The following is a shortened English version of the report "Det økonomiske
potentiale ved en øget anvendelse af open source komponenter i
In the spring of 2011, Danish National IT- and Telecom Agency (NITA
hereafter) invited Zangenberg & Company to gather information
about 128 ongoing and scheduled IT-initiatives in order to estimate
the potential of an “open source approach” to development of
Within the scope of this project, the term “open source approach” is
used to describe a strategy, in which system elements or components
are developed centrally by means of open and fully accessible source
code. We base the project on the concept that any individual authority
is obliged to employ these system elements where appropriate – by such
obligation, achieving the potential becomes more realistic. The system
elements may be configured and adapted to the individual local
solution. The open source-approach is a supplement (and not an
alternative) to development of centrally driven system elements such
NemKontoor common user-
and rights management.
Our estimations are based on open source being combined with an
iterative agile development model; you use a compilation of fixed
elements as a basis for shaping your own system. Studies have shown
that such approach reduces development costs and, perhaps even more
important, reduces project risks. And so, the open source-approach
makes it easier for authorities to use agile development methods.
The 128 analysed initiatives are produced from 12 authorities
representing app. 30 % of the total governmental IT-budget. The total
amount of DKK 970m for the 128 projects represents between 39 % and 49
% of the annual expenditure for governmental development projects.
Our conservative model calculations show that the potential of a
combined use of open source-approach and an agile development model
may reduce costs of annual governmental IT-development by DKK 175 to
219m. Use of open source-components constitutes DKK 78 to 97m of that
amount. These calculations are based on the part of the project
portfolio where the potential is most obvious. The remainder holds a
potential of more than DKK 200m (and more than DKK 100m in the open
source-element alone). Add to this the reduced project risk and
reduction of annual maintenance costs.
Zangenberg & Company and the NITA have chosen 30 authorities with
significant IT-budgets. These authorities have
been asked to fill in a questionnaire including ongoing and future
it-projects amounting to an economical volume of more than DKK 500.000.
This illustrates that the focus of the report is on those authorities
most concerned with IT in order to cover as much of the government’s
project portfolio as possible.
Zangenberg & Company have processed the data and on the basis of
the project descriptions drawn a number of project categories, which
will be described next. It is important to stress that the project
categories were not predetermined and that the authorities have not
been required to categorise their initiatives.
These are projects with the purpose of establishing a system with a
database and registration system as its core components. Included in
this type of systems are typically registration- and reporting
functions and various search functions. To the extent the system
contains developed functionality for case management, such system is
categorised as case management system and not a database/registration system.
ESDH (Electronic management of cases and documents)
Projects establishing electronic management of cases and documents
based on a standard platform. The difference between ESDH systems and
case management systems is the proportions of organisation-specific functions.
Reporting projects implement solutions with the primary purpose of
providing external stakeholders (citizens and companies) with the
opportunity to register data electronically through a web-interface.
In such projects systems for receiving data will exist. An example of
such project could be an authority’s development of new blank forms
for virk.dk. Reporting solutions separate themselves from
data/registration solutions as a database is not established and focus
is on providing external stakeholders with an interface – often for an
already existing system or an existing database.
These are projects establishing or upgrading physical infrastructure
(locale network, servers, etc.) or system infrastructure in terms of
architecture components such as mail.
These projects establish integration between companies’ own systems
or between own systems and external systems.
Communication projects establish new communication solutions such as
telephone systems or “unified communication”.
Systems with the primary purpose of collecting data from different
systems and present relevant management information and/or provide an
analytical environment (business intelligence).
This category comprises projects where existing systems are
modernised e.g. in terms of moving functionality on to a new platform,
updating basis components or changing/developing functionality within
an existing system architecture.
Economy and payment
Economy and payment projects implement financial functionality e.g.
Projects establishing intranet portals and internet portals where
users can find content provided by different sources. Such projects
will typically contain Web Content Management elements
Projects implementing interrelated systems that support case
management, and manages documents and cases in its core and ensures
that the documents and cases are managed by relevant personnel.
Considering the increased focus on financial management it is
noteworthy that projects supplying management information systems only
account for app. 1 % of the total financial volume. The reason for
this may be that a part of management information functionality is
supplied through other projects and not as separate projects.
It is also noticeable that solutions focusing on economy and payment
does not account for more than DKK 12m. Based on previous reviews of
project surveys, we expected to see more projects implementing actual
supplementary solutions, but this type of solutions apparently does
not attract much attention.
The term “special-system” is in this analysis used as a collective
designation for systems not logically fitting into the categories
described earlier. 33 projects fall into this category. We have
reviewed the descriptions of these systems and are not able to find
further groupings. App. a quarter of all the projects and 40 % of the
total financial volume falls into this category. Presumably, within
this category there is a potential for using open source components;
only, we are not able to quantify this potential within the framework
of this analysis.
Modernisation of existing systems normally consists in updating the
basic programming or infrastructure and in functional extensions due
to new or altered legislation. Modernisation comprises a substantial
volume (estimated at more than DKK 250m annually) and it is worth
noticing that a number of the modernisation measures has a volume that
enables replacement of central components by shared (open source)
components at a moderate additional price. It is comparable to “energy
renovation” of houses; it is substantially cheaper to make such
renovations in connection with a repairing compare to an energy
renovation done as a separate project.
Conclusion and recommendation
Based on a data material comprising projects for nearly DKK 1bn we
are able to conclude that projects containing and open source
potential constitutes a total volume of between DKK 733m and DKK 916m
annually. We have estimated the savings potential if components are
developed and used as per the open source approach in combination with
a more agile system development process. A conservative estimation
points to a savings potential of between DKK 175m and DKK 219m
annually. Concurrently such an approach will contribute to risk
reduction related to this type of projects.
Zangenberg & Company recommend that an architectural work is
initiated in cooperation with authorities that are about to introduce
projects of the types identified in this report. The architectural
work should lead to a definition of a number of open source components
being developed as a part of the development projects.
An organisation for the future work with these open source components
needs to be defined. It could be beneficial to refer to the
cooperation of SBSYS and TING for inspiration, each having taken on
the task differently but arrived at the same result.
A financial model ensuring economical additions for developing
reusable components must also be defined.
Finally, a governance structure ensuring that the reusable components
are being reused must be determined.
Most Danish citizens occasionally receive
payments from the public sector. These payments can be tax refunds,
child subsidies, pensions, student loans, unemployment benefits,
housing support or social welfare payments. All citizens and companies
in Demark are required to have a NemKonto. A NemKonto is a normal bank
account that your assign as your NemKonto.
 All government agencies have been ranked
according to their IT-budgets collected in connection with earlier
analysis. Some have been removed as they were not able to participate.
The 30 largest have subsequently been selected.