Limited working budgets and an unsuitable organisational culture are the biggest barriers to achieving digital transformation in the local government sector, says a new report.

The report, from University of Technology Sydney (UTS) and sponsored by software company Civica, is based on a survey of Australia and New Zealand Local Government Authorities. It was released to coincide with the annual Civica Expo conference for customers and partners, held in the Sydney seaside suburb of Manly on 22-23 November.

Approximately 70 percent of survey respondents said that limited budgets are a major constraint to digital transformation, and 65 percent believe organisational culture is an impediment.

Other perceived barriers are the speed of technological change (37 percent), difficulty in meeting user expectations (32 percent) and conservative leadership (25 percent).

The findings are in the fourth edition of Civica’s ‘Changing Landscape’ research series, developed in collaboration with Institute for Public Policy and Governance at UTS. This year’s report is called ‘The Changing Landscape for the Public Sector: The Challenges of Building Digital Bridges’.

According to Professor Roberta Ryan, the Institute’s director, local governments in particular continue to struggle with limited funding, implementation and resourcing issues for digital projects.

“Many LGAs 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.”

The survey also found that LGAs 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.

“Public sector organisations want to embrace digital solutions, said Richard Fiddis, managing director at Civica. “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.”

Nearly all (84 percent) of the survey respondents view digital transformation as an opportunity, but 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 Mr Fiddis.

He said 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.

“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.”

The study was based on survey responses from 200 professionals within IT teams, finance, corporate and governance teams at local government councils, state departments, infrastructural organisations and educational organisations from Australia and New Zealand.