Dissertation: Public sector IT projects often fail due to structural problems – modular systems and increased transparency are the solution
Every year, the Finnish public sector spends billions of euros on IT systems used in areas such as healthcare and digital services. Despite this, projects are delayed, costing more than expected, and sometimes failing completely. A dissertation from the University of Jyväskylä shows that the problem is not due to technical incompetence, but rather due to structural problems in the public administration.
According to Reetta-Kaisa Kukkonen, M.Sc. (Econ.), the root causes are silo mentality, disruptions in information flow, and procurement practices that guide overly large and rigid systems.
"Silos are created when different units make decisions and definitions separately from each other. Gaps in information flow prevent people from seeing the big picture, and lessons learned from previous purchases are not transferred from one phase or team to another," Kukkonen explains.
According to Kukkonen, the situation is exacerbated by procurement practices where entire systems are purchased as "all-in-one" solutions.
“Systems acquired in this way tend to be inflexible, difficult to modify, and expensive to maintain. Smaller, modular solutions would often be more effective, but they are not chosen because the prevailing procurement practices steer toward monolithic solutions,” says Kukkonen.
Lack of transparency creates structural corruption
The study highlights in-house companies, i.e., companies owned by municipalities or other public entities, through which municipalities and welfare regions procure services without competitive bidding. According to the law, the owners must have decisive authority over the company, and at least 80% of the companies' operations must be focused on the owners' purchases.
“Ownership is often divided among several municipalities, which means that the voting rights of an individual municipality may be largely nominal. Furthermore, information on the activities of in-house companies is not openly available to everyone, but only to the contracting parties, which is an exceptional feature in the use of public funds," Kukkonen explains.
According to Kukkonen, this arrangement fuels structural corruption, where the needs of large owners override those of smaller ones and decision-making is concentrated among insiders. This is a distortion that directs resources in a suboptimal way and erodes trust in public procurement.
The solution is to build systems in a modular way and to increase transparency
The key conclusion of the dissertation is that large projects should be abandoned, and systems should be built from small, independently functioning parts that are connected via standardised interfaces.
“An example of a successful implementation is the Finnish Legal Register Center, which has already partially transitioned to a modular model. This allows outdated parts of the information system to be replaced individually without costly and time-consuming projects that last for years. At the same time, services remain operational during the changes,” Kukkonen explains.
However, according to Kukkonen, a technical solution alone is not enough; consistent learning and sharing of responsibility are also needed. Kukkonen divides these lessons into three points.
- Organisations must collect lessons learned from projects instead of letting them disappear with staff changes.
- IT budgeting must be centralized to avoid overlapping and disjointed purchases.
- Procurement data must be open and technically accessible so that risks and inefficiencies can be identified in a timely manner.
Public organizations can turn failed IT projects into successes by combining three things: modular architecture, clear corporate governance, and transparent information. Organizations need to change their attitude toward procurement documentation as a legal obligation. It must be a means of learning from previous projects and making effective solutions visible and accessible to everyone," Kukkonen sums up.
Kukkonen's dissertation is based on purchase invoice data from Finland's 11 largest municipalities from the year 2021, as well as 28 interviews with public sector purchasers, IT managers, suppliers, and architects.
Reetta-Kaisa Kukkonen defends their doctoral dissertation “Sustainable ICT Systems and Responsible ICT Procurement: The Role of Enterprise Architecture and In-House Procurement" on 19 December 2025. Opponent is Professor Juho Lindtman (University of Gothenburg) and custos is Professor Tommi Mikkonen(University of Jyväskylä).
The event is in Finnish. The dissertation can be followed in Martti Ahtisaari -hall (Agora) or online
