Digital Transformation Opportunities for Local Councils
Councils are reconsidering traditional business models. They’re under pressure to become more efficient and cost-effective while delivering services in a way that responds to increasingly sophisticated and tech-savvy customers.
Customers are no longer satisfied with an operating model that relies primarily on in-person customer service, provided between 9am and 5pm, Monday to Friday, at the local council office. People expect council services to be available online, enabling them to transact with their local council at a time and place that’s convenient for them.
To meet these changing community expectations, councils must undertake a transformation journey that builds their IT capability, drives innovation and continuous improvement, and supports an agile, customer-centric service delivery model.
In late 2018, KPMG sponsored a series of local government events throughout Australia and New Zealand, focusing on the use of IT and digital transformation to improve efficiency and customer satisfaction. These sessions identified several common themes, challenges, and insights specific to local government transformation.
Finding 1: Low IT and digital maturity
Most councils (64% of respondents) rated their IT and digital maturity as low to moderately low. Their operations included minimal automation, fragmented systems and data sources, and high use of manual and paper-based processes. Many councils expressed they were unsure of how to start the transformation process.
For a transformation business case to get traction, it must clearly outline the operational, financial and customer benefits it will achieve, detail how the change will be resourced, and establish a baseline to measure progress. Offering customer-centric technology is vital; however these efforts must be supported by a holistic program that also looks to improve the efficiency of back-office operations.
Finding 2: Resourcing is a challenge
Having the right resources is the biggest challenge councils face on their transformation journey. Because they’re juggling their transformation efforts with BAU operations, supporting the change program with people with the right capabilities and availability is not always easy. Additionally, councils of the future will need employees with different skillsets than what they’ve had in the past.
To resource their transformation journeys, leaders must make funding and freeing up – or hiring – the people they need to support the change a priority.
Finding 3: Consistent areas of focus
Councils identified improving the use of technology, enhancing the customer experience, and better capture and use of data as key focus areas. Investment in technology to support automation and drive efficiency was nominated by 43% of respondents as their highest priority. Identifying opportunities to digitise customer transactions and offer a 24/7 service was also popular.
Savvy councils recognise that ensuring that customer-facing and back-office systems talk to each other and share data is essential – a powerful interface for ratepayers will be of limited value if it’s not integrated with back-end systems. They’re also looking for ways to better capture data and use it to support informed decision making.
Finding 4: Executive level leadership
More than 50% of respondents told KPMG that their CEO and executive team are leading their council’s digital transformation. Only a small percentage of organisations shared that their CIO/CTO was driving the change. Additionally, 65% of participants agreed that clear leadership from the top was essential to a successful digital and transformation strategy.
Finding 5: Flexible resourcing
Seven out of ten respondents said that their council was driving transformation efforts using a mix of internal and external resources. The most popular approach is to use employees as subject matter experts, bringing in external consultants on an as-needs basis if a skill or availability gap is identified.
At Nelnet International, we partner with councils to support digital transformation programs that deliver measurable and sustainable outcomes. Xetta, our commerce platform, focuses on uniting people, process and technology and acts as a catalyst for innovation, allowing you to create a future-focused, agile organisation that responds to our changing world.