Report No: AUS0002349 . South Caucasus GovTech for Armenia A Whole of Government Approach as a Key Foundation for the Digital Economy in Armenia . June 10, 2021 . Governance Global Practice Europe and Central Asia Region . Document of the World Bank . © 2021 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. 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GovTech: A Whole of Government Approach as a Key Foundation for the Digital Economy in Armenia Key Messages • In the context of the digital transformation worldwide and the move towards a digital economy, GovTech creates the enabling environment to deliver better faster, and more agile services to citizens and the private sector. • Armenia has a long track record of government digital transformation , including the development of an e-government portal, the implementation of digital signature, smart ID, an interoperability platform, a G -cloud prototype and cybersecurity. • The COVID-19 pandemic has made GovTech it even more urgent accelerating the momentum to promote more effective, efficient, transparent and accountable public services to citizens and the private sector , in line with Armenia’s Digitalization Strategy 2021-2025. • Opportunities for reform to leapfrog the potential of GovTech include: (i) developing and implementing a whole -of-government GovTech approach , (ii) foster the adoption and implementation of disruptive technologies and data governance , (iii) modernizing digital platforms and services , and (iv)strengthening the G -cloud infrastructure and cybersecurity. This note presents main findings of the GovTech Snapshot Assessment for Armenia forming part of a larger World Bank global engagement on GovTech and Advisory Services and Analytics (ASA) in the South Caucasus on Transforming Government Services through Digital Innovations.1 The objective of the note is to conduct an initial GovTech stock-taking using the GovTech conceptual framework within the broader Digital Economy context. Starting with a first analytic phase in 2021 and to be continued through a second phase of implementation support in 2022, the assessment focuses on key thematic areas in line with client’s interest to help identify entry-points and reform options. It applies a simplified and customized version of the Digital Government Readiness Assessment Methodology (DGRA), assessing key thematic dimensions and developing a menu of reform options in line with client priorities.2 The note is structured in four sections. The first section presents the GovTech and Digital Economy conceptual framework. Section two includes key findings of the snapshot assessment for all nine 1 This note has been prepared by a team led by Kathrin A. Plangemann, Lead Public Sector Governance Specialist and Task-Manager, and Constantin Rusu, Sr. Public Sector Governance Specialist and co-Task-Manager with contributions by Magali Junowicz, Araks Avetyan and Reyn Anderson. It includes comments received by Arman Vatyan and Khuram Farooq and peer reviewers Cem Dener and David Santos Ruano. Valuable feedback has been received from stakeholders in Armenia which is gratefully acknowledged. 2 Rather than a full-fledged assessment, this assessment has been carried out in an agile mode as a snapshot assessment, considering the multi-country approach, client priorities, budget, timing and the nature of the virtual dialogue in times of COVID 19. 1 dimensions of the DGRA. Section three propose potential reform opportunities based on entry-points identified in the assessment and customized to client priorities. These are presented below as a proposed preliminary menu of reform options and as a basis for further discussion with Armenian counterparts. Finally, Section 4 presents different GovTech engagement options to deepen collaboration between the Government of Armenia and the World Bank. I. Armenia GovTech Stocktaking: GovTech Essential to Realizing the Potential of the Digital Economy The digital economy is expected to reach 25 percent of global GDP by 2030. A strong digital economy can help achieve inclusive growth, foster competitiveness and enhance resilience to shocks.3 GovTech is a crucial pillar of a strong digital economy leveraging government systems, capacities and incentives to deliver services to citizens and the private sector. Empowered by digital infrastructure, endowed with digital skills and safeguarded against cybersecurity and data privacy risks, it can help strengthen government performance, digital entrepreneurship and digital financial services including FinTech. Figure 1: The Digital Economy – Conceptual Framework GovTech is a whole-of-government approach to public sector modernization. With its digital platforms pillar and broader GovTech concept, it is foundational for the digital economy leveraging technologies to achieve national priorities and improve public services and contributing to increased efficiency, effectiveness, transparency and accountability.4 Leading to a new way of thinking, organizing, and working in the public sector, it boosts government performance by enhancing service delivery outcomes, both access and quality. COVID-19 pandemic has further accelerated the need for GovTech reforms to support government 3 The World Bank, “GovTech - Putting People First� GovTech Launch Report and Short-Term Action Plan, 2021, http://documents.worldbank.org/curated/en/213131609824669955/GovTech-Launch-Report-and-Short-Term- Action-Plan. 4 The World Bank, “GovTech-Putting People First�, 2021. 2 business continuity, promote alternative, faster, and more efficient service delivery; allow for significant opportunities to generate fiscal savings, and create resilience to future shocks. The World Bank GovTech agenda, supported by the Figure 2: The virtuous GovTech Cycle GovTech Global Partnership (GTGP),5 defines four focal areas that constitute the GovTech foundational blocks. As shown in Figure 2, these are (i) core government systems, (ii) public service delivery, (iii) citizens engagement, and (iv) GovTech enablers which are defined as cross-cutting drivers of the digital transformation agenda. The four GovTech areas are thus linked to all five pillars of the digital economy framework (Box 1). In its GovTech Maturity Index (GTMI) the World Bank assesses the level of development in these four areas.6 The index places Armenia in group “B� defined as “countries with significant focus on GovTech�. The 2020 UN e-Government Development Index ranks Source: GovTech Maturity Index Armenia as 68 out of 193 economies placing it above the average globally and regionally in the area of digital government. GovTech is also a powerful driver to enhance the business climate promoting private sector development in line with Armenia’s Vision 2030 which highlights the role of the private sector, especially small and medium enterprises, to become a major source of economic growth and employment.7 Digital infrastructure and services have significant potential to boost Armenia’s export enablers and competitiveness. The digital economy could improve competitiveness across all sectors, create new opportunities for business and entrepreneurial activity and provide new avenues for accessing international markets and participating in global e-value chains. Digital improvements hold the potential to enhance investor and consumer trust, increase trade and foster more transparent competition, greater integration into global value chains, diversification and innovative entrepreneurship.8 The World Bank “Doing Business Report 2020� ranks Armenia 47 out of 190 economies, above the regional average.9 5 The World Bank GovTech Agenda. https://www.worldbank.org/en/programs/govtech. World Bank “The-New- Frontier-in-Digital-Government-Transformation� (2020) 6 The World Bank “GovTech Maturity Index: The State of Digital Government Transformation�, May 2021 7 “Armenia 2030: National Priorities for Socio-Economic Development� approved by the order of the President of the Republic of Armenia, 02 February 2021 8 The World Bank, “Country Partnership Framework for the Republic of Armenia 2019-2023� (2019). Annex 5. “Can Armenia Leverage Digital Opportunities� 9 The World Bank, “Doing Business Report 2020�https://www.doingbusiness.org/en/data/exploreeconomies/Armenia 3 Box 1: Key Concepts and Conceptual Framework The Digital Economy encompasses the adoption of digital technology in all sectors as a driver of economic growth, innovation and other means of transforming the economy. It is based on five key pillars: digital infrastructure, digital platforms, digital financial services, digital skills and digital entrepreneurship. These foundations are identified as the key pillars of the World Bank’s Digital Economy Approach which provides the overall context for this analysis. GovTech is a crucial foundation of a strong digital economy leveraging government systems, tools, capacities, and incentives to deliver services to citizens and the private sector. GTGP defines four focal areas that constitute the GovTech foundational blocks. These are (i) core government systems, (ii) public service delivery, (iii) citizens engagement, and (iv) GovTech enablers which are defined as cross-cutting drivers of the digital transformation agenda. The GovTech concept serves as the underlying conceptual framework for the analysis conducted in this note. The DRGA (Digital Government Readiness Assessment) is a methodology developed by the World Bank to measure the progress and challenges of countries in different dimensions of digital government. Having been applied in many countries across the world, it provides granular insights into the state of government’s readiness for digital government reforms and can be used to identify entry-points for further reforms. This analysis uses the DRGA methodology. In May 2021, the publication of the GTMI (GovTech Maturity Index) paved the way for benchmarking countries and identify opportunities and lessons to be drawn for countries seeking to deliver GovTech solutions. It measures the presence of cross-cutting enablers relevant to advancing GovTech, building on a composite index based on 49 key indicators with data on 198 economies. This assessment tool could inform future GovTech assessments. Countries around the world are undertaking innovative GovTech reforms. This includes the integration of online and offline multichannel service delivery, the agile development of digital services, the expansion of e-participation and partnerships, the adoption of data-centric approaches, the strengthening of digital capacities and the innovative use of new technologies such as artificial intelligence (AI), machine learning (ML) and blockchain. For example, Estonia (e-Estonia), Singapore (GovTech Singapore) and the United Kingdom (Government Digital Service) are considered to be among the strong performers in the GovTech whole-of-government approach having transformed their model of service delivery (Box 2). 10 10 Most country’s experiences presented in Box 2 have been featured in the following reports: The World Bank’s “GovTech Maturity Index: The State of Digital Government Transformation�, May 2021; European Union’s “Exploring Digital Government transformation in the EU� 2019; UN Department of Economic and Social Affairs’ “UN E- Government Survey 2018� United Nations; The World Bank’s “GovTech Agenda: The-New-Frontier-in-Digital- Government-Transformation�, 2020 4 Box 2: GovTech Innovations in Numbers 1. Core Digital Government Systems • The Finnish Tax Administration (FTA) reduced the tax gap to 5-7% gap and increased tax compliance by automating nearly 80% of its operations. • In the United States, government agencies saved between saved between US$ 500,000 and US$ 10 million per year depending on size by implementing government cloud collaborative solutions. • In Chile the use of e-procurement saved $8 billion being used by 850 public bodies generating 2 million orders for 101k suppliers (90% micro and small enterprises). • In Singapore the Land Authority saved $11.5 million in user application costs for 70 government agencies through geospatial data sharing and GeoSpace’s Application Programming Interface and web services . • In the UK the North Tyneside Council expects to reduce costs by £56 million over the next few years using RPA (Robotic Process Automation) for finance and human resources. • Also in the UK the adoption of disease surveillance systems based on machine learning algorithms led to more than 90% reduction in outbreaks of norovirus in hospitals in Hampshire. • Brazil’s Observatory of Public Spending has implemented data mining tools that allow officials to audit around US$5 trillion of public spending. In 2015 alone the unit raised red flags in more than 7,500 cases on contracts worth US$104 million. • In Ukraine the rate of tax evasion decreased from 29% to 16.9% after the implementation of an Electronic VAT Administration System, and ultimately fell to 0,9% after the Electronic Control System of Economic Transactions was introduced. 2. Digital Service Delivery • The Estonian government estimates that X-Road – a solution making all government services available in one spot – saves 1,400 years of working time annually. • Moldova significantly reduced costs for payment processing from 22 million MDL annually to 4 million MDL by allowing users to pay for services with any of legally allowed payment tools including bank card, online banking, e-money, and cash. • The UK, one of the top digital government reformers, saved more than £4 billion by bringing 780 user- centered services online leading to more than a billion transactions per year. • In Spain, Barcelona saved €75 million of municipal funds by integrating smart water, lighting and parking management through IoT (Internet of Things) • In Portugal the introduction of a one-stop-shop for business registration led to a 17% increase in new firm registrations and seven new jobs per 100,000 inhabitants. • Mauritius increased tax collection by 12 percent in the year following implementation of mobile money payment facilities. • In the US, introduction of ‘Risk Terrain Modelling’ method in many cities has helped to reduce gun crimes by 35% in Newark, vehicle theft by 33% in Colorado Springs and contributed to a more than 40% reduction in robberies in Glendale, Arizona. 3. Citizen Engagement • The UK Parliament launched its electronic petition platform in 2010. Almost 50,000 petitions have been signed by more than 60m British citizens. • In Kenya an integrated solution for the submission and handling of complaints resulted in ten times more complaints and an increase in resolution rates from 46 to 94 percent. • In Colombia the implementation of the Online Government Strategy led to greater citizens satisfaction with digital services and digital citizen engagement 4. GovTech enablers • In Austria the public sector digital skills and innovation website- GovLab Austria- provides training on innovation and a platform to exchange ideas with other innovators in the administration. • In Switzerland, the Swiss Digital Initiative (SDI) was launched to strengthen trust in digital technologies and in the actors involved in ongoing digital transformation. One of its initiatives, the Swiss Digital Days 2020, attracted 80,000 visitors from 100+ partners in the first fully-hybrid Swiss-wide event. 5 II. Armenia GovTech Stocktaking: Progress Made and Opportunities Armenia has a long track record of government digital transformation. The COVID 19 pandemic has made GovTech even more urgent accelerating the momentum to promote more effective, efficient, transparent and accountable public services for citizens and the private sector. In 2020, the Government of Armenia developed the Armenia Transformation Strategy 2050 which, lays out its long-term socio-economic, educational and human development objectives for the next 30 years and prioritizes digital transformation as a cross-cutting theme. In February 2021 a new Digitalization Strategy was adopted. To help inform the implementation of the new digital strategy and accelerate the implementation of the digital economy, this note presents an initial stock-taking of progress in Armenia. The assessment is based on the Digital Government Readiness Assessment (DGRA) methodology, an analytical tool designed to assess digital government transformation achievements and opportunities.11 It covers nine core foundations: (i) Leadership & Governance, (ii) User-Centered Design, (iii) Public Administration and Change Management, (iv) Capabilities, Culture and Skills, (v) Technology Infrastructure, (vi) Data Infrastructure, Strategies and Governance, (vii) Cybersecurity, Privacy and Resilience, (viii) Legislation and Regulation and (ix) Digital Ecosystem. This section presents the initial findings of the on-going stock-taking for each of the nine dimensions. The initial diagnostic findings have benefitted from client feedback and validation and laid the foundation for global knowledge-exchanges. Its menu of reform options has opened new pathways for reforms and collaboration. 1. Leadership & Governance High-level political commitment, a strong vision and the appropriate institutional architecture are all critical for conducting key GovTech reforms. This section assesses strategies and organizational structures for effective GovTech implementation.12 Key Findings: Achievements and Opportunities Following the Velvet Revolution, the Government of Armenia has provided high-level sustained political commitment to digital transformation. Government strategies have prioritized digital transformation of state and local government, recognizing them as foundational to Armenia’s long-term development. The Government Action Plan for 2019-2023 focuses on digital government including digital systems as a key driver for improving public sector efficiency. The “Armenia’s Digitization Strategy 2021-2025�, adopted in February 2021, envisages two phases of implementation with nineteen activities through 2025 to achieve key goals such as the use of digital government and e-commerce by 50% of the population by 2025. While 11 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. The framework of the DGRA methodology is based on a comprehensive set of 67 questions and explores nine non- sequenced core foundations that build open and agile digital government. The DGRA toolkit has been applied in a number of countries (Myanmar, Vietnam, Lebanon, Kyrgyzstan, Uzbekistan, Senegal, etc.) and informed government decision making and implementation. 12 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams� 2020. 6 the strategy is ambitious, further development of action plans, roadmaps, budgets and performance monitoring is needed to support implementation. The institutional framework for GovTech is led by one of the two Deputy Prime Ministers who also is the Government’s Chief Information Officer (CIO). The CIO ensures high-level coordination for effective GovTech and chairs the Digitization Board, which includes twelve highly-ranked officials from Ministries, Departments and Agencies (MDAs).13 The Board facilitates coordination across government MDAs and reviews and approves major digitization projects. The Ministry of High-Tech Industries (MHTI) focuses on digital transformation policy and strategy. EKENG, the Digital Infrastructure Implementation Unit, is responsible for operations such as digital infrastructure and interoperability platforms. While the central administration institutional framework for GovTech is in place, there is a need for enhanced coordination and information-sharing across MDAs. An intersectoral CIO Network Working Group under the Digitization Board has been formed bringing together the deputy heads of MDAs and heads of IT departments to serve as a platform for internal technical discussions and decision making on digital solutions and digital systems implementation. The Digitization Board is planning to develop a dashboard for performance analysis to inform decision making and facilitate the implementation and monitoring of digitalization initiatives across government. One of the greatest challenges for effective digital transformation is that the Government has no centralized approach for the whole-of-government projects. Currently, each ministry plans and implements its GovTech initiatives independently without a clear set of standards and impeding the alignment and integration of multi-sectoral projects which are key for many GovTech systems and tools. For the financing of GovTech, most of the budget goes to individual MDAs for separate projects. This prevents the adoption of cross-sectoral financing as well as some of the agile planning and budgeting approaches that produce synergies and fiscal savings across government, promote alignment and integration and have proven effective for digitization. Most projects are not fully funded through the state budget. Some MDAs have developed core digital systems to deliver their services including the State Revenue Committee, Cadaster Committee, Ministry of Labor and Social Affairs and the Ministry of Justice. These have developed core systems and have staff to coordinate digital transformation implementation in their functional areas. They were supported by the Third Public Sector Modernization Project (PSMP3)14 which, focused on improved access to selected, enhanced e-government services and an initial roll out of several large GovTech solutions including Support to Tax Administration and Policy Leadership.15 The State Revenue Committee has experience in using selected GovTech tools in its core tax administration systems such as for tax reporting, tax invoice issuance, single window principle for border crossing and even for the application of artificial intelligence. The Ministry of Labor and Social Affairs and the Cadaster Committee have core information systems and they coordinate and organize the development of their respective 13 These include the Head of the Prime Minister’s Office, the Minister of High Tech Industries, the Minister of Economy, the Deputy Head of the Prime Minister’s Office, The Deputy Minister of High Tech Industries, the Deputy Minister of Education, Science, Culture and Sports, the Deputy Minister of Territorial Administration and Infrastructure, the Deputy Head of State Revenue Committee, the Deputy Head of the Central Bank, the CIO Office Digitization Team Lead, the Director of EKENG and the Head of UN Sustainable Development Goals (SDG) Innovations Lab. 14 The World Bank, Third Public Sector Modernization Project (P149913) 15 The World Bank, Support to Tax Administration and Policy Leadership Project (STAPL) P170814). 7 systems showing progress notwithstanding a silo approach. Nevertheless, many state entities do not have effective GovTech systems, tools, capacities and incentives. Reform Options In light of the institutional architecture, the progress made and the acceleration of digital needs by COVID- 19, the new Digitalization Strategy sets a fertile ground for the development and implementation of a whole-of-government GovTech approach. A whole-of-government GovTech approach could help improve efficiency and transparency through improved planning, policy coordination, budgeting, performance management and performance monitoring and evaluation (PM&E). It calls for the public sector to leverage political commitment to work together across administrative boundaries, strengthening the digital strategy roadmap and sequencing and implementing performance monitoring and organizational set-up to deliver faster, better and more inclusive services to citizens and the private sector. The whole-of-government approach could be complemented by institutional leadership in specific GovTech areas such as public sector digital infrastructure and procurement of digital solutions. This would not only enhance policy-coordination and focus thereby strengthening effectiveness of service delivery but can also generate important fiscal savings by aligning reforms across sectors and seeking synergies for joint approaches. 2. User-Centered Design A User-Centered Design with the focus on the user’s needs is a fundamental principle of GovTech.16 This section reviews the extent to which user perspectives are incorporated into the design and implementation of digital services. Key Findings: Achievements and Opportunities Over the past ten years, the Government has made progress in the development and coverage of digital services. The Digitization Strategy specifies user-centricity as one of the principles to foster accessibility of digital systems. An e-government portal provides information about the privately operated service providers. It contains links to different MDAs’ digital services webpages as well as information on government functions. Some fiscal, economic and social services have been digitized, with common approaches for websites and digital identification. For example, an integrated multi-channel one-stop-shop has been implemented for foreign trade, which offers an array of digital services. The strengthening and upgrading of the e-government portal including the initial implementation of a smart/mobile application is being supported by the World Bank’s PSMP3 project.17 Building on digital and mobile ID implementation, a smartphone software solution, the Gov-ID is being launched to enable signing documents and e-authentication with smartphones. Unlike earlier digital solutions, Gov-ID will not require using any additional hardware while at the same time maintaining high standards of security and compliance with e-IDAS (Electronic Identification, Authentication and Trust Services) regulations. Gov-ID holds the potential to spur advancement of mobile Government. 16 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 17 The World Bank Public Sector Modernization Project III (P149913) 2016-2020. 8 A unified platform (e-request.am) for online requests, complaints and applications makes it possible for citizens to contact any of the MDAs and track the status of requests via the platform. A Citizen Feedback Platform was created to collect and analyze data on citizen satisfaction with public services. The system has already been launched and services provided by the Civil Status Act Registry and Legal Entities Registry are included for citizens’ feedback. At the same time, each ministry has developed customer feedback mechanisms which are implemented independently. In recent years the number of management systems used by state entities has increased. The catalogue of IT systems (CatIS) includes around 150 such systems by 34 MDAs. The list includes such systems as Tax Reporting MIS and Customs MIS, the Public Debt Management System, Treasury Operations System, Public Debt System, Citizens’ Civil Status Act Registry System and many more.18 The introduction of these systems can lead to more efficiency in the public administration and the delivery of quality services to citizens and businesses. The catalogue has been updated to serve as a supplementary instrument for registering and storing the inventory data on public services but needs further improvements to fully serve its purpose. Reform Options Common user-centric approaches within the government could be further developed with a greater focus on user research and user design. This entails efforts to increase access, promote business processes reengineering to operationalize digital services implementation and enhance digital skills and dissemination to increase uptake by users.19 Guidelines for the design and implementation of digital services could also further facilitate the design of digital platforms. Streamlining the use of e-ID and mobile-ID to avoid the need for additional hardware and tedious procedures for its use can help reduce barriers to adoption and enhance user uptake. Greater customization to user needs, will help enhance the end-to-end customer journey. It can also promote the life-events approach to service delivery which designs and delivers digital services around citizens’ life events as the central theme of the user-centric design of public and private sector digital platforms. 3. Public Administration and Change Management Whereas previous phases of e-government have been based on existing business processes, GovTech aims at transforming public sector reforms to optimize digital service delivery outcomes.20 The digital transformation of core government systems can be considered the backbone of GovTech as digital systems enable, accelerate and facilitate key executive and administrative functions including public financial management, civil service management and subnational government systems.21 This section reviews the public administration reforms and change management strategies developed to conceptualize and implement such reforms. 18 Other examples include the Electronic Population Register; Mulberry Electronic Document Exchange System, the Land and Property Management Information System, the e-Health System, the e-Procurement System, e-Auction System, Citizens’ Border Crossing System, Traffic Police MIS, e-Notary MIS, e-Penitentiary. 19 According to a survey in 2019, 35,5% of participating citizens that interacted with public authorities did not submit online applications simply because they didn't know how to use the website. More research needs to be done to gain a clearer picture and understanding of the reasons for which citizens do not use the digital services available to them. 20 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 21 The World Bank, “GovTech-Putting People First�, 2021 9 Key Findings: Achievements and Opportunities GovTech is one of the cross-cutting pillars of Armenia’s Public Administration Reform Strategy22 which, is currently under preparation. Over time all key government functions would be built on digital platforms and systems. A series of such systems already exists. For example, the Government Financial Management Information System (GFMIS) is being planned and its implementation is timed for the initial phase of business process review (funded by a Russian grant). Other cross-cutting systems have been designed for tax, public investment management and human resource management as well as specific tools to address core public administration principles of transparency and accountability emphasized after the Velvet Revolution, such as whistleblower protection across the administration. A common set of security and interoperability requirements for government information systems have been in place since 2015. The Government Interoperability Platform (GIP) allows data sharing for almost 200 MDAs and private sector entities that can access state registries in real time. GIP is maintained and operated by EKENG. Government data is shared between MDAs and also is available to the private sector but the collection, quality and use of the data would benefit from further enhancement. GovTech implementation has also given rise to some resistance in the public sector and by users. In the public sector, civil servants are in some cases concerned about automation and see it as a threat to job security or are reluctant to use new technologies fearing that they might not have the necessary digital and other skills. Uptake of the use of digital services by citizens has been overall low as digital literacy and skills are unevenly distributed. Reform Options Digital platforms could be enhanced including their design, interoperability, coverage and use. Developing and implementing a change management strategy could be desirable to engage all MDAs across sectors in GovTech resulting in reforms ownership, capacity-strengthening and sustainability mobilized by greater individual and institutional support and capacity. Engaging with citizens and other users of services by highlighting the benefits of reforms and ensuring greater user research and design will also help expand uptake. Highlighting the greater value of a coordinated and whole-of-government approach to GovTech, such a change management strategy could facilitate reforms generating a greater results-focus, clear prioritization, road-mapping and greater use of quick wins visible to citizens and businesses. Key instruments to be considered include stakeholders engagement, strategic communications and risk management strategies. 4. Capabilities, Culture and Skills GovTech reforms require a combination of digital and other capabilities and skills helping to create a culture of innovation and creativity across the public sector.23 This section identifies progress made and opportunities for human capital readiness to support an innovative GovTech culture in Armenia. 22 The PAR Strategy is based on the SIGMA Baseline Measurement Report conducted in 2019 and is aligned with the Government’s mid-term program. SIGMA (Support for Improvement in Governance and Management) is a joint initiative of the OECD and the European Union which conducted research on public administration in Armenia. 23 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 10 Key Findings: Achievements and Opportunities To strengthen the supply of digital capabilities and skills, several universities and training centers offer ICT training programs to deepen digital skills for public and private sector employees. Some of these programs could be updated to reflect the latest digital education trends and innovations. Such training offers include (i) the Armenian-Indian Center for Excellence in ICT offering courses on digital skills, management skills and exchange programs, (ii) the Innovative Solutions and Technologies Center (Joint initiative of the Government, IBM, Yerevan State University and the Enterprise Incubator Foundation) offering training on specialized digital skills such as Cloud Computing, Cyber Security, Cognitive computing, Big-Data Analytics, etc., and (iii) the Synopsis Training Center which invests in microelectronics education through collaboration with domestic and regional universities. Demand for digital skills in the public sector but also in the private sector is high. The Government is actively seeking talent for the public sector which offers the appropriate skills mix, including digital skills, project management and related soft skills. The digital skills mix varies across MDAs. Some institutions (such as the State Revenue Committee, Cadaster Committee, National Center of Educational Technologies, Nork Foundation, EKENG, etc.) have developed a strong cadre with experienced and qualified digital practitioners while other MDAs lag behind. GovTech skills are in increasingly high demand. Like most governments throughout the world, the Armenian public sector suffers a digital skills brain drain. High-skilled staff in the public sector are attracted by high compensation provided by the private sector and by labor markets overseas. Due to digital skills shortages and other reasons, Government often outsources the design of digital systems and tools. While the question of outsourcing versus in-house development has its pros and cons, this trend has led to lower capacity in government and to the creation of ten boutique consulting firms in Armenia. These companies specialize in GovTech projects and have accumulated significant institutional knowledge and experience enabling them to offer services to the public sector. An effective balance between approaches, seeking synergies between public and private sector digital project teams and mutual hands-on learning could help strengthen both public and private sector skills. To address the shortage of digital skills in the public sector the Government has developed a bonus system that helps flatten public-private sector wage differences. Nevertheless, digital specialists tend to gain knowledge and shift to the private sector as soon as there is an attractive offer. Reform Options Opportunities to strengthen government digital capabilities, culture and skills would benefit from a digital skills competency framework and a clear, well-established career development path for public sector staff with a strong digital skills mix and other technical qualifications. A long-term talent attraction, management and retention strategy can help create the digital culture in the public service and ensure greater attraction of digital skills. This could be coupled with an incentive framework for digital government staff to address key retention challenges yet aligned to the civil service legislation, regimes and wage bill. A strong hands- on capacity-strengthening program focusing on in-sourcing of digital and agile project management skills, private and public sector exchanges and learning programs including two-way staff mobility programs and exchanges, could also help learning on the job and reducing turn-over. 11 5. Technology Infrastructure Leaders in digital government look to use increasingly standardized technology infrastructure components including public infrastructure. Use of cloud computing is seen as a strategic tool to achieve the flexible and fast deployment and enhanced capacity needed to meet GovTech goals as well as a form of data center consolidation for server efficiency.24 This section assesses existing technology infrastructure standards, designs and implementation processes. Key Findings: Achievements and Opportunities The Government of Armenia has designed and deployed a secure, government-wide digital network connecting all MDAs at the central and subnational levels. This government network is outsourced to local telecoms using their infrastructure. The Government Data Center hosts many critical services and data operations, such as: • Mail servers and official websites of the PMO and some MDAs; • Digital systems like e-request.am, the unified platform for online requests that serves as the main communication tool between citizens and the Government, and e-citizen.am, the portal for citizens to have access to their digital data stored in state databases; and • The Government Interoperability platform. Some of the MDAs have their own server capacities but these are developed independently without having specific government-wide guidance on design, upgrade and maintenance. The Digitization Strategy includes the creation of cloud infrastructure. A Government Private Cloud (G- Cloud) prototype has been developed. Modern infrastructure, based on a virtual computer system to support container-based application development needs to be designed. However, the G-Cloud will soon run out of capacity as the demand from MDAs is growing. Reform Options Public sector IT infrastructure could be further enhanced through greater integration including the development of government-wide standards and guidance on design, upgrade and maintenance. A Hybrid Cloud model in which the private government cloud is used for hosting sensitive data, while the Public Cloud offered by commercial providers is used for hosting non-sensitive data could be more cost- effective. The World Bank has developed a cloud readiness assessment toolkit that could be used to help address these issues. A data classification standard could be developed to distinguish between sensitive and non-sensitive data and adopt a risk-based approach to cloud adoption. An evaluation methodology using a centralized, whole-of-government approach to procure cloud service providers from the private sector could help mitigate some of the risks around cybersecurity and data sovereignty. 6. Data Infrastructure, Strategies, and Governance GovTech relies to a great extent on data-driven activities. The ability to collect, store, analyze and share data using emerging technologies is critical to improve evidence-based policy-making, coordination and 24 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 12 service delivery. 25 This section assesses the public sector’s ability to collect, store, analyze and share data, using emerging technologies where feasible. Key Findings: Achievements and Opportunities The 2021 Digitization Strategy includes data policy as one of its main pillars and envisages the development of a data governance strategy including enhanced data-sharing mechanisms and data-driven innovation. A “Law on Personal Data Protection� was adopted in 2015. The Personal Data Protection Agency, established under the Ministry of Justice oversees its implementation focusing on three main areas: • Maintenance of the registry of personal data operators; • Protection of personal data rights; and • Lawful processing of personal data. Core state data registers have been set up and data sets are published regularly via the GIP. Armenia’s membership in the Open Government Partnership has helped to develop and implement policy commitments on open data. The list of the registers available within the GIP includes the Ministry of Finance, the Central Bank, the State Revenue Committee, the Ministry of Justice, the Police and the Cadaster Committee. The exchange of citizen data across registers is based on unique identification numbers, the so-called Social Services Number (SSN), which serves as the main identifying data in state registers. The SSN is assigned to citizens and residents including individuals without citizenship and refugees. The Government’s Electronic Document Management System “Mulberry� was developed in 2007 and rolled out to all MDAs and Marzpetarans (Armenia’s territorial administrative units) and recently updated. Over 75 MDAs have adopted Mulberry as the standard for intra-governmental digital document circulation.26 Yet, digitization of old, paper-based registries is relatively recent. Many MDAs still rely on paper-based data requests and responses in their business processes and have not yet digitized their data archives and other data. The Law on Personal Data Protection includes the “Once-Only� principle to ensure that citizens, institutions, and companies only have to provide certain standard information to the authorities and administrations once. In practice, however, this principle is still not fully implemented due to infrastructure constraints and the quality of databases. For each government register the data holder is responsible for its operation and maintenance. As a result, registers’ capacity and development pace differ across entities and many times MDAs need to collect the same data independently in order to execute their functions. To help address this challenge, the Prime Minister has recently announced plans to introduce a penalty system for all entities requesting data from citizens rather than requesting it from the original data collection source. While a government-wide performance M&E system to ensure the quality of performance information is yet to be developed, data management has also been enhanced through some recent work on data analytics in specific World Bank supported areas, such as on anti-corruption. 25 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 26 Marzes are Armenian territorial administrative-units. Marzperatans are the offices of Marz governors that implement Government policy. 13 The Government is very interested in using innovative technologies such as Artificial Intelligence (AI) and Big Data. For example, the State Revenue Committee has an initiative to use Big Data in tax and revenue forecasting. Several additional information systems under development are adopting Big Data analytical tools to improve government decision making.27 The Government is collaborating with the Armenia National Sustainable Development Goals lab to develop an AI algorithm that will automate the classification of the letters sent to Government. The goal is to increase efficiency of digital correspondence between citizens and public institutions. Reform Options GovTech implementation strongly depends on the quality of the information available across government. Data quality, including the availability, comprehensiveness and user-friendliness thus needs further strengthening. To do so, a data governance, management and monitoring strategy could be elaborated which could include enhanced standards for data collection, use and sharing mechanisms, open data and data-driven innovation to facilitate evidence-based decision making. Also, data could be classified based on its sensitivity and usability for which a classification framework could be developed. Databases would also need greater harmonization and interoperability across government. As part of the on-going GovTech dialogue, the Bank has organized a workshop on different concepts, global practices and options for the use of AI and there is significant interest in deepening the use of AI in Armenia. Assessing, designing, piloting and implementing solutions based on AI, IoT, Big Data and Blockchain could be an opportunity to enhance such dimensions as data analytics, data for management, transaction's reliability28 and in other strategic areas of impact. The use of GovTech could also be enhanced to facilitate private and financial sector service delivery with the use of disruptive technologies including the creation of regulatory sandbox licensing to enable direct testing environments for innovative solutions. 7. Cybersecurity, Privacy and Resilience Security and business continuity in the public sector are vital elements of GovTech and resistance to shocks as recently emphasized in the COVID 19 pandemic. Specific standards, protocols and scenarios to ensure security and recovery of any risks from undefined cyberthreats, disasters, etc. need to be prepared.29 This section analyzes measures to ensure security, privacy, authenticity, integrity and resilience of digital public sector infrastructure, platforms and services. Key Findings: Achievements and Opportunities Cybersecurity is one of the main pillars of the Digitization Strategy. A “Cybersecurity Center of Excellence� is expected to be created by the end of 2022. A government working group drafted a National Cybersecurity Strategy and Action Plan in 2017 but it has not yet been adopted. As a result, most cybersecurity measures are taken ad-hoc. The National Security Service monitors Government’s digital infrastructure cybersecurity and informs authorities about potential threats and incidents. The COVID-19 pandemic and other recent shocks have underlined the need for an integrated Cyber Security Strategy along with a business continuity strategy to enhance resilience to shocks. Some steps in that direction have been taken. An integrated 27 For example, the MIS for State Commission for the Protection of Economic Competition envisages daily monitoring of prices of consumer basket products in supermarkets based on hourly printed invoices. 28 For example, an AI tool can be used to detect “unusual� or “anomalous� transactions. 29 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 14 security system for digital platforms is being procured to enable encryption, collection, monitoring, analysis and quick response to network flows and threats. EKENG will be responsible for its operation and maintenance. There are several MDAs that are positioning themselves as a Cybersecurity Emergency Response Team (CERT) although none has been given the specific legal mandate. The General Department of the Criminal Police with its Division for Combating High-Tech Crime is one of the cybercrime units responsible for handling cybercrime country-wide. Reform Options A Cyber Security Strategy could be developed including the definition of a list of critical infrastructure needs to maintain and monitor systems and to distribute resources effectively in times of emergency. Sectorial CERT units could be set-up to promote inter-institutional cooperation. Clarifying mandates and coordination mechanisms while ensuring cooperation will be necessary moving forward. Finally, a business continuity strategy –beyond COVID – could be elaborated to enhance resilience to future shocks. 8. Legislation and Regulation GovTech needs a sound legal and regulatory environment that has new laws for data privacy, consumer protection, digital signatures, digital identification, cybersecurity mitigation, etc. These kinds of regulations also bring transparency to decision-making on public spending or any e-services such as e-procurement processes that are driven by data.30 This section assesses the legal and regulatory framework for digital government and its implementation. Key Findings: Achievements and Opportunities Armenia’s GovTech legal and regulatory framework has been updated over the years to allow for digitalization and to reflect the reality of a digital economy and society. Several information and data- related laws have been adopted. • The Law on Personal Data Protection was adopted in 2015 and subsidiary legislation to implement the primary legislation is in place. • The Law on Identification Cards was adopted in 2011 and has become a vehicle for the introduction of digital identification. • Amendments of the Civil Code, the Law on Commerce and Services and the Law on Consumer Protection were enacted in 2016 to lay the legal foundation for e-commerce and to grant legal force to transactions carried out in electronic form. • The Criminal Code also has been updated to include provisions that penalize unauthorized access to, monitoring of, or alteration of data in computer systems and unauthorized interference with computer systems and financial websites. • The Law on Freedom of Information was adopted in 2003 providing access to information for citizens and facilitating data governance and data exchanges. 30 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 15 Legal and regulatory barriers still hinder effective GovTech implementation. For example, the Law on Public Procurement does not differentiate among the types of products and services required. The procurement of office supplies are thus subject to the same principles and processes as the development and procurement of complex IT solutions which require different quality standards. As a result, there are cases when the company that won the bid for supporting the IT system does not have sufficient knowledge to deliver quality products under the contract. Business processes defined by the legislation are often based on non-digital technologies. For example, some electronic systems have been developed but remain underused because of the absence of legally binding provisions for individual notifications of citizens and other obligations. To mitigate risks the legal and regulatory framework and the terms of references for new digital systems need to include reform proposals to ensure that newly-introduced systems will be able to function as intended.31 Reform Options Regulatory changes are needed to allow for proper implementation of new solutions. This includes both the need to streamline and reduce the legal and regulatory framework, such as through regulatory impact assessments, as well as deepening the existing framework to set appropriate standards for quality assurance. A review of the regulatory framework for digital infrastructure including open access policy, infrastructure sharing, licensing regime and the move towards 5G could also help strengthen GovTech implementation and use. A law on digital ID could open new opportunities for common digital IDs for digital service delivery and digital payments both in the public and private sector. The legal framework for digital payments could be strengthened to facilitate regulatory sandbox licenses, mobile payments and FinTech. 9. Digital Ecosystem GovTech can strengthen transparency and accountability not only within the public sector but also in the relationship with citizens and the private sector. This can dissolve barriers between the Government and citizens while connecting them in unprecedented ways through new forms of citizen engagement. Open and active participation by citizens, civil society, academia, media and the private sector in the digital ecosystem can boost innovation and entrepreneurship, contributing to the development of a modern digital economy.32 This section analyzes the institutional framework in the public and private sector to promote digital government. Key Findings: Achievements and Opportunities Following the Velvet Revolution’s emphasis on transparency and accountability, Armenia has made progress in CivicTech, deepening the relationship with civil society. A number of tools have been developed to strengthen civil society and citizens engagement including e-participation, e-consultation and e- monitoring tools building on public sector mechanisms to strengthen anti-corruption. These include access to information, conflict of interest and whistleblower protection as well as interactive feedback mechanisms for digital service delivery. 31 One example is the e-notification and e-verification systems projects supported by the World Bank in which suppliers provide an analysis of current legal arrangements and suggestions for legislative changes in relevant fields. 32 The World Bank, “Digital Government Readiness Assessment Toolkit: Guidelines for Task Teams�, 2020. 16 While the partnership between the Government and the private sector to strengthen the digital ecosystem is not yet formalized there is currently an active collaboration in that direction. The Government of Armenia has been supporting firms in generating new products and business models that can provide innovative solutions to address public sector challenges. For example, the MHTI launched an award program “From Idea to Business� to finance innovative projects on disruptive technologies such as AI, Data Science, Cybersecurity, Robotics, Nanotechnologies, etc. The Union of Advanced Technology Enterprises (UATE), Union of Employers of Information and Communication Technologies (UEICT), Charitable Foundation Initiatives for Development of Armenia (IDeA), Foundation for Armenian Science and Technology (FAST) and Armenian National Innovation Sustainable Development Goals Lab have initiated various programs to support the digital ecosystem in Armenia. The AgriTech Accelerator program launched by FAST in cooperation with academia and civil society is designed to support science and technology-backed startups and promising entrepreneurs developing solutions to tackle Armenia’s agricultural sector challenges. The digital ecosystem is also strengthened by supporting the development of a high skilled workforce, with basic and advanced digital skills to support increased technology adoption and innovation. For example, universities such as the National Polytechnic University of Armenia, Yerevan State University and the American University of Armenia offer specialized digital training programs aimed at strengthening advanced digital skills and promoting digital economy career paths. Reform Options A high-level digital partnership between the public sector, private sector and civil society including academia could be further formalized and systematized to strengthen strategic focus, capacity and collaboration. In particular, academic value propositions and preparation of a talent pool with the appropriate knowledge and skills for both the public and private sectors is critical. Given the interest in transparency reforms, social innovation mechanisms provide a fertile ground for furthering CivicTech in Armenia. Different initiatives to enhance citizens participation and social accountability to enhance government responsiveness could include crowdsourced expertise and open data platforms and other tools such as civil hackathons. The following table summarizes main findings and achievements for each of the nine DGRA dimensions along with a set of reform opportunities and entry points to deepen engagement in line with the Country Partnership Strategy (2019-2022) objectives by enhancing public sectors delivery, improving macro-fiscal balance and mitigating risks.33 33 “Armenia - Country Partnership Framework for the Period FY19-FY23� (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/523501552357219076/Armenia-Country-Partnership-Framework- for-the-Period-FY19-FY23 17 Table 1: Armenia DGRA Reforms Summary Table DGRA dimension Main findings and achievements Opportunities and entry-points 1.Leadership and Governance • The Digitization Strategy adopted in • Adopt a whole-of government 2021. approach and institutional leadership • Armenia Transformation Strategy on Govtech. has a strong focus on digital • Strengthen the institutional set-up transformation. and implementation with greater • The Deputy Prime-Minister leads the focus, synergies and results-focus for GovTech agenda and ICT Ministry GovTech outcomes across sectors. created. 2.User-Centered design • The e-government portal offers • Enhance common user-centric information on service-providers. approaches with focus on user • Digital services available for selected research and design. fiscal, economic and social services. • Develop guidelines for the design and • Digital and mobile ID implemented. implementation of digital services. • Strengthen uptake of digital services. 3.Public Admin. Reform and • GovTech is at the center of the PAR • Enhance design, interoperability, Change Management Strategy. coverage and use of public sector • Digital platforms operational for digital platforms. budgeting, tax, procurement, etc. • Develop a change management • Some change management strategy. initiatives implemented. 4.Capabilities, Culture and Skills • Digital literacy progressing across • Promote digital learning platforms, government, citizens and private rapid tech skills and digital skills, sector. innovation campus etc. • Digital skills mix varies across • Develop a long-term talent attraction, institutions. management and retention strategy • Private sector with institutional including an incentive framework. experience to offer services to the public sector. 5.Technology Infrastructure • A secure government-wide digital • Consolidate server infrastructure and network in place. enhance the design, upgrade and • The Government Data Center in maintenance. place. • Adopt the Hybrid Cloud Model based • Gov. Interoperability Platform in on data classification. place. • A G-Cloud prototype in place. 6.Data Infrastructure, Strategy and • Base data registers set up and • Develop a data governance, Governance operated. management and monitoring • “Law on Personal Data Protection� strategy. (2015). • Enhance quality of data. • Strengthen harmonization and • Armenia is an OGP members and interoperability of databases. implements policy commitments on • Pilot use of innovative technologies open data. for data analytics. 7.Cybersecurity Privacy and • Cybersecurity is a main pillar of the • Develop a Cyber Security Strategy. Resilience digitization strategy. • Define critical infrastructures list. • Integrated security system for digital • Set up sectorial CERT units. platforms is rolled out. • Develop a business continuity • Cybersecurity Emergency Response strategy to enhance resilience to Team (CERT) in place. shocks. 18 DGRA dimension Main findings and achievements Opportunities and entry-points 8.Legislation and Regulation • Legal and regulatory framework • Strengthen enforcement of the legal developed. and regulatory framework. • Law on Freedom of Information, Law • Implement Law on digital ID. on Personal Data Protection, Law on • Expand the regulatory framework: Identification Cards, etc. enacted. open access policy, infrastructure • Criminal Code includes provisions on sharing, licensing regime towards 5G criminalization of digital and financial and regulatory sandbox licenses (e.g. crimes. FinTech). • Citizens have unique identification numbers. 9.Digital Ecosystem • Private sector provision of e-services • Strengthen a high-level digital to Government. partnership across public and private • Academia and the media stakeholders. contributed to strengthen the digital • Promote social innovation through ecosystem. crowdsourced expertise, open data • Government supports IT innovations platforms and civil hackathons. targeting citizens (CivicTech • Strengthen PPP including e- initiatives) and private sector (“From commerce and GovTech. Idea to Business Program�). III. Making GovTech Reform Happen in Armenia The findings of the desk-review uncovered a series of potential reform opportunities for client consideration. They are presented as a proposed preliminary menu of reform options and as a basis for discussion with the government counterparts. The proposed reform options are based on this initial stock- taking and informed by common features of countries which have successfully implemented whole-of- Government GovTech approaches and strategies customized for Armenia’s unique opportunities.34 Reform options are structured around four main Figure 3: Proposed Reform Options components aimed at strengthening Armenia’s whole-of-government approach to GovTech, a key foundation for the country’s digital economy. Key components are: (i) Whole-of-government GovTech framework, (ii) Disruptive technologies and data governance, (iii) Digital platforms and services, and (iv) G-Cloud infrastructure and Cybersecurity. Each reform option presents a set of proposed activities for each component which are based on the findings of the desk review and stakeholder feedback. 35 34 Most of the experiences in this section are presented in more detail in the World Bank’s “GovTech Maturity Index: The State of Digital Government Transformation�, forthcoming 2021 35 These areas are proposed to be supported under the PSMP4 project (Four Public Sector Modernization Project) being prepared by the Bank. 19 1. Whole-of-government GovTech Framework. The Government of Armenia has shown a sustained commitment to GovTech reforms. The newly-adopted Armenia’s Digitization Strategy 2021-2025 provides the opportunity to leverage progress and take a comprehensive approach to development of the institutional architecture, digital systems and infrastructure and digital services that constitute the core GovTech foundation. A whole-of-government GovTech approach can help address key challenges in Armenia including deepening digitization across sectors and government entities, strengthening partnerships with academia and the private sector, growing institutional culture and capacity for digitization and effectively spending budgeted funds. Common features of countries that have successfully adopted a whole-of-government approach to GovTech include national strategies with shared GovTech outcomes, dedicated organizational structures close to the center of Government, a GovTech reform champion and conducive legal and policy frameworks.36 Specific actions for Armenia could include: • Developing a comprehensive, equitable, user-centric, whole-of-government conceptual GovTech framework and strategy including institutional architecture, coordination and delivery mechanisms, and performance M&E arrangements based on the principles of “Once-Only�, “Digital by Default� and “Mobile by Default� customized to Armenia’s context;37 • Designing a roadmap and detailed Action Plan to support the implementation of the Digitization Strategy ensuring effective planning, budgeting, management and performance M&E for GovTech reforms; • Strengthening institutional capacity at the center of government for GovTech design and implementation, development and deployment supported by appropriate digital talent attraction, management and retention; • Using the GovTech whole-of-government and Open Government Framework to promote Government-as-a-platform (GaaP), under which government becomes an open platform for data accessible to civil society and the private sector to promote public and private service delivery, job creation and citizen engagement opportunities. 2. Disruptive Technologies and Data Governance. Armenia has made some important advancements on data management and infrastructure. Base data registers are available for data sharing via the Government Interoperability Platform and data is also shared between MDAs and with the business sector in accordance with existing regulations. The development of a data governance and management strategy will further enhance evidence-based decision making and service delivery. Integrated security systems for state e- governance platforms has also been procured to enable encryption, collection, monitoring, analysis and quick response to network flows and threats. Also, there is growing interest in the public sector in using innovative technologies such as AI, Machine Learning or Big Data building on existing experiences in Armenia and elsewhere. The State Revenue Service of Armenia has made initial progress on incorporating 36 The World Bank, “Conceptualizing a Whole-of-Government Approach to Gov-Tech�, April 2021 37 The Digital by Default principle envisages that Governments make active use of the possibilities provided by information technologies and each newly designed public service is offered in digital format in parallel to its physical analogy, thus increasing the variety of service provision channels while leaving the selection of the channel up to the user. The principle also obliges Governments to gradually transform their existing services into electronic format to increase customer choice, attend to specialized needs of users and reduce the costs and time of public service delivery. The same logic applies to Mobile by Default principle. 20 AI tools for tax administration, leveraging good practices and lessons learned from international experience. Possible actions for Armenia in this field include: • Developing a standardized data management policy to address the whole cycle of data processing from creation to archival; • Increasing the quality of basic state databases with focus on digitization of paper sources and optimization of database structures to ensure full-fledged data availability and transfer to other systems through Government interoperability platform; • Establishing a digital archive for digital documents and state data for better preservation and opportunity for sharing within MDAs and private sector; • Fostering data-sharing both within the public sector and with the private sector including the financial sector; • Assessing, designing, piloting and implementing solutions based on AI, IoT, Big Data and Blockchain to enhance such dimensions as data analytics, data for management, transaction's reliability38 and in other strategic areas of impact; • Exploring further areas of implementation of disruptive technologies in partnership with the private sector such as anonymization of data to enable broader use; and • Enhancing the use of GovTech to facilitate private and financial sector service delivery with the use of disruptive technologies including the creation of regulatory sandbox licensing to enable direct testing environments for innovative solutions. 3. Digital Platforms and Services. Armenia has already developed two digital identification solutions based on National ID cards (eID) and mobile phones with SIM cards (mID). A new solution for smartphones (GovID) is planned to be implemented in the beginning of 2022. Both solutions are used solely for public services provision while having the potential to be widely utilized by the private sector. Armenia has also developed a multi-channel service delivery approach based on both physical service delivery centers and digital services. A key challenge is to further modernize digital services to enhance uptake by making digital services more accessible and user-friendly while incorporating user feedback into digital services’ design and implementation. Possible actions for Armenia in this field include: • Defining a new digital identity concept and develop infrastructure to provide citizens and businesses with a single, secure way to access Government and other services online. As a result, Armenia will have a personal digital ID comprehensive solution based on existing digital identification means and Government Interoperability Platform, which in turn will improve the uptake of eID, mID and GovID. • Complementing existing legislation on digital identification and authorization of citizens and introducing more user-friendly solutions for these purposes; • Analyzing and re-engineering business processes for public services (digital and paper based) taking into consideration innovative technologies and existing infrastructure, facilitating administrative simplification and making digital public services more user-centric and revising legislation to 38 For example, an AI tool can be used to detect “unusual� or “anomalous� transactions. 21 support new business processes to align them to the new multi-channel model of digital service delivery; • Developing the “Mobile First� concept with a clear implementation plan to improve public services accessibility through mobile government solutions following the “Mobile First� concept; • Introducing and mainstreaming the adoption of “Mobile-Government� as the new paradigm to facilitate access to service delivery for the poor and vulnerable without internet access; • Prioritizing and digitizing services delivered at both central and subnational levels for greater accessibility and ease of use including the necessary change management to enhance the uptake of digital platforms and services; • Expanding the use of digital services for CivicTech to enhance citizen engagement including citizen feedback and citizen participation in policymaking building on existing tools for anti-corruption such as for whistleblower protection. 4. G-Cloud Infrastructure and Cybersecurity. The Government of Armenia has built a digital network and Government Datacenter. A G-Cloud prototype is in place and Cloud adoption is a priority in the Digitization Strategy. A Cybersecurity Emergency Response Team (CERT) is in place, and sectorial CERT units could be set up to promote cooperation across institutions to assure a secure environment for deployment of digital platforms and services. A whole-of-government approach to cybersecurity that fosters inter agency coordination is needed. For Armenia possible reforms to strengthen the data governance framework include: • Establishing a reliable computing and network infrastructure with central coordination and management in line with international standards and customized to Armenian needs. In order to identify the appropriate solutions a Cloud readiness assessment could help to shape a feasible architecture with potential adoption of a hybrid cloud model and to determine capacity needs for the private government cloud. • Revising legislation to prevent stand-alone procurement of digital infrastructure by MDAs and development of measures to enforce the use of shared cloud-based resources; • Strengthening technical capacity to ensure professional operation and maintenance of a unified data center and the government’s cloud-based virtual environment using Hybrid Cloud Model; • Defining business and financial models to secure continuous infrastructure development, maintenance and enhancement; • Developing a whole-of-government approach to cybersecurity as part of preparing a Cybersecurity Strategy building on a cybersecurity assessment; • Putting in place sectorial CERT units with a clear mandate and enhanced skills and capacities and promoting inter-institutional cooperation across institutions improving cybersecurity competencies among public sector employees and society at large and; • Strengthening resilience and developing tools to scan the environment and gather data to improve government preparedness for dealing with uncertainty and responsiveness to external shocks, 22 similar to what was done in Singapore. 39 The use of data and digital tools for scenario planning to address cybersecurity, pandemic, macro and other risks could help enhance resilience to shocks in Armenia. IV. How the World Bank Can Help Armenia Succeed with GovTech Reforms Armenia’s Digital Strategy provides perfect ground for the development of a whole-of-government GovTech approach, an endeavor for which the World Bank can become a key partner deepening the existing collaboration. The proposed reform options would need to be carefully prioritized and sequenced based on both the expected impacts at different levels -social, political, fiscal, economic- and technical and operational feasibility. Global World Bank GovTech expertise has helped achieve strong results in many different countries and contexts assisting governments throughout the policy cycle in prioritizing, designing, implementing, monitoring and evaluating GovTech projects in a wide range of areas. Support could be provided throughout the GovTech cycle in line with the World Bank GovTech approach through different reform options, collaboration modalities and engagement strategies: • Conducting key diagnostics such as digital economy assessment, digital platforms and digital services needs assessments and specific public sector management system and tools assessments to allow Armenia to identify entry points for further reforms. These diagnostics serve as valuable sources of first-hand information to develop strategies, roadmaps and action plans that allow for smart prioritization and sequencing of reforms. • Providing strategic policy advice to ensure an enabling regulatory and legal environment for a thriving GovTech ecosystem including advice on new laws, regulations, and policies as well as guidance on institutional architecture, organizational frameworks and procedures; • Technical assistance to build and strengthen citizens-centric digital services and digital systems for whole-of-government and specific MDAs such as e-tax, e-procurement, customs, budgeting, public investment management, human resources management information systems, performance monitoring and evaluation systems, etc.. These can be linked with other tools for performance management and M&E including dashboards that allow for continuous tracking of GovTech reforms design and implementation thereby generating valuable performance information for decision making and implementation. • Implementation support for interoperable platforms for service delivery, facilitating data exchange and simplifying business processes; • Implementation support for data governance - including availability, usability, consistency, integrity and security to strengthen data quality throughout the complete data lifecycle, improving decision making and enhancing efficiency and effectiveness; 39 Singapore has established a Center for Strategic Futures (CSF) to build a strategic public service ready to manage complex and far-changing environmental challenges. The Center focuses on whole-of-government strategic planning and prioritization, coordination and development to incubate and catalyze new capabilities in Singapore’s Public Service. 23 • Capacity-strengthening and global knowledge-exchanges tailor-made to country needs, such as peer-to-peer learning opportunities with other countries leading GovTech reforms, study-tours, workshops and webinars and customized cutting-edge hands-on training courses for political and technical audiences help bring in innovation and enhance talent and sustainability. • Change management for whole-of-government GovTech approach to ensure that governments are organized and have the capacity to migrate to new ways of working. Change Management contributes to foster cultural change, address potential resistance to change and engage civil servants in the reform process. Some potential instruments include stakeholders’ engagement, strategic communications and risk management.40 The World Bank stands ready to help Armenia spur GovTech reforms through multiple possible engagement modalities leveraging the long and fruitful path to digital government in the country and deepening the existing collaboration. The PSMP project has been informed by this GovTech stocktaking and offers a strong pathway for the implementation of the proposed GovTech reform options. Initial findings from the DGRA provide valuable insights to inform the preparation of the development of reform options to address challenges, seize opportunities and advance in the development of a whole-of-government GovTech approach in Armenia. The timing is propitious. 40 Leah April; Caroline Sian Hughes; Sokbunthoeun So; Erwin Ariadharma. “Change management that works: making impacts in challenging environments� World Bank Policy Research Working Paper 2017. http://documents.worldbank.org/curated/en/965071512568885187/Change-management-that-works-making- impacts-in-challenging-environments. 24