Faced with limited budgets, legacy technology, and evolving citizen needs, the findings from Unit4’s newly released ‘State of the Digital Nation 2025’ report signal a pivotal point for public organisations aiming to deliver efficient, transparent, and data-driven services
Surveying over 400 UK public sector decision-makers spanning finance, IT, HR, and operations, our latest report, ‘State of the Digital Nation 2025’, provides an authoritative examination of urgent challenges and solutions as the sector strives for greater value from its digital transformation efforts.
Insights from the State of the Digital Nation 2025
- Widespread change barriers: 89.9% of UK respondents report challenges adapting to service and target changes in the past two years. Notably, the majority confirm COVID-19’s effects persist, with over half still experiencing major or significant impacts.
- Integration and data quality gaps: Only 6% say data is seamlessly compatible across all applications. Manual data entry remains common, with half of users still manually exporting and importing information. A significant number of respondents identify the need for improvements in data compatibility.
- Operational inefficiency: Nearly two-thirds report struggling to obtain the necessary information for their roles, while 70% believe that real-time data access could be improved. Both year-end and statutory reporting present an ongoing process.
- Execution risks: 60% lack confidence in achieving interoperable solutions; 53% cite budget constraints; nearly half are concerned about delivery timelines; many point to shifting priorities that are affecting transformation programmes.
- Prioritising outcomes: For the upcoming 12 months, organisations cite improving reporting, better system integration, driving greater value for money, and artificial intelligence (AI) adoption as top priorities.
Positive digital developments
The adoption of Cloud migration is rising in all areas of the public sector, with 52.8% exploring and 38.5% already adopting Cloud services. Over half are exploring the updating of legacy systems, while 61.5% target integration of back-office Software as a Service (SaaS). Automation and AI are of growing importance, with over 56% and 50% of organisations, respectively, exploring or adopting these technologies.
Additionally, there is a significant rise in shared service environments, as well as centralised and cross-service collaboration. Over half of UK respondents now consider achieving greater value for money, enhancing employee experience, and improving reporting as urgent. Collaborative service delivery enables distributed teams across entities to centralise core functions, streamline workflows, and support regulatory compliance.
Transformation in action: Greater value with Unit4
Unit4’s Cloud solutions for Finance, HR, and Planning have become instrumental across UK public sector organisations, including central and local government, healthcare, and housing. By delivering a unified SaaS platform that enables secure data management, robust financial planning, and real-time reporting, Unit4 enables measurable improvements:
- South Oxfordshire and Vale of White Horse District Councils report, “Unit4 Enterprise Resource Planning (ERP) Cloud was the perfect fit for the shared services model. It eliminates the cost, complexity, and maintenance associated with an on-premises platform.”
- A local government finance lead notes, “With Unit4, we’ve streamlined reporting and planning, saving countless hours each month.”
- A housing sector leader highlights, “Unit4 helps us unify data and improve transparency, directly supporting audit compliance and citizen accountability.”
Unit4 platforms enable organisations to automate high-volume manual workflows, reduce reporting bottlenecks, and easily consolidate grants, capital, and workforce data, allowing for proactive budget management and a faster response to changing requirements.
Strategic opportunity for modernisation
Public bodies now face a decisive moment. Unit4 stands ready to support visionary public sector leaders as they bridge legacy gaps, reduce complexity, and drive real value for citizens. Unit4 empowers public sector organisations with integrated Cloud-based ERP, Financial Planning and Analysis, and Human Capital Management solutions, enabling collaborative, efficient, and citizen-focused service delivery.
UNIT4’s ERPx for the public sector addresses today’s challenges through its unique architecture, delivering a well-designed user experience, tailored business capabilities, and an elastic foundation. Our next-generation SaaS ERP has been designed from the ground up to eliminate siloed operational models in people-centric sectors, such as government and public administration.
Cloud-native architecture enables organisations to securely store and process data across all departments. Our microservices delivery model and no-code customisation features empower everyone who uses the system to create the tools and features they need to meet their specific workloads and requirements.
Discover how purpose-built Cloud solutions can power your transformation by visiting www.unit4.com.
For the full details of our research, download the whole State of the Digital Nation 25 report.
This work is licensed under Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International.
