Outdated Technology Holding Back Public Sector’s Digitalization Progress

In fact, more than half of public sector executives (55 percent) believe their organization will no longer exist in its current form in just four years from now, and some 82 percent recognize that fundamental change is inevitable, as digitalization drives sweeping changes to business practices across all sectors.

To thrive, some 93 percent say their organizations will need to evolve, and almost all (96 percent) are confident that they will be able to do so. In fact, just 14 percent were concerned or worried by the disruption brought by digital, the lowest of any sector surveyed. This confidence is underlined by the finding that more than a quarter (26 percent) of public sector executives believe they are among the digital leaders in their sector – a higher percentage than in any other sector.

Unlike other industries, where digitalization is primarily influenced by a desire to keep pace with the competition, it is customers who are the key force in driving digital disruption in the public sector – reflecting the public’s growing expectations for customer service and digital service delivery. In addition, when asked who is leading digitalization in the industry, the most frequently cited response was “established organizations entering the sector” such as Google and Amazon (at 33 percent), suggesting that most public sector organizations are increasingly considering the use of online, customer-driven services.

Ageing technology is holding back the Public Sector
While embracing digitalization has many possible benefits, not all public sector organizations expect to be able to fully exploit them. Many executives believe that they are being held back from reaching their potential, primarily by ageing technology and infrastructure (50 percent), which represents the highest proportion of any sector. A further 43 percent cited internal culture and a fear of change as being a hindrance, while the sheer complexity of the change was mentioned by one in three (32 percent).

Despite these challenges, the public sector is taking measures to digitalize and to update its infrastructure. Two thirds (66 percent) have already invested in new technology, almost the same proportion (65 percent) have changed their business strategy and slightly more than half (51 percent) are making improvements to operations and processes. When assessing what is most needed to be successful in an increasingly digitalized world, almost half (49 percent) of public sector respondents cited “investing in innovation”.

An ongoing focus on technology remains at the center of public sector organizations’ ability to thrive, per 71 percent of its leadership. Almost the same number (70 percent) feel that collaborating with technology experts will be vital, enabling them to co-create their response to the changes in the industry. Some 43 percent have already started establishing new strategic relationships. Despite the progress made to date, change is progressing too slowly for most respondents, with 72 percent saying that they would like their organizations to move faster.

Hugo Lerias, Vertical Industries, Partner Public Sector & Automotive Business Application Services at Fujitsu in EMEIA, said: “It’s clear that the public sector is moving towards digitalization, driven primarily by its customers and their increasing expectation for public services to be online. Nevertheless, progress is being held back, primarily by outdated IT infrastructure. As the public sector continues to overhaul its service delivery, executives have already identified the need to turn to expert partners to help them co-create their own digital transformation. As digitalization finally takes hold in the public sector, we expect this to create significant new opportunities for technology vendors and channel partners alike in making the quantum leap.”

¹The “Fit for Digital: Co-creation in the Age of Disruption” quantitative research was carried out in September 2016 by independent research company Censuswide. The survey covered 1180 C-Suite decision makers within mid to large sized businesses across public sector, financial services, retail and manufacturing, including 250 respondents from the public sector. Respondents were in the US (210), UK (156), Australia (152), Germany (152), Spain (150), France (150), Italy (150), Finland (30) and Sweden (30).