The 2022 Local Government Digital Transformation Index has found councils across Australia are investing and migrating to Software-as-a-Service (SaaS) technologies in record numbers, tripling to 37 per cent compared to 13 per cent in 2021.
For the second year running, Local Government Professionals Australia and TechnologyOne have surveyed more than a fifth of Australia’s 537 metropolitan, regional and rural councils to benchmark their progress on digital transformation, which has accelerated dramatically since COVID-19.
More than half of the councils surveyed have a digital transformation vision but are still in the early stages of executing it, suggesting investments in SaaS will increase over the next 12-24 months.
According to the report, the biggest external challenge is staff shortages, which is having an even greater impact on councils than COVID, funding pressures or natural disasters, with 93 per cent of councils are finding skills shortages extremely, very or quite challenging.
A further finding was that customer expectation was driving local governments towards SaaS technologies.
76 per cent of council respondents believe their customers want them to be more progressive by transforming digitally, which is a number that sits well above other factors such as compliance or reducing costs.
35 per cent of respondents pinpointed customer-facing reasons as the main internal/external drivers for digitally transforming.
LG Professionals Australia President, Mr Throssell, said the company has seen an increasing need for a dedicated digital transformation leadership role within more councils.
“In the wake of the sudden digital acceleration prompted by the pandemic, customer expectations and community demand also evolved to be digital-first,” Mr Throssell said.
“Now that digital services are becoming the norm, councils are looking to capitalise on the momentum and digitise even more of their operations.
“While most council leaders understand the importance of digital transformation, the reality is that adequate funding, resources and skilled talent are not easy to procure. As the scope of their digital transformation grows, the lack of a dedicated digital leader within the council to manage the complexity of transformation is also being felt more acutely.”
The suggested growth of digital transformations has been further mirrored in research data released by industry analysts Gartner, published in November 2022.
This data predicted global enterprise spending on cloud-related technologies will accelerate to 20.7 per cent per annum next year to reach a total of US $490.30 billion.
TechnologyOne General Manager for Local Government, Peter Suchting, said council’s moving digital transformation to the top of their agendas has been driven by multiple factors.
“Post-pandemic, councils are facing a combination of old and new challenges,” Mr Suchting said.
“Community expectations of councils are increasing and many services are coming under pressure from population shifts driven by the pandemic. At the same time, councils are also setting higher bars for themselves in terms of service delivery.”
For more information, download the 2022 Local Government Digital Transformation Index.
