Digitalization is the driving force behind the modernization of German administration. Despite the ambitious initiatives, such as One-Stop-Government, Online-Futures Act, Federal-State Competence Portal, E-File, Citizen Account, and Electronic ID, the key question remains: Can the determination of the decision-makers meet the high expectations?

by Jan-Henning Wedler, Project Manager, Policy and Digital Analyst, OEZB, a Berlin-based think tank. 

Deficient Digitalization: Germany Trails Behind in Administrative Modernization

The Online Access Act (German acronym: 'OZG'), initially set for completion already by the end of 2022, is still not fully implemented, with many aspects yet to be addressed. In a noteworthy development, a preliminary draft for an advanced version of the law, known as OZG 2.0, had been unveiled. The draft, which was adopted by the German Government in May 2023 and is currently under parliamentary review, aims to further accelerate digital transformation and address existing shortcomings.

What is the real progress of digital transformation in Germany? A closer examination exposes the weaknesses and raises questions about the actual state of implementation. Up to present time in 2023, Germany continues to lag behind in terms of e-government, ranking in the lower midfield in a European comparison. 

Ernst Bürger, Head of the Department 'Digital Administration; OZG Steering' at the Federal Ministry of the Interior and for Home Affairs (BMI), in a guest contribution to the magazine Behördenspiegel in August of this year, once again made the big picture clear: "The modernization of the state and especially the digitalization of the administration is an ongoing task. We need a modern state on an equal footing. Above all, to secure the trust of citizens and companies in a functional state."

Indeed, the original goals were ambitious: improved efficiency, cost savings, error reduction, automation of manual processes, and simplified citizen access to administrative services. Likewise, streamlining information processing, speeding up decision-making, and simplifying license applications, tax payments, and access to other online services were targeted. However, the pace of internal digitalization has been a subject of widespread criticism. Experts and media outlets have pointed out that Germany's digital transformation is stuck in the slow lane, calling for urgent reforms. By early 2023, the sobering reality was that only 105 of the 575 administrative services planned under the Online Access Act had been implemented, with a mere 80 available nationwide. Since then, progress has been slow. The stagnation is concerning, especially in light of the ambitious objectives outlined by current version of the Act. While the OZG had grand plans, its sluggish rollout has drawn intense dissatisfaction. Both experts and policymakers are demanding a swifter and more effective digital service implementation. 

While Germany is struggling, Estonia faces no such challenges. On the contrary, this Northeastern European country leads the pack with 99% of its administrative services available online, while many processes in Germany remain offline. What sets Estonia apart? In the Baltic nation, citizens can manage almost all administrative tasks from the comfort of their homes. Over 3,000 digital services are provided by both authorities and businesses, with only three procedures remaining offline: marriage, divorce, and property purchase. 

It's worth asking how Germany can learn from Estonia's success. Identifying potential obstacles and challenges is crucial, especially considering that German administration is perceived to be many years behind in digitalization. The EU has set a new benchmark with its "Single Digital Gateway" regulation, aiming for digital availability of public services across the EU by January 2024. This adds another layer of urgency for Germany to accelerate its digital transformation efforts.

Digitalizing Public Access, Ignoring Internal Processes: Online Access Act Under Scrutiny

The Online Access Act (OZG) promises a revolution in communication between citizens and administration, yet an investigative examination reveals a reality that falls short of expectations. Caught in an analog maze, authorities resort to printing online applications, which are then managed in paper form, pushing the anticipated efficiency gains far away.

The OZG 2.0, currently under parliamentary review, envisioned as a Future Administration Act, must decisively address the internal digitalization processes of administration that have been neglected thus far. This necessitates integrated strategic process management, harmonized procedures, and comprehensive solutions – a daunting challenge compared to isolated online forms.

To future-proof bureaucratic machinery, uniform standards, interfaces, and processes must be implemented to ensure smooth, continuous, and tamper-proof document exchange between authorities. Precise development and thorough digitalization of all procedures are essential.

The pressing question remains: Can an OZG 2.0 significantly enhance efficiency and transparency in internal administration? Considering the findings so far, the outlook is disheartening. Successfully ushering internal administrative processes into the digital age remains a monumental task

Learning from the e-Pioneer: Estonia's Seamless Data Integration

In contrast, Estonia has already fully integrated data into its internal digital administration, allowing all authorities to access the same database, enabling seamless collaboration and efficient application processing.

The cornerstone of this system is the online service "X-road", which ensures secure data exchange between various offices. As a result, Estonia can electronically manage, store, and exchange nearly all state archives, administrative records, and documents with the utmost security. The X-Road, an open-source standard, connects different data systems and enables multifunctional queries across multiple information systems simultaneously.

As a centrally managed data exchange system, X-Road employs technologies such as RSA, XAdES, Virtual Private Network, TSL, ASiC, RFC3161, and OCSP. In Estonia, it forms the foundation for a comprehensive digital ecosystem offering various services such as e-Tax Board, e-Business, e-Banking, e-Ticket, e-School, and e-Governance.

The future of X-Road lies in its further development as a cloud-native solution that is easier to use, more sustainable, and more secure. Through harmonized registers and continuous innovation, Estonia will further solidify its position as a pioneer in digital administration.

In Germany, efforts are being made to facilitate citizens' digital interaction with authorities and automate numerous processes. However, the existing Online Access Act (OZG) alone proves insufficient for effectively harmonizing and standardizing registers. For example, there is a lack of a defined timeline perspective.

Estonia, as a digital leader, is open to cross-border cooperation and shares the best-practice experience of its successful X-Road implementation. This openness promotes the dissemination of X-Road and supports other countries in digitizing their public administration. But how can Germany benefit from this collaboration?

A pilot project by the Association of Statutory Health Insurance Physicians in Hesse demonstrates initial approaches by testing Estonian infrastructure for video consultations and digital prescriptions. Through such collaborations, important insights can be gained and pave the way for a more comprehensive implementation of X-Road processes in German administrations. But is European-wide cooperation enough to advance the digital transformation in Germany when the existing framework is like navigating with a faulty compass?

Online Access Act Evolution: The Dawn of OZG 2.0

According to the intentions of its creators, the magic word is ‘The Online Access Act 2.0 (OZG 2.0)’. It represents a new milestone in Germany's efforts to optimize public administration through technologies such as low-code, process mining, agility, and modernization of registers. This would primarily modernize the internal digitalization processes of the administration. The amendment aims for fully digital procedures and includes significant directional decisions. The new draft of OZG 2.0 aims to tackle existing shortcomings by introducing a centralized citizen account called "BundID" for seamless two-way communication between citizens and authorities. It also plans to eliminate the need for physical signatures by enabling secure online requests through the online ID function of the national identity card. The draft focuses on achieving end-to-end digitalization of the 15 most important administrative services, such as driver's licenses and marriage certificates, by 2024. Additionally, it introduces the "Once-Only Principle" for electronic retrieval of application records with the applicant's consent and emphasizes user-friendliness and accessibility. Public administrations offering digital services will be required to use an "Organization Account," and by 2028, all business-related services falling under federal economic laws are expected to be exclusively digital. 

Given these ambitious plans, what challenges must OZG 2.0 overcome to move from concept to reality?

The Federal Ministry of the Interior (BMI) presented the first draft version of OZG 2.0 as the successor to the OZG in May 2023. In July 2023, the Bundesrat, Germany's upper house, demanded specific amendments. However, reports from August 2023 indicate that the federal government has been reluctant to make significant changes based on these demands. The first reading in the Bundestag took place on September 21, 2023, marking the beginning of parliamentary discussions on the Online Access Act and E-Government Act amendments. Various stakeholders continue to critique the evolving draft. 

Long before the legislative process for OZG 2.0 even began, critical voices were already being raised about the future digital course. For example, the OZG Task Force Baden-Württemberg, a committee of digitalization officers and administrative experts on state level, calls for stronger integration of municipal insights into the planning of a successor regulation for the Online Access Act. They emphasize the need to precisely define responsibilities and competencies, enable the integration of specialized procedures, and digitally redesign administrative processes.

At the beginning of 2023, the German IT Planning Council sharply criticized the implementation of the former OZG and made it clear that the targeted objectives were significantly missed. Given these critical voices, the question arises whether the OZG 2.0 will indeed bring the hoped-for progress in the digitalization of German administration. A critical examination of current developments, including the Bundesrat's demands and the federal government's reluctance to make significant changes, is essential to understanding the future of administrative digitalization in Germany. Ultimately, the success of OZG 2.0 hinges on its technological implementation.