The MEF LL approach strives for mutually beneficial outcomes based on the different project objectives. Overall, co-creation is understood as a form of 1) needs investigation and 2) as a tool to enhance productivity and stakeholder buy-in. MEF DSII LL’s focus is to have a physical location to invite other stakeholders and to support co-creation innovation. Co-creation activities are undertaken at the exploratory stage, where it is important to identify the needs and the “current state” of stakeholder interest as well as the operational background context. A preferred option to understand user needs is to prepare co-creation activities based on established definitions and understanding of the users and what they represent. This exercise translates into the definition of personas. These are fictional characters that represent specific types of customers. For instance, a persona could be “Marc – IT supplier.” Marc has a background in IT software development, has certain predefined personal and professional needs, he is introverted but has strong analytical skills. Persona examples are created based on preliminary investigation of the themes and common characteristics of the people that will take part of the co-creation sessions. This involves research to produce an overview of the current habits and practices of the targeted users. After understanding the user characteristics, one then engages in the process of discovering the latent needs and wants of the user. A specific focus is placed on the current problems they routinely face, taking into account the specific situations in which these problems occur. Here, sensitizing techniques are used to delve deeper into the users’ levels of knowledge – uncovering tacit and inherent needs and wants. This leads to the development of opportunities for the improvement of the users’ ‘current state.’ These materialize in possible ‘future states’ and originate from collective brainstorming, ideation, and co-creation techniques. Co-creation at the MEF DSII is also understood in terms of productivity. Despite the perception that deliberate and open discussion among all stakeholders may be time consuming, the real productivity gains resulting from co-creation exercises validate these nuanced methodologies. During and after the co-creation sessions, there were positive outcomes from multi-stakeholder engagement. In fact, it became clear that the discussions organized inside the LL were settled faster and more smoothly simply by giving the opportunity to all the participants to work in a common space during a fix set of time. Co-creation is understood in terms of cost-efficiency. This is especially true in user-centric software design approach coupled with Agile and SCRUM methodologies. These spur the greatest benefits when they are undertaken in a conducive environment where cooperation between developer teams is facilitated. This is why Agile methodologies are synergetic with co-creation and participatory approaches, where developers can act preemptively by interacting with other teams and end users to step-by-step develop development IT systems – gradually building up the complexity of the solution over time and improving overall efficiency. The role of front-end employees/public service staff in co-creation The Living Lab is having an increasingly prominent role at the MEF DSII as Living Lab managers sponsor and promote its usage to external stakeholders. At the MEF DSII, front-end employees take over the role of coordinating the different groups of participants. They also establish and promote the emergence of close relationships between various participants. In this sense, MEF DSII Living Lab front-manager tasks and responsibilities go beyond the physical space of the Living Lab. Positive relationships outside of the lab preclude and guarantee successful co-creation sessions. For the MEF LL to be disruptive, strong alliances should be built with other stakeholders.The facilitation of co-creation sessions requires competences which are highly contextual, anticipate the designer/manager needs and capabilities in stakeholder interactions and adjust to local settings. Due to the novelty of the MEF LL, there is still a need to hire a number of practitioners that possess the right skillsets in order to get the most out of the co-creation sessions. Attracting and retaining a broader range of practitioners that are trained in a varied set of methodologies such as co-design, co-implementation and co-assessment activities should be prioritized. Further, the stockpiling of institutional knowledge on User Research, Usability Testing, Design Thinking Workshop, Business Model Design, Change Management and Service Design is likely to produce skillful judgments and facilitate meaningful interventions which are much needed. The role of users in co-creation The users that are invited to participate in activities at the MEF DSII LL have different profiles and demographic backgrounds. The answer to the question of “who” are the end-users in the co-creation session varies according to the session’s objectives. The users, or customers, with different qualifications are included in the innovation processes based on their suitability to achieve the expected output. The MEF DSII LL utilizes the personas approach to profile the main distinctive features of the LL session participants. Regulatory and compliance, contract law, and technical/IT experts combined with the end user groups are some of the categories which are commonly involved in test experiments. The role and involvement of the users at the MEF DSII Living Lab is understood both as reactive informants as well as active co-creators (Dell’Era & Landoni, 2014). The Living Lab of the Ministry of Economy and Finance (MEF) DSII In the first use case, the users were involved in the MEF LL for implementation of top-down experiments, which are centered on the users and place users as the object of study. The MEF DSII ran a series of usability tests where the objective was to understand how a system should be used in order to produce optimal results. Different end users were asked: “Can you make sense of the tool? Did you experience any issues? Are there improvements needed for a user-friendly designed solution”? The project workers observed use of the products, identified problems and solutions with the engineers, and thought of ways to utilize different functionalities and properties of the IT system being studied. This methodology at the MEF DSII has proved successful when a technology/service relying on user feedback and acceptance has been tested. In such an occurrence, the MEF Living Lab allows collection, filtration, and transfer of all valuable end user ideas to the developers. In other co-creation sessions stakeholders are called upon to participate in an interactive and empowering way, enabling them to become co-creators, and to go beyond user-centered approaches that only passively involve users. Partners are therefore identified with important consideration of active user involvement in order to determine who should be involved in the different innovation stages. Users, or customers, with different qualifications are included in the co-creation processes based on their suitability to achieve the expected output.

Distinct from other Living Labs, the MEF DSII LL is driven by the public sector. It is operated by the public sector for the public sector. Although users are invited to co-create solutions, ultimately and intentionally, the public sector remains the primary beneficiary. The strategic aims of the MEF LL are in alignment with the Institution’s key objectives. Therefore, the Living Lab does not abide to set operational The Living Lab of the Ministry of Economy and Finance (MEF) DSII rules and its administrators are keen to explore potentially disruptive applications. The MEF LL employs a multi-methodological approach that is output oriented. It has flexible objectives that evolve to meet its changing needs. Since its recent inception, the MEF LL has produced tangible results by acting as a platform and co-creation space to facilitate:

A co-creation space facilitating multi-stakeholders collaboration and knowledge sharing;

Used as experimentation and usability tests to bolster digital innovation;

To provide an example, in use case n° 1 we detail out the operations and outcomes of the Living Lab within the so-called “Cloudify NoiPA” project. The MEF DSII is undertaking a large project that, by 2020, aims to expand the number of public organisations it services to cover the entire Italian public administration staff. It is then paramount to involve the end users, which in this case are the other public organisations that currently depend on the payroll and HR services or are expected to do so in the near future, in the design process. The MEF DSII launched a series of multi-stakeholder co-creation sessions to collect their input. The involved participants were decision-makers from other public institutions (for example, representatives from the Italian police and the army). The goal was to collect their feedback on the functionality of the IT platform they use, including insight on what bugs, errors and other technological issues they would like to see improved and to better understand if their needs were being met. In this respect, the MEF DSII LL put into action a methodology for collecting user needs and produced a physical space that fostered different and varied forms of collaborative interaction to spur innovation. The overarching objective is to ensure that stakeholders from other public administrations buy into the programme. Ultimately, by strengthening their confidence in the process, stakeholders are more inclined to support the transformation programme throughout all phases of the “Cloudify NoiPA” project. Another example of the Experience centre functioning as a space that facilitates multi-stakeholder collaboration and innovation was the participatory re-design of the MEF DSII’s new organizational model –much needed initiative to support its service expansion. Rather than making the organizational re-design a purely top-down management decision, the process extensively used and prioritized a co-creation approach. As part of the project, the design team invited around 50 MEF and Sogei top figures to a co-design session at the Experience Centre (picture on the left). Each participant was asked to share their ‘Loves’ and ‘Loathes’ of several pre-identified critical processes and was tasked with proposing their own preferred to-be organizational model by drawing a diagram with the office responsibilities and target processes. The participants were clustered in 7 groups and asked to agree upon a common a to-be organizational model for the group. In this stage, the list of 50 organisational models was reduced to 7 potential options. Afterwards the 7 organisational diagrams were displayed at the living lab during an “Expo” day (picture below) and the employees that did not attend the co-design session were invited to visit the “Expo” to discuss the models with project owners, share ideas, and provide input. This two-way communication ensured implementation of both top-down and bottom-up decision-making. It eventually resulted in the final selection of the preferred to-be organizational model of the MEF DSII. The highly participatory approach enabled by the Experience Centre environment and related co-creation methodologies guaranteed an avenue for the entire Ministerial staff that would be affected by the organizational change to express their design preferences. Ultimately, this can ensure a higher adaptability and success rate in the subsequent phase of transition plan implementation. Additionally, the MEF DSII experiments in semi-real life context and tests its products to collect feedback about usability issues. To provide an example, the MEF DSII has forgone some usability tests in advance of the launch of its updated webpage portal. This portal, on top of sharing informative material to the constituents about the MEF DSII activities, has a specific webpage devoted to “self-provisioning” services. The ”self-provisioning” services are a type of delivery mode that allow the MEF DSII to enlarge the user base of its public administration “clients” in a cost efficient manner. The local and regional public administrations can select, configure, and start services themselves in a cloud environment where they have access to download software from the web portal. Self-provisioning allows users to have rapid access to a customized infrastructure through a self-service portal, thereby limiting installation and maintenance costs, and avoiding costly procedures for requesting and approving new software. Thus, seamless functionality of the portal is critical for incentivizing adoption of the services and the wider buy-in from targeted stakeholders. The MEF DSII carried out usability tests on the portal by inviting a representative set of users to surf the web portal in the “observation room” (pictured on the right). The test subjects were then provided with a personal computer and were requested to navigate the portal by performing a selection of given tasks. In doing so, the users interacted with the test moderator in a consistent and measureable manner. The front line staff employed the “speak aloud method,” advising the users to say out loud what he/she thought were the main obstacles when processing the tasks. This was intentionally used to prevent participants from taking a reflexive approach where they say what they think they are supposed to say rather than their first impression. In fact, by proctoring the usability test in the separate “observation room,” the MEF DSII designers were able to effectively record the natural feelings and reactions of the participants. The metrics used for the web-portal user navigation assessment were, 1) Efficiency, 2) Efficacy, 3) Satisfaction, 4) Learning ease, 5) Memorisation ease, and 6) Error management. Technical tinkering enabled users to diagnose and fix bugs and optimize the customer experience with assistance from engineers and frontline employees.

In 1995, Mark Moore, in his book Creating Public Value (Moore 1995), coined the term Public Value to encapsulate an essential difference between the public and the private sector. According to Moore, public value can be seen as the total societal value that cannot be monopolized by individuals, but is shared by all actors in society and is the outcome of all resource allocation decisions. This shift calls for a different understanding in how value is generated. At the MEF DSII LL, it was observed that value stems from cross-interactions and knowledge exchange produced in Living Lab sessions and what emerges as an outcome. In its role as a public IT and HR service provider the MEF DSII is expected to deliver services to other public organizations. In this context, when these organizations see themselves merely as a recipient of services, dissatisfaction and claims of non-usable services are more likely. The MEF LL bridges the divide between the provider and end users and helps circumvent issues by integrating the users (other public organizations) in the different product/service development stages. It promotes active user engagement and incorporates user-feedback in a variety of ways. In the above-mentioned example, it is the user-friendliness and intuitiveness of the portal that gives it value. The public value and overall satisfaction generated from the MEF LL co-creation methodology is understood as a continuous and iterative value creation of services and products oriented for end users and prioritizes customer satisfaction. Initially a private consultancy provided co-designed and co-created solutions to the MEF DSII. In a context of contamination of approaches, the value seen in these methodologies in fulfilling customer satisfaction made the MEF DSII interested in establishing its own Living Lab at its own premises. This exemplifies the effect of contamination of approaches between private and public service offerings and delivery models crossing and blurring the differences. This is even more apparent in light of the shift, described in the New Public Management scientific literature, in how public services are increasingly inspired and managed according to private sector models. Public service providers are focusing on customer service and understand the centrality of the users as recipients of the services and holders of its public value.

Throughout the co-creation session, staff observed an initial resistance by the involved stakeholders when having to follow a certain structure and set of rules during discussions and negotiations. For some participants, embracing the discussion in a different way than conventional meeting styles made them hesitant, impatient, or dismissive. However, at the end of the co-creation session a collaborative behavior emerged and participants gradually acted more like themselves. Seemingly less tangible, but still documented by participants during the co-creation session, was a heightened closeness with the other stakeholders. During the co-creation sessions users were more prone to finding a common ground with others and improved relationships proved to be a critical success factor.

It is expected that such digital transformation practice could be replicated in other parts of the Italian public administration if the need and the will is there, since it is the same socio technical conditions that apply. Whether such digital transformation can be replicated in public organizations located in other national contexts depends on the way public administration is organized in such contexts as well as the level of digitalization of both businesses and society.

The MEF living lab is an avenue that promotes innovation – which is understood in two ways. Firstly, as what stands between the ‘current state’ and how things will be done (i.e. the ‘future state’) – encompassing a whole series of drivers such as technology, nuanced business models, and organisational restructuring in line with the Open Innovation paradigm. Secondly, as a disruption to the current way of thinking and acting through the exploration and usage of innovative technologies. The MEF DSII Living Lab innovation approach mirrors the principles of Open Innovation, which is the concept that in addition to its own internal research and development, the unit’s innovation is based on external ideas, resources, and competencies. Openness is crucial for the innovation processes of Living Labs due to the valuable role in the collecting of a multitude of perspectives which allows development of the most competitive and productive innovations possible. This paradigm is based on the belief that knowledge today is diffuse and distributed among various stakeholders and no organization, no matter it size and influence, can afford to innovate effectively on its own. It is critical for the MEF DSII to open its innovation procedures to the critical sources of knowledge that are the potential beneficiaries of their services. Open innovation facilitated by a certain usage of Living Labs, such as the MEF LL, is a step toward an innovation process that is increasingly shifting away from top-down approaches and promoting user-driven ecosystems. The second approach to innovation at the MEF DSII LL can be labelled as ‘experimentation.’ In the stage where a certain solution or ‘future state’ materializes into a proven concept, the building stages of developing and experimenting technology applications are validated. For instance the MEF DSII organized a Design Sprint workshop in its Living Lab to select a cost-efficient and valuable blockchain solution for the redesigning of MEF’s internal processes. The workshop methodology combined divergent and convergent thinking in order to address the business problem/s from different perspectives. This problem solving session led to the prototyping phase of a blockchain application to re-invent and innovate MEF DSII processes. This is only an example on how the MEF DSII Living Lab acts as an innovation method.

Observation of the ongoing activities and results from the initial studies of the MEF DSII LL are encouraging. Several psychological and general considerations have been realized for the correct assessment of its service experience. Ultimately, involvement and motivation in the process were both a pre-conditions to the co-creation session as well as a succeeding outcomes. Although involving users is only one factor among many that promotes co-creation in a LL, it is considered indispensable. Users at the MEF DSII LL were considered involved to the extent where their ideas were helping influence and develop others’ point of views. The success of such real-life collaboration, which aims to promote learning between different stakeholders, hinges on how the co-design process was orchestrated, facilitated, and managed.