Many organizations struggle with digital transformation. The concept goes against established ways of doing things as well as threatens practices that have existed for many years. Limited working budgets and an unsuitable organizational culture are also forms of digital transformation barriers.

Limited Budgets

A report from the University of Technology Sydney, sponsored by software company Civica, found out that in a survey conducted among Australian and New Zealand local government authorities the biggest percentage of respondents blamed limited budgets as the major constraint to digital transformation. Another big barrier to digital transformation is organizational culture, followed by other factors, which include the speed of changes, failure to meet user expectations, and poor and conservative leadership.

Continuous struggle with limited funding and other issues, hamper local governments in their digital projects implementation. Many LGAs have to make sacrifices with their digitization plans, pushing down their list of priorities in favor of the more immediate requirements of building or maintain infrastructures to keep the community moving. Between providing health services to the people and digital transformation, the more popular course of action will be the former. Local government policymakers both in Australia and New Zealand are aware that the electorate does not give as much attention about digitization as much as they do about healthcare.

The major reason for the lack of digital transformation intiatives is that the electorate does not deem it is necessary at this point in time. There are other concerns which need addressing and funding from the local government budget. Local government units in Australia and New Zealand are not pushing for digital initiatives for their constituencies because there is no need for it as far as their constituency are concerned. The community leaders listen to their followers in the direction their cities will take.

Organizational Culture

The survey shows that 65 percent of the respondents consider organizational culture as an impediment to digital transformation. There are many organizations that are composed of people who are resistant to change or lacking in talent and resources to drive transformation projects. When leadership lacks the knowledge and sound strategy to implement the project, it cannot achieve the goals of digital transformation. The good news is that despite the struggles, about three-quarters of the survey respondents believe that their leaders have the established strategy to potentially become a matured digital organization.

Digital transformation goals are met only when there exist a digital culture and an organization-wide mindset, led by strong leaders that can handle the challenges of promoting a digital-first environment.

The survey found out also that local government authorities are in favor of partnering with other organizations in order to achieve transformation goals. About 60 percent of respondents believed that partnering with other organizations present an opportunity for them to digitally transform. Next to partnering with similar organizations, the respondents believe with partnering with external consultancies and private organizations. Only a small percentage of the respondents believe that they should partner with the federal government in achieving digital transformation.

The survey polled more than 200 professionals from different state departments, organizational teams of local government councils, and educational and infrastructural organizations from Australia and New Zealand.

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