principle of "digital by design". However, mere technological tools are not enough - it is now critical that public bodies proactively integrate new digital capabilities into their organization and processes in order to stay ahead of the competition and effectively serve citizens in the digital age.
Fikirte Zemene, Researcher at PSI
Fikrte said that according to the OECD, there are several key reasons why the public sector needs to undergo a digital transformation. Rising citizen expectations, security concerns and compliance requirements mean that public services need to boost productivity, increase effectiveness and satisfaction with services and improve openness, trust and engagement with users. The OECD views the digital economy as an evolutionary process that emphasizes the gradual introduction of digital technologies in all sectors. This digital transformation has permeated all areas of society, changing people's interactions and leading to major cultural shifts.
Dr. Abebe Belay, Debre Markos University
Fikirte added that Ethiopia is currently undergoing a remarkable transformation, having implemented a wide range of reforms, particularly in the last four years. the "digital transformation of the national economy" is one of the Ethiopian government's key objectives, with the country's digital transformation strategy now at the top of the agenda in all sectors, including recent achievements. she emphasized that the government and public sector organizations are faced with growing expectations and demands from citizens regarding the scope and quality of public services provided, making it imperative for the public sector to embrace digital transformation to remain relevant and drive economic growth. However, public sector digital transformation faces several key challenges, including a lack of awareness of the benefits of new technologies to drive the economy forward and improve competitiveness, a lack of awareness, regulation and follow-up when implementing digital transformation into existing processes and systems, a lack of alignment between new technologies and the existing processes used to integrate digital-related tools, methods and culture, and limited public sector budgets to invest in the hard and soft infrastructure required for successful digital transformation. Overcoming these barriers is critical for the public sector to embrace digital technologies and become more responsive, efficient, and user-centric public services that meet the evolving expectations of citizens.
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Fikirte further explained that the overall objective of this study is to assess the maturity level of digital transformation, focusing on priority sectors in Ethiopia in 2023, and to generate data for policy advocacy. The specific objectives of this study are: 1) Identify the strengths, weaknesses, opportunities and threats (SWOT) for digital economy implementation in selected priority sectors in Ethiopia. 2) Assess the current maturity level of digital transformation in priority sectors in Ethiopia using public sector maturity models. 3) Select strategies for addressing digital maturity of selected priority sectors in Ethiopia. 4) Provide feedback to policy makers and ministries on the level of digital maturity of the selected priority sectors. She also said the study aims to answer the following research questions: 1) What are the strengths, weaknesses, opportunities and threats of the public sectors in implementing digital transformation in the priority sectors in Ethiopia? 2) What is the maturity level of the identified priority sectors in Ethiopia? 3) Which digital maturity assessment model is best suited to assess the digital maturity of Ethiopia's priority sectors? 4) What are the basic things that should be improved in the Ethiopian priority sectors identified for this study?
Fikirte stated that this study has several advantages: 1) It helps to identify the main problems in the application of digital transformation and recommend solutions to policy makers that can unify them and act accordingly to improve the digitization principles in Ethiopian priority sectors. 2) It can contribute to improving the views and practices of digital transformation in Ethiopian priority sectors. 3) It promotes digital transformation especially in the priority sectors as most other organizations reflect it. 4) It can serve as a resource for other researchers interested in studying the digital maturity of the public sector in Ethiopia. Fikirte cited the study's limitations as The study does not specify the number of organizations included. A larger sample would provide a more generalized picture of digital maturity across all sectors. Possible political or economic instability could disrupt and delay the timely implementation of research findings and hinder digital transformation efforts. She also explained case studies from some countries related to the topic. She said scholars argued that digital maturity assessments are considered helpful in understanding the current maturity level of organizations and determining how to further drive digital transformation . They refer to an organization's ability to respond and adapt to disruptive technological trends (Aslanova and Kulichkina 2020). They are used to identify areas for improvement and provide recommendations on how to achieve the required improvements. She mentioned that how the Republic of Korea restructured its entire economic system by implementing major reforms in the corporate, financial and public sectors. As a result, South Korea now regards human capital as its most valuable asset and is driving its knowledge-based digital economy.
Fikrte also added that China's digital economy is dominated by domestic companies. Instead of applying this technique, China's goal has been to first copy foreign technology and then restrict foreign companies' access to the Chinese market while generously supporting domestic firms. In this way, the role of US companies was significantly curtailed or banned altogether, giving its own companies, particularly Baidu, Alibaba and Tencent, time to develop equivalent services or early clones of US services. Governments and companies across Africa are implementing digital strategies, policies and plans, leading to an increase in digital economy services. Africa's digital economy has been conceivable for two decades, thanks to the great strides made by Africa's KINGS (Kenya, Côte d'Ivoire, Nigeria, Ghana and South Africa). The transition to a digital economy in Africa is not only creating opportunities for economic growth and increased job creation, but also accelerating access to quality basic services and improving government transparency and accountability. Kenya is a regional leader in information and communication technology (ICT) innovation and has a thriving digital ecosystem. Kenya's National ICT Policy was developed with the aim of improving the lives of Kenyans by ensuring the availability of accessible, efficient, reliable and cost-effective ICT services. President Paul Kagame has made Information and Communication Technology (ICT) a major factor in achieving a service-oriented government for all government stakeholders since he introduced decentralization and developed a knowledge-based country. The Rwandan government is committed to providing better, faster and safer services to all citizens, preventing corruption, increasing openness and efficiency and reducing the possibility of bid rigging through various strategic plans.
Dr. Abebe Belay , from Debre Markos University then presented the research methodology and results of the study. Dr. Abebe said that the study deliberately selected the agriculture, IT-enabled services and tourism sectors as they are currently among the key drivers for the organization to transform the country's economy. The study population includes individuals involved in and leading the digital transformation of each selected organization before and during the study period (2023). At least one individual representing a total of 19 organizations/institutions from the focus sectors were considered for the quantitative survey.
Dr. Abebe noted that the quantitative data was collected from primary sources, namely individuals responsible for or working on the digital maturity of the sectors, offices or institutes. The data was collected using a questionnaire administered by a data collector, adapted from Magnusson and Andreas Nilsson (2020). The questionnaire consists of institutional information and 26 questions on a Likert scale to assess the digital maturity of the sector, using a 6-point scale from 1 (strongly disagree) to 6 (strongly agree). Trained data collectors with BSc and MSc degrees and previous experience of similar roles were involved in the data collection. Where more than one person was identified within a sector, the average response for that sector was taken into account. Different people could respond to different specific components of the questionnaire if the first person approached did not cover them all. The data was collected using tablets/smartphones after the questionnaire was developed with ODK.
The instrument was checked for consistency through translation and back-translation, and data collectors were trained, including a pre-test. A pretest was conducted in two organizations (pilot project): Ethiopian Policy Studies and the Ministry of Innovation and Technology; the results are presented in the appendix of the main document. The research team checked the completeness and consistency of the data on a daily basis before the data collectors left the actual data collection site. Prior to formal analysis, a descriptive analysis was conducted to check the validity of the data.
The statistical results of the quantitative research were corroborated by qualitative results and the SVM method. The information was used to identify areas for rapid digital transformation in the domestic economic reform agenda and the 10-year development plan for priority sectors. A high level of digital maturity is required to understand the efficiency and effectiveness of an organization. This research used an adapted digital maturity model, the Government Digital Maturity Model, adopted from Magnusson and Andreas Nilsson (2020). Dr. Abebe explained that the model has two dimensions, namely digital capability and digital legacy, to successfully assess the digital maturity level of the public sector. Digital capability is the ability of an organization to identify, seize and reposition digital opportunities in terms of dynamic capabilities. Digital legacy refers to the impact of previous investments or activities in information infrastructure that either enable or constrain the organization's agility.
Dr. Abebe said each dimension also includes three categories of factors that together measure the digital maturity of the sector. The six factors are efficiency, innovation, balance, technology, organization and users. Three of the factors under the digital capabilities dimension (18 points) are efficiency (7 points), innovation (6 points) and balance (5 points). The three factors under the digital heritage dimension (8 items) are technology (4 items), organization (2 items) and users (2 items). Four of the 26 items were newly added in the current study compared to the assumed digital maturity model. Further descriptions of the individual factors and items can be found in Magnusson and Andreas Nilsson (2020) and in the appendix of the main document.
The data was categorized and cleaned to manage the data and prepare it for analysis. Descriptive statistics such as frequency, percentage and mean were used to summarize the data and the results of the study were presented using tables, charts and text. First, the average of the 18 items under "digital skills" and the 8 items under "digital heritage" were calculated, and then the averages were converted into percentages (average-1)/5. A score of at least 50% is considered good: high digital skills or digital heritage promotion. To determine the digital maturity level, the average values of the two dimensions (skills and digital heritage) are averaged and converted into percentages in a similar way. A percentage of at least 50% in both "digital capabilities" and "digital heritage" is considered "digitally mature" A percentage of less than 50% in both "digital capabilities" and "digital heritage" is classified as "early stage" The remaining sectors are classified as "digital development stage". The quantitative data was analyzed using Excel. Then the SVM is trained and the sectors are classified into different categories: "early"," "developing" and "mature" To identify problematic areas in the sectors for digital maturity, the six factors of digital maturity are assessed separately. Based on these results, the sectors are recommended to work on specific categories of digital maturity factors where improvements are needed. The data is prepared and organized for analysis and then reduced to themes through a process of coding and condensing the codes, interpretation and narrative. In addition, a SWOT analysis was also conducted to address problem areas, identify fertile ground and be prepared for challenges.
Dr. Abebe also presented the findings and discussion of the study. He said that the main findings of the study show a mixed picture of digital maturity in different government organizations and sectors in Ethiopia. The digital capability assessment shows that the Ministry of Agriculture (5.5), Oromia Industrial Park Office (5.2) and Sidama Tourism Office (5) have relatively high capability level. The assessment of digital heritage shows a similar picture: the Ministry of Agriculture (5), Oromia Tourism Commission (5.1) and Oromia Industrial Park Office (5.1) have a relatively high level of digital heritage, while Dire Dawa Industry Park (1.6), Sidama Industrial Park (2.7) and Harari Industry Park (2.9) have a lower level. On the other hand, Harari Tourism Bureau (2.63) and Amhara Region Culture and Tourism Office (3.25) had relatively low scores.
Dr. Abebe said that the Ministry of Agriculture (5.3) and Oromia Industrial Park Office (5.2) had the highest maturity level. On the other hand, Sidama Industrial Park (3.2), Dire Dawa Industrial Park (3.2), Harari Tourism Office (3.3) and Hahari Industrial Park (3.4) had the lowest maturity level. However, the majority of the organizations achieved a maturity level of over 50%, which indicates a generally positive development. He mentioned that the strengths of the assessment lie in the fact that the Ministry of Agriculture and the Oromia Industrial Park Office have achieved a maturity level of over 83%, serving as a model for other sectors. However, the weaknesses lie in the five organizations that have achieved less than 50% maturity, highlighting the need for targeted interventions. The mixed results show that some organizations have made significant progress in digital transformation, while others are lagging behind. The majority of organizations are on a positive path, with an average maturity level of over 50, suggesting that the government's digital transformation efforts are bearing fruit. Dr. Abebe noted that the high performing organizations can serve as role models and provide valuable insights for other sectors to emulate. However, the organizations with lower levels of maturity need focused action to address their weaknesses and catch up with the leaders. The research provides a useful benchmarking tool to track progress over time and identify areas for improvement. Overall, the results suggest that Ethiopia's digital transformation efforts are on the right track, but there is still work to be done to ensure that all sectors and regions benefit from the country's digital progress.
Dr. Abebe also stated that the research presented in the findings may have some weaknesses. One major weakness is the limited consideration of sustainability factors. The study may not have sufficiently addressed the long-term sustainability of digital transformation in the selected sectors. Another weakness is the limited qualitative data that was collected. The research focused primarily on naming individuals responsible for the digital transformation strategy in each company, targeting IT leaders in particular. Consequently, the component of interviewing key informants could not be fully considered, which limited the depth of insights that could be gained.
Dr. Abebe also mentioned that despite the weaknesses identified, the study offers several opportunities for improvement and growth. Policy recommendations: The research findings can directly inform policy makers on targeted interventions to accelerate digital transformation in various sectors. Sector-specific solutions: Developing digital solutions tailored to the needs of priority sectors can significantly improve efficiency, productivity and service delivery. Benchmarking and tracking: Establishing a baseline for digital maturity enables future comparisons and tracking of progress over time, allowing identification of areas for improvement. Capacity building: The research methodology can be adapted to assess other sectors, promote a broader understanding of digital transformation in Ethiopia, and build capacity across different government agencies and industries.
Dr. Abebe noted that the research is also exposed to potential threats that should be considered. Rapid technological change: The pace of technological development may require a revision of the assessment model to remain relevant and adapt to the evolving digital landscape. Sustainability considerations: As mentioned above, the long-term sustainability of digital transformation may not have been adequately considered in the selected sectors. Political instability: Potential political or economic instability within the country could disrupt and delay the timely implementation of research findings, hindering the progress of digital transformation efforts.
Dr. Abebe emphasized that the following recommendations for improvement can be considered to address the identified weaknesses and capitalize on the opportunities. 1. Prioritize investments: Focus resources on organizations with low capabilities ("C" and "B" levels), such as Dire Dawa Industrial Park and Amhara Agricultural Office, to improve their digital maturity. 2. Strengthen digital heritage: Develop programs to improve infrastructure, user adoption and organizational structures, especially in Harari's tourism sector and Dire Dawa Industrial Park. 3. Leverage high-performing organizations: Learn from leading organizations such as the Ministry of Agriculture and the Oromia Industrial Park Office to develop best practices and share knowledge across different sectors. 4. Continuous monitoring: Regularly assess progress and adjust strategies based on new trends and technological advances to ensure relevance and effectiveness of research.
Dr. Abebe emphasized that the following strategy can be considered to implement the recommended improvements. 1. Targeted interventions: Focus resources and efforts on the sectors with the biggest gaps (Dire Dawa, Harari). Implement tailored strategies for the specific needs and challenges of each sector. 2. Enhancing digital heritage: developing programs to improve organizational structures, user engagement strategies and technology infrastructure, especially in lagging regions. 3. Knowledge sharing and collaboration: Facilitate knowledge sharing between high-performing organizations (Ministry of Agriculture, Oromia) and those facing challenges. Encourage collaboration on digital initiatives to promote learning and sharing of best practices. 4. Capacity building: Provide training and support programs to build digital skills and expertise in government agencies and industry representatives to ensure sustainability of digital transformation. 5. Continuous monitoring and evaluation: Regularly assess progress and adjust strategies based on results. By addressing the identified weaknesses, capitalizing on the opportunities and implementing the recommended strategy, the research can contribute to a more comprehensive and sustainable digital transformation in Ethiopia.
Finally, the researchers led an interactive discussion with the participants of the research presentation. The attendees asked numerous questions and provided valuable comments. The researchers acknowledged the importance of these suggestions and committed to taking them into consideration when refining and finalizing the research findings for final external validation workshop.