Why the right digital strategy is key to helping government unlock budget efficiencies

The 2025 National Budget has drawn significant attention to the topic of budget efficiencies. During tough economic times, it might seem like a good idea to cut tech budgets to focus on essential services. However, updating IT systems can actually save money and ultimately transform service delivery.

Last year, at the ITWeb HPE Executive Forum, Hewlett Packard Enterprise (HPE) shared the results of its public sector survey, revealing key insights into the nature of cloud adoption strategy within the South African government and highlighting the future potential for significant cost savings.  Around 57% of respondents to the survey said almost half of their workloads are in the public cloud. In comparison, 73% of public sector officials in the UK say they remain on premises.

This tells us that either local cloud adoption is happening far more quickly than one might imagine, or that for many of these organisations, there is a gap in clarity around the definitions of public and private cloud. Ultimately, it indicates that government agencies are still grappling with challenges around IT infrastructure that is ‘hybrid by mistake’ rather than ‘hybrid by design’.

While public cloud technology has boosted innovation and agility, it doesn’t fit every workload. Focusing solely on cloud-first policies can be problematic, as this prioritises data location over business goals. With the push for rapid public cloud adoption, many enterprises have ended up with a mix of public, private, and on-premises workloads, leading to a hybrid cloud model by accident rather than by design. The result is that a high majority of businesses around the world are spending far more than necessary.

When organisations end up being ‘unconsciously hybrid,’ they often find themselves juggling a mix of IT systems and workloads without a comprehensive strategy, which leads to inefficiencies that can affect the bottom line significantly. Furthermore, because there isn’t a unified approach to digital transformation across the public sector, different departments often follow their own strategies. Even within the same department, teams might use completely different systems that don’t work well together. This leads to fragmented IT environments with data silos, which impact productivity and increase maintenance and energy costs. A haphazard combination of outdated systems and applications running across different cloud environments makes operations and maintenance a struggle for IT teams, who are constantly trying to put out fires to keep things running smoothly.

Foundational IT issues also lead to cybersecurity challenges, which must be addressed to navigate the constantly evolving thread landscape and modernise effectively. Local departments are experiencing an increasing number of varied cyberattacks, and it’s less about if you’ll be attacked, but rather how quickly you can recover. Without essential security systems in place, digital transformation efforts will fail.

To truly deliver data-driven public services, organisations must modernise outdated systems with a clear strategy. This strategy should be central to all government departments. By creating one interconnected department that generates cost savings and provides all public sector agencies with a holistic view of their citizens, they can drive excellent service delivery.

Core to this is redefining and categorising data and workloads. Many public sector organisations moving to the cloud are simply lifting and shifting, missing the chance to use this move as a transformation opportunity. They should be asking: What am I moving to the cloud? How do I optimise? Is there a better way? A clear strategy linked to your overall goals ensures you locate data and workloads where they are needed and can be used most efficiently, avoiding duplication and extra costs.

Vendors such as HPE, but also specialists like managed service providers, are in a great position to help government departments to adopt a hybrid cloud strategy to improve efficiencies and reduce costs. With as-a-Service solutions like HPE GreenLake cloud, they can manage workloads across their cloud environment for optimal performance, avoiding overprovisioning, and with it unnecessary upfront expenses, and only paying for what they use.

Furthermore, lengthy government procurement cycles usually mean departments budget for their IT infrastructure for the next five to seven years, but this alternative approach lets departments pay as they go, making budgeting more flexible and efficient.

Having a comprehensive strategy is crucial for improving public service delivery. Digital transformation and modernisation are viewed as key enablers of effective public service delivery, offering savings for both the government and the general public, as well as bringing important co-benefits in the form of increased access, transparency, and quality of services. Enhanced digital tools and IT systems can centralise processes, improve energy efficiency, boost collaboration, and speed up operations. For example, research shows that e-justice systems can save up to 800,000 person-days per year.

True data maturity, meaning an organisation’s ability to create value from data, also allows for automation and the use of advanced AI tools. Automating tasks can save work hours, and optimising finance management can reveal budget inefficiencies. Customer experience can be transformed by using automation in customer service environments to speed up service delivery and address potential issues as quickly as possible.

In fact, advanced AI tools have the potential to completely transform public sector operations, making them more efficient and responsive.  AI-powered chatbots and virtual assistants can help provide always-on support to citizens, answering questions and offering help whenever needed. Sentiment analysis can be used to understand public opinion and improve engagement. Predictive analytics and demand forecasting, on the other hand, can optimise resource allocation and logistics, ensuring services are delivered smoothly. In finance, AI enhances fraud detection and financial forecasting, ensuring better management of public funds. Additionally, AI can be used to improve cybersecurity, physical security, and data management, enabling public sector organisations to deliver smarter, more reliable services.

Due to these extensive benefits, digital modernisation of public services must continue to be a top priority for governments.

The benefits of adopting a ‘hybrid by design’ model are vast. It’s an architecture that helps businesses use data strategically. Working closely with IT service providers, organisations can easily determine which workloads should stay on-premises and which should move to the private or public cloud. HPE has helped clients achieve significant results by mapping out objectives and developing a thoughtful hybrid strategy.

The public sector holds immense potential to achieve significant cost savings and enhanced service delivery through digital transformation. By adopting a clear ‘hybrid by design’ cloud strategy, public sector organisations can optimise their data use, streamline processes, and deliver outstanding services to citizens. This approach not only drives efficiency but also ensures agility and security, paving the way for a more connected and responsive government.