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Digitalisation Germany: 11 Percent. And the Pace Is Slowing.

Why Germany’s public administration is failing at legacy IT and what Switzerland is doing differently with automation

In Zurich, in early 2026, a taxpayer opens her tax return app. The fields are already filled in: wages, bank interest, pension – imported automatically. She reviews, confirms, and is done. In Frankfurt, at the same moment, someone is typing the same data into ELSTER by hand, copied off three separate paper statements. Both countries are federal democracies. Both consist of 26 and 16 semi-autonomous sub-jurisdictions, respectively. The difference does not lie in the political structure. It lies in the technical one.

In Germany, 823 of 7,509 public administrative services are digitised at the federal level – eleven per cent. Last year, thirteen new ones were added. At that pace, full digitisation is still more than nineteen years away. This is not an implementation problem. It is an architecture problem. And 400 kilometres to the south, Switzerland is showing what happens when you build the foundations first.

11 %600,00019+26
SERVICES DIGITIZED INSM Digimeter 2026VACANT POSITIONS dbb Monitor 2026YEARS TO FULL DIGITAL INSM extrapolationCANTONS FULLY DIGITAL Netzwoche / Switzerland

The 11-Percent Balance Sheet

The deadline of the Onlinezugangsgesetz (OZG) expired at the end of 2022. By that date, every public administrative service in Germany was supposed to be available digitally. The verdict: missed. The successor law, OZG 2.0, failed in the Bundesrat (lto.de). At the start of 2026, 823 of 7,509 services are digitized – eleven percent. Last year, only 13 new services were added. The pace is slowing, not rising (INSM Behoerden-Digimeter 2026).

At the same time, the demographic foundation of the public sector is shifting. 600,000 positions are currently unfilled (dbb Monitor 2026). Over the next ten years, 1.3 million public-sector employees will retire – in a population that will not produce the next generation in sufficient numbers (dbb / Destatis). Public administration is therefore losing not only headcount but also the institutional knowledge embedded in undocumented processes, specialist applications and workarounds. Whoever fails to convert that knowledge into automated processes before the generation that holds it leaves will face a double problem: no people and no documentation.

The reflexive call for “more budget” and “more staff” falls short. The problem is not political will. The federal government and the states have made billions available. The problem is technical debt: specialist applications that have accreted over decades, proprietary interfaces, and federal fragmentation. Whoever digitises on top of those foundations is digitising stagnation.

The True Cost of Legacy Architecture

The numbers are sobering. Eighty per cent of public-sector IT mega-projects with a volume above EUR 15 million overrun their schedules by an average of 47 per cent. Nearly half of all projects ultimately cost twice what was planned (McKinsey / Oxford Global Projects). These are not isolated cases. They are systemic patterns that emerge from the complexity of grown architectures. Every new digitisation project must work its way through layers of proprietary middleware, obsolete databases and undocumented interfaces before the first line of new code is even written.

The private sector struggles with the same inheritance: 61 per cent of German companies still run their core applications on legacy platforms (Slalom / Luenendonk). Encouragingly, 83 per cent plan to increase their IT modernisation budgets in 2026 – a sign that awareness is growing. In public administration, that momentum is absent.

Federalism compounds the problem. Sixteen states run their own IT service providers, their own specialist applications, their own standards. Modernising the registers – a precondition for the once-only principle, under which citizens provide their data only once – is estimated to cost at least EUR 2 billion (McKinsey). INSM Managing Director Thorsten Alsleben puts it bluntly: “Germany remains a digital desert.”

The Swiss Counter-Model: Infrastructure First

Switzerland has a similar federal system – 26 cantons instead of 16 states – and faces comparable challenges. Yet the approach is fundamentally different. Rather than digitising individual government forms one at a time, Switzerland is building the infrastructure for end-to-end automation.

The centrepiece is the state-issued digital identity Swiyu. In 2021, voters rejected a privately operated e-ID by referendum, and the state took over. The result is a self-sovereign identity platform on which citizens store their data decentrally and themselves control who has access. Privacy by design – not as a marketing promise but as an architectural principle. The public beta has been live since March 2026; full launch is planned for the third quarter of 2026. The budget for the entire trust infrastructure is CHF 160 million over the period 2023 to 2028.

But the e-ID is not an identity project for identity’s sake. It is the foundation for a cascade of automations. Beginning with tax year 2025, wage statements, bank interest and pension benefits flow automatically into a pre-filled tax return – the so-called Automated Tax Assessment (nume.ch). The ELM standard (uniform wage-reporting procedure) obliges companies to make their payroll systems compatible by 2026. All 26 cantons now offer fully digital tax filing, with new cantonal systems such as eTax Zug, E-Tax SG and eTAX Aargau. The punch line: in the best case, the citizen no longer has to do anything at all. The tax return is already filled in when she opens it. That is not the digitisation of a form. It is the abolition of the form.

“Germany remains a digital desert.” – Thorsten Alsleben, INSM Managing Director (INSM Behoerden-Digimeter 2026)

Austria is pursuing a similar vision with its no-stop-government approach. The principle is the same everywhere: don’t digitize forms – automate processes, on the basis of shared, interoperable infrastructure.

Why Automation Needs Infrastructure

The difference between the German and the Swiss approach can be summarized in a table, but it runs deeper than any single project. The real question is whether automation is built on dilapidated foundations or on solid ones.

DimensionLegacy Approach (Status Quo DE)Infrastructure-First (Swiss Model)
Digital IdentityPaper-based / eID card with low adoption; no wallet infrastructureSwiyu SSI wallet: state-run, decentralized, privacy by design, from Q3 2026 (eid.admin.ch)
Tax ReturnsELSTER requires manual entry; no automatic data transfer from employers or banksAutomated Tax Assessment: wages, interest, pensions flow automatically into a pre-filled form (nume.ch)
Register IntegrationSiloed registers; NOOTS only since late 2025; estimated cost EUR 2 billion (McKinsey)Once-only principle: data is collected once, shared automatically between authorities
Project Governance80 % of major projects delayed; budgets double on average (McKinsey)Modular implementation: 26 cantons with their own but interoperable systems (Netzwoche)
Data SovereigntyCentralized storage by authorities; no unified data protection conceptSelf-sovereign identity: citizens control their own data, decentralized storage (eid.admin.ch)

Automation on legacy systems is at best an RPA band-aid: bots copying data from one ageing application into the next, without anything changing in the architecture underneath. Such solutions are important and necessary today. But they are also fragile, maintenance-heavy and do not scale sufficiently. Automation on modern foundations – digital identity, integrated registers, standardised interfaces – is structural efficiency. Processes are eliminated rather than merely accelerated. The difference is not gradual; it is categorical.

The lesson is not that Switzerland is “better.” The lesson is that digitisation without infrastructure modernisation is a contradiction in terms. Anyone trying to digitise 7,509 administrative services on top of siloed registers, paper-based identification and proprietary specialist applications will still not be finished in nineteen years. The way forward does not run through faster digitisation of individual forms, but through modernisation of the layer beneath them.

What This Means for the DACH Region

The good news: the tools exist. Digital identities, integrated registers, standardised interfaces and automation platforms are not future technology. They are already in operation in Switzerland, in Denmark and in parts of Austria. The question is not whether, but in which order. And that order decides whether automation creates structural efficiency or merely masks the symptoms of an outdated architecture.

Three priorities suggest themselves. First, register modernisation is not an optional digitisation measure – it is the precondition for everything that follows. Without integrated, standardised registers, the once-only principle remains a PowerPoint slide. Second, digital identity has to be understood as infrastructure, not as a one-off project. Switzerland has shown that an SSI-based solution can deliver privacy and automation at the same time, provided the political will for a state-run solution is there. Third, large projects need architectural governance. The Danish model of an independent review body for any IT project above EUR 2 million would be an immediately deployable lever against the systematic cost and schedule overruns.

As a UiPath Diamond Partner and Microsoft Partner, Lunatec supports public administrations and enterprises in the DACH region through exactly these transformations: from automation strategy to platform architecture to live operations. The experience from more than a hundred automation projects is consistent: the largest efficiency reserve does not lie in faster bots. It lies in better foundations.

Success Story

Case Study: Automation in the Public Sector

Resident parking permits processed automatically around the clock – no longer limited to office hours.
German city · Citizens’ Service Office · 100,000+ applications p.a. · UiPath RPA · System integration without an API
⚡ UiPath RPA – Custom System – Bridging Without an Interface
Challenge

The city’s online application form for resident parking permits was not connected to its specialist back-office system. Applications arrived by email and had to be transferred manually, line by line, by two case workers via copy-and-paste. With more than 100,000 applications per year, that meant permanently tied-up capacity, long waiting times for residents – and no way to process applications outside of office hours.

Solution

A UiPath RPA robot reads the incoming form data from the email, validates the information and creates the application in the specialist system – using the same interface the case workers do. The bot handles new permits, vehicle changes and address changes for vehicles registered in the city. In parallel, Lunatec is building up the city’s in-house RPA capability through monthly coaching, so the team can develop further automations independently.

1,000 h
saved per year
35 % of applications fully automated
4×
faster
30 s instead of 4 min per application
3.6 mo.
payback period
€40,000 savings per year
24/7
availability
same-day processing

ABOUT LUNATEC

Lunatec, headquartered in Frankfurt with offices in Dubai, is a UiPath Diamond Partner and Microsoft Partner. We support public administrations and enterprises in the DACH region in modernizing their IT infrastructure – from automation strategy to platform architecture to live operations. With deep expertise across the European and Arab markets, we combine regulatory understanding with delivery speed.

lunatec.de  ·  Frankfurt  ·  Dubai  ·  Shape the Automated World

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