Digital transformation in government has reached a turning point. After a decade of pilots, strategies and cloud migrations, departments are now focused on scale - in particular, how to modernise confidently across legacy estates while maintaining control, security and service quality.
New research from Government Transformation Magazine, produced in association with Oracle, reveals a public sector that is digitally ambitious but still wrestling with systemic barriers. The report, Build, Buy or Both?, draws on a survey of 100 senior government professionals and interviews with digital, data and commercial leaders from central departments and arms-length bodies.
The findings show transformation is no longer about intent - it’s about delivery. Ninety-one per cent of departments have adopted some form of Software-as-a-Service (SaaS), and hybrid delivery models have become the norm, but only 49% report success at scale.
The barriers to success are familiar: integration with legacy systems, contract complexity, and internal resistance to change are among the most common. Procurement also remains a consistent drag on progress, with just 23% of respondents saying current frameworks support agile SaaS adoption.
Despite these challenges, confidence in the direction of travel is high. Among the DDaT leaders who took part in the research, SaaS is rated above bespoke development across key transformation metrics - speed, cost-effectiveness and AI readiness - signalling its role as a strategic baseline for modern delivery.
Many government departments are taking a pragmatic approach to their technology models. Most now blend SaaS with low-code tools and targeted in-house builds. As Liam Walsh, Chief Technology Officer at the Department for Environment, Food and Rural Affairs (Defra), explains: “We prioritise buying SaaS before building. We first look for an existing service to reuse or a commercial SaaS solution. If nothing meets our needs, then we build.”
That mindset reflects a more mature phase of digital transformation that focuses on reuse, integration and sustainability. Euan Slack, Programme Director for the Central Digital Platform at the Cabinet Office, emphasises the importance of designing for adaptability:
“Because we built our own SaaS platform in-house to support the Procurement Act, we’ve been able to remain agile and respond quickly to evolving legislation,” he says.
Hybrid delivery is not a compromise, it’s a sign of maturity. It allows departments to meet unique service needs without fragmenting their digital estate.
Artificial intelligence and automation are no longer theoretical. Eighty-five per cent of departments are already using AI to support triage or decision-making, most often through SaaS platforms. But scaling remains difficult. Departments cite poor data quality and limited skills as the biggest obstacles to confident adoption. Dr Kate Marks OBE, Deputy Director of Digital Services & Solutions at the Environment Agency, highlights the practical benefits and the caution required: “We use AI to automate lower-risk flood alerts and triage incoming citizen data. CoPilot integration helps us accelerate adoption safely.”
At the same time, Alexis Castillo-Soto, Group Deputy Director for Digital Missions and Transformation at the Department for Energy Security and Net Zero and the Department for Science, Innovation and Technology, warns of the cultural challenge ahead: “AI is a tool. But we also have to prepare for the backlash. Adoption is the easy bit. Operationalising it is harder.”
Technology choices matter less than the capability of the teams implementing them. Eighty-two per cent of respondents expect rising demand for in-house software expertise over the next five years. The most valued skills now span delivery, service design, commercial management and data literacy - signalling a shift towards multidisciplinary digital teams.
As one Transformation and Programme Director in a central government department noted: “Digital, data and commercial skills need to come together, not just exist in parallel. That is where real capability lives.”
The research concludes that digital transformation success now depends on three things: capability, confidence and governance. SaaS provides a foundation for scalable and secure delivery, multidisciplinary teams provide the skills to adapt and iterate, and modernised procurement frameworks provide the confidence to move at pace.
The tools are ready. The question is whether government can align people, platforms and processes to deliver transformation at scale.
Read the full report: Build, Buy or Both? Enabling Whole-Organisation Digital Transformation in Government