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Only 9% of organizations globally have achieved digital maturity, as cost cutting, delivery delusions, manual processes and resistance to change hamper back-office modernization
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Over half of global public sector survey respondents say pressure to improve spending transparency is growing and 40% admit cost savings will come through cuts to citizen or community services
Unit4, a leader in enterprise cloud applications for mid-market people-centric organizations, released findings from a new global study, State of the Digital Nation, which examines digital transformation in the public sector around the world exploring the challenges and successes of back office innovation. Conducted by Vanson Bourne, the study consulted decision makers across a range of public sector bodies in Europe and the United States. The findings confirm organizations face a number of challenges to transformation ranging from resistance to change and delusions among decision makers about progress, but above all it is clear there is a long way to go before digital transformation has been completely achieved.
Digital Transformation Performance
As part of the study, Vanson Bourne evaluated the digital transformation maturity among public sector organizations and only 9% believe they are outperforming in terms of modernizing back-office IT systems to enable greater collaboration and productivity. The vast majority (76%) of respondents said they were either cautious followers or enthusiastic evaluators, suggesting there is a long way to go before digital transformation has reached every corner of the public sector. At the country level, Sweden (40%) is the global leader in terms of transforming back-office systems, followed by Belgium (39%) and the US (31%), while Canada (11%) has the lowest percentage of such digital transformations rolled out. The UK has the highest percentage (56%) of partially rolled out digital transformation for back-office systems.
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There are also concerns about how ambitious public sector organizations are in their delivery timetables for transformation. On average, it will take 2.4 years in central govt and 2.7 years in local govt to fully roll-out digital transformation across all areas of organizations, which given how much has already been spent on digital transformation in the last 10 years suggests citizens will have some time to wait for completely updated services.
“The global public sector is coming through one of the toughest challenges it has ever faced, but in some ways it has demonstrated what is possible in terms of digital transformation,” said Mark Gibbison, Global Director Public Sector, Unit4. “However, organizations face an even tougher task in the years ahead to maintain essential public services and continue to invest in innovation to deliver significant improvements. It will require a mindset shift to embrace the change needed to modernize public services and a willingness to be more agile, accepting that disruption will ultimately lead to far better value for citizens.”
Reality check for digital transformation strategies
The State of the Digital Nation study indicates there are significant hurdles to overcome for digital transformation to be successful, which should serve as a reality check for organizations as they plan their strategies. 41% globally say large improvements are needed in data compatibility in their organizations and 16% say wholesale changes are needed. A further 38% globally say data is manually entered by someone from paper to software systems and 43% say data is manually exported from one system and imported to another. Additionally, the vast majority of respondents (86%) believe their staff don’t have the right skills or training for transformation of back-office systems, which will further impede delivery.
There are also concerns that senior management are over-confident in their assessment of the delivery of digital transformation. 47% of top-level management and 44% of high-level management believe transformation will be delivered on time, which compares to only 5% of junior level management who agree with this statement. Similarly, 51% of top-level management and 48% of high-level management believe transformation will be delivered within budget, compared to only 5% of junior level management.
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The way forward     Â
The survey indicates where public sector organizations are focusing to improve processes and drive efficiencies in back-office systems. The top three priorities are cloud migration (50%), data management tools (49%) and real-time reporting tools (47%), while artificial intelligence is the lowest priority (36%).
Looking at the maturity of public sector organizations more closely, the study breaks out the indicators of the out-performers and under-performers, who occupy either end of the performance spectrum. Out-performers:
- Only take 1.5 years to fully roll-out digital transformation in their organizations
- The smallest percentage (25%) looking to achieve cost savings by cutting citizen and community services
- Only 18% making mandatory or voluntary redundancies
- They can also recruit from a wider geographic area (37%)
Under-performers:
- Are most likely to complain about red tape/regulation to justify spending
- Will take 2.8 years (compared to 2.4 years on average globally) to fully roll-out digital transformation
- 39% will achieve cost savings by cutting citizen and community services and implementing mandatory or voluntary redundancies
- They have the highest number of recruiters but cannot find the right people, and 30% are hiring staff who do not have the right skills
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