These are the challenges hindering a digital shift in Australia’s public sector

Australian businesses were hit hard by the pandemic, leading to increased digital transformation to keep up with changing consumer demands. Government agencies, in particular, across Australia and around the world have been forced into digital transformation to cater to the booming demand for online social services since the pandemic began.

The sector has performed remarkably well in this regard, considering the pressures these organisations face to satisfy the changing expectations of citizens while sticking to tight budgets when demands for spending transparency are high. However, there’s still a long way for the public sector to go before embracing the digital revolution en masse.

Customer-facing services have received the most attention given citizens relied on them during the pandemic to survive. But this has come at the expense of back-end optimisation, delaying digital transformation across the entire organisation, leading to overspending.

Recent Unit4 research revealed that almost every public sector organisation updated their services in response to COVID-19, and almost all (95%) struggled with the pace of change.

Australia’s public sector stated that leadership’s resilience to change was the biggest challenge, followed by employees’ resistance to change and back-office systems that don’t allow firms to become agile. So how can businesses close the skills and compatibility gap?

Budget constraints haven’t changed

Firms with tight budget restraints need to form a digital transformation strategy to understand their needs and how they’ll get there. According to Unit4, only 29% of public sector agencies had implemented their strategy. The sector is often branded late-adopters, but the lack of adoption is causing unnecessary strain on the back office.

Only half of those surveyed have migrated their systems to the cloud, and just 46% are replacing their legacy systems. Part of the reason for this is these organisations’ financial strain, with citizens demanding even more transparency around spending.

Most agencies received additional funding during the pandemic, but these funds were largely considered increases meant for minimum disruption rather than digital shift initiatives.

The public sector needs to rely on solutions from vendors that support the visibility of accurate data to assist with budgeting, planning, forecasting and procurement support that can dynamically shift alongside the organisation’s changing demands.

What’s the problem?

There are more obstacles that prevent digital transformation. Two primary roadblocks that nearly every firm has faced: lack of skills and a lack of compatibility across all platforms.

Most public sector firms (86%) believe their employers and fellow employees lack the right skills and training needed to adapt to change. Skills shortages are also still a deep concern, only worsening since well before the pandemic began, but the problem has only worsened.

The organisations solving this issue have adopted automation, which was previously viewed as replacing jobs with technology. The opposite is true, as modern automation systems are intended to make it easier for humans to complete their job.

Organisations can use automation technology to help allocate people with the right skills at the right time to wherever they’re most needed, saving on time and effort and minimising the need to recruit elusive talent from outside the country.

Composability is key

More shocking, only 9% of agencies surveyed said that their data is compatible across all applications with no data duplication, while 38% still need to manually key data from paper, and another 43% have to manually export data between systems to use it.

This is especially concerning when you consider how many systems public sector organisations need to support their services, which has only increased in the past two years, and the inability to share data between these systems is critical to run these services.

Public sector firms need connected applications so systems can share information, measure the cost of frontline service delivery and streamline processes to increase performance.

What can be done?

These issues will persist without action, but thankfully there is a silver lining to the unrest caused by the pandemic which is that the door to innovation has been opened. There’s nothing preventing organisations from becoming leaders in technology adoption.

Once firms start adopting new technologies and realise the possible savings – in both time and money – businesses will begin digitally transforming anything and everything they can.

The first port of call is to enable real-time data to make sure that all reports are up-to-date. The other priority is to employ predictive analytics for workforce planning and forecasting.

Over half of public sector firms struggled with more complex regulations as financing increased, forcing businesses to make decisions faster than normal. By using predictive analytics, decision-makers and employers are better prepared for change.

Organisations don’t need to prioritise any of these initiatives over the other but rather take a holistic approach to digital transformation through systems like ERP, which interlink multiple processes and systems that agencies need to realise their vision.

By transforming an organisation’s back-office functionality and customer-facing services, organisations will save themselves time, money and effort in the long run.

Andy Brockhoff is the President APAC of Unit4