There is no single strategy towards digital transformation in social security institutions. This article shows how, through different approaches, institutions in the Americas have been able to move from an initial digitization of processes and services to a broader and more agile strategy of digital transformation, breaking paradigms and operating models.
Digital transformation has been present for many years in the improvement of processes in social security institutions in the Americas. The crisis caused by COVID-19 and the challenges posed by its long-term effects have been a strong accelerator of innovation and digital transformation in the Americas (ISSA, 2021a), as in the rest of the world (ISSA, 2022a). The digital transformation strategies implemented seek to respond to evolving challenges, optimizing resources, increasing productivity and efficiency, taking advantage of technological capabilities, and creating higher value-added services for members with a focus on greater access, trust and quality.
Institutions in the region have adopted different approaches in the transformation process, which have been effective in advancing gradually from an initial vision of digitalization of processes and services to a broader and more agile strategy of digital transformation. Within this we can observe the following approaches:
- Digitization: Distinguished by the migration from manual processes in which automation is evident, to the elimination of processes where physical documents and work papers are required. Normally one business process is addressed at a time, partially or totally digitizing the service in which the technology is to be introduced.
- Robotic Process Automation (RPA): Use of software robots to automate simple or complex high-volume repetitive activities that would be performed by people with the help of a system. The advantages of RPA include, the elimination of manual steps between the various systems, through precise and predictable actions, which means lower time and costs to the human resources involved. Likewise, they can operate continuously without a pause, allowing employees to dedicate themselves to tasks that provide greater added value to the business processes and the organization.
- Digital transformation: The full life cycle transformation of complete business processes or complete functional areas: This group includes one-stop-shop solutions that become a single point of access for requesting and managing procedures. It also includes access to services and benefits, with variations in the scope of their functionality (first-stop, convenience store or true one-stop) and in the degree of implementation (reception desk or transformational) (ISSA, 2021b).
- Institutional digital transformation: Responding to the strategic vision of becoming agile and fully digital institutions, focused on the value of the services provided to members and pensioners. Typically transforming various business processes in which one or more business units collaborate to achieve a systemic and sustainable digitization in the institution.
Figure 1. Approaches to digital transformation
The four types of approaches have their own individual emphasis and obey a strategy determined by the organization. They need to consider restrictions on internal resources, from human resources, capacity and technological infrastructure to financial resources available. Therefore, it is difficult to think that any of these approaches has greater merit than the other, but on the contrary, they are established as a path to follow to achieve digital transformation of institutions.
Digital transformation is a process through which organizations converge multiple new digital technologies to improve efficiency, achieve sustained competitive advantage and enhance the experience of their users. In addition, it can transform multiple dimensions of the institution, including the business model, customer experience (digitally enabled products and services) and operations (processes and decision making), whilst simultaneously impacting people (talent and organizational culture) and the service value of the organization (Ismail, Khater and Zhaki, 2017).
Digital transformation is a continuous process because technology is constantly evolving. It comprises the combined adoption of emerging technologies such as smart devices, cloud computing, Internet of Things (IoT), data analytics, artificial intelligence, robots and automation, virtual and augmented reality, biometrics and development with agile methodologies. However, it does not just involve technology because it affects all areas of an institution, changing the way it operates and providing value to its users. Therefore, when thinking about digital transformation, concepts such as "organizational change", "cultural change" and "customer-centric approach" are involved.
Figure 2. Digital Transformation Components
Source: Gobierno de España (2021).
Digital transformation needs to be aligned with the strategic vision of the institutions. (Tabrizi, et al., 2019). It should be planned at a strategic level with clear and precise objectives and goals that can be monitored and measured. The leadership must understand the impacts of digital transformation, facilitate its application in organizational culture, processes and services, and promote innovation. (Gobierno de España, 2021). Adopting a user-centric approach, improving their experience, meeting their expectations, changing the way you interact with them and delivering services is fundamental to providing higher value services to users as a result of the transformation process. (ISSA, 2019a).
The technological capabilities of the institution facilitates the adoption of new technologies, provides the assets, resources and technological tools, and creates a digital environment to face future challenges, thus improving efficiency and creating new business process models (Technical Commission on Information and Communication Technology, 2019).
In the digital transformation, taking advantage of the internal human talent of the institutions is fundamental because they have a deep knowledge of the business processes and of what works and does not work in the operation. It is therefore necessary to develop their skills and competencies, and ensure their involvement in the transformation and innovation process. Human capital, formal business processes and procedures, and an organizational culture that promotes innovation and collaboration are elements that favour adaptation to change throughout the digital transformation process.
Furthermore, the transformation process compels institutions to address complete domains such as end-to-end management of processes and services, complete processes or complete functional areas, instead of concentrating on only one or a few steps of specific processes or use cases. The domain(s) to be addressed in the digital transformation should be large enough to generate value and measurable results for the institution, but small enough not to be dependent on the transformation of other domains or business processes. (McKinsey, 2023), which will allow the transformation to be scalable and incremental.
Experiences of ISSA member institutions
The International Social Security Association (ISSA) supports its member institutions in their digital transformation through the ISSA Guidelines in the areas of information and communication technologies (ISSA, 2022b), good governance (ISSA, 2019b), human resources (ISSA, 2022c) and service quality (ISSA, 2019a), webinars and analysis articles on technological transition, and by presenting experiences in different publications (ISSA, 2022a and 2022d). The following examples show the variety in the approaches developed in the Americas.
Retirement, Pension and Retirement Fund of Cordoba, Argentina
The Retirement, Pension and Retirement Fund of Cordoba (Caja de Jubilaciones, Pensiones y Retiros de la Provincia de Córdoba – CJPRC) of Argentina's Federal Social Security Council (Consejo Federal de Previsión Social – COFEPRES) went from being an institution with some digitized processes to a fully digitally transformed organization focused on the value of the services provided to its members (Federal Social Insurance Council, 2023). The digital transformation began with an evaluation of the organization's situation and the services provided, an assessment of viable alternatives, and the development of a strategic plan. The implementation integrated new technologies, digital tools, training and education of its employees, and an internal communication strategy and communication with beneficiaries to manage the change. The use of agile methodologies, robotic automation of processes and a customer-centric approach were crucial in the transformation process. All the procedures and services provided operate under a one‑stop‑shop model. The call centre and the use of social networks were strengthened as means of communication with members and pensioners. Working from home was consolidated as the only work model for all employees. Mechanisms were put in place to train and ensure the digital inclusion of users, with special emphasis on senior citizens.
Ministry of Social Security, Brazil
At the beginning of 2023, the Ministry of Social Security in Brazil (Ministério da Previdência Social), through the National Social Security Institute (Instituto Nacional do Seguro Social – INSS), implemented a process of exchange and cross-referencing of databases to perform proof of life of pensioners receiving long-term benefits (old age, disability and survivors' pensions) (Ministry of Social Security, 2023). The new regulatory provisions transferred to the INSS the responsibility of verifying annually the survivorship of pensioners in order to continue the payment of benefits. Proof of life is performed by verifying the existence of records of proceedings or life events of pensioners in the administrative databases of public institutions at the federal, state or municipal level. Events recorded within ten months after the person's birthday through certified access to applications, in person or with biometric identification are valid for proof of life. Pensioners not located in this process receive an electronic notification to submit proof of life. There is an exception to the procedure for people with mobility limitations or who live in hard to access areas.
This innovation changes a paradigm on the responsibility of the burden of proof of life, increases the efficiency and agility of the process, significantly reducing the need to submit the annual proof of life in person. In addition, it reduces errors and associated risks of fraud, guarantees the payment of benefits without interruptions and significantly improves the value of the service provided to pensioners. It is worth noting that the INSS has digitally transformed other areas of management as well (ISSA, 2020).
Employment and Social Development Canada
In 2022, Employment and Social Development Canada (ESDC) successfully completed the Canada Pension Plan Services Improvement Strategy (CPP SIS). The strategy was implemented in a structured, comprehensive, institution-wide approach over six years to improve the overall delivery of services to millions of citizens who rely on the CCP and CCP-Disability programs. (Employment and Social Development Canada, 2023). The strategy, with more than 30 initiatives, focused on customer service excellence, operational performance, programme and resource management. The initiatives ranged from improving and optimizing the services provided to customers, enabling all benefits to be ordered online (a true one-stop-shop), to modernizing back-end processing systems to ensure timely delivery of cost-effective benefits to an increasing number of customers. The project continued earlier award-winning efforts to focus on user-centred design to identify and address service delivery and the development of a flexible strategy that could adapt to evolving priorities were essential elements of the Project (Employment and Social Development Canada, 2020). In 2023, a formal evaluation of the CPP SIS contributions concluded that communication and engagement with stakeholders and the flexibility of the CPP SIS in managing individual initiatives determined the success of the strategy.
COLSUBSIDIO - Colombian Family Allowances Fund
In 2022, as part of its transformation strategy towards an agile and digital organization, the Colombian Family Allowances Fund (Caja Colombiana de Subsidio Familiar – COLSUBSIDIO) consolidated and scaled up its robotic process automation (RPA) plan in the organization to improve its attention to the needs of its users and meet market expectations (COLSUBSIDIO - Colombian Family Allowances Fund, 2023). This practice transferred repetitive, operative, manual and high volume activities to software robots so that they could perform the tasks with much greater speed and precision and with reduced errors. The human resources freed from these tasks focused their talent and skills on added vale activities; generating higher quality processes, increasing productivity and risk mitigation. In addition, employee satisfaction rates have improved, leading to a better experience for members and users. The use of agile methodologies in automation generated value early on, which helped capitalize more quickly on results and benefits. For change management, a process of training and internal awareness of the staff involved was developed with the premise of harmonizing the organizational culture with the use of technology.
Social Insurance Fund of Costa Rica, Costa Rica
The Social Insurance Fund of Costa Rica (Caja Costarricense de Seguro Social – CCSS) implemented the Single Digital Health Record (Expediente Digital Único en Salud – EDUS), through an innovative project that modernized the public health system to manage health care in a continuous, efficient, high quality and comprehensive manner. (Social Insurance Fund of Costa Rica, 2023a). EDUS is the health care information system that records the actions and follow-up of patients' health status (medical history, medical appointments, health status, diagnoses, treatments, medications, surgeries, disabilities and others). It has a user centred design where patients or beneficiaries can consult and download their medical records on mobile devices. The development of this initiative considered best practices and observed the principles of interoperability, information security, unique identification, traceability, scalability, usability, portability, integrity, productivity and quality. Change management throughout the process was fundamental for health sector employees to adopt EDUS as part of their daily work.
The success of this initiative generated favourable conditions for the start of a project in 2022 that integrates EDUS with a comprehensive digital imaging solution with institutional coverage to improve response and diagnosis times (Social Insurance Fund of Costa Rica, 2023b).
Table 1 summarizes the results achieved by these institutions in the implementation of their digital transformation projects described in this article.
|CCSS, Costa Rica||
Critical success factors
Management support and alignment of the transformation process to the strategic vision. At CJPRC in Argentina and COLSUBSIDIO in Colombia, the transformation responded to the strategic vision of becoming agile and digital institutions, focused on the value of the services provided to their members. At ESDC in Canada, the strategy had a transformational and comprehensive approach throughout the institution. At the CCSS in Costa Rica, the transformation process modernized the public health system.
The focus of digital transformation in social security should be to focus on customers and the delivery of higher value services. In the case of the CJPRC in Argentina, the objective of the digital transformation was to provide simple, user-friendly and satisfactory services to members and pensioners, with special emphasis on the elderly, and to reduce the time it takes to obtain services. ESDC's multi-year strategy focused on providing secure and simple electronic services to users, responding to the growing expectations of its clients and strengthening its capabilities to serve an increasing number of users.
Adjustments to the regulatory framework can be key to implementing innovative practices. In the case of the INSS in Brazil, the regulatory framework was modified to transfer to the INSS the responsibility for the proof of life and to authorize the use, in this process, of a database exchange system with public institutions. In the case of the CCSS in Costa Rica, the enactment of a law was essential to declare EDUS to be of public and national interest and to make its adoption mandatory in the health sector, thus eliminating the initial barriers faced by this initiative.
Having a change management strategy that promotes innovation and collaboration is essential for teams to accept and assimilate changes and add their talents to the transformation processes. In the case of the CCSS in Costa Rica, a team of change managers was integrated and trained in all aspects of health services, who shared with their colleagues the benefits of change and facilitated internal communication and collaboration. In COLSUBSIDIO in Colombia, the change management strategy sought to harmonize the organizational culture with the use of technology through staff training and awareness processes.
Digital transformation is a long-term and continuous process due to the constant evolution of technology. In many ways it is considered more a path than a destination. Regardless of the scope or graduality speed with which it is implemented, the transformation strategy must be aligned with institutional goals and objectives and be supported by management.
Change management throughout the transformation process and across the organization is essential for the institutions to capitalize on its benefits, and to ensure that the institutional talent renews its commitment and effort in offering services of greater value to members, beneficiaries and contributors (ISSA, 2021c). International experiences, in particular the lessons from the COVID-19 pandemic, show that the digitization of social security processes and services is essential in achieving this commitment (ISSA, 2022a).
In the context of social security institutions, it is important to emphasize that digital transformations should aim at improving user inclusion and facilitating access to services. In this sense, the transformations that promote the use of digital channels by users must be accompanied by digital inclusion strategies in order to avoid the exclusion of people, who for example, have reduced capacity to access digital channels (UNU-EGOV & ISSA, 2022). This is particularly relevant in Latin American and Caribbean (LAC) countries, where Internet access and use is associated with household income levels and access is significantly lower among the older population aged 65-74 (18 per cent) and those over 74 (8 per cent ). (OECD, 2020). Therefore, along with the digital transformation, social security institutions must maintain an inclusive approach by simplifying and improving the efficiency of their face-to-face channels where they provide services to older workers, pensioners and users with less digital capabilities or with limited access to the Internet (ISSA, 2019a; UNU-EGOV and ISSA, 2022).
Colombian Family Subsidy Fund. 2023. [Forthcoming]. Robotic process automation: improvement and optimization (Good practices in social security). Geneva, International Social Security Association.
Employment and Social Development Canada. 2020. Service transformation: design-thinking and the Acceleration Hub (Good practices in social security). Geneva, International Social Security Association.
Employment and Social Development Canada. 2023. [Forthcoming]. Canada Pension Plan: Service improvement strategy (Good practices in social security). Geneva, International Social Security Assocation.
Federal Social Insurance Council. 2023. [Forthcoming]. Digital organizations: How the Cordoba Retirement and Pension Fund became a fully fledged digital organization post-pandemic (Good practices in social security). Geneva, International Social Security Assocation.
Gobierno de España. 2021. Digitalización y Protección Social. 30 desafíos para 2030. Madrid, Gerencia de Informática de la Seguridad Social.
Ismail, M. H., Khater, M.; Zaki, M. 2017. Digital business transformation and strategy. What do we know so far?. Cambridge, Cambridge Service Alliance.
ISSA. 2019a. ISSA Guidelines on service quality. Geneva, International Social Security Association.
ISSA. 2019b. ISSA Guidelines on good governance. Geneva, International Social Security Association.
ISSA. 2020. Human-and-digital social security in the Americas. Geneva, International Social Security Association.
ISSA. 2021a. Priorities for social security – Americas 2021: Trends, challenges and solutions. Geneva, International Social Security Association.
ISSA. 2021b. Online one-stop shops: Good practices in Latin America. Geneva, International Social Security Association.
ISSA. 2021c. Social security in the human-and-digital age: Some key insights. Geneva, International Social Security Association.
ISSA. 2022a. ICT response to COVID-19: Leveraging accelerated digital transformation to build better and more resilient social protection systems (Summary report 2020–2022). Geneva, International Social Security Association.
ISSA. 2022b. ISSA Guidelines on information and communication technology. Geneva, International Social Security Association.
ISSA. 2022c. ISSA Guidelines on human resource management in social security administration. Geneva, International Social Security Association.
ISSA. 2022d. Priorities for social security – Global 2022: Trends, challenges and solutions. Geneva, International Social Security Association.
McKinsey. 2023. What is digital transformation?. [Online article].
Ministry of Social Security. 2023. [Forthcoming]. Proof of Life: Reversal of the burden of proof (Good practices in social security). Geneva, International Social Security Association.
OECD. 2020. Latin American Economic Outlook 2020: Digital transformation for building back better. Paris, Organisation for Economic Co-operation and Development.
Social Insurance Fund of Costa Rica. 2023a. [Forthcoming]. Change management as a success factor in implementing the digital health record in Costa Rica: a people-centred approach (Good practices in social security). Geneva, International Social Security Association.
Social Insurance Fund of Costa Rica. 2023b. [Forthcoming]. Institutional digital medical imaging network project (Good practices in social security). Geneva, International Social Security Association.
Tabrizi, B. et al. 2019. “Digital transformation is not about technology”, in Harvard business review, 14 March.
Technical Commission on Information and Communication Technology. 2019. Applying emerging technologies in social security. Geneva, International Social Security Association.
UNU-EGOV; ISSA. 2022. Digital inclusion: Improving social security service delivery. Geneva, International Social Security Association.