Local government, like all industry sectors, had to move quickly in response to COVID-19 and environmental crises. They needed to find ways to build resilience and manage through the uncertainty that now characterises the operating environment.

The need to react to these crises has catalysed changes in the sector that many had previously found difficult to contemplate. How customers engage with council services has shifted significantly, as has how our workforces operate remotely and flexibly.

Enabling these necessary shifts challenged and accelerated the digital connectivity and agility of organisations. It has also embedded council’s role in supporting and building resilience in the community.

KPMG and the Public Sector Network once again sponsored The Local Government Transformation Series, a number of in-person events that focused on whole-of-council digital transformation in the post-COVID-19 world. For the fourth time, we brought together a group of key senior public sector attendees from across local government to gather insights and learnings on how they are enacting digital transformation in their organisations.


Drivers for digital transformation remain the same

These crises have served to augment the drivers for digital transformation which were already present by making the challenges more urgent and the opportunities more immediate.

  • Technology

    Technology

    The case for scalable, robust and secure technology was highlighted during this period of disruption. Now is the time to examine what possible risk exposures newly embedded technology may have created, what elements should be taken forward in the architecture solution and what changes are required to create an ongoing, safe and reliable technology environment. Councils also need to address the challenges of maintaining trust in their stewardship of data, and in ensuring equity of access to their diverse communities.

  • Talent

    Talent

    The war for talent is real for councils, and only more challenging in these disruptive times. Councils need to embed the benefits realised during remote working and create a framework around flexible, mobile-enabled working arrangements that offer staff safe, equitable working options. Flexible and agile working environments will assist in improving councils’ ability to attract and retain critical skills. Interestingly recent research conducted by Forrester on the future of local government has identified this as being critical in achieving the ambitions of connectivity and customer centricity, however it is an area that appears quite low in terms of investment priority for a number of councils globally.

  • Do more for less

    Do more for less

    As service demands increase, budgets rarely do, and councils are not immune to the economic impacts of COVID-19. As financial sustainability becomes an urgent priority, the need for agile, efficient service delivery, and robust data and analytics to support sound decision making around models of service, becomes increasingly important. A vigorous data strategy can also help with future asset planning and management, and alignment to long-term financial goals.

  • Customer

    Customer

    Councils have a broad and diverse customer base that expects digital services that are personalised, intuitive and readily available, and these expectations have only been heightened during COVID-19. Local governments need to effectively serve today’s customers and communities in new ways, ideally with a single timely view of their customers, to deliver what they have come to expect in terms of service and outcomes amid the modern digital experiences of other service-based organisations.

What are the main challenges councils are facing?

Councils now need to consider how to remain resilient during these uncertain times while working towards recovery and planning for a new future.

The tensions between expediting transformation, COVID-19 related uncertainties, budget constraints and overcoming capability deficits, manual processes and outdated technology pose the greatest challenges as local councils navigate towards a sustainable, responsive and agile future.

The City of Bunbury wants to evolve. We want to bring our vision of Building a Better Bunbury to life. We want to deliver improved and innovative services and value to our community. We want to make a difference today and into the future. We want to empower our staff, exploit technology and build capability to meet the financial, environmental and community challenges of the future in the best possible way.

City of Bunbury, WA



How COVID-19 has impacted digital transformations

During COVID-19, councils across Australia needed to respond rapidly, adjusting ways to deliver services to their communities, supporting community wellbeing, social connection and economic continuity. Participants shared some of the key impacts that COVID-19 triggered, and insights on their digital transformation journeys.

  • In a fundamental change to a centuries old practice, council meetings went virtual, and executives and IT teams had to rapidly mobilise the technology but also the capability to effectively convene meetings online.
  • New ways of connecting people and people to services were needed when council offices, libraries and community centres closed.
  • Relief support and business development support is needed for the tourism and hospitality sector which has been hit hard.
  • Aged care and residential services had to adopt new procedures and operate in a world with staff and visitor restrictions.
  • Strategies and services needed to be revisited as revenue was reduced.
  • Shifting to a work from home model meant a rapid adoption of applications and digital access to data was needed. This presented challenges in ensuring equity of access and flexibility for the highly varied workforce of councils.
  • The cleanliness of public spaces became an even more pressing priority, and hence resources needed to be diverted accordingly.

Survey responses

KPMG Public Services Network Events Series

The series was delivered across six cities commencing in May 2021 in Australia and New Zealand. While the Council Executives embraced the in-person format and the opportunity to share their journey, they were most appreciative of learning from each other’s challenges.

Attendees at the Public Sector Network’s Local Government Transformation Series were asked a set of questions regarding their transformation journey. Overall, we received 43 responses. 

Q1

What is the biggest challenge your council currently faces?

Across all states, the two primary challenges identified were rising demands and expectations of services, and immaturity of technologies, with budget constraints not far behind. This highlights the tensions between meeting expectations, investing upfront costs in technologies and the return on investment this can provide for economic viability in the long term.

Biggest challenges your council currently faces chart
Biggest challenges your council currently faces chart

Q2

What impact has COVID had on your priority and plans for transformation?

There was a strong consensus that the impacts of COVID-19 have been a catalyst to prioritise transformation. Delays or changes to scope were evident though, which is reflective of how customers, employees and suppliers can and will want to engage with council differently in the future and the consequences of this for digital transformation.

Local government: COVID-19 impact on transformation bar chart
Local government: COVID-19 impact on transformation chart

While COVID-19 has had many negative impacts, my proposition today is that COVID-19 has had an overall positive impact on our digital journey at COHB.

City of Holdfast Bay, SA


Q3

Where are local councils on their digital transformation journey?

All councils identified as being somewhere between starting and changing their digital transformations. COVID-19 caused some challenges with individual journeys, some were delayed and some needed to revisit their scope. All identified the need to ensure digital transformation and customer experience were at the heart of their approaches and goals.

Local government: Digital transformation stages bar chart
Local government: Digital transformation stages chart

Transformation is a state of being rather than an end state.

City of Stonnington, VIC


Q4

In a post-COVID world, what is your key focus area for your ongoing digital transformation journey?

While each state varied on what they identified as their key focus area for ongoing transformation, there were three consistent focus areas. Improving customer experience had the highest selection, closely followed by enabling greater efficiency and cost effectiveness of operations and improving availability and integration of data to inform decision making. This further highlights the challenges in de-coupling the need for improved data for decision making from the first two priorities – improving CX and enabling efficiencies. When making a decision on whether to focus on the data, or other priorities first will depend on a council’s maturity and their strategic drivers for change.

Local government: Post-COVID key focus areas for ongoing digital transformation bar chart
Local government: Post-COVID key focus areas for ongoing digital transformation chart

Q5

What is your biggest barrier to reaching your digital transformation goals?

While respondents indicated that they have the leadership to deliver on their transformation goals, technology, people and process remain the barriers identified across all states. This tells us that the need for reinforcing the links between cultural change, process improvement and automation into technology is as critical as it has ever been.

Local government: Biggest barriers to reaching digital transformation goals bar chart
Local government: Biggest barriers to reaching digital transformation goals chart

How we can help

Connected Council – how to transform and optimise

The themes discussed by the attendees at these events strongly resonate with the themes explored more deeply in KPGM’s global The future of local government report. To create a truly customer-centric organisation there needs to be a focus on the eight key capabilities. The KPMG Connected Enterprise for local government framework is designed from the ground up to enable robust discussions at the leadership level.



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