EY survey reveals barriers to modernization among government agencies

Government leaders point to a lack of infrastructure as barrier to modernization, according to new EY survey

Survey reveals outdated IT, limited funding and an overwhelmed workforce are among top barriers to tech modernization at federal, state and local agencies across the US

While emerging technologies like generative AI have revolutionized the business landscape, a majority of government leaders report significant barriers to tech modernization across the public sector, according to a new survey  from Ernst & Young LLP (EY US). The 2024 EY Government and Public Sector (GPS) federal, state and local trends survey.

The EY Center for Government Modernization, commissioned the survey and asked 300 decision makers across federal, state, and local government agencies about their perception of and experience with emerging technologies. Results revealed widespread operational barriers to adoption, with 67% of government leaders saying their agency’s IT infrastructure is not built to handle emerging technologies. Three-quarters (72%) also report competing with the private sector for top talent, and a similar percentage (73%),  the public sector isn’t offering enough incentives for top tech talent to join. 

“The public sector can benefit from the innovation and potential of emerging technologies the same way that private sector industries do,” said Stacy Lindsay, EY US Government and Public Sector Federal Leader. “To realize the full potential of modernization investments, government leaders should address the triple threat of legacy IT systems, siloed operations and a lack of skilled talent.”

Top barriers poised to derail tech modernization

According to government leaders surveyed, outdated software (42%) and hardware (38%) are some of the biggest barriers to tech modernization efforts at their agency. 95% of government agency leaders surveyed say that over the next five years, they plan to invest in emerging technologies, including:

• Cloud networks (53%)
• Artificial intelligence or machine learning (35%)
• Generative AI (33%)

However, fueling tech-driven transformation in the public sector requires sufficient infrastructure to support integration. The EY survey revealed 43% government leaders say modernizing IT infrastructure is a top priority for their agency. Even more concerning, 63% worry they don’t have the funding to maintain the needed infrastructure.

Government agency leaders surveyed also overwhelmingly agree infrastructure is important for resilience against cyber-attacks (91%) as a majority (63%) are worried about data breaches, and (62%) are concerned their agency is not prepared for a breach. Investing in cyber preparedness is largely perceived as a potential solution, with 82% saying their agency should push for additional cybersecurity funding.

Despite recognizing the benefits of tech modernization and its crucial role in protecting against cybersecurity risks, less than half of government agency leaders surveyed say training  or upskilling employees on emerging technologies (42%) or cybersecurity challenges (43%) is a top priority over the next five years. Building on that, 73% of government leaders wish their agencies allocated more funding for cybersecurity, but currently, must prioritize other areas.

Empowering the public sector workforce of the future

For the public sector to maximize the potential of adopting new technologies, agencies must embrace a people-centric integration model. With 75% of saying their agency struggles to find qualified candidates to fill roles and 64% Upskilling existing employees is a key component for modernization strategies. In fact, 40% of government leaders surveyed point to  overworked staff as  one of the biggest barriers to technological modernization efforts at their agency.

Attracting top talent in a highly competitive labor market is a growing challenge for government agencies. Adopting emerging technologies will make their agency more attractive for future talent, according to 85% of government leaders. 

“The public sector workforce is entering a phase of rapid change, with a wave of retirements on the horizon and fierce talent competition in the private sector,” said Brad Duncan, EY US Government and Public Sector State Local & Education Leader. “Our survey revealed that 89% of agency leaders feel  tech-savvy employees. This strategy should emphasize the public sector’s attractive benefits, growth and upskilling opportunities, and clear communication about joining an innovative mission-driven organization with the potential to positively impact their community, state and country.”

The EY Center for Government Modernization, an initiative of the EY US Government and Public Sector Consulting practice designed to highlight how technology and the purposeful use of data can help solve the complex issues facing government agencies. For more about the Center, visit https://www.ey.com/en_us/government-public-sector/government-modernization, and to view additional findings from the study specific to federal agencies or state and local agencies, visit here.

METHODOLOGY

EY US commissioned an online survey among 300 US government employees who have primary or shared decision-making power (e.g., hiring/staffing, budgetary, IT, long-term planning/strategy) at the federal, state and local levels. The study was completed October 10 -23, 2023. The margin of error for the total sample is +/- 6 percentage points. 

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This news release has been issued by Ernst & Young LLP, a member firm of EY serving clients in the US.