How the UK Public Sector Can Tap the Vast Potential of Digital Enterprise Solutions

Squeezed between a growing demand for services on one side, and rising costs and budgetary constraints on the other, the UK public sector workforce is bearing the strain. The result is a troubling triad of staff shortages, low morale, and recruitment issues.

But the public sector can bolster its workforce—by harnessing the vast potential of enterprise solutions that increase efficiency, reduce workloads, and streamline data-driven insights

That potential has yet to be fully tapped, however. A new Workday white paper, “Unlocking Workforce Potential with Digital-led Solutions”—based on a 2023 survey of almost 400 UK civil servants responsible for workforce management—explores the current state of HR, finance, and enterprise planning systems within government. The paper also uncovers civil servants’ current and future priorities for transforming these systems, assesses both the progress and the hurdles on the sector’s digital transformation journeys, and offers actionable recommendations.

Taking Stock of the Status Quo

The public sector’s existing HR, finance, and enterprise planning systems are often outdated and fragmented, with limited functions. Overall, fewer civil servants report “a lot of progress” or “significant progress” on transformation priorities than those reporting moderate, little, or no progress. Three main areas of growth emerged.

• Paper-Based Processes: The UK public sector’s fragmented and disconnected systems rely on costly paper-based processes that require manual labour and are likely to create data inefficiencies. Eliminating unnecessary paper-based services and processes could save over £1 billion by 2025, according to the UK government. But paper-based processes are still prevalent, as about half (47%) of UK civil servants report their department is only partially replacing paper-based processes.
• Workforce Data and Tools: To know how to hire, retain, and deploy its workforce more effectively, the public sector first must establish reliable workforce data. Robust, real-time workforce data can enable a stronger understanding of the resources and skills that government departments/organisations have—and the workforce strategies that they need. The survey shows that 43% of civil servants feel their department does not have the data visibility and tools needed for efficient workforce management.
• Cross-Functional Integration: HR processes integrated with functions such as finance and enterprise resource planning can enable government departments to significantly streamline operations, with consistent user experiences and with unified data supporting workforce decisions. Only 28% of respondents feel their department/organisation has a single centralised system in place for HR, finance, and enterprise planning.

Making Progress

In the face of limited budget and resource capacities, government departments can turn to digital solutions to boost productivity, efficiency, and strategic resource management—and many are doing precisely that. The area with the highest stage of progress is data protection and security (27%), followed closely by replacing paper-based processes with self-service applications (24%). Almost half (45%) of UK civil servants say their department has fully replaced paper-based processes with digital self-service applications for HR and finance.

Civil servants are well aware of the limitations of their existing systems and the power of digital transformation. Survey respondents identified the top current digital transformation priority as modernising, replacing, or upgrading legacy technologies. And modernising legacy technologies drops from the top spot to fourth place when civil servants are asked about their digital transformation priorities in the next two to three years, suggesting that many modernisation processes will be implemented by then. 

Meanwhile, developing and retaining staff grows in importance—going from the third top current priority to the number one future priority. Civil servants recognise the value of their staff—and the benefits of maximising their potential. “Push more for modernisation and ensure workforce are skilled to understand and operate with change,” stated a survey respondent from the Department for Work & Pensions.

Spotting the Roadblocks

Workday’s survey reveals four main barriers impeding the transformation of HR, finance, and enterprise planning systems within the public sector:

• Existing tech infrastructure: Fragmented and disconnected systems are the biggest barrier to digital transformation, civil servants report. Respondents note that inflexible legacy HR and finance systems threaten operational resilience.
• Skills and tools gaps: Developing and retaining skilled staff ranks is the second top barrier, with respondents also citing a lack of internal technical knowledge or expertise.
• Budgets and regulations: Budget restrictions emerge as the third biggest barrier.
• Data challenges: These include limited data visibility, sharing, access, and availability, as well as data security and privacy concerns.

Finding the Way Forward

To be sure, progress has been made. Government departments and organisations are now in various stages of digitally transforming their HR, finance, and enterprise planning systems. But with ongoing economic uncertainty pushing them to do more with less, they still have a way to go. They will have to overcome the challenges of fragmented legacy systems, poor use of data, and a significant skills gap.

The Workday white paper provides five recommendations for government departments and organisations to transform their enterprise resource planning management systems. A quick rundown:

• Improve the employee user experience. A seamless, easy-to-access user experience can boost employee productivity and development.
• Invest in tools to tackle workforce challenges. Digital tools that provide a holistic view of staff productivity and skills can help shape plans for workforce deployment, development, engagement, and retention.
• Educate and train staff to use digital tools. To deploy technology meaningfully, the public sector must ensure its staff is skilled enough to utilise solutions optimally.
• Foster innovation. Modern, innovative digital solutions harness AI to drive automation and analytics and deliver real-time workforce insights.
• Explore cloud-based solutions. Unlike inflexible legacy HR and finance systems, cloud-based solutions offer a seamless ecosystem of applications, an integrated user experience, and greater security and flexibility

Although the public sector faces growing constraints, investment in digital transformation is helping the workforce meet demands. 

Read the report for in-depth digital transformation solutions for the public sector workforce.