Top-down or bottom-up digital transformation? A comparison of institutional changes and outcomes

Investigating two major digitalization projects in Germany, the authors conclude that to fully utilize the potential of digitalization, old processes should be replaced with newly-designed and optimized digital ones (displacement) instead of layering new digital tools on top of analogue ones. Digitalization should be an opportunity for public sector managers and policy-makers to adjust administrative processes and structures. To implement such changes, top-down approaches are expected to contribute more effectively than bottom-up approaches to the standardization of processes and outcomes. However, this may also create challenges regarding adaptation to local needs, acceptance, and the risk of resistance to change. To guarantee effective and efficient digitalization processes and locally matching, well-accepted solutions, policy-makers in multi-level contexts are advised to strive for a well-calibrated digitalization approach, potentially consolidating digitalization efforts. Bundling certain tasks related to the provision of digital services can help to reduce the pressure on the local level.