A Stakeholder Perspective of eGovernment for Development Partnerships using

Business Dynamics Modeling.

by

Peter Olu JackSupervisor:

Prof. Jun-Seok Hwang

Peter Jack, ITPP 1

eGovernment implementation in Africa is generally faced with a myriad of challenges, ranging from uncoordinated efforts by stakeholders and a dearth of Strategic Leadership, to severe funding constraints. Global efforts to fight poverty in Africa through Infrastructure Funding offer hope (MDGs, NEPAD, G8, EU, DFID, WB_GICT, etc).

This work aims to invoke the stakeholder theory to model eGovernment implementation using Business Dynamics Modeling Methodology.

The Social Enterprise Model will be simulated to develop an operational funding/business model for implementing eGovernment projects.

A Survey of eGovernment PPP projects in Nigeria will be carried out to determine the factors influencing Stakeholder Participation, Project Success/Failure and Sustainability. The policy implications of the results will be analysed.

Additionally, partnership/management structures for the

implementation of e-government projects involving government, academia, private sector firms and civil society organisations will be simulated for different levels of service provision, i.e., at the Federal, State, Local Government, and Community levels. 19/04/23 2

• Abstract

• Motivation

• Introduction

• Research Objectives

• Research questions

• Conceptual Model

• Literature Review

• Methodology

• Conclusion

• References

3Peter Jack, ITPP

The need for harnessing multi-stakeholder efforts towards the development of eGovernment Projects for people empowerment in Africa.

The Potential to develop viable and sustainable business models for “Public Social Private Partnerships” using Simulation Tools to model a Stakeholder Strategy .

Globally, in Infrastructure development, there is an evolving Stakeholder /Partnerships (PPP, PSPP, PCSP, PCBOP, PCP, PAP, PIAP, PPPP, PCSRP) focus, as opposed to Contract/Operational Model (BOT, BTO, BOOT, DBFO, BLT, BRT, BOO, SEM, OSM) focus.

Modeling and Simulation tools offer a robust latitude for the analysis of complex systems.

Peter Jack, ITPP 4

Global Efforts are currently being channelled towards supporting eGovernment initiatives for Development in disadvantages communities such as in Africa. eGovernment is seen as an enabler, sanitizer, resource protector, and catalyst for sustainable development.

Public Private Partnerships have become prevalent in the drive towards sustainable infrastructure development primarily in the developed economies, but more aggressively by the Multilateral Agencies and International NGOs for fighting poverty in Africa through people empowerment.

Nobel Laureate Mohammad Yunus (Grameen Bank/Foundation) popularised the Social Enterprise Model and it has become part of the Policy Framework for strategic intervention to ensure grassroots empowerment even in the developed nations where poverty is still a challenge in some neighbourhoods.

Model: “A model is a simplified version of something that is real” [3] Some Simulation Applications:

Stakeholder Dynamics/Business Process Modeling (Focus of this work) Capital Asset Pricing/Budgeting Virtual Reality Modeling

Peter Jack, ITPP 5

19/04/23 6

The research aims to investigate the roles of Stakeholders in eGovernment for Development (eGov4D) Public Private Partnership (PPP) Projects.

To also determine the factors that ensure the success/failure and sustainability of the eGov4D PPP Projects.

Modeling and Simulation will be employed to allow flexibility, robustness and a variety of Scenario Analysis of Stakeholder Dynamics

The interactions between Stakeholders groups involved in eGovernment PPPs at the various arms (Executive, Judiciary, and Legislature) and layers (Federal, State, Local Government and Local Community) of Government will be examined.

eGovernment Service Delivery Centre models (CCC, MPTC, IAC, RIRC, eKiosks, etc) will be compared to ascertain the efficient and effective centre deployment mix.

What factors influence Stakeholder Participation, Success/Failure and Sustainability of eGovernment for Development PPP Projects?

Is the Stakeholder theory a potent approach for analysing Public Private Partnerships operating as Social Enterprises?

Does the “Social Enterprise Model” satisfy multi-stakeholder objectives in the operation of Public Social Private Partnership ventures?

Is Simulation an effective Tool for Modeling “Stakeholder Involvement” in the Sustainable implementation of eGovernment projects in Africa?

Peter Jack, ITPP 7

Source: Final Report of the Committee on harmonization of Nigerian National Identity Cards, March 2006

Copyright. Peter Jack, ITPP 9

Peter Jack, ITPP 10

Peter Jack, ITPP 11

The Stanford Research Institute (1963) defined “Stakeholders” as “those groups without whose support the organization would cease to exist” (cited in Freeman 1984, 31).

Preston (1990) on the other hand, opined that the concept of stakeholders has origins in the period of the great depression in USA (1929-1941) when General Electric categorised four stakeholder groups: Shareholders, Employees, Customers and the General Public.

There are three notable approaches to Stakeholder Theory: Descriptive (Rooted in Organizational Behaviour Theory; Organization versus

Stakeholders) Instrumental (Competitive advantage is gained by involving key Stakeholders) Normative (The moral responsibility of organizations rests in an all-stakeholder

approach)

Several works on linking Stakeholder Theory to eGovernment Projects have focussed on the normative approach as it lends itself to the analysis of Public Private Partnerships for eGovernment development. CSR component of corporations’ activities is the central theme of the Normative Approach.

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Peter Jack, ITPP 13

Author Main Subject Area

Title Focus Findings

Elias et al (2000)

Stakeholder TheorySystems Dynamics

Linking Stakeholder literature and Systems Dynamics: Opportunities for Research

General Proposition

Systems dynamics methodology can contribute to understanding the dynamics of stakeholders.

Hans J Scholl (2001)

Stakeholder TheoryeGovernment

Applying Stakeholder Theory to eGovernment: Benefits and Limits

General Theory and Case Study

Stakeholder theory can be applied to eGovernment Projects in the context of managerial decisions because of the emerging network-nature of organizations in both public and private sectors

Savita Bailur (2007)

Stakeholder TheoryTelecenters

Using Stakeholder Theory to Analyze Telecenter Projects

General Theory and Case Analysis

Both Normative and Instrumental approaches can be taken. A social responsibility perspective fits the Normative approach.

Janowski , Estevez and Ojo (2007)

eGovernment

A Project framework for eGovernment.

General Framework/Case Study

Presentation of a rigorous framework for foundationale-Government projects/Outline of e-Macau Project.

Peter Jack, ITPP 14

Author Main Subject Area

Title Focus Findings

P. Noumba and S. Dinghem (2004)

PPP in Infrastructure Development

Private Participation in Infrastructure Projects in the republic of Korea

Country/South Korea

Korea relied heavily on PPP to expand and Modernize its infrastructure but not without severe challenges like cartelization and Monitoring and Supervision inadequacy.

Hee Joon Song (2006)

eGovernment E-Government in Developing Countries: Lessons learned from Republic of Korea

Country/South Korea

In this work an effort was made to update UNESCO’s 2005 eGov. Toolkit by drawing from Korea’s experience based on Song’s methodology. Korea, even as a global eGov leader, also experienced a significant number of project failures.

Lee et al (2008) ICT for Development

Analysing South Korea’s ICT for Development Aid Programme

Country/South Korea

Korea ‘s emphasis on ICT for Development Aid is significant. Its aid program has assisted the diffusion of ICTs in poorer nations and brought ICT related benefits as well.

Moszoro and Gasiorowski (2008)

Public Private Partnerships

Optimal Capital Structure of Public Private Partnerships

General Proposition

Their model shows that PPPs may provide public services cheaper than sole private or sole public entity. Efficiency considerations suggest that optimality requires mixed ownership.

Peter Jack, ITPP 15

Author Main Subject Area

Title Focus Findings

Jiang Wu and Bin Wu

eGovernment/Simulation

Modeling and Simulation of Group behaviour in e-Government Implementation

General Proposition

E-Government Group Behaviour Model (EGGBM) can help decision makers make choices to improve the level of ICT acceptance of groups.

P. Zimmermann and M. Finger (2004)

Stakeholder theory,Information and Communication Technology

The Impact of ICTs on Local Power relationships.

Local Govt./Community

The introduction of ICTs, without a counterbalancing control mechanism, heavily decreases the power of the local administration against the businesses and other administrations.

Zahir Irani and Tony Elliman (2008)

Social Entrepreneurship

Creating Social Entrepreneurship in Local Government

Local Government

The work sought to develop a process to support Local Governments effort to stimulate innovation. The key proposition is to manage the process and let the ideas flourish.

Mayanja Meddie (2006)

Social Enterprise/Telecenter

Rethinking Telecentre Sustainability: How to Implement a Social Enterprise Approach - Lessons from India and Africa.

Regional:Africa/India

The Paper concludes that the Social Enterprise Model takes the best out of the Charity Model and the Enterprise Model. The decision as to the appropriate mix will be dealt with on a case-by-case basis.

THEORY Assumptions Board member role

Main board function

Key issues

Principal-Agent theory Owners’ interests may differ from managers’ interests

Supervisor(Chosen to represent owners interests, and be independent of management)

Conformance:- Safeguard owners resources and interests- Supervise management/staff

Emphasis on control may stifle innovation and risk taking, and reduce staff motivation

Stewardship theory Owners and managers have similar interests

Partner(Chosen for expertise)

Improving Performance:- add value to top decisions/strategy- partner management

Management proposals and systems may not be given adequate scrutiny.

Stakeholder theory Different stakeholder have legitimate but different interests in the organisation.

‘Represent’ different stakeholder views

Political:- represent and balance different stakeholder interests- make policy- control executive

Board members may promote stakeholder interests rather than the organisation’s. May be difficult to agree objectives.

Resource dependency theory Organisational survival depends on maintaining coalition of support to obtain resources and legitimacy

Supporter (Chosen for influence or resources they may bring.)

External influence:- secure resources- improve stakeholder relations- bring external perspective

External focus of board members may mean internal supervision is neglected. Board members may lack expertise.

Managerial hegemony theory Owners and managers have different interests, but managers control main levers of power.

Symbolic Legitimacy:-ratify decisions-support management-give legitimacy

Management may pursue own interests at expense of ‘owners’, managers gain little of value from board.

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• PHASE ONE• Stakeholder Dynamics Modeling and Simulation .

• Social Enterprise/Business Process Modeling and Simulation

• Model Testing with Nigerian Pilot Project

• PHASE TWO• Survey Method.

• Hypothesis Development

• Data Analysis

Business Dynamics Modeling is based on pioneering work by Prof. Jay Forrester, Germeshausen Professor Emeritus of Management, MIT-Sloan School of Management, extended by Prof. John D. Sterman, author of “Business Dynamics: Systems Thinking and Modeling for a Complex World”.

Peter Jack, ITPP

eGovernment for Development Information Exchange Portal (Funded by CTO*; authored and maintained by Richard Heeks, University of Manchester).

World Bank Investment in Infrastructure Database

United Nations Development Reports

European Union Intervention Reports

United Kingdom PFI Reports

Survey of Selected Nigerian eGovernment PPP Projects

Nigeria’s top 100 listed Companies’ CSR activities.

*CTO – Commonwealth Telecommunications Organization.

Project Cost Partners (Government, Private sector, Civil Society, etc) Funding Sources (Equity, Debt, Grant, etc) Stakeholders (Citizens, Technology Vendor, International Agency,

Government, Consultants, etc.) Funding Features (Interest Rate, Tenure, etc) PPP Nomenclature by Partners (PCSP, PCBOP, PCP etc) PPP Legal Contract Types (BOT, BOO, DBFO, etc) Service Quality (Excellent, VG, G, P, VP) Project Sustainability (LTS, MTS, STS, MS, US) Ownership Structure Board Structure Management Structure

Stakeholder Category: Funding Partners

H1. The power of a stakeholder is positively associated with the level of funding contribution to the partnership.

H2. Stakeholder willingness to contribute funding is positively associated with

perception of management’s capability (track record, trustworthiness)

H3. A Stakeholder’s decision to contribute funding will depend on the extent to which the Organization’s Values are congruent with its intervention goals.

Management Citizens (Users/Customers) Organized Catchment Area Groups (Youth, Women, Local Leaders, etc) Solution Vendors Consultants

Peter Jack, ITPP 20

Peter Jack, ITPP 21

iThink iThink provides a complete set of resources for business process

improvement or re-engineering : Identifying the system of business processes Developing a high-level understanding of the system Designing and testing re-engineering and continuous improvement initiatives Organizational learning and the dissemination of process knowledge

Powersim Studio 7: What if-scenarios

A business simulation model created using Studio 7 can describe several aspects of a company, and at the same time incorporate the factors that are precise and constant, and those who vary dynamically, thereby enabling future planning.

The dynamic business simulation using Studio 7 helps to test and analyze how changes over time affects a business – indicating which factors are real-core factors – and which factors are not.

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Vensim is a visual modeling tool for conceptualizing, documenting, simulating, analyzing and optimizing models of dynamic systems, enabling the flexible building of simulation models from causal loop or stock and flow diagrams.

By connecting words with arrows, relationships among system variables are entered and recorded as causal connections. This information is used by the Equation Editor to help form a complete simulation model.

The model can be analyzed throughout the building process, exploring the causes and

uses of a variable and the feedback loops involving the variable. Once a model has been built, Vensim allows one to thoroughly explore the behavior of the model.

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Simulation Tool

Visual Modeling

Capabilities

Simulation Capabilities

Input/Output Analysis

Applicability to Stakeholder

Simulation (*)

iThink

Powersim

Vensim

Modeling Process:Construct ModelExamine the Structure using a structural analysis

toolSimulate the ModelExamine the Model Behaviour using dataset

Analysis ToolPerform Simulation Experiments to understand or

refine the ModelPresent the Results (The final model and its

behaviour)Test the Simulation Model by implementing a

pilot or analysing existing projects.Peter Jack, ITPP 24

Methods for analyzing the survey data will be explored

Some of the data may be employed for some simulation experiments

The proposed eGovernment Partnerships for Development Stakeholder Dynamics Model (eGP4D_SDM) will be tested and validated using real data.

Peter Jack, ITPP 25

Stakeholder Theory is gaining Momentum in its application to eGovernment research and analysis.

Stakeholder Theoretical Analysis offers a credible perspective for understanding Stakeholder dynamics in Public Private Partnerships focussed on eGovernment for Development.

Simulation Tools have become prevalent across almost all perceivable facets of human endeavour as they offer a flexible, robust and potent capability for analysing complex system behaviour with minimum exposure to risk.

Business Dynamics Modeling (BDM) in particular, has truly evolved; starting with basic budgeting with calculators and spread sheets, through Business Process Re-Engineering and Business Process Management, to today’s robust tools handling simulations involving business decision making under dynamic flux and uncertainty.

BDM use in Business Process Modeling and Management will prove to be an invaluable tool to model Social Enterprise management and operations.

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PPP can be a good funding strategy for developing countries to accelerate eGovernment Implementation

It must however be approached methodically. The legislative, legal and Institutional frameworks must be in

place first. Overwhelming Political Will cannot be substituted by any other

factor (Korea is a shining example) All stakeholders must be involved (Stakeholder Theory). Multilateral Agencies have a variety of support initiatives to

assist developing countries in their eGovernment Initiatives aimed at improving Efficiency, Transparency and Accountability

eGovernment PPPs offer opportunities for widespread social entrepreneurship development and to reach out to the otherwise forgotten grassroots communities.

Policy Considerations: Legal (Act), Regulatory (Body/Commission) and Operational

(Department/Unit) Frameworks must be in place to ensure the gains from public private partnerships

Incentives and special concessions are perceived driving forces to motivate private sector involvement in PPPs

Joint Operational Structures may offer the best consensus for addressing potential disputes.

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28Peter Jack, ITPP

[8] M. H. Jansen_Vullers and M. Netjes (2006) “Business Process Simulation- A Tool Survey”; Seventh Workshop and Tutorial on Practical Use of Coloured Petri Nets and the CPN Tools , Denmark.

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[22] Vensim: http://www.vensim.com Peter Jack, ITPP 30

[23] Hans j Scholl (2001); Applying Stakeholder Theory to E-Government: benefits and Limits. Proceedings of the IFIP Conference on Towards The E-Society: E-Commerce, E-Business, E-Government 2001   October 03 - 05, 2001

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