Unit4’s State of the Digital Nation 2023 survey shows public sector needs to accelerate investment to improve citizen services

International data indicates program delivery contends with inconsistent goal setting and increased pressure for efficiencies

London, UK, May 23, 2023 – Unit4, a leader in enterprise cloud applications for people-centric organizations, today 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 programs is 2-3 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 organizations 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’ organizations 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’ organizations 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 organization 2 - 3 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 2 years. It was also found that there has been a reduction in the number of respondents saying their organizations’ 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 organization 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%).