Benchmarking Digital Transformation in Municipalities

JULY 20, 2023, CALGARY, AB – The rapid growth of urban populations in recent years has brought about increased complexities for municipal organizations. At the same time, the evolving expectations of citizens and municipal stakeholders has generated higher demands for transparency and accountability at the local level. Amidst limited resources, municipalities face mounting pressure to prioritize efficient service delivery that maximizes value for their communities.

"Recognizing the shifting landscape of service delivery models, municipalities across Canada must embrace digital transformation to meet the changing needs of citizens, businesses, community stakeholders, and employees," said Wendy Gnenz, Partner at MNP Digital.

To shed light on the current state of progress and priorities for digitization, MNP, in collaboration with Leger and with the support of MISA Canada, has conducted extensive research on the digital transformation journey of Canadian municipalities from coast to coast. The result is a comprehensive benchmarking report, titled "Understanding the Current State of Digital Transformation Journeys for Canadian Municipalities."

This benchmark report presents an overview of the survey responses received from 102 municipalities nationwide, identifying specific challenges and opportunities that municipalities can leverage when evaluating their digital transformation plans, activities, and progress. To gain further insights into the challenges faced by municipalities, opportunities for improvement, and to benchmark their own progress in the digital transformation journey, interested parties can download the full report.

"Cyber security and privacy emerge as the top priorities for municipalities over the next three to five years. Municipalities understand the importance of protecting technology, data, and information, particularly as they strive to expand digital service delivery options," added Gnenz. "However, internal skills gaps pose a significant obstacle in enhancing cyber security and privacy measures. To overcome this, local governments must prioritize training for existing team members, strategically recruit digital leaders, and leverage external subject matter expertise to strengthen their organizational practices in safeguarding municipal data and technology assets."

Gnenz emphasized, "Our goal is for this report is to provide valuable insights that will guide municipalities in enhancing their practices and fortifying their organizational resilience."

The COVID-19 pandemic accelerated the adoption of technology, raising citizen expectations for user-friendly, mobile, and convenient digital tools. James Richardson, a Partner in MNP’s Consulting services group, highlights the strategic significance of technology in optimizing the citizen experience.

"As the report shows, many municipalities are currently prioritizing service delivery transformation to streamline and enhance the overall experience. By breaking down organizational siloes and offering a holistic and standardized experience across all municipal programs and services, municipalities can address the expectations of their constituents," said Richardson.

"Effective technology is the foundation for sustaining the shift towards standardized and consistent service delivery, accommodating unique needs, and facilitating personalized interactions. We hope that the insights and recommendations in this report will be instrumental in helping municipalities leverage technology effectively to create a seamless and personalized citizen experience,” Richardson added.

The report also identified that insufficient resources emerge as a major challenge for municipalities, with 62 percent of survey respondents citing it as the top barrier to achieving their digitization priorities.

“Historically, public sector organizations have allocated limited funding to technology, favouring public-facing services. However, recent trends indicate an increased investment in digital transformation programs as organizations embark on journeys to modernize, optimize resources, and create sustainable efficiencies,” explained Richardson.

Another prominent area of focus for municipalities that were identified in the study is the replacement of legacy financial systems.

“Selecting the most suitable systems for the organization requires meticulous strategic planning and procurement. The transition from outdated tools to modern solutions supports sustainable growth and organizational resilience while mitigating risks associated with process inefficiencies and cyber security breaches,” added Gnenz. “This will continue to be a top priority for municipalities going forward.”

About MNP LLP

National in scope and local in focus, MNP is one of Canada’s leading professional services firms — proudly serving individuals, businesses, and organizations since 1958. Through the development of strong relationships, we provide client-focused accounting, consulting, tax, and digital services. Our clients benefit from personalized strategies with a local perspective to fuel success wherever business takes them. For more information, visit www.mnp.ca.

For more information, please contact:

Wendy Gnenz, Partner, MNP Digital, at 780.733.8605 or [email protected]

James Richardson, Partner, MNP, at 780.919.2060 or [email protected]