Supporting Public Welfare Digitalization: A Supplier Perspective

Local governments responsible for welfare provision regularly outsource information and communication technology (ICT) development and services. Despite the reliance on private-sector ICT firms, little attention has been paid to the capabilities of these firms and their perspective on public-sector digitalization. This paper addresses this research gap by examining how ICT-supplier firms view 1) what constitutes their most important capabilities in the context of public-welfare digitalization and 2) what factors influence their creation and character. The study employs an interpretative research design, using semi-structured interviews and thematic analysis. The results indicate that ICT suppliers rely on higher-order relational capabilities to enable them to deploy value-adding capabilities. Additionally, the results show that inadequate municipal ICT governance, public-sector coordination, and insufficient procurement practices cause systemic uncertainty, which ICT suppliers are required to manage.