For all the attention given to cloud, data and AI, it’s not technology that’s holding back digital transformation in government - it’s confidence.
New research from Government Transformation Magazine, produced in association with Oracle, reveals a public sector that is technically ready but still constrained by skills gaps, procurement friction and cultural inertia. Drawing on a survey of 100 senior leaders across central government, and in-depth interviews with transformation directors, CIOs and CTOs, the report Build, Buy or Both? paints a picture of departments that know what good looks like, but are still learning how to scale it.
Departments have already modernised much of their core estate - 91% report using Software-as-a-Service (SaaS) in some form, and 85% are applying AI to tasks like triaging data or automating decisions. But only half say they’ve implemented SaaS successfully at scale. The challenge isn’t intent or integration, but rather capability.
“Transformation doesn’t happen because you install a new tool,” says Dr Kate Marks OBE, Deputy Director of Digital Services & Solutions at the Environment Agency. “It happens when people know how to use it - and have permission to change how they work.”
That sentiment runs throughout the research. Technology choices matter, but the differentiator is people, specifically, how digital, data and commercial skills combine within teams. Eighty-two per cent of departments expect demand for in-house software expertise to rise over the next five years, while the most valued skills now blend service design, delivery and governance.
As one transformation director put it, “Digital, data and commercial skills need to come together, not just exist in parallel. That’s where real capability lives.”
Procurement is another defining pressure point. Only 23% of respondents believe current frameworks support agile SaaS adoption, and more than a quarter say simplifying procurement would be the single biggest unlock for transformation. For Alexis Castillo-Soto, Group Deputy Director for Digital Missions and Transformation at DESNZ and DSIT, the problem isn’t technology it’s confidence. “Frameworks are maturing, but they still don’t provide the flexibility needed when you’re not sure what the exact outcome is. That’s a real challenge in modern delivery.”
This need for confidence - in procurement, governance and data - is emerging as the defining factor of successful transformation. as a sign of maturity, The report’s foreword notes: “The findings mark a moment of maturity in public sector transformation. Departments are no longer debating whether to digitise or whether SaaS delivers value; that debate is over.” The focus now, is on how government can scale, govern and extend the benefits of cloud-native platforms.
The debate is no longer whether to digitise, but how to govern and extend the benefits of cloud-native platforms. SaaS, Oracle argues, is now the secure, scalable foundation for the next phase of public sector modernisation — enabling automation and AI to flourish, provided teams have the skills and trust to use them effectively.
The findings mark a turning point. Technology is in place; the next step is alignment - people, platforms and processes working in sync. Departments that build multidisciplinary capability, modernise procurement with confidence, and embed governance from the start will be the ones that deliver transformation at scale.
Read the full research: Build, Buy or Both? Enabling Whole-Organisation Digital Transformation in Government, produced by Government Transformation Magazine in association with Oracle.