Limited working budgets and organisational culture are the biggest barriers to achieving digital transformation within the public sector particularly focused on Local Government in ANZ, according to ‘The Changing Landscape for the Public Sector: The Challenges of Building Digital Bridges’, a study of local government leaders in Australia and New Zealand.

The report was conducted by the University of Technology Sydney (UTS) and commissioned by Civica, developer of the Authority enterprise application suite for Local Government.

Approximately 70 percent of survey respondents claim that limited working budgets act as a major constraint to digital transformative change, while 65 percent believe organisational culture is an impediment. Speed of technological changes (37 percent), difficulty in matching user expectations (32 percent) and conservative leadership (25 percent) were also listed as barriers.

The figures are part of the fourth edition of Civica’s Changing Landscape research series, developed in collaboration with Institute for Public Policy & Governance (UTS:IPPG) at the University of Technology Sydney. This year’s report examines the role of leadership in building digital bridges that connect community outcomes and public sector authorities.

According to Professor Roberta Ryan, Director, Institute for Public Policy & Governance (UTS:IPPG) & UTS Centre for Local Government (UTS:CLG), local governments in particular continue to struggle with limited funding, implementation and resourcing issues for digital projects.

“Many local councils have to make a trade-off. Digital services are being pushed down the list of priorities in favour of more immediate requirements to build or maintain physical infrastructure that serves to keep communities moving.  Meanwhile, the absence of leadership understanding in driving an outcome-based strategy is also hindering successful implementation of digital initiatives,” said Ryan.

Partnerships seen as key enabler for the changing landscape

Local governments are strongly in favour of partnering with other organisations to achieve strategic transformation goals. Nearly 60 percent of respondents felt that partnering with similar organisations was a substantial opportunity for them, and closely followed by partnering with external consultancies (54 percent) and private organisations (49 percent). Partnerships with state and federal government were some way behind at 34 percent and 16 percent respectively.

“What we are seeing in our work with public sector organisations is that they want to embrace digital solutions. Many organisations operate different system environments. Even though amalgamations offered access to bigger budgets, this also meant that larger amounts of data and systems need to be merged. We see huge potential for the public sector to work with each other and third parties like ourselves to achieve strategic goals – and they appear willing to do this voluntarily – but what maybe they are saying is support us, don’t force us” said Richard Fiddis, Managing Director at Civica International.

While 84 percent of the survey respondents view digital transformation as an opportunity, almost one in five felt they were still not given many chances to learn new skills relevant to a digital-first environment. In addition, nearly 80 percent of respondents admitted failure to implement some digital projects.

There is also still a significant one in three organisations who believe they only talk about emerging digital technologies. Alarmingly, a small section revealed that they don’t pay attention to emerging technologies.

“For some councils their citizens place a high value on physical services and human engagement. At the same time, some communities can seem ambivalent around the use of new technologies,” said Fiddis.

Establishing a digital culture  

The results demonstrate that organisations with a culture resistant to change or lacking resources and talent struggle with driving transformation projects. Another key reason that can lead to implementation failure is an absence of knowledgeable leadership backed by a sound strategy. Despite the struggles, almost three quarters of the survey respondents state their leadership has a clearly established strategy to become a digitally mature organisation.

According to Fiddis, embracing digital transformation requires the existence of a digital culture and mindset across the organisation, championed by strong leadership that can tackle the challenges of leading in a digital first environment.

“As we see from our work in the UK and our Civica Digital business there, we need leaders to make the tough calls on prioritising investment in digital infrastructure against physical infrastructure, or finding ways to justify and finance both, said Fiddis.