Digital government teaching case study

Introduction

At first glance, the solution to the problem Cluj-Napoca City Hall faced— a lack of ITC specialists for advancing digital transformation efforts — seemed evident. It was not as though Cluj-Napoca was short of digital professionals, and the relationship between City Hall and businesses had never been better. The second largest city in Romania, Cluj-Napoca had experienced very fast economic economic transformation in the previous 15 years and the backbone of this transformation was the ITC sector (Ionita, 2022). 

The transformation of Cluj-Napoca’s economy began in 2004, when a reformist local administration came to the City Hall (Shafir, 2004; Cimpean, 2024). This set the stage for a profound transformation of Cluj-Napoca, from a post-industrial, post-communist city, to the urban area with the fastest economic growth in the EU over the last 20 years, according to the World Bank. The city’s  GDP more than quadrupled between 2004 and 2019, outpacing even tech hubs like Tallinn (Bud, 2021). Cluj-Napoca’s economy remained strong even during challenges, like the 2007 financial crisis and the COVID-19 pandemic. Studies show that the city has the highest number of entrepreneurs per capita and the lowest urban unemployment in the country (Dumitrescu, 2024).

Public-private-academic collaboration is often cited as a defining characteristic of Cluj-Napoca’s economic growth (Hințea et al., 2020). For instance, the strategies underpinning the city's success were formulated in a collaborative way, using inclusive processes coordinated by academic institutions. The local government supported the creation of innovation clusters and IT parks and eased bureaucratic hurdles for investors. The continuity of leadership and clarity of strategy gave investors confidence in Cluj-Napoca as a stable, forward-looking location to do business (SDG-Colab, 2025).

If one sector epitomizes Cluj-Napoca’s economic renaissance, it is Information Technology and Communications (ITC). Over the past 15 years, Cluj-Napoca’s IT sector has grown from a handful of software outsourcing firms to an engine of growth and innovation. Several factors explain how IT became so central. The presence of six state-funded universities meant that Cluj-Napoca had a comparative advantage in skilled tech talent, with thousands of IT and engineering graduates each year, many with multilingual capabilities(Tomasi et. al., 2024). Major IT outsourcers and consulting companies set up operations in Cluj-Napoca, bringing projects from abroad. All this created a boom in IT employment; in the 2010s, the number of IT jobs in the city was growing by ~30% annually. 

According to the Romanian National Institute of Statistics, almost 10% of the country’s workforce is directly employed by the IT industry, and estimates suggest that over 25,000–30,000 people in Cluj-Napoca work in IT and related services, up from only a few thousand in 2004. Such growth far outpaced overall employment growth in the city (World Bank, 2021; Ionita, 2021). Initially, much of the work was outsourcing — relatively low value-added coding or call-center tasks. However, as the talent pool matured, the city began exporting higher-value services: software product development, R&D, and creative services. By 2019, Cluj-Napoca reportedly generated over 80% of Romania’s IT service exports (Popoviciu, 2024). 

Collaboration between ITC companies and Cluj-Napoca City Hall gradually developed after 2004. Companies increasingly saw the benefit of helping the city with its digital transformation. Multiple companies used Cluj-Napoca as a testbed and a showcase of their products and services. A number of platforms and websites were offered pro bono to the municipality, including its participatory budgeting platform, main website, internal software systems necessary for digital public service delivery, and elements of the public transport ticketing system. Some of these platforms, having proved successful in Cluj-Napoca, were then offered commercially to other municipalities around Romania (Velez, 2023). 

The increasingly close cooperation between ITC companies and City Hall was formalized in 2017. A Consultative Council for Innovation and Entrepreneurship in IT (CCIEIT) was created, uniting business, academia and City Hall leaders to leverage the expertise of the growing IT sector to increase citizens’ quality of life. A number of collaborative projects started as ideas first floated during these meetings. Among them, we can mention: 

• A digital education project for elderly people, with trainers from Cluj-Napoca Universities and infrastructure (space, computers) provided by ITC companies

• A smart city strategy for Cluj-Napoca — after a false start with one of the four big consultancy companies, the strategy morphed into a digital transformation strategy for the city, coordinated by professors inside one of the Universities and unanimously approved by the Local Council in 2021

• The project that is the subject of this study, in which IT specialists were paid by the private sector  at market salaries to help with the digitalization of the City Hall

The Public Servant’s Dilemma 

The problem faced by City Hall came partially from the success of the Cluj-Napoca ICT sector. The market for IT professionals was red-hot, with companies, both multinational and local, vying for talent. Students in these fields from all universities in the city are offered contracts long before they finish their studies. Public institutions find it very hard to compete with private businesses on pay, working conditions, or benefits, especially for senior positions such as experienced project managers or system architects. These realities were evident to City Hall leadership and were discussed multiple times during the meetings of CCIEIT. During these gatherings, three potential solutions were identified:

Option 1: Outsourcing 

First, they considered outsourcing more of the digital transformation work. There was an abundance of companies that could offer their services, most of them already with experience working with City Hall. 

Advantages: 

• A large number of potential offers

• Proven digitalization expertise

• Good relationships between organizations, with trust built over a decade of collaboration

Challenges:

• Higher implementation costs

• The Romanian public procurement process, which prioritizes cost over quality

• An increasing reliance on outside actors for digitalization projects

Option 2: Internal Development

Then they considered relying on internal development. They could implement digitalization projects with the specialists already working in the City Hall. A number of projects were already underway or planned, and Cluj-Napoca was one of the municipalities in Romania with the most robust digital public service offering.

Advantages: 

• Increasing internal expertise and experience

• Better control of results

Challenges:

• A lack of all necessary resources, especially senior IT specialists

• Longer implementation time and higher failure probability

• Lower likelihood of using the newest technology

Option 3: A Hybrid Approach

They also considered a hybrid approach, combining the first two solutions by embedding private sector experts inside the City Hall. In this model, people paid by IT companies would work within the City Hall for a fixed period of time, spurring innovation and speeding up the implementation of digital projects.

Advantages: 

• Up-to-date experience and expertise

• Quicker delivery of digital public services

• Fostering innovation inside the City Hall and building capacity quicker

• Minimal impact on the budget of the institution

Challenges:

• Harmonizing different ways of getting things done

• Overcoming the initial, inherent resistance to change

• Navigating any legal or administrative hurdles of having externally funded personnel working within a government institution (e.g., clarity of roles, authority, accountability)

From the start of the discussion, none of the stakeholders imagined that one of these solutions would be a panacea. The ideas were envisioned as pilot projects, during a rapidly changing environment, as both technology and citizens’ expectations were quickly evolving. The unanimous decision was to go ahead with the third option, and the most acute pain point identified by City Hall was a lack of an experienced Project Manager to help with current and future digitalization efforts.

Actions and Reactions

To kick-start the pilot, one of Cluj-Napoca’s large IT firms (with the blessing of the CCIEIT) recruited a senior Project Manager (PM) from the open market and seconded him to City Hall for a one-year assignment. The plan was to embed this external project manager within City Hall’s staff and workflow. The project’s goals were twofold: first, to accelerate the rollout of new e-government services and improve existing digital platforms for the public —for example, expanding online services, enhancing the participatory budgeting platform, updating City Hall’s main website, and upgrading internal software systems and the public transportation e-ticketing system. 

The second objective was the transfer of digital expertise into the bureaucracy and strengthening the collaboration between City Hall and the tech community. The PM was expected to deliver quick wins in digital service delivery and to act as a bridge between the private and public sectors, introducing new ways of working to City Hall.

Implementation Story

The external PM began work inside City Hall in 2017, operating as a member of the organization. He collaborated closely with the heads of the IT department and the innovation unit, both of whom were CCIEIT members supportive of the project. However, it wasn’t long before cultural and procedural frictions emerged. The City’s employees were not well-prepared to receive an outsider in their midst. The decision to bring in the PM had been made by top leadership, without involving the mid-level public servants who would have to work with him day-to-day. As a result, those employees had little understanding of the project’s purpose or their role in it. With limited or no information provided to them upfront, their instinctive reaction was wariness, if not outright opposition or indifference. In essence, the newcomer was treated as a foreign body by the bureaucracy.

Even those inside City Hall who welcomed innovation found that bureaucratic processes hampered the PM’s efforts. The institution’s hierarchical nature meant that nearly every proposed action required approvals from various levels of management. This red tape significantly slowed down the PM’s work; in some cases, it froze progress entirely. What might have been implemented in weeks in a tech company could take months in the government due to formal procedures and siloed decision-making authority.

The PM came from a fast-paced private sector environment and was used to agile execution – the ethos of “move fast and break things.” To City Hall staff, this approach felt destabilizing. Some public servants perceived the PM as brash or condescending, and, in their view, he didn’t fully understand the limits or possible consequences of proposed projects. For his part, the PM grew frustrated with what he saw as an ossified, overly cautious organization resistant to change. These mutual misunderstandings created an atmosphere of tension. Instead of blending the best of both worlds, the partnership at times devolved into an ”us-versus-them” dynamic.

Government organizations in Romania operate under strict laws and regulations (procurement rules, civil service laws, budgetary rules, etc.) that can significantly constrain action. From the public servants’ perspective, the PM sometimes appeared to ignore or dismiss “the way things must be done” legally, which undermined his credibility. Some staff also felt that the PM had a conflict of interest – since his salary was paid by an IT company, people wondered if he was acting as a champion for certain tech vendors or products. There were whispers inside City Hall that he behaved at times more like a salesperson than a neutral advisor devoted solely to the city’s needs.

From interviews with the people involved in the project, including the PM, the head of the IT department, the head of the innovation unit, and members of the CCIEIT, we distilled the outcomes of the collaboration and the lessons learned by both the public institution and people in the private sector. 

Even if this project did not take place in a collaborative vacuum — the City Hall and companies were part of several previous successful initiatives, and a great deal of trust was already present between actors —  conditions for this venture were different, for a number of reasons, including:

• It was not based on clear requirements for each partner  — usually, for a normal public procurement process, the specifications are clear from the beginning

• The timeframe was longer than usual  — the person had a one-year contract

• The authority chain was not very clear  — did the PM respond to the CEO of the company that hired him, or to somebody inside City Hall?

The results of the project were not what City Hall or the business community had expected. The people involved hesitate to characterize it as a failure, because some digital services were introduced or improved as a result of the collaboration. It did not, however, have the transformational effects expected; in hindsight, the expectations were too rosy from the beginning. 

Strengths of the Project

• Quicker implementation of some digitalization or smart city projects in Cluj-Napoca, including a centralized public parking platform, updated back-office tax software, and the setting up of smart traffic lights

• Better understanding between the two partners  — it was a learning process for both parties, in which businesses understood the limitations of public institutions, and City Hall learned a different way of doing things

Weaknesses of the Project

• Little to no preparation of the people inside City Hall who were expected to form a team with the outside person

• Culture clash between the way things get done inside the public sector as opposed to a private company

• Misunderstanding from both parties — the public servants considered the PM condescending and too willing to break things, while the PM saw the whole public organization as ossified and resistant to change

• Even if the PM worked well with some people inside City Hall, including the head of the IT department and the people in the communication unit,  the hierarchical nature of the organization meant a number of approvals for each desired action, which lengthened the process or froze it in place

• From the PM’s perspective, City Hall was not a nimble enough organization, ready and willing to change. It also lacked the expertise to write concrete specifications for what it wanted, including platforms and services, from the market, or the specifications were formulated in such a way that the winner of the tender was preordained. 

In the end, the contract was terminated two weeks before its expiry date. All subsequent hirings, including talks about a system architect and a UX/UI specialist paid by Cluj-Napoca companies and working in City Hall, were put on indefinite hold. 

Further Reflections

All stakeholders involved in this project — from generating the idea, to implementation, and its eventual failure — acted in good faith and with the best intentions. So why did this project fail?

One explanation lies in unrealistic expectations. As reported by researchers, the bigger the gap between expectations and reality, the higher the likelihood of failure (Anthopoulos et al., 2016; Masiero, 2016; Hughes et al., 2017; Basten et al., 2016; Oludapo et al., 2024). In this case, the expectations were unrealistic from the beginning. One person, embedded into an unfamiliar organization, was counted upon to massively contribute to its transformation (as a frame of reference, the Cluj-Napoca City Hall has over 1000 employees). 

Another problem was the lack of organizational readiness. In hindsight, parachuting somebody into the middle of a functional team and hoping for the best was not such a good idea. The organization treated the outside person as a foreign body and mostly rejected him. The projects that were implemented had more to do with interpersonal relationships and less with an effective meshing of a public and private sector approach.  

Fundamentally, the project underscores that cultural and human factors can make or break a collaboration. Public organizations in Romania are, by design, highly hierarchical. The decision to start the project and its development was made by the top management of the institution. The public servants expected to work directly with the PM were not involved in the decision process. It is not surprising that, in the context of limited or no information on the goals or expected results, the instinctive reaction was one of opposition or indifference. Many public servants are afraid that technology will make them redundant. As such, it is again not surprising that many public servants did not feel invested in the success of the project. 

It is important to recognize that structural and systemic barriers also played a role, though they were not the primary cause of failure. The case highlights several classic bureaucratic obstacles: rigid procurement rules, complex legal regulations, and a strict hierarchy of decision-making. These are precisely the kinds of systemic barriers discussed in Unit 8 of the Teaching Public Service in the Digital Age (TPSDA) syllabus as common impediments to digital innovation in government. However, one could argue that these hurdles might have been overcome (or at least mitigated) if the human and cultural aspects had been taken into account. It was the lack of trust, the lack of early stakeholder engagement, and the clash of mindsets that ultimately derailed the project more than the formal rules or structures. In other words, the soft issues (people, culture, communication) proved harder to overcome than laws, procedures, or organizational charts.

This less-than-successful initiative did not mean the end of the quadruple-helix model of collaboration in Cluj-Napoca. A number of projects were initiated and successfully implemented after the one described in this case study, including the Cluj-Napoca Digital Transformation Strategy, Innovation Camps, Cluj Innovation and Experiment Fund, and the Horizon Projects proposed by the Cluj-Napoca ecosystem.  In the end, this case may have increased the City’s tolerance to failure. Which, all-in-all, is not a bad outcome.

Conclusion

Many technology companies have adopted a saying by  Samuel Beckett: “Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.” The “fail better” sentiment aptly characterizes this collaborative project. In the words of the innovation head at City Hall, “such experiences are never useless.” Innovation is hard. Transforming an institution is hard. Building internal expertise and learning to work together, despite differences in understanding, is hard. However, it is not useless.

The key lessons from this case study align with the systemic challenges highlighted in Unit 8 of the TPSDA curriculum. Effective digital transformation in the public sector is not mainly about finding the right technical solution – it’s about navigating the organizational and cultural landscape in which that solution will be implemented. Public managers should remember to avoid over-promising, to engage stakeholders early on, and to address systemic barriers. Rigid procurement processes, legal constraints, and hierarchical silos need to be taken into account, but failing to bring people along has a high chance of dooming a project.

On the other hand, such projects prove that experimentation is a good thing; creating sandboxes where public institutions can take risks and fail can lead to better future initiatives. 

In the end, digital government is not primarily about technology. The project presented in this case study was less successful, not because technology was not available. It did not succeed because the people who needed to work together as a team did not. Even with funding, political will, and external expertise, a project can fail if the softer aspects are neglected. Taking into account people’s reactions to new developments, desires, and fears can be the difference between failure and triumph.