The digital transformation challenges facing councils today

Insights with Peter Suchting

Councils have been quick to respond to the changes wrought by the pandemic, but progress has been far from uniform. Even though most councils have done a great job serving their communities in uncertain times, there are still many key challenges of digital transformation to overcome. Peter Suchting, Industry General Manager - Local Government, TechnologyOne, deep dives into the factors shaping the transformation of local councils.

Since COVID-19 struck, councils have been working tirelessly to make sure their communities get the services they need, with varying degrees of success. Some councils were already further ahead in their digital transformation journey than others and found it easier to transition to digital service delivery. Other councils, especially some rural and regional ones, were still in the very early stages of their transformation journey and turned to short-term solutions to quickly bring digital services to their communities.  

The desire for digital transformation is there, but resources are limited
According to the 2021 Local Government Digital Transformation Index, councils are clearly in favour of digital transformation but lack budget and resources. 83 per cent of respondents rated digital transformation as a high priority, but 56 per cent reported that they did not have adequate resources.  

Local councils have been under a lot of financial pressure since COVID struck. Their normal sources of revenue like community events, recreation centres and sports facilities have dried up, while many have also had to bear the additional costs of digital service delivery. While grant funding from the government has helped offset some of these costs, councils still needed to prioritise their spending on ensuring their communities have access to essential services.

Local councils have also struggled to find skilled resources to help them with their digital transition.  
It is important to understand that every council is different. There's a huge spectrum of digital maturity levels across urban, regional and rural councils, all of whom have different operational and technological priorities. To add to the complexity, organisational culture also has a huge influence on how progressive a particular council is.

Even so, the goal of serving communities in the best manner possible is consistent across all councils. The report found that improving customer satisfaction and employee productivity is the number one driver of digital transformation. 76 per cent of respondents rank customer satisfaction as the highest priority for digital transformation, followed closely by employee productivity with 66 per cent also ranking it as a high priority.

Councils are keenly aware of community expectations and most councils do take a customer-first approach when planning their digital initiatives. However, councils vary in their interpretations of digital transformation and where they see themselves in their transformation journey.

Industry General Manager - Local Government

From all of the successful transformation cases we have seen, and there are many, the governance process and leadership were always driven by the CEO or executive sponsor who had the mandate and authority to drive change across the organisation.

The growing importance of cyber security in councils
Cyber security is also becoming a growing concern for councils, though actions on this front have been slow. The report found that 49 per cent of recipients use internal resources to manage security, 39 per cent do not have an enterprise risk management strategy that includes cyber security controls and 28 per cent have no dedicated resources in place to manage cyber security at all.  

There has been a shift in thinking when it comes to cyber security, with many councils embracing Software as a Service (SaaS) because of the cyber security benefits. IT responsibilities are evolving accordingly. In many cases, internal IT teams now do penetration testing and cyber security audits.

At a strategic level, councils are thinking about ways to outsource aspects of cyber security when they transition to SaaS.

Executive leadership holds the key to digital transformation 
A healthy 41 per cent of respondents were best-in-class, and three quarters of these reported that their executive teams are either actively involved with their digital transformation or participating in quarterly reviews of their strategies.

Executive leadership must take charge and lead digital transformation. Digital transformation is organisational change at the highest level and is a business transformation as much as a technological one. Change on an organisation-wide scale always creates uncertainty. People wonder about how the change will affect them and their jobs.

From all of the successful transformation cases we have seen, and there are many, the governance process and leadership were always driven by the CEO or executive sponsor who had the mandate and authority to drive change across the organisation.

Council leaders need to include a communications component along with their digital transformation plans to show their staff and their communities what the change will mean for them. There is a huge opportunity for councils to upskill and redeploy their staff to support the council’s digital transition. Digital modes of working need to be integrated into a council’s culture, include staff and ultimately support the communities the council serves. That makes the involvement of senior leadership critical to the success of their digital transformation plans.

The report illustrates that while COVID-19 has been a catalyst for increasing the pace of digital transformation, local councils are still in the early stages of their journey to digital maturity. Technological innovation, coupled with the transformation of their human resources, are going to be the key enablers for councils to serve the evolving needs of their communities.

Discover More:

Government’s adoption of e-invoicing to drive digital transformation across ANZ

Why executive leadership is the key to unlocking the power of digital transformation in local government

Councils need digital transformation to meet the growing expectations of their communities

Publish date

14 Jul 2021


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