OECD Peer Review of E-Government in Denmark - ePractice.eu

The additional workload is connected to problems many businesses (particularly smaller ones)
are experiencing in complying with new invoicing requirements. These include wrong or missing
information, creation of duplicate invoices, and disappearance of some invoices within the system.
Government organisations have been obliged to use manual processes (i.e. telephone calls) to
complete or correct these invoices before they can be processed. They have also had to handle an
unanticipated level of enquiries from suppliers wanting to know that their invoices have been received.
These costs are proving significant. Evidence of these problems is provided by municipalities, which
have had their State funding reduced on the basis of the expected savings from e-Faktura. Because
these savings have yet to materialize, they have asked the Ministry of Finance for compensation for
the extra costs they have been incurring while dealing with these problems.
Danish businesses have been strongly critical of the way e-Faktura has been implemented, to the
point that the Minister of Finance issued a request that government organisations be flexible in their
implementation of the new invoicing rules during the first months of their enforcement – especially by
paying invoices on time and refraining from imposing penalties for incomplete and/or paper invoices.
None of these problems appear to be insurmountable, and there is every indication that the new
system will eventually meet its objectives. However, it is important that Denmark treat this experience
as a valuable lesson in: 1) the need to fully identify and plan for the risks that exist around rapid
digitalisation of government processes on such a wide scale; 2) the sensitivity of the costs and benefits
of e-government business cases to unanticipated events; and 3) the importance of committing
sufficient resources to processes of stakeholder engagement and change management.
Box 6.3 E-government implementation risks and challenges
Denmark’s e-Faktura electronic invoicing system is a good example of how government can apply ICT to redesign
common (or generic) back-office business processes in pursuit of significant benefits, both for government and/or
businesses and citizens. It is also a very good example of some of the risks and challenges that can accompany
e-government-enabled change of such magnitude.
The business case for e-Faktura identified significant savings from moving to a purely electronic approach to
invoicing of government organisations. The estimated efficiency and economic benefits of making this change
were judged to be of sufficient size that a legislatively mandated move to electronic invoicing, coupled with
closure of non-electronic channels for invoicing, was justified.
As part of the rapid implementation of this change, consideration was given to the impact it would have on both
businesses and government organisations, with special attention paid to ensuring that small Danish businesses
without the necessary ICT capability were provided with alternative means to present electronic invoices. Despite
this, during implementation a range of unanticipated problems has threatened achievement of expected savings
from e-Faktura, at least in the short-term. Technical implementation has been more difficult than expected, and
businesses have responded by charging additional invoicing fees and presenting incomplete or duplicate
invoices. Government organisations have also reacted in unexpected ways. For example, municipalities have
requested financial compensation for implementation costs. In addition to risks to the business case for e-Faktura,
these problems also created political risk, with the Government being extensively lobbied by businesses critical of
the implementation process and the problems it has created for them.
In the short term, the Government has responded by requiring government organisations to take a more flexible
and lenient approach to the failure of businesses to fully comply with the invoicing rules. In the longer run, it
appears that the problems currently being encountered will be rectified, and that the new system will eventually
deliver the full benefits expected of it. In the meantime, the experience of implementing e-Faktura provides a good
opportunity for Denmark to learn important lessons about making successful e-government-enabled change of
such large scope. It is especially important to ensure that e-government business cases factor in risk, and to plan
for adequate levels of resourcing for stakeholder engagement and change management.
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