Digital Government in Chile

1. Assessment and recommendations

Abstract

This chapter presents the assessment of the state of digital government investments in Chile. It includes policy recommendations to improve the management of digital investments in the public sector, contributing to strengthening the governance of digital government in the country. The assessment and recommendations are structured around three pillars 1) strategic planning, 2) coherent implementation; and 3) sound monitoring and oversight, based on the OECD Digital Government Investment Framework.

Strategic planning of digital government investments

Strategic planning is the cornerstone for an efficient and coherent approach to digital government investments. A strategic planning of digital government investments implies having the tools and co-ordination mechanisms that allow governments to align policy efforts, ensure coherence, and maximise value-for-money when investing in digital government. This report assesses strategic planning in terms of investment alignment and co-ordination for digital government, risk management approaches, and the value proposition for digital government investments. These elements are essential to secure a cost-effective, sustainable, and results-oriented digital transformation of the public sector, ensuring that today's digital investments continue to deliver value in the future. Through strategic planning, government can prevent fragmented and inefficient initiatives, fostering scalability and interoperability across public sector institutions.

Strategy, alignment, and co-ordination

For the past decade Chile has developed solid foundations for digital government. In 2024, the country established the Digital Government Secretariat (DGS) within the Ministry of Finance, consolidating a journey to strengthen digital government in Chile that includes the Digital Transformation Law issued in 2019. This new institutional setting strengthens the governance for the modernisation of the State led by the Ministry of Finance. Further, it offers a unique opportunity for the digital government authority to advance co-ordination with key institutions leading this policy, including the Modernisation Secretariat, the Budget Office (DIPRES) and ChileCompra, in the context of the Digital Transformation Law implementation. Altogether, these institutions lead the implementation of the Modernisation of the State Agenda 2022-2026, which has prioritised better spending policies and an improved management of investments in digital government. This policy and legal framework provide an opportunity to advance the timely development and adoption of an overarching strategy to steer digital government investments by setting clear prioritisation principles to drive investments.

These developments position Chile to advance the strategic planning of digital government investments, leveraging the country’s strong public management foundations, including its robust budgeting process, new performance incentives mechanisms for government digital transformation, and the digital maturity of front-runner institutions within the Chilean administration such as the Internal Revenue Service (SII), the General Treasury of the Republic (TGR), and DIPRES.

Risk management

Chile has strengthened the management of cyber and digital risks through the enactment of a dedicated institutional setting, legislation and national policy on State cybersecurity. It defines five priority areas and a dedicated action plan to advance a resilient digital infrastructure, secure public service continuity, and adopt a risk-based management approach. Despite this progress, Chile does not have a structured approach to identify, assess, and mitigate risks associated with digital technologies across the public sector. While the Chilean government has the Internal Risk Management Framework, managed by the General Government Internal Auditing Council (CAIGG), it does not clearly outline an adequate approach to managing risks associated with digital technologies in government. At present, the value proposition tool (EVALTIC) includes a section for risk identification across different types of projects. However, this process does not assess risks associated with the operation, running and maintenance of digital government investments, nor actions for their mitigation.

When looking at the sectoral level, public sector institutions show different maturity levels in identifying risks related to digital government investments. At present, the central government does not have a single authoritative effort to map digital assets across public sector institutions – despite progress made by mapping specific digital assets related to the implementation of the Digital Transformation Law. Further, the central government does not provide guidelines or common procedures that support institutions to effectively identify, assess, and mitigate possible risks, which in turn may be deepening the digital maturity gap across public sector institutions. The absence of a comprehensive risk management approach for these investments implies potential disruptions in government operations and services, for example, due to limited management of technology obsolescence.

Value proposition

Chile's governance for digital government investments is centred around the value proposition mechanism – EVALTIC. This tool serves as the backbone for planning and approval of investments. EVALTIC enjoys broad support and buy-in from public sector institutions and public officials. However, this tool is not yet fully leveraged in strategic ways to guide the implementation of digital government policies. This includes better calibrating the complexity of investment assessments according to the strategic relevance of the investments. Further, despite the various components in place to articulate the value proposition of investments (including but not limited to EVALTIC, risk management and cybersecurity policies, project management guidelines, and policy evaluation mechanisms), value proposition and other planning tools are not fully embedded into the broader management of digital government investments. These gaps call for a more comprehensive, end-to-end approach to digital government investments by better integrating existing processes and tools across the investment lifecycle.

 

Proposals for action In light of the key assessments exposed above, which draw on the main findings and analysis included in Chapter 2 of this review, Chile could consider implementing the following policy recommendations:

1. Strengthen the governance and co-ordination for managing digital government investments. The following actions can be considered: a. Consider enhancing the mandate of the Digital Government Secretariat to effectively steer the digital transformation of the public sector, including specific functions to manage the planning, approval and oversight of digital government investments. b. Formulate a single strategic instrument, such as a National Digital Government Strategy, that articulates the existing policy frameworks (e.g. Digital Transformation Law, Modernisation of the State Agenda, and Service Quality and User Experience System) and translates them into a whole-of-government roadmap to guide and prioritise digital government investments. c. Formalise a co-ordination body for digital government investments in collaboration with the DGS, DIPRES, Modernisation Secretariat and ChileCompra, and in alignment with existing co-ordination governance mechanisms for digital government and state modernisation policies. 2. Develop a risk management framework for digital government investments. The following actions can be considered: a. Leverage existing processes, including the Internal Risk Management Framework of CAIGG, to assess and approve digital government investments to ensure that risks are identified, assessed, managed, and mitigated in a timely manner. b. Establish a tier-based system based on budget thresholds to identify, assess, and monitor risks, with emphasis on high-risk and strategic investments that require close oversight by the cybersecurity and digital government authorities. c. Define a digital baseline by mapping existing digital assets and key digital infrastructure in the public sector to inform the risk management of digital government investments. 3. Reformulate EVALTIC to transform it into a comprehensive framework for the management of investments in digital government. The following actions can be considered: a. Adopt a tier-based system for digital government investments to classify them according to their strategic relevance and to allocate management efforts according to their value proposition and required oversight. b. Establish a dedicated team (e.g. PMO) to evaluate and follow-up investments based on their strategic relevance and complexity. c. Establish a network of government digital/ICT experts to support the implementation of the framework, including alignment of criteria and sharing of best practices. d. Leverage the experience of digitally mature public sector institutions to promote institutional strategic plans across the public sector, in alignment with the guiding national digital government strategy, to guide and prioritise digital government investments. e. Integrate EVALTIC, risk management, and budget formulation with specific actions during the management and monitoring of investments, and advance towards an end-to-end approach that enables a feedback loop between the value proposition and evaluation.

Coherent implementation of digital government investments

Implementation is a critical stage in the lifecycle of digital government investments, given their complexity and the need to balance administrative processes with the agility required for an effective digital transformation of the public sector. By structuring and integrating approval, funding and project management practices, governments can secure digital investments that are timely, cost-effective, and outcome oriented. Governments can also leverage strategic partnerships with the private sector to secure efficient and sustainable outcomes when investing in the digital transformation of the public sector. This section assesses the implementation of digital investments in terms of approval and funding, project management, and partnerships with the private sector, including public procurement and GovTech.

Approval and funding

At present, investment approval is based on the technical assessment and outputs of EVALTIC, which provide the basis for a whole-of-government understanding of digital needs and investments across public sector institutions. Approval decision-making serves as a technical input for budget allocation by DIPRES. However, there are no concrete mechanisms to trace whether budget allocation responds to the technical assessment provided by EVALTIC, nor the specific amount of resources provided for each digital investment, for example in the form of ICT portfolio management systems. This restricts the capacity of the digital government ecosystem to effectively oversee investments after budget allocation, including their sourcing through public procurement if applicable. Additionally, the current format and timeline set by Chile’s budget cycle constrain public sector institutions in meeting their digital needs in a timely manner. This is reflected in limited time for institutions to prepare and submit value propositions, and to iterate on them if these are contested during the technical assessment. This creates a significant time lapse between identification of digital needs, budget allocation and implementation.

Project management and assurance

Effective implementation of investments in government digital transformation requires adequate management tools and skills to transition from project planning to delivery and operation. Evidence indicates that Chile does not have a comprehensive approach to support digital and ICT project management in the public sector. Existing mechanisms such as the Digital Academy and communities of practice on digital government provide guidance and skills development, however aspects related to project delivery and assurance are not comprehensively addressed. In turn, public sector institutions rely on existing internal capacities, procedures and project management capabilities. Similarly, further efforts can be devoted to establishing common guidance and standards on project management and implementation, leveraging the experience of more digitally mature public sector institutions.

Public procurement

Chile relies on a robust public procurement policy, centralised in ChileCompra, the national public procurement agency. However, this policy does not comprehensively address the sourcing of digital and ICT goods and services – for example, in the form of a dedicated strategy to inform and guide a whole-of-government approach to procuring digital products and services. While dedicated actions for specific digital and ICT needs have been implemented, including framework agreements as well as centralised procurement exercises for certain IT commodities (e.g. laptops and basic IT equipment), there is a need for a dedicated and more comprehensive public procurement approach that encompasses the agility needed for digital and ICT projects. Further, established relationships with digital providers are limited, including early market engagement and dialogue on how to strengthen the supply chain for digital government. Continuous dialogue with national IT associations and representatives would help the government understand the available options on the supply side and acquire the right resources and tools.

The recent amendments to the Public Procurement Law, including the decree that enables its implementation – notably the use of innovation procurement – are an opportunity to introduce forward-looking procurement mechanisms for digital goods and services. Further considerations, such as the introduction of Dynamic Purchasing Systems (DPS), would considerably strengthen the digital and ICT public procurement policy in Chile by introducing a more flexible, adaptive and responsive access to digital and ICT providers compared to existing public procurement mechanisms.

 

Proposals for action In light of the key assessments exposed above, which draw on the main findings and analysis included in Chapter 3 of this review, Chile could consider implementing the following policy recommendations:

4. Adopt an ICT portfolio management approach to integrate procedures across the digital government investment lifecycle. The following actions can be considered: a. Leverage the reformulation of EVALTIC as a comprehensive investments framework to establish a digital baseline and portfolio system that supports the implementation and follow-up of digital/ICT investments, including those that have or have not obtained approval for funding. b. Integrate value proposition, risk management, implementation guidelines and oversight function to advance towards an end-to-end approach when managing digital government investments. c. Define whole-of-government prioritisation principles for digital government investments to ensure strategic relevance and outcome-oriented investments. d. Develop and adopt whole-of-government investment delivery standards, building on the existing guidelines for EVALTIC and project management, to ensure consistency and quality in digital government investments. e. Develop a digital and ICT project definition that better reflects the digital needs of public sector institutions, and helps calibrate approval efforts by considering digital government investments’ value, risk, cost, and strategic relevance. 5. Strengthen partnerships with the private sector through continuous market engagement and fit-for-purpose ICT procurement mechanisms. The following actions can be considered: a. Define a whole-of-government strategic approach or policy to guide efforts on ICT procurement. b. Establish mechanisms for systematic market engagement and dialogue with the ICT industry for Chile’s public sector to better communicate digital needs and understand sourcing options and capabilities. c. Leverage the possibilities of the public procurement law approved in 2023 to introduce more agile procurement mechanisms for digital goods and services, including the introduction of DPS as a more agile and accessible evolution of the existing framework agreements. d. Continue implementing joint procurement of specific digital goods while maximising value for money, managing vendor-lock-in and acknowledging the specific digital needs of the public sector. e. Introduce environmental criteria for the procurement of digital government investments to better align green and digital transitions. 6. Build skills and capabilities for an effective management of digital and ICT projects in the public sector. The following actions can be considered: a. Collaborate with the civil service to create a framework that attracts, retains, and develops digital talent within the public sector, including identifying required skills and roles for the management of digital government investments. b. Develop dedicated communities of practice to foster project management capabilities in public sector institutions, focusing on the planning, implementation and monitoring of digital government investments.

Strengthening oversight of digital government investments

Monitoring and evaluation are essential components in the lifecycle of digital government investments, ensuring that digital and ICT projects are delivered on time, meet expected outcomes, and maximise the efficiency of public expenditure. Effective monitoring mechanisms enable a strategic oversight of the public sector’s digital investment portfolio, helping to build resilience and improve risk management.

Monitoring

Monitoring efforts in Chile’s public sector are anchored in a strong institutional culture of accountability, as reflected in the leading role of DIPRES in the oversight and evaluation of public spending. However, at present, there is no dedicated framework or action that supports an effective oversight of investments in government digital transformation that contributes to effective implementation and benefits realisation. There is no dedicated mandate for investments oversight, nor supporting tools (e.g. an ICT portfolio system) that contribute to this purpose. The limited integration across the investments’ lifecycle, manifested in the limited role of EVALTIC and its connection with budget allocation and expenditure, means that the information gathered in the value proposition cannot be effectively used to monitor delivery or guide future decision-making. Currently, DGS and DIPRES are piloting a methodology to monitor the eight most strategic digital transformation projects. The absence of an integrated, whole-of-government monitoring system for digital government implies that both the DGS and DIPRES are unable to track the implementation of digital government investments, which constrains the monitoring and evaluation of outcomes and results. However, lessons from the piloting exercise could be expanded to equip DGS and DIPRES to implement similar mechanisms for selected digital and ICT projects.

Policy and User Evaluation

At present, there are no comprehensive efforts to evaluate digital investments, reflecting the need to better assess whether existing policies and investments are delivering their intended outcomes beyond expenditure control. Chile can leverage its mature policy evaluation ecosystem, which can serve as a foundation for dedicated evaluation actions on digital government investments. DIPRES plays a crucial role in this process, supported by systems like the Performance Management Program (PMG) and the Quality of Service and User Experience Performance System managed by the Ministry of Finance. Ongoing policy evaluation by DIPRES could integrate an assessment of digital investments, or existing methodologies could be applied to conduct a bespoke evaluation of digital investments. In addition, the absence of a shared, overarching digital government strategy poses a significant barrier to the effective evaluation of investments, as there are no unified policy objectives against which to assess performance. The current implementation of the Digital Transformation Law is an opportunity to close this gap, as the legal framework requires the identification of a baseline of digital capacities in the public sector.

Finally, Chile has made significant progress in improving public services by developing capabilities to measure and analyse user experience through initiatives like the Quality of Service and User Experience System, and the User Experience Measurement System. These developments reflect a step towards a more responsive and user-driven public sector and present an opportunity to integrate these insights into the evaluation of how the government is investing in digital transformation efforts.

 

Proposals for action In light of the key assessments exposed above, which draw on the main findings and analysis included in Chapter 4 of this review, Chile could consider implementing the following policy recommendations:

7. Define and empower an oversight function to monitor the implementation of strategic digital government investments. The following actions can be considered: a. Clarify mandates and co-ordination mechanisms between key stakeholders (DGS, DIPRES) for the monitoring and evaluation of digital government investments, securing whole-of-government oversight. b. Establish dedicated roles and competencies for the monitoring and evaluation of investments. c. Define and implement a tiering system to focus monitoring efforts on strategic investments based on budget and strategic policy priorities. d. Adopt an open-by-default approach in the monitoring of digital government investments by opening monitoring data. 8. Implement an integrated monitoring system for investments in digital government. The following actions can be considered: a. Leverage the implementation of the Digital Transformation Law to develop a digital baseline to monitor existing assets in the digital government ecosystem, integrating EVALTIC to ensure an updated understanding of digital needs and initiatives. b. Define dedicated key performance indicators for the monitoring of digital investment, improving the strategic relevance of information and indicators obtained through EVALTIC. c. Integrate existing monitoring systems, including EVALTIC and monitoring actions led by DIPRES, to ensure whole-of-government oversight. d. Continue efforts to integrate existing digital systems such as SIGFE, MercadoPublico and EVALTIC to enable a better financial traceability of investments and expenditure. e. Define and implement a benefits management framework for digital investments, integrating the consideration of benefits management at each stage of the investment lifecycle to guide public sector organisations in the monitoring and evaluation of their digital government investments. 9. Leverage existing evaluation and management performance tools in the public sector to advance the evaluation of digital government investments. The following actions can be considered: a. Integrate existing evaluations systems, including policy evaluation led by DIPRES, into the management of digital government investments to ensure whole-of-government oversight. b. Leverage the Performance Management System (PMG) managed by DIPRES to incentivise collaboration for the monitoring of digital government investments, and to avoid duplication. c. Introduce user experience outcomes and outputs from the Systems for Quality of Service and User Experience Performance (Sistema de Calidad de Servicio y Experiencia Usuaria) into the evaluation of strategic digital government investments.