Government Makes Good Strides for Cloud Migration, Report Finds

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According to the report, government and the public sector are strong in their cloud migration efforts, but lagging behind the private sector in other areas of digital modernization.

Government continues to invest in digital transformation to improve agility and customer engagement, seeing the greatest results in cloud migration efforts, according to KPMG’s 2022 U.S. Technology Survey Report.

The report found that the government and public sector at large spend a similar percentage of their budgets on technology as the private sector and gain similar benefits. In particular, there has been a strong migration to the cloud. In comparison to all organizations, government and public sector organizations are ahead in all of the measured areas for cloud migration. 

Specifically, 18% of government and public sector executives reported that their organization had completed its cloud migration and was now looking to modernize and enhance cloud capabilities, in comparison to 13% of all executives. Meanwhile, 55% of government and public sector organizations said they are proactive in their evolving cloud strategy, compared to 48% of all organizations; 42% stated that cloud has lowered the total cost of ownership, compared to 34% of all organizations; 40% reported that their organization’s ERP or application portfolio is completely in the cloud or moving towards that, compared to 31% of all organizations. Furthermore, 31% of government or public sector respondents reported having more than 60% of their organization’s workload in the cloud.  

The report found that there are several factors driving government and public sector organizations’ digital transformation, such as improved agility and modernization (55%); accelerating customer engagement (55%); propelling growth, efficiency and resilience (51%); reducing risk (43%); increasing revenue (38%); and advancing environmental, social and governance practices (33%). All of these factors were higher for the government and public sector than for organizations overall. 

The report also examined the government and private sector in regards to data and analytics, with 60% saying their organization is proactively working towards its data strategy. But 34% said that they face data management challenges when adopting new digital technologies. 

“When you’re suboptimal in data management, you can’t be ahead in analytics, because analytics doesn’t work without optimal data management,” Viral Chawda, principal head of government technology at KPMG, said. 

And while government and the private sector are also using and benefitting from the deployment of various technologies, they lagged behind the overall average in these areas. Government was only slightly behind the private sector in machine learning—77% compared to the overall 82%—natural language processing—59% compared to 61%—and case-based reasoning—19% compared to 20%. But they are further behind in robotic process automation—21% compared to the overall 50% —and vision systems—18% compared to 30%. 

A “lack of capable talent” is hindering government and public sector’s digital transformation, the report stated. Other challenges stemmed from data management and the high cost of purchasing and implementing new systems, as well as adding the needed talent. KPMG added that the use of large, complex, legacy systems is another challenge. 

“Converting systems and applications of that age, scale and complexity to modern cloud-based solutions is not easy,” Chawda said. “Finding the right talent to orchestrate the change isn’t easy, either, because none of these transformation programs are technology-only undertakings. You need people within the organization who have a lot of domain and functional expertise, including an understanding of why things are being done the way they are, what the interdependencies are between different systems and what the impact of changing those systems will be. There aren’t many people who understand all that.”

The report made five recommendations: 

  • Have a customer-focused design when introducing new technologies, so they will find them easy-to-use and use them.
  • Treat data like a shared product, not something to be siloed.
  • Increase and fast-track the use of a development, security and operations—or DevSecOps—approach to create new software applications and to build security into the software from the beginning. 
  • Modernize technology to include software-as-a-service platforms, advanced cloud, AI, edge computing and strong data management, to help users access necessary data.
  • Use modularity—“dividing large software applications into smaller modules”—and containerization—running applications in secluded environments—to help modernize large and complex legacy systems and applications.