UN pinpoints six ‘fault lines’ hindering government digital transformation
Governments’ digital transformation efforts are being held back by outdated funding and procurement models, fragmented institutional structures, and data governance issues, according to new analysis from the United Nations Development Programme (UNDP).
The organisation says that many public-sector digital transformation projects fail to reach their goals, despite significant government investment in technology.
In an article examining the blockers, Milica Begovic, deputy director of the UNDP’s Digital, AI and Innovation Hub, and head of system transformation and innovation; Alexandru Oprunenco, regional innovation advisor, UNDP Asia Pacific; and Benjamin Bertelsen, manager, digital transformation, Digital, AI and Innovation Hub, outline six interconnected ‘fault lines’ holding back government transformation.
“In pursuit of public sector digital transformation, it seems that focus tends to be more on ‘digital’ than transformation,” they write. “While there is no single recipe, many governments find it difficult to resist the allure of quick fixes, better technology and AI magic at the expense of rethinking policy and service delivery and results people care for.”
One of the most significant issues identified through UNDP’s work with governments is the “lack of policy intent” or the disconnect between digital initiatives and broader government reform strategies.
According to the article, many projects are treated as standalone technology programmes rather than as mechanisms to improve policy delivery, public services and operational performance across government.
Read more: Major study with 12 UK permanent secretaries reveals key enablers to ‘rewiring the state’
Funding and fragmentation
The analysis also pinpoints challenges with the “funding architecture” for digital initiatives, arguing that governments often rely on large one-off capital investments despite the need for continuous system updates, security improvements and service redesign.
“What is needed is a shift toward ongoing, product-style funding streams for digital services, treating them not as construction projects with an end date, but as public institutions that require continuous investment and care to remain effective”, the authors state.
Institutional fragmentation, or the issue of “overlapping mandates”, is also highlighted as an obstacle and one which significantly impacts citizen experience.
“Where no single actor owns the end-to-end experience, it becomes difficult for any single actor to identify and address the points where that experience breaks down, and thus to design good digital services,” they write, urging governments to adopt cross-cutting mechanisms such as shared outcome metrics, joint budget lines for cross-ministry services, mission-driven institutions, and service owners “whose remit genuinely spans institutional boundaries”.
Read more: NHS leaders call for funding overhaul to accelerate digital transformation
Data sharing obstacles
A further faultline identified is ‘data as a territory’, which prevents data being shared across government.
While many governments have the technical capability to share information between agencies, the authors argue that legal, governance and institutional barriers often limit efforts.
They note that countries that have made meaningful progress, such as Estonia with X-Road and Singapore with its data frameworks, “did so not primarily through technical innovation but through a deliberate political decision to treat data as shared public infrastructure”.
The commentary also points to the longstanding “talent pipeline” challenge and the competition for digital talent, with governments struggling to match private-sector salaries and career progression opportunities.
The authors highlight that a growing number of countries are reforming the civil service and establishing new public utility-type institutions which have more flexibility to define career pathways, pay scales, working arrangements and internal structures to attract talent. Examples cited include Singapore’s Open Government Products, Rwanda’s Irembo, and Cambodia’s Techo Startup Centre.
Read more: Formal data-sharing mandates should be introduced in UK public sector, suggests study
Procurement for digital
The final ‘fault line’ identified is “procuring for risk, not uncertainty”, where governments define detailed technical specifications too early, creating the risk that systems are outdated before deployment.
While agile methods and procurement frameworks are aiming to address this, further reform and cultural change are still needed, the authors say.
They conclude that none of the fault lines “will necessarily break any individual project. But each puts an invisible tax on every project in the portfolio”.
However, they say that “addressing any one of them unblocks progress on many other things simultaneously”.
The UNDP analysis reflects themes that have also emerged in Global Government Forum’s research with senior public service leaders globally, including the need for funding modernisation, stronger digital leadership, and collaborative working structures.
These issues are explored in depth in reports including Rewiring the State: Unlocking Government Transformation, A Fresh Mandate for Digital Leadership in the NHS, and Making Government Work: Five Pillars of a Modern, Effective Civil Service.
About Sarah Wray
Sarah has over 15 years’ experience as a journalist with a specialism in the public sector and topics such as digitalisation and climate action. Sarah was formerly the editor of Cities Today and Smart Cities World, as well as a specialist video-based publication in the aerospace sector. She has also written for publications including Smart Cities Dive, Mobile Europe, Mobile World Live and Computer Weekly.
