Benchmarking digital transformation across municipalities: MNP Digital Municipal Research Report

Expectations around service delivery models are shifting, and it is becoming more essential than ever for municipalities to embrace digital transformation to meet the changing needs of citizens, businesses, community stakeholders, and employees.

MNP Digital works closely with municipalities across Canada. In partnership with Leger and with nation-wide distribution support from MISA Canada, we conducted research on the digital transformation journey of municipalities from coast to coast to benchmark the current state of their progress and priorities for digitization.

This survey report summarizes the 102 completed responses received from municipalities all over the nation, highlighting specific challenges and opportunities that you can leverage when assessing your organization’s digital transformation plans, activities, and progress.

Cyber security and privacy a top priority

Seventy-six percent of survey respondents placed the highest priority on cyber security and privacy over the next three to five years. Municipalities recognize the importance of ensuring technology, data, and information is protected and secure — especially as they seek more digital service delivery options.

However, significant internal skills gaps make it difficult for many local governments to enhance cyber security and privacy. They must prioritize training for current team members, strategic recruitment for in-demand digital skills, and leveraging external subject matter expertise to drive the enhancement of organizational practices for the protection of municipal data and technology assets.

Technology viewed as a strategic enabler to citizen experience

Many municipalities are prioritizing service delivery transformation to streamline and enhance the service experience — reducing or removing organizational siloes from view and creating an experience that is holistic and standard for all municipal programs and services.

In addition, the COVID-19 pandemic forced many local government organizations to embrace technology and shift services and operations to a digital environment. As a result, citizen expectations are even higher for accessing programs and services through user-friendly, mobile, and convenient digital tools.

Effective technology is foundational to sustaining the shift in service delivery design to enable a citizen experience that is standard and consistent across channels. Additionally, this technology must be able to support their unique needs and provide personalized interactions.

Municipalities struggling with a lack of resources

Sixty-two percent of survey respondents indicated that the top barrier to achieving digitization priorities within their organization was insufficient resources.

These challenges are not uncommon — historically, many public sector organizations have limited funding for technology in favour of public-facing services. Trends have started to show an increase in spending on digital transformation programs across the public sector as organizations embark on their journey to modernize, optimize resources, and create sustainable efficiencies.

Legacy financial system replacement is trending

The replacement of legacy financial systems is a key area of focus for many municipalities. Selecting the systems that best meet the needs of the organization will require careful strategic planning and procurement.

This transition from legacy tools to modern solutions will support sustainable growth and organizational resilience. Introducing a modern financial management solution will also help to reduce risks such as process inefficiencies and potential cyber security breaches.