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Overcoming digital transformation challenges in local government

Presented by Katie Hayes
in Technology

Sponsored by MNP

Local governments are currently in a period of momentous change. Digital platforms are rapidly becoming a critical lifeline to streamline and sustain operations.

Meanwhile data is emerging as a powerful asset to drive timely and targeted decision making. These evolving capabilities are reshaping expectations for all orders of government. They’re also redefining the public sector’s role in enabling healthy, vibrant, and thriving communities.

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Many government organizations are recognizing the opportunity for citizen-centric service delivery models to:

  • expand access;
  • improve public engagement; and
  • spur economic growth.

The COVID-19 pandemic has accelerated the need for public sector modernization. As a result, government organizations have had to shift services and operations, wherever possible, to a digital environment.

Yet, despite the urgency, many government organizations still lack the robust infrastructure required to provide seamless digital experiences for citizens and other stakeholders. This is particularly true at the local level. Looking ahead, local governments must prioritize advancing their digital maturity by:

  • identifying stakeholder needs; and
  • catering programs and services to deliver a consistent experience.

However, there are many internal and external challenges ahead on this digital transformation journey. And each has the potential to inflate costs, distort focus, and slow forward progress. The following are some of the most pervasive concerns, as well as recommendations to smooth the path ahead.

Internal Challenges

Many existing challenges within local governments stem from legacy decisions and historical practices. For example, maintaining a traditional approach to the management of information technology, including:

  • Outdated legacy systems – Decades-old software, infrastructure, and processes both hinder effective, efficient service delivery and limit an organization’s ability to digitize. Transformation often requires systemic change, which is both costly and time consuming.
  • Complex technology contracts – Vendor management can be challenging. There’s often an inability to negotiate, plus vendor relationships and contracts can be complex. The contemporary technology marketplace requires a broad understanding and varied skills to negotiate with and manage vendors.
  • Lack of innovation skills – Skill gaps in data governance/analytics, innovation, and continuous improvement make it challenging to make the most of technology transformations. Upskilling of current team members, as well as strategic recruitment for in-demand digital skills, is critical to prevent the gap from widening even further.
  • Increased breadth and depth of services – Governments are no longer just utility providers. They also address complex societal challenges. This not only increases the need for digital channels, but also the challenge of delivering and managing stakeholder services and deciding digital transformation priorities.

External Challenges: Trends

Local governments also face increased pressure from external sources. These include citizens, businesses, other orders of government, academic institutions, non-profits, and community organizations. The following pressures can slow transformation plans:

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  • Demand for accountability and transparency – Stakeholder expectations have shifted with the rise of digitization. Transparency and accountability are paramount. Citizens want to understand the value of programs and services that their governments provide.
  • Partnerships – Many are realizing the importance of cross-collaboration to achieve community and economic outcomes faster and more efficiently. This can support positive outcomes, but it also introduces new layers of complexity. For example, cross-collaboration may add decision-making hierarchies and possibilities for disagreement.
  • Digital experience – Citizens demand convenient, user-friendly, and accessible digital services. Governments must pivot to more citizen-centric approaches to meet the needs of their diverse community members.
  • Privacy and security – Local governments must protect the digital rights of their citizens. They must also ensure maximum cybersecurity. Citizens and other stakeholders have little tolerance for their data being compromised due to cyberattacks, data breaches, etc.

External Challenges: Environment

Local governments face environmental and societal challenges that may include:

  • COVID-19 financial pressures – The pandemic has introduced significant financial constraints. Governments are struggling to deliver timely, cost-effective, and high-quality programs and services.
  • Evolving security environment – As cyber security risks grow, so does the demand for skilled workers who can monitor and manage potential security threats. Local governments face challenges both as a primary target for attacks, as well as in competing for top talent.
  • Duty to safeguard infrastructure – In addition to safeguarding stakeholder data and information, governments must also protect critical infrastructure. This helps ensure business continuity in the event of a natural disaster. The more public sector entities depend on digital assets, the greater the importance (and cost) of protecting it becomes.
  • Complex societal challenges – Limited resources will challenge many governments to balance the needs of growing populations (e.g., homelessness, climate change, civil equality, and community health and well-being) and demands for equitable and convenient digital service delivery.

Overcoming Challenges through Digital Transformation

While these challenges are potential barriers to digital transformation, they also happen to be the best way forward. Digital transformation is undoubtedly the most effective solution for local governments to:

  • navigate change;
  • mitigate risks; and
  • deliver effective programs and services efficiently.

A skilled advisor can help execute a comprehensive baseline analysis. They can also identify risks and opportunities to create a customized transformation roadmap.

This roadmap should include digital strategy and scenario planning, change management, and implementation. The right advisor should bring together an interdisciplinary skillset that includes familiarity with:

  • digital transformation;
  • municipal innovation;
  • data governance, strategy, and analytics; and
  • citizen experience transformation.

Most importantly, they should prioritize working collaboratively and in partnership with you from the outset. They can help you advance on your digital journey by focusing on key outcomes and defining success. After all, this transformation must meet your current needs and support your ability to innovate, adapt and evolve for many years to come.

Municipal World Insiders might also be interested in Wendy Gnenz’s podcast, “Digitally transforming municipalities,” at

Katie Hayes is a Manager with the MNP Digital Advisory team in Edmonton.

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