6 Common Challenges Public Sector Businesses Face

Woman in the public sector working on computer

Public sector organizations have a reputation of being slow to adapt to change, but most public sector insiders know that this is no longer true, if it ever was.

In fact, the business challenges facing the public sector are not so different from those facing private companies. Technology has changed what constituents expect from their governments. Public administration organizations struggle to respond, just as private sector companies do. Yet, although technology has created new expectations, it can also help public sector organizations rise to the challenge.

What are some of the challenges municipal organizations face?

1. Budget Constraints

All organizations deal with budget constraints, but what’s unique about state-run organizations is how budgets are developed, how visible they must be to constituents and how accountable organizations must be to adhering to them. In public sector, budgets may be developed as long as two years in advance. This creates challenges in times of economic change; promised service levels may be difficult to maintain when the tax base falls, leading to shortfalls.

2. Hiring Processes

Hiring is more challenging in public sector, there’s no doubt. As organizations grow, particularly in fast-growing municipalities, it can take as long as two years to gain approval for a new position, and it can take months to fill a position that opens up, due to the requirements around documentation and approvals. This creates a business challenge for public sector organizations when needed positions, especially in IT, are unfilled for extended periods of time.

3. Procurement

In many businesses, if you need something you can simply order it from a preferred vendor. In public sector, the process can be more challenging. Depending on the nature and size of the purchase, a competitive bidding process may be required to ensure that the selection process is fair and decision making is visible to taxpayers.  This prevents fraud, waste and abuse but can make purchasing longer.

4. Too Much To Do, Too Little Time

This is a challenge in both the public and private sector, especially as technology changes what customers and constituents expect organizations to provide. As governments and their workers are expected to communicate with more constituents on more topics, finding time to manage the flow of communication, collaborate effectively with vendors, other jurisdictions and the community, and still get everything done is not easy.

5. Network Security

In the age of nation-state attacks, hacktivism and the “dark web,” network and data security are becoming major concerns for public organizations. As of 2023 16% of public sector organizations were involved in a data breach with the average breach costing around 4.35 million dollars. This underscores the vulnerability of public sector networks. The problem will likely intensify as the web becomes tomorrow’s battleground; more than 60 nation-states are known to be developing tools for computer espionage and attacks; 29 already have cyber military or intelligence units. Lest you think this is only a problem at the Federal or state level, even small governments and municipalities are vulnerable.

6. Delegation

In private sector, when a manager has too much to do, portions of the work can usually be delegated to a junior staff member. In the public sector this may not be so easy, particularly when workers have defined roles that may be limited by contract. Not to say delegation doesn’t happen, but it typically requires more careful planning.

How Technology is Solving Public Sector Challenges

Fortunately, technology can help. Cloud-based software like Office 365 can put collaboration and communication tools in the hands of those who need them. Cloud solutions like these are catching on in public sector after initial resistance over security concerns. Several local governments such as the City of Seattle and King County, Washington migrated to Microsoft’s cloud-based Office platform.

Why are public sector organizations making the move? Office 365 allows organizations to streamline processes while scaling their technology needs as budgetary constraints require.

Technology can assist in other areas as well. Many municipal organizations are turning to eProcurement and even mobile procurement, to facilitate their procurement and bidding processes. And when smaller governmental organizations are overwhelmed with IT and technical concerns such as network security and are unable to hire needed staff, they can turn to an IT management firm to assist.

These are just a few of the challenges public sector organizations face. In many ways, the challenges public sector organizations deal with are not so different from the private sector. The difference is in the approach and some of the day to day details.

What technology challenges is your organization facing? We’d love to hear from you in the comments.