Can We Skirt Around the Budget Issue When It Comes to Innovation?

A look at how governments can overcome budget constraints to continue their innovation journey and meet citizen expectations with exceptional service delivery.

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Heather Dailey 14 March 2024
Can We Skirt Around the Budget Issue When It Comes to Innovation?

Exploring Global Barriers to Innovation & Citizen-Centricity 

Prior to the pandemic the world was already experiencing rapid technological advancement and digital transformation, with citizen expectations towards government services starting to see a shift driven by B2C digital juggernauts like Netflix, Amazon and Spotify.  

Many agencies had already realised the benefits of delivering digital-first, citizen-centric services - not just for the citizens themselves, but for their staff, for productivity levels, and for their bottom-line, so they refocused their efforts. For those agencies reticent to adapt, or for those only just commencing their digital transformation journey in 2020, COVID-19 emerged as a massive accelerant.   

Now, with the fundamentals in place most agencies are looking to continue the innovation momentum and continue providing users exceptional experiences, however, government entities operate within a unique environment, characterised by a myriad of competing priorities. Unlike their private sector counterparts, governmental institutions must balance the diverse needs of their citizens, address societal issues, and adhere to strict regulations, all while striving to meet rising expectations for digital service delivery. This juxtaposition presents a complex landscape for public sector leaders, where the imperative to modernise and innovate is often met with resource constraints and logistical challenges.  

To better understand the biggest barriers to continuous innovation and to driving user experience we asked 6000 plus government professionals and the answer was unanimous. The number one barrier to continuous innovation globally, and unsurprisingly, is budget constraints as indicated by 24% of all respondents. This was followed by change management challenges at 16% globally – although a considerably larger challenge in Canada and in fact the number one challenge for the nation. Rounding out the top three challenges is leadership buy-in at 15% globally. Buy-in was the number one challenge in New Zealand (figure 3).  

In the face of budget constraints, government professionals still have an opportunity to drive innovation and meet mounting citizen expectations. Rather than allowing limited resources to dampen ambitions, strategic approaches can be embraced to overcome these challenges. These approaches include:  

  • Forging partnerships with the private sector and academia to tap into external expertise and resources  
  • Embracing agile and holistic project management methods that can achieve incremental improvements within restricted budgets. 
  • Involving citizens through crowdsourcing initiatives and open data platforms to harness collective intelligence to revolutionise government services.  
  • Breaking down silos and collaborating with other departments and agencies to reduce effort duplication, share collective knowledge and iterate faster.    

With determination and ingenuity, government professionals can triumph over financial obstacles and continue delivering groundbreaking solutions to the people they serve. Ultimately a revolutionary idea is just as powerful as a shiny new technology.  

Case Study Snapshot – New York State Comptroller  

Saving $5 Billion Annually with a Scalable Smart Government Audit Service 

Insights from Tina Kim, Deputy Comptroller for State Accountability, Office of the New York State Comptroller 

The Challenge: 

Like most government entities the Office of the New York State Comptroller (The Office), which safeguards the State’s fiscal health, roots out waste, fraud and abuse in state and local government, and ensures that municipal agencies serve the needs of all New Yorkers, needed to find ways to work more effectively and efficiently in an effort to reduce costs and improve fiscal health.  

The Strategy: 

In 2015 The Office introduced Smart Audit. Smart Audit provides a traditional service – government performance auditing – in a more efficient and effective way. It uses technology and data analytics coupled with partnerships to improve audit decision making. Best of all Smart Audit is not a one-off initiative or project with a deadline – but instead an ongoing effort woven into the way business is done. As work evolves so too does Smart Audit.  

While a simple idea, in practice it has been difficult to successfully execute in the government sector, where change management is often a stumbling block. Statistics show that 70% of digital transformation initiatives fail. The problem is rarely the technology though – it's the culture. To ensure they succeeded The Office focused on creating a culture of innovation and collaboration and adopting practices that support such a culture.  

“Through a focus on vision and mission, Smart Audit helps improve productivity and morale by providing purpose. It creates a shared mission and vision and focuses on creating a culture that would support successful adoption of a new way of making decisions.”

 - Tina Kim 


To ensure success The Office harnessed a three-pronged program management approach that enables the promotion of strategic alignment, the transfer of innovation internally and the tracking of the external impact of work. OKR, which stands for Objectives and Key Results helped manage and change and align visions. The OKR program is a popular goal setting and performance management strategy in which teams and individuals set challenging, ambitious goals to create alignment and engagement around measurable outcomes. 

The Outcome: 

Smart Audit has proven results. It not only has increased fiscal impact from $250 million a year when we started seven years ago to $5 billion in 2022 but has also improved New York State’s efforts to become a more data-driven state by ensuring that the necessary foundations are in place.  

Interested in learning more?

Sign up for free to Public Sector Network's social learning platform to access the full '2023 Global Government Survey Report'. By analysing global government trends, collected from over 6,000 government professionals across Australia, New Zealand, the United States and Canada, this report identifies common areas of concern and success, promoting knowledge exchange and fostering international collaboration in an effort to help build the thriving, citizen-centric governments of tomorrow.

Technology & Transformation
Australia Australia

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Heather Dailey Content Strategist, Marketing