Canadian public sector faces urgent need for digital overhaul
New research from Unit4 highlights significant challenges faced by Canadian public sector organisations as they seek to modernise back-office systems to meet rising demands for efficiency, sustainability, and improved data governance.
The State of the Digital Nation 2025 research study, carried out by Vanson Bourne and commissioned by Unit4, found that 57% of Canadian respondents believe their organisations require major improvements in data compatibility to realise their digital transformation objectives. Furthermore, 66% of public sector leaders surveyed expressed doubts that their current digital strategies would achieve the necessary interoperability for smarter, data-driven decision-making.
Modernisation requirements
The study indicates that a significant portion of Canadian public sector leaders perceive modernisation as essential rather than optional. Data from the survey, which included 400 public sector decision-makers from Canada, the UK, the Netherlands, and Sweden, revealed that 37% of Canadian organisations continue to face operational difficulties linked to the aftermath of the COVID-19 pandemic - higher than their international counterparts. Additionally, 31% identified national policy changes as a driver of transformation efforts.
"The message from Canada's public sector is clear: Modernization isn't just a goal but a necessity," said Greg Beaumont, Managing Director, Canada at Unit4. "Leaders face mounting pressure to do more with less, while legacy systems and fragmented data continue to slow progress. The path forward requires adaptable, integrated solutions that streamline operations and empower faster, more informed decisions."
Among the top priorities, 59% of respondents identified the improvement of system reporting capabilities as crucial, followed by 53% who pointed to the need for better integration between various platforms, and 32% seeking to enhance user experiences.
Despite these priorities, 44% of Canadian public sector leaders stated that their current back-office systems do not provide good value for money, underlining an increasing requirement for investment in more effective enterprise resource planning (ERP) solutions.
Persistent data silos
The survey also demonstrates that data silos continue to obstruct progress. Over half of respondents - 57% - reported that compatibility among applications and across departments is inadequate and requires significant improvement. Furthermore, 88% noted that access to real-time data could have been easier in the past two years, emphasising the need for solutions that can facilitate information sharing and enable enhanced cross-departmental collaboration.
Workforce and operational pressures
The research indicates that, alongside technology challenges, workforce pressures are adding to the complexity. The study found that 51% of Canadian organisations have increased their recruitment of technical talent over the last two years. However, there has been a decrease in hybrid and remote working models, which now account for just 66% of organisations compared to 89% in 2023. This change could limit access to highly skilled technical professionals, especially at a time when digital skills are increasingly vital for transformation efforts.
Calls for urgent action
As expectations and challenges intensify across the public sector, technological enhancement is seen as increasingly urgent.
"The complexity of public sector transformation is growing, and so is the urgency for action," added Beaumont. "By embracing solutions designed for interoperability, user engagement and real-time insight, Canadian public sector organizations can turn these challenges into opportunities for long-term resilience."
