Australian Public Sector Innovates to Modernize Services

Australia’s public sector is transforming service delivery by replacing outdated systems with tools that let agencies build services around citizen experience, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2025 ISG Provider Lens Public Sector Services and Solutions report for Australia finds that agencies are expanding digital services to meet rising citizen expectations and improve efficiency. Citizens want digital encounters with government to be simple, reliable and personalized. Institutions are responding by modernizing infrastructure and adopting technologies that streamline processes and strengthen trust.

“Public sector modernization in Australia is being driven by citizens’ expectations for secure and seamless services,” said Michael Gale, partner and regional leader, ISG Asia Pacific. “By rebuilding new technology foundations, agencies are creating systems that enable lasting improvements in service quality.”

Research shows more than 90 percent of Australians prefer digital government interactions, but only 79 percent of service contacts occur online, ISG says. While significant progress has been made, the continuing shortfall reflects both outdated systems and fragmented data environments. Closing the gap is expected to yield more cost savings and reclaim millions of citizens’ hours. Agencies are aligning modernization efforts with the national 2030 Data and Digital Government Strategy, which sets goals for reliable, connected public services.

Outdated IT systems and siloed data continue to limit interoperability across departments, slowing decision-making and service delivery, the report says. Agencies are replacing legacy platforms with integrated solutions that support evidence-based policymaking and allow real-time collaboration. This infrastructure modernization also helps agencies meet compliance standards and protect sensitive data more effectively.

Workforce transformation is emerging alongside technology adoption in the sector, ISG says. Younger employees in Australia place a high value on digital fluency and flexible working conditions. Agencies are introducing hybrid and remote work options supported by secure infrastructure. In addition, AI, automation and fraud detection tools are streamlining operations and allowing agencies to be more responsive. These technologies increase citizens’ trust in digital services while enabling staff to focus on higher-value activities.