Municipalities around the world are embracing digital transformation as a key strategic initiative. It is critical to modernize your technology and enhance the use of data and innovation to meet the changing needs and expectations of citizens, businesses, community stakeholders and employees. However, digital transformation is a broad term, and it may be difficult to determine where to focus your efforts. What strategic areas should your local government focus on during digital transformation?

We recently developed the nationwide MNP Digital Municipal Research Report to benchmark digital transformation across local governments. The results revealed seven strategic areas that over 50 percent of local government survey respondents intend to prioritize in the next three to five years — including enhancing cyber security and privacy and a focus on continuous improvement and innovation.

We’ve summarized each of these strategic priorities below to help guide you on your journey toward digital transformation. We will also examine the challenges that may prevent your local government from achieving these goals — and the steps you can take to overcome them.

While strategic priorities vary between local governments, these key areas rank highly for most on the journey toward digital transformation:

Cyber attacks and threats are increasing — and 76 percent of survey respondents report that enhancing technology security efforts is a key priority for their local government. Municipal organizations collect, manage, and store a high level of sensitive data and information about citizens. Additionally, local governments process credit card payments for services. It is vital to ensure that both this data and the systems used to house it are protected, secured, and adhere to security and privacy regulations.

A strategic plan helps balance a municipality’s daily operations and service delivery with long-term goals and outcomes — and technology is foundational to success. Sixty-two percent of survey respondents recognize the importance of including technology and digital outcomes within strategy and business planning efforts. Technology requires large investments, and local governments must think critically and strategically when identifying, determining, approving, and planning for new technology. This helps to ensure that these investments will enable and enhance both daily operations and long-term objectives.

Technology is constantly evolving, changing, and growing. This provides new opportunities for local governments to automate manual processes and leverage data to drive decision-making. Sixty-one percent of survey respondents cite continuous improvement and innovation as a key priority as technology continues to transform. A bottom-up approach toward innovation with hands-on engagement from leadership can help to drive collaboration through a municipality, reduce silos, and increase organization-wide initiatives.

Sixty percent of survey respondents report that the citizen experience is a key priority over the next three to five years. More citizens expect a convenient experience through a channel that is right for them and meets their needs as digital adoption increases. To meet these expectations, local governments are assessing service delivery models to identify how to improve convenience and accessibility through digital channels. This may include offering service delivery options that are available outside of traditional business hours or offering more visual support and language options to improve accessibility. This will help enhance the citizen experience as the digital landscape continues to evolve.

Employee expectations are also evolving as the digital landscape continues to grow — and 55 percent of survey respondents cite recruitment and retention as a key priority over the next three to five years. Local governments are examining how technology can enhance the employee experience to recruit and retain new talent. This may involve implementing new platforms to streamline workflows or improve communication and collaboration in the workplace. It may also include offering flexible work opportunities to support work-life balance or increasing training and development through online platforms to develop talent and nurture leadership potential.

Fifty-three percent of survey respondents report that technology modernization is a key priority for their local government over the next three to five years. Many organizations are restricted by decades-old software, technology infrastructure, and processes that limit their ability to digitize, make data-driven decisions, or provide efficient service delivery. Technology modernization is critical to enable systems, tools, and processes to work more efficiently and support effective planning for municipal programs and services.

Fifty percent of survey respondents report that employee engagement and culture is a key priority over the next three to five years — and many are examining how technology can help achieve those goals in the workplace. Digital transformation often involves an increase in collaborative tools and platforms, allowing employees to work together more easily and creating a sense of shared purpose and connection. Implementing effective technology that supports the work of employees can also help drive an increase in workplace satisfaction and create a productive working environment. These tools may also help increase employee health, wellbeing, and morale, build a stronger sense of community in the workplace, and drive employee engagement.

The MNP Digital Municipal Research Report reveals that many local governments are facing several common challenges on the journey toward achieving their strategic goals, including:

Sixty-two percent of municipal organizations report a high level of competition for technology resources. Many are struggling to attract and retain skilled employees. Additionally, some skills such as cyber security cannot be acquired in the current marketplace due to high demand.

Upgrading legacy technology, systems, and applications is both time-consuming and costly. Many municipal organizations struggle to balance the need to upgrade legacy technology against higher priorities such as citizen-facing initiatives.

Thirty-three percent of respondents indicate that leadership is struggling to balance citizen expectations for digital service delivery models with priorities such as economic development and public safety. This may result in a lack of strategic direction if not managed carefully.

Thirty-two percent of respondents report that their organization is slow to adapt to new trends and technologies — although progress toward embracing innovation has been made in recent years. Organizational culture transformation is a complex and time-consuming task that requires careful management and active involvement from leadership. This is crucial to ensure a successful and sustained transformation.

Thirty-two percent of respondents report that departments in their municipal organization act as independent units — creating organizational silos that slow down the rate of digital growth. To overcome this challenge, many local governments are looking to establish a collaborative style of governance where cross-departmental linkages play a critical role and are supported by technology.