Unit4, a leader in enterprise cloud applications for people-centric organisations, has announced the findings of its 2023 State of the Digital Nation survey, which examined the progress in digital transformation made by public sector institutions in the UK, Canada, the Netherlands and Sweden since the last research was undertaken in 2021.
This latest study interviewed 300 public sector professionals across central and local government, non-governmental bodies and healthcare. The 2021 study interviewed 600 public sector professionals across the same verticals within US, Canada, UK, Belgium, Sweden and Australia.
Key findings:
- The average time for completing digital transformation programmes is two-three years, suggesting there has been little progress in speeding up delivery since 2021
- The most likely priority when it came to cost savings, was to adopt lower cost collaboration solutions that deliver efficiencies, whereas in 2021 it was by making cuts to citizen or community services
- Changing priorities has been the key challenge in the last 24 months, resulting in stopping transformation initiatives when organizations attempted to adapt to changes to services and targets
- The three most likely areas where organisations have seen changes to services and targets are:
- Greater pressure to deliver efficiency savings (37%)
- Public pressure to improve spending transparency (34%)
- Growing central services/ shared service footprint (33%)
Pace of change is static despite more confidence in on-time and on-budget delivery
Compared to the 2021 study, respondents’ organisations are more likely to be completely confident that projects to transform the back office will be delivered on time in 2023 (52%) vs 41% in 2021, and will be delivered on budget this year (46%) compared to two years ago (43%). This may be borne out of the necessity to ensure project delivery is micro-managed in the face of growing scrutiny of budgets. However, there are discrepancies across the different functions over the delivery of back office transformation.
Nearly two thirds (63%) of HR decision makers are completely confident that projects will be delivered on time, with Finance (48%) and IT (45%) functions reporting lower levels of confidence. It may also be wishful thinking from Finance that projects will be delivered within budget, with over half (55%) being completely confident in this area, compared to HR (41%) and IT (35%). Additionally, Finance (55%) is more likely to be completely confident about achieving a level of interoperability compared to HR (44%) and IT (37%).
While the proportion of respondents’ organisations who feel completely confident that the digital transformation of back office systems will be delivered on-time and on-budget has improved since 2021, the pace of digital transformation has only seen a slight improvement. Nearly two in five (37%) respondents stated that it will take their organisation two – three years to fully digitize, with Sweden having the highest proportion of respondents reporting this timeframe. Canada has the largest proportion (25%) saying it will take 12 – 18 months, and the UK has the largest proportion (32%) believing it will take 18 months to two years.
It was also found that there has been a reduction in the number of respondents saying their organisations’ digital transformation strategies have been fully implemented — 21% in 2023 vs 29% in 2021. There is also an increase in those saying their organizations’ digital transformation strategies have been minimally implemented — 31% in 2023 vs 22% in 2021.
Measuring success: the impact on citizens
The findings also revealed changes in how the public sector measured success, with the ability to deliver services without raising taxes having become less of a priority metric. In 2021 it was the second most likely priority at 40%, but now only 33% cite this, making it the third most likely factor. Similarly, respondents also said it was less of a priority in 2023 for their organisation to measure the number of services delivered within budget, which was the third most likely priority in 2021. The most likely measure now is the ease of access to — and speed of delivery of — services (such as medical), followed by the number of citizens successfully treated or moved through such a service.
In the last 24 months, aside from COVID-19 impacts, the two biggest changes the public sector has seen include a greater need to deliver efficiency savings followed by public pressure to improve spending transparency. In order to make cost savings, apart from adopting lower cost collaboration solutions that deliver efficiencies, respondents’ organizations are also moving to a shorter working week to save salary costs, which is the most likely priority for non-Governmental bodies. The third most likely priority across all surveyed countries is making cuts to citizen or community services (29%), which is the most likely priority for UK (37%) and central Government respondents (35%).
“It is understandable that efficiency is the watchword for most public sector organizations today, amid an ever-increasing level of scrutiny over spending,” said Chris Richards, Regional President UK&I at Unit4. “Against such a backdrop, the reality is that organizations are simply focused on making sure services are delivered, but we see the warning signs that it is getting harder to do this within budget and without raising taxes. Even with such pressure, though, it is critical to retain focus on long-term transformation goals, as ultimately this is what will benefit citizens and revolutionise services.”
Could a lack of goal consistency impact long-term delivery?
The survey also shed light on the challenges organisations face when adapting to changes to services and targets in the last 24 months, with respondents claiming that shifting priorities are stopping change programs (40%). This indicates that moving goal posts are having a detrimental effect on the long-term delivery of transformation initiatives. This problem is most prevalent in the UK and Canada (45% respectively) and central Government (49%). The second most likely challenge at a total level is leadership resistance to change (34%), which is also the most likely issue in Sweden (46%). The third most likely impediment overall is back office systems that prevent organisations from being agile and adaptable (32%), which is the most likely issue for the Netherlands (41%). Separately, the most likely challenge for local Government is staff resistance to change.
The 2023 State of the Digital Nation survey reveals that digital transformation is clearly facing challenges in the public sector around the world, since Unit4 last commissioned the research in 2021. It signals that organisations face difficult choices to balance the need to identify cost efficiencies, while still maintaining the appropriate levels of services for citizens. It also shows that inconsistency in strategy is hampering transformation, which is likely to be as a result of organisations having to switch focus from dealing with the pandemic to short-term initiatives to sustain services against a backdrop of budget constraints. However, if public sector bodies do not keep sight of long-term objectives for transformation, they risk stagnation in the pace of change, at a time when accelerating such initiatives will be even more important to improving services and outcomes for citizens.
