The benefits of the application of digital technologies in the management of European funds with a view to innovation and streamlining of control governance processes. The analysis by Alessandro Cencioni, Managing Director of Protiviti – Government Services
DIGITIZATION? A MUST
The European Union long-term budget 2021-2027 together with NextGenerationEU (NGEU) form the largest incentive package ever funded by the EU. For the implementation of the recovery and resilience facility (RRF main component of the NGEU) the European Commission has defined a series of strategic guidelines through the Annual strategy for sustainable growth 2021 aiming at a green recovery, digital and sustainable. The strategy, in fact, urges Member States to include in their National Recovery and Resilience Plans (PNRR) investments and reforms focused on Set “Faro” initiatives including, for example, the initiative “Modernise – Digitize the public administration and public services, including the judicial and health systems “.
An essential element of the loans included in the NRP is, moreover, an effective and timely implementation of the Plan; the Commission, in fact, has placed a strong emphasis on the implementation capacities of the Member States, so as to link the disbursement of resources to the achievement of targets and objectives, going beyond the mere criterion of financial progress. It therefore assumes particular the reliability of the data that will be communicated as proof of the progress of the Plans is important. The data collection and processing systems, therefore, must guarantee: i) constant control, ii) the timely provision of information to the national and community decision-makers and iii) interoperability with the information system of the European Commission.
The investment in digital, advocated at every level and financed with important figures, added to the implementation needs of the PNRR, suggests the need for a paradigm shift in the management and control of the Plan, compared to what has been envisaged so far in the implementation of European funds, which can only be pursued through global digital management according to the principles of the so-called “Intelligent Process Automation (IPA)”.
A VIRTUOUS PATH FOR A DIGITAL GOVERNANCE OF PNRR: INTELLIGENT PROCESS AUTOMATION AND ITS POTENTIAL APPLICATIONS
In Italy, the absorption rate of EU funds is among the lowest in the EU (as attested in the annual report of the European Court of Auditors on the implementation of the EU budget for the financial year 2019). The point of attack is therefore to eliminate the causes of delays and inefficiencies: waiting times for inputs (unsynchronized activities), errors (which require reworking) and manual skills on the entire supply chain (meaning also the use of basic information technology).
The control and reporting processes of EU funds, by their nature (also and above all regulatory), are articulated and complex, but by analyzing in depth, some typical characteristics for effective digitization can be grasped: the processes are stable and mature, with well-defined control steps, with high volumes, repetitive activities and with native (or digitizable) digital inputs.
Therefore, in order to face the challenge launched by Europe to Italy (mobilizing more than double the resources allocated with the programming of the structural and investment funds), the use of those technologies that can affect the process in terms of speed of implementation and structural soundness of the management and control system and then toIntelligent Process Automation.
Intelligent Process Automation is a combination of Robotic Process Automation (RPA), Artificial Intelligence (AI), Data Mining and Workflow Management technologies, which together enable rapid end-to-end process automation and accelerate digital transformation. IPA technologies make it possible to affect processes at different levels:
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- AI, Artificial Intelligence is a wide-ranging branch of computer science interested in building intelligent machines capable of performing tasks that typically require human intelligence. It is a powerful technology that drives innovation, increases performance and improves decision making and risk management. AI is integrated into IT systems and allows the latter to carry out processes independently, processing information and simulating decision making based on pre-defined rules.
- L’RPA, Robotic Process Automation is the technology that allows the user to configure computer software or a robot to emulate and integrate the actions of a human being interacting within digital systems for the execution of a process. RPA robots i) use the user interface to acquire data and manipulate applications, just as humans do, ii) interpret information, iii) trigger responses, and iv) communicate with other systems to perform a wide range of repetitive tasks . Routine tasks are entrusted to the software, with significant cost and time savings, quality increase and error reduction.
- Data mining it can be understood as a natural consequence of the proliferation of data combined with the advancement of automation technologies and data science. The Data Mining solutions, combined with the know-how that allows the implementation of advanced analytics solutions, are identified as the systems that facilitate the exploration of data in an automated and repeatable way in order to identify trends, anomalies and potential risks. Reporting is made available in real time allowing effective and timely decisions.
- Il Workflow management it allows to orchestrate and automate the specific activities of a process, favoring the interaction between different users within the organization and eliminating the use of unstructured collaboration tools. The workflow management solutions allow you to assign operational activities to the appropriate resources, plan their execution times, monitor their completion status and therefore have visibility and overall governance on the progress of processes and related performance indicators.
The technologies described can be applied to each of the phases that typically characterize the management and control system of European funds, currently attributable as a whole to the Management Authorities (MA), Certification Authority (AdC) and Audit Authority (AdA ). In particular
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- Strategic planning and operational planning;
- Periodic monitoring of the progress of the operational program;
- Administrative and on-the-spot checks on the operations financed;
- Periodic certification of expenditure;
- Ensuring the correct functioning of the management and control system and the legality and regularity of the expenses for which reimbursement has been requested.
The IPA technological solutions, applied to EU funds, allow significant savings in costs and time by increasing the quality of performance and reducing errors.
From the analyzes carried out by some important customers in the PA world, very comforting data emerges. The application of the following tools, on different points of the process, has allowed us to observe significant reductions in timing:Artificial intelligence for the recognition and verification of documents in any format (digitization and cataloging of inputs), the Robotics for automation of some routine activities with low added value, the Data mining for processing and reporting of large volumes of data and tools workflow management to automate the interaction between different users.
Therefore, the imperative for the success of the Recovery and Resilience Plan is to aim for one technological development that allows operators to free themselves from repetitive and manual activities, dedicating their time to verification activities with higher added value, where human and not artificial intelligence is absolutely necessary.
THE CHALLENGE OF RECOVERY? WITH THE IPA YOU CAN WIN
The provisions dictated up to now by the EU provide for minimum requirements for digitization of the management of European funds; however, the efficiency that can be obtained from the application of IPA tools to processes results, In this sentence, essential to respect the timing of implementation del Recovery Plan e ensure adequate assurance in terms of reliability and completeness of the data underlying the refund requests that Italy will present to the Commission.
A solid digital management would also make it possible to make the recovery implementation process more effective, guaranteeing a real incisiveness of interventions on economic recovery.
The feasibility of an incremental and sustainable digitization passes through the gradualness and constant accompaniment in terms of training and customization of the tools implemented, respecting the three fundamental phases: Explore, Planning, Implementing.
The analyzes conducted give us great comfort on the feasibility and effectiveness of the digitization process. We therefore hope that the awaited publication of the calls for support in the implementation, monitoring and verification phases of the PNRR will take into account this necessary evolution and therefore a new phase of the administration of Community Funds can really open: the Next Generation.