Digital Transformation in Government: Challenges, Examples (2025)

Technology has redefined work, from hybrid work, big data, automation, customer experiences software suites, and more. Government services isn’t known for being on the cutting edge of technology and has a reputation for being disjointed, slow, and tedious.

Digitalization presents a unique opportunity for governments to finally face these challenges and stigmas head on, powered by digital transformation.

In this article, we define digital transformation in government, explain the pros and cons of these initiative, share real-life examples of digitalization in the public sector, and provide you with actionable tips to successfully manage digital transformation in your organization.

What Is Digital Transformation in Government?

Digital transformation refers to replacing legacy applications and manual processes with new technology throughout all aspects of an organization’s operations to improve efficiency, effectiveness, customer experience, and service delivery – essentially all company areas.

In the context of the government sector, digital transformation involves using technology to improve public services and create a better overall experience for citizens and businesses engaging with government offices.

The goal of digital transformation in government is to create a more transparent, efficient, and responsive public sector that meets the evolving needs of citizens. It creates a fundamental shift in how government offices operate, using technology to streamline processes, improve data management, and create a better citizen experience.

Digital transformation in government can take many forms, including the replacement of outdated systems, the development of modern digital platforms, and the adoption of automation and artificial intelligence (AI) to improve service delivery and reduce operational costs.

Benefits of Public Sector Digital Transformation

Although digital transformation in the government sector does present difficult challenges, its benefits significantly outweigh these pain points – both for government offices improving efficiency, as well as from the citizen experience perspective. The most impactful benefits include:

1. Automation of manual tasks and more efficient operations

Slow processes and overreliance on manual work are often the core reasons behind the inefficiency of the public sector. By implementing modern software, governments can replace outdated manual processes with automated workflows, allowing employees to focus on high-priority tasks.

From automated workflows to cloud-based collaboration tools, technology streamlines processes across departments and agencies. It reduces redundancies and simplifies complex tasks. Digital documentation and recordkeeping also increase productivity. All to optimize day-to-day processes.

2. Improves internal morale, job satisfaction, and productivity

Public sector workers are always overworked. If you want to improve your employee well-being, you should promote digital transformation first thing.

Adopting modern digital tools allows employees to get more satisfaction from everyday work. Alongside automating repetitive processes, digital transformation brings in more effective collaboration tools, improving employee relations that create a happier workspace, and provides government employees with the tools that allow them to focus their core attention on more essential tasks that require critical thinking, creativity, and innovation.

3. Enhanced citizen experiences

Technology bridges the gap between government agencies and the citizens they serve. Online portals and mobile apps make information and services readily accessible 24/7. Cloud platforms enable employees to work remotely. Digital adoption enhances transparency and two-way engagement.

However, two-thirds of consumers who used a digital government channel cited at least one issue. User-friendly digital services improve interactions between government and citizens. When done right, technologies come together to create better experiences.

By digitizing citizen-facing services such as license or permit renewals and taxing filing, you’ll improve process efficiency and your reputation among customers.

4. Data-driven decision making

Digital transformation helps governments to obtain more data to understand their citizens’ behaviors and preferences. With the wealth of data generated through digital interactions, public sector organizations can design their services to meet the needs of their citizens.

Technology offers data that can drive smarter governance. For example, analytics dashboards provide real-time insights from multiple sources. AI and machine learning can also rapidly process large datasets to identify patterns. This data-driven approach leads to more informed resource allocation and proactive planning.

Digital Transformation Challenges in Government

Digital transformation is an inevitable step for the public sector. But before you start, you should be ready to face and address the following digital transformation challenges:

1. National security risks

Governments handle sensitive and confidential information, which needs to be protected from cyber threats and other forms of attacks. As the government moves to digitize more information and services, it becomes vulnerable to hacker attacks. Governments must invest in robust security measures to prevent unauthorized access to confidential data.

2. Federal technology regulations and compliance laws

Public sector operators also have strict laws and regulations to contend with. Adopting new technology and staying on top of compliance needs can be particularly challenging as requirements change.

Federal agencies typically rely on desktop, on-premise solutions to protect their data better from outside attacks. However, this challenges federal digitalization projects, as most technology vendors have adopted cloud-based applications.

Additionally, government offices and agencies must comply with federal legislation and security standards when partnering with new cloud solutions and technology providers. The two major compliance requirements are FedRAMP and the Federal Information Security Modernization Act (FISMA).

In the case of FedRAMP, software providers must become FedRAMP compliant before federal agencies can partner with them. However, this is difficult, as FedRAMP requires a current federal agency customer to vouch for software vendors to gain FedRAMP authorization – which is next to impossible when nearly all federal agencies fall under FedRAMP requirements.

These factors often lead to government offices and projects building their own internal applications and technology infrastructure – which in itself presents massive new challenges that ISVs would typically have under control.

3. Politics and stigmatization

Digital transformation initiatives can be met with resistance from politicians and citizens, who may view the changes as threatening traditional government operations. Additionally, some groups may hesitate to use digital services due to stigmatization or mistrust.

4. Government bloat

Government agencies often have complex structures, bureaucratic processes, and redundant systems, which make it difficult to implement digital transformation initiatives. Streamlining and simplifying these processes may involve some painful steps, like reducing staff, closing departments, or reorganizing existing ones.

5. Siloed government organizations

Many government agencies operate in silos, with limited communication and collaboration across departments. 51% percent of public sector organizations consider organizational silos one of the top digital transformation blockers. Successful digital transformation requires a coordinated effort across multiple teams and agencies to deliver cross-silo digital initiatives.

6. Insufficient funding and resources

Implementing digital transformation initiatives will require significant financial and human resources, and governments may need help justifying high expenses and allocating resources effectively. It’s not uncommon for public sector organizations to lack the funding necessary to invest in new technology and systems.

For example, Two programs focused on public health preparedness and response, the Public Health Emergency Preparedness Program (PHEP) and the Healthcare Readiness and Recovery Program, have both experienced major budget cuts over the past two decades. After adjusting for inflation, PHEP funding has been reduced by about half since 2003.

7. Addressing the digital skills gap

Most public services and government offices rely on outdated, legacy systems and manual processes. This presents issues surrounding upskilling and addressing skill gaps across multiple generations of workers.

More concerningly, In PwC’s 2023 Global Workforce Hopes and Fears survey of nearly 54,000 employees worldwide, government workers were less likely than respondents overall to believe that the skills needed to do their jobs would change in the next five years. They don’t see the need for change.

Government organizations must invest in digital upskill training to introduce employees to new digital tools and systems. This is critical to drive technology adoption and improve processes for all.

Examples of Digital Transformation in Government

What forms may digitalization in government take? Here are a few examples of public sector agencies implementing technology in internal processes and citizen-facing operations.

1. Self-service government e-portals for citizens and businesses

Implementing e-portals for citizens and businesses is one of the simplest ways to make government services more accessible. It allows users to access government services and information online, reducing the need for in-person interactions and streamlining processes.

E-portals include services such as online payment processing, permit applications, and license renewals.

Example: Around 98% of Estonia residents declare their taxes online. The e-tax system enables users to file enterprise or personal declarations, request tax returns and excise taxes, and file customs declarations electronically.

2. Electronic document management

Electronic document management systems allow governments to store, manage, and share documents digitally, reducing the need for paper records and physical storage.

Example: To provide centralized access to all documents, the United States Environmental Protection Agency (EPA) digitized all of its paper-based documents, including reports, maps, photographs, and other records.

The system has helped the EPA to reduce paper usage, streamline document workflows, and improve collaboration among staff. It has also enhanced the agency’s ability to manage documents in compliance with legal and regulatory requirements.

3. Open-data platforms

An open-data platform is the central web portal where government employees, citizens, researchers, and others can search, access, analyze or download government data for free. Open data promotes transparency and accountability by making government data available to everyone.

Example: To promote open knowledge, New York Сity’s government has launched the NYC Open Data initiative. This online portal makes the public data generated by various New York City agencies and other City organizations available for public use.

4. Public safety and emergency response alert systems

Governments can improve public safety and emergency response by implementing digital technology for real-time alerts. These systems can support emergency alerts via text message, social media, or other digital platforms, as well as location-based services to help first responders locate and assist those in need.

Example: The United States government has created the Integrated Public Alert and Warning System (IPAWS) to send immediate warnings to the American people. State, tribal, and local authorities use the system to notify the public of any potential risks, like storms or flooding, and provide instructions on how to stay safe.

5. Predictive analytics

Predictive analytics uses data to identify patterns and predict future events. Public sector organizations can use predictive analytics to forecast budget and revenue, monitor public health trends, and identify potential fraud or misuse of government resources.

Example: Los Angeles Fire Department (LAFD) runs a predictive analytics program to identify areas at high risk for fires and predict how wildfires will spread. The system analyzes data from multiple sources, including weather reports and historical fire data to identify at-risk areas and send alerts to emergency officials.

Since implementing the predictive analytics program, the LAFD has reported a significant decrease in the number of fires in the location as well as a reduction in the overall cost of fire-related incidents.

6. Citizen and community engagement platforms

Citizen and community engagement platforms allow governments to communicate with citizens and gather feedback on policies and initiatives. Citizens can use these platforms to report issues that they want the government to address and monitor their requests being processed.

Example: Open311 is a digital platform built for San Francisco citizens to report non-emergency issues, such as graffiti or broken streetlights, to the city government. The platform enables citizens to submit requests through a mobile app and includes features such as request routing and real-time status updates.

7. eLearning platforms for government employee training, development, and support

Digital transformation isn’t limited to implementing citizen-facing technology. Public sector organizations should also promote digitalization internally.

Replacing in-person training with eLearning is one of the ways to support digital adoption among government workers. eLearning platforms and learning management systems (LMS) can include on-demand training modules, interactive simulations, and virtual classrooms.

Example: The Federal Virtual Training Environment (FedVTE) program is an online learning platform that provides cybersecurity training to federal employees, contractors, and veterans. The program includes over 800 courses on a variety of cybersecurity topics, such as network security, incident response, and vulnerability assessment.

8. eVoting

Electronic voting enables citizens to vote electronically, improving accessibility and reducing the potential for errors associated with manual vote collecting and counting. It also significantly increases voter turnout and reduces costs associated with traditional paper ballots.

Example: Internet voting (i-Voting) is a unique solution the Estonian government uses to engage citizens in the governance process. The system allows voters to cast their ballots online from anywhere in the world. 

Voters simply need to log into the system using their government-issued e-ID. To ensure anonymity, their identity is removed from the ballot before it reaches the National Electoral Commission for counting. Nearly 64% of eligible voters participate in this i-Voting system.

9. IRS’s new free online tax-filing system

Tax season is always frustrating for taxpaying citizens. This is convoluted by the array of premium tax-filing apps like TurboTax, TaxSlayer, and more that provide a simple solution to filling your taxes and a more Millennial-friendly alternative than going to H&R Block.

With the IRS’s new round of $80 billion in funding, it commissioned a new report on the logistics of developing its own, direct tax-filing system for citizens. It found extremely high levels of interest from the public and began working on a new system, “Direct File.”

The results of that report found that 70% of the public wanted a free option that was directly created by the IRS.

The IRS also found that the annual cost of its new Direct File technology would range from $64 to $249 million, depending on the level of adoption it can drive among the public.

While a high cost, it means that more people will have an easier time submitting their taxes each year – and will drive more revenue for the IRS. It also will require the government to spend less time hunting down those who have yet to pay their taxes.

The new program is being rolled out in 2024 to a select beta group of citizens, but the IRS plans to have the system available to over 90% of taxpayers in the following years.

How to Drive Tech Adoption in the Public Sector

Now that it’s clear what you can do to create more effective processes in your public sector organization, let’s figure out how you can do it to drive digitalization through your digital strategy.

1. Invest in a digital adoption platform

Say, you’ve implemented a modern record management system. How do you ensure your employees use it in the most effective way?

To help your employees navigate change, invest in a digital adoption platform (DAP) that will support them throughout their journey with new systems.

With a DAP like Whatfix, government offices can create in-app guidance and just-in-time support for their applications and citizen portals that layers help content, tooltips, and contextual support on top of the app’s interface. You can create personalized in-app training programs for different departments and agencies, ensuring your employees access the most relevant information.

Whatfix Analytics provides public sector organizations with product analytics capabilities to capture and analyze user behavior and product usage. Track any government employee or citizen user action, create cohorts of users to segment experiences, map user journeys to identity friction points and improve process completion.

2. Create a technology transformation committee and appoint adoption leaders

Be sure to start with a team that takes charge of this initiative. The change leadership committee should have a clear mandate, scope, and structure, which should be communicated to all stakeholders

The committee should work closely with your employees and provide guidance and oversight to ensure the success of the digital transformation initiative. This way, employees have direction.

The change leadership committee should have a clear mandate, scope, and structure, which should be communicated to all stakeholders. The committee should work closely with the digital transformation consultant, if one is brought on board, and provide guidance and oversight to ensure the success of the digital transformation initiative.

3. Bring on a digital transformation consultant

If you don’t have previous experience with implementing new technology and driving digital adoption in your organization, hire a digital transformation consultant. The process involves too many structural changes for you to navigate it without a professional on your team.

A digital transformation consultant will assist you throughout the entire process by:

• Conducting a needs analysis to identify areas for improvement and opportunities for digitization.
• Developing a digital transformation strategy that aligns with the organization’s goals and objectives.
• Building a digital transformation roadmap to plot out your digital transformation journey.
• Providing guidance on the selection and software implementation of new digital technologies and tools.
• Offering training and support to employees to ensure the successful adoption of new technologies and processes.

With an experienced consultant to help you navigate the process, you’ll achieve your digital transformation goals faster and with fewer expenses.

4. Align governmental department goals with the overall digitalization strategy

Each department should identify how digitalization can support and enhance their services and operations. And most importantly, you should outline the specific actions and initiatives that each department needs to take to achieve your digital transformation goals.

To create alignment, encourage different departments to maintain open communication, collaborate, and exchange feedback. Departments should share updates on their progress and challenges regularly, and the digital transformation team should be there to support and guide employees where necessary.

5. Provide evidence to employees and the public on the need for digitization

Resistance to change is the critical roadblock for organizations in every niche. Public sector companies aren’t an exception.

As you develop your digital transformation initiative, you’ll face resistance not only from your internal employees but also from citizens. To address it,  you should clearly communicate the benefits of digitalization to your staff and the public.

Provide evidence-based data on the positive outcomes of digital transformation, such as improved efficiency, cost savings, and enhanced service delivery, to garner support from people involved in the initiative and those affected by the change.

Examples of Government Tech Adoption Success Stories

While the public sector is often viewed as slow and dysfunctional, there are tech adoption success stories in government that have driven real citizen engagement and benefits. A few examples include:

• Medicare: The updated Medicare.gov website highlights key tasks and information for people enrolled in Medicare and people nearing Medicare eligibility.  A redesigned Medicare Plan Finder makes it easier to compare plan options online. As a result of these improvements user satisfaction scores increased up to 72%.
• Public record requests: Public records request volume increased nearly 30% year-over-year. NextRequest simplifies and streamlines the management of a growing number of public records requests with their public records software.
• Veteran affairs: The flagship VA Health and Benefits mobile app provides important information just a tap away and improves accessibility. With over 1.8 million downloads, the app is a key digital tool for veterans accessing and managing their health care and benefits.

Drive Tech Adoption in Government with Whatfix

With Whatfix, drive tech adoption of digital transformation projects with in-app training, just-in-time support, and user analytics. Here is why public sector technology clicks better with Whatfix:

1. Provide hands-on simulated training with Whatfix Mirror

What if you could create interactive replica environments of web applications for virtual hands-on user training without introducing risk? Whatfix Mirror can help public sector organizations do exactly that.

Whatfix is the only DAP that provides organizations with a no-code tool for quickly creating replicate sandbox environments of your software, allowing you to conduct beta user tests and train users without impacting your operations and application data.

2. Enable end-users with in-app guidance and just-in-time support

Users often need quick help to stick with technology. DAPs deliver by providing in-workflow tips. For example, if a user hesitates to set up an account, a personalized tip can help them progress. By integrating this assistance, DAPs promote user independence and satisfaction.

With Whatfix, create in-app support like Tours, Task Lists, Flows for interactive walkthroughs, and more that provide moment-of-need support for professionals during their work and citizens navigating new tools.

3. Collect user feedback with in-app surveys

End-user perspectives offer valuable direction for enhancing digital tools. DAPs support this feedback loop with in-app surveys and forms gathering user suggestions right in their workflow. This convenience incentivizes participation to guide refinements and feature additions.

Whatfix’s digital adoption platform makes it easy to create customizable in-app surveys to collect user feedback and insights, including seven different types of questions. All to help you understand what users want and need.

4. Track in-app content usage and consumption with Guidance Analytics

Whatfix Guidance Analytics provides usage and engagement-related data for all your Whatfix content in easy-to-understand visual formats. Using the data, you can make changes to your content where it is necessary and guide users to complete their goals.

5. Capture any custom user action or event with Whatfix Product Analytics

Product analytics is the process of tracking, analyzing, and studying how users engage with a digital product or service. It enables product managers to capture, visualize, and analyze product usage and user behavior data. Whatfix offers powerful no-code Product Analytics tools to help businesses understand their users’ behavior and improve the product/application experience.

Public Sector Technology & Software Clicks With Whatfix

Accelerate your public sector digital transformation by enabling your employees and citizens contextual in-app guidance and constant real-time support with Whatfix’s digital adoption platform (DAP).

Whatfix empowers public sector IT teams with its no-code Visual Editor to create in-app, moment-of-need support and contextual guidance – all inside your public sector software applications and digital processes.  This reduces time-to-proficiency and achieves new levels of productivity and proficiency through better public sector technology adoption for all end-users.

It also provides abilities for self-service, personalization, and guided user experiences for any application end-user – enabling end-users to use public sector technology, improving end-user productivity, and automating operations.

Whatfix empowers a data-driven approach by analyzing tech experiences with end-user behavioral analytics and event tracking. This identifies areas of friction in your public sector digital processes and tech experiences, allowing you to create optimal, contextual user journeys across various end-user segments.

With Whatfix, public sector IT teams can identify areas of friction causing issues and launch new in-app guided Flows, Smart Tips, and Self Help elements to guide and assist them with localized content that guides them through processes, driving workflow adoption and achieving business outcomes.

How does it work? Whatfix empowers public sector organizations to:

• Create in-app Flows and Task Lists that guide end-users step-by-step through digital processes and applications.
• Enable all end-users with Self Help, providing a searchable help wiki that connects to all your help and support documentation, FAQs, help desk articles, and more – that overlays on your applications’ digital UI.
• Notify end-users of process updates, compliance changes, team updates, deadlines, and more with Pop-Ups and Beacons.
• Provide contextual Smart Tips that give end-users timely information that nudges them to take the correct in-app action.
• Use Field Validation to ensure data is entered in full, in the correct format.
• Collect end-user feedback from end-users such as NPS, customer satisfaction surveys, staff training and onboarding feedback, and bug identification with In-App Surveys.
• Analyze end-user behavior with User Actions and Enterprise Insights by tracking custom in-app events to optimize user journeys, segment users into cohorts, identify areas of friction, and more.

With Whatfix, you can understand how your public sector technology is used and under-adopted by your employees and citizens. This makes it easier to adjust software onboarding, training, support, and overall end-user adoption strategies—all to provide a seamless experience for every end-user that enables them with the right context and support to utilize new technologies and systems fully.

Ready to get started? Request a Whatfix demo today!