6 Digital Transformation Mistakes to Avoid

Avoiding Problems in Public Sector Digital Transformation Projects

Digital transformations can feel overwhelming, especially in the public sector: project timelines, vendor management, reliable, and secure services. There are a ton of factors to consider and dynamics to navigate. Even with careful planning and good intentions, unexpected challenges can turn a transformation project into a disaster. This can leave everyone from stakeholders to citizens frustrated. Public sector agencies can create smoother, more successful transformations by being aware of some of the most common mistakes. Here’s a list of 6 mistakes that we see all too often.

The Risks of Digital Transformation in the Public Sector

Digital transformation in the public sector often involves implementing new systems, migrating to the cloud, and modernizing processes that have been around for decades. Many of these changes are urgently needed. Outdated systems can pose security risks, create inefficiencies, and even cost taxpayers more over time.

Understanding the challenges the public sector faces can facilitate a clearer path forward. But sometimes things go wrong and when they do, it's imperative to have a contingency plan.

When things go wrong, it can lead to missed go-live dates, increased costs, or even the need for a complete re-do. Understanding common pitfalls and planning carefully can help ensure your project doesn’t become messy and unsuccessful. Here are some of the most common pitfalls and more importantly how to avoid them.

Common Problem #1: Underestimating the Scope and Timeline of Cloud Migrations

Many agencies start out excited about cloud migration—it’s modern, secure, and often seems like a more manageable option than sticking with on-premises solutions. But moving to the cloud isn’t always as simple as it sounds. Sometimes, organizations underestimate how much planning and time a successful migration requires, especially when moving from a long-standing legacy system to a modern cloud-based one.

Risks:

If an agency underestimates the time or complexity of cloud migration, it can lead to blown budgets, extended timelines, and a system that doesn’t quite meet the organization’s needs. Imagine you’re trying to go live, but the system isn’t ready to support essential functions. Deadlines keep getting pushed back, and the entire organization waits for a system that’s still incomplete.

Solution:

To avoid these issues, set a realistic timeline and be prepared for the unexpected. A good rule of thumb is cloud migrations can take 12 to 18 months, depending on the complexity of your organization’s needs and the data being moved. For the most accurate timeline, consider bringing in an advisor specializing in digital transformation projects. Independent consultants can help with everything from initial assessments to vendor selection and implementation planning, so you won’t risk underestimating the time or resources needed for success.

Common Problem #2: Lack of Clarity and Documentation in Project Scope and Contracts

Another common mistake we see is what we call “scope creep.” This happens when project requirements and deliverables start shifting—sometimes in small ways, sometimes in big ones—leading to unexpected increases in time and cost. Scope creep often occurs when contracts aren’t specific enough, leaving both you and the vendor guessing about what’s actually included.

Risks:

Without a clear scope, projects can start requiring “change orders” for work that wasn’t part of the original budget. This can cause delays, as each change order needs approval, but it also adds unexpected costs.

Solution:

To keep scope creep from happening, make sure your contract clearly defines the project scope. Spell out exactly what the project will deliver, what’s outside the scope, and when a change order would be needed. A solid contract should also include how risks will be managed, who’s responsible for different parts of the project, and how any changes will be communicated. Don’t hesitate to ask your vendor for clear documentation on these points—it’s crucial for protecting your agency’s interests. And if something feels vague, push for clarification before you sign.

Common Problem #3: Vendor Infidelity – Sunsetting Products and Limited Support

One of the worst-case scenarios we often see in public sector projects is when a vendor unexpectedly “sunsets” a product. This means they stop supporting an older system, essentially forcing clients to upgrade or switch to something new. When this happens without warning, organizations are left scrambling—either to adopt the vendor’s new product (often at a higher cost) or to start fresh with an alternative.

Risks:

Unexpected sunsetting puts a huge strain on budgets and can lead to rushed migrations, incomplete implementations, or even temporary downtime. For a government agency, this can mean delays in critical services, inaccessible records, or staff falling back on outdated, manual methods to keep things running.

Solution:

During contract negotiations, talk with the vendor about their long-term plans for the product. Ask for written commitments on how long they’ll support it and what your options are if they decide to sunset it. You can also negotiate exit clauses to give you some financial flexibility if you need to switch products later. A knowledgeable advisor can be invaluable here—they’ll help you spot these risks early on and make sure your contract includes protective clauses.

Common Problem #4: Disorganization Due to Manual Processes and Paper-Dependent Workflows

Even with the push toward digital transformation, many public sector organizations are still stuck with manual, paper-based processes. These workflows are slow and inefficient but also bring a high risk of human error. On top of that, they make it harder to access data, take up physical storage space, and can even put data security at risk.

Risks:

Relying heavily on paper is expensive, inefficient, and insecure. Physical records can be lost, damaged, or accessed without permission. And the cost of renting storage space to hold years of files is not cheap.

Solution:

Switching to a modern, cloud-based system can simplify these workflows and reduce the need for paper. With automated processes and secure, encrypted storage, you can lower the risk of data breaches and human error. Plus, digital records are easier to access and don’t require any physical storage space. It’s a big shift, but one that can lead to major efficiency gains and long-term cost savings.

Common Problem #5: Paying Vendors Upfront Without Ensuring Accountability

Some agencies make the mistake of paying vendors most of their fees upfront, leaving them without leverage if things go wrong. This is risky because once the vendor has been paid, they may be less motivated to address your needs promptly.

Risks:

Without the leverage of payment milestones, the agency might struggle to get issues resolved. If timelines start slipping or quality starts dropping, your options for holding the vendor accountable are limited.

Solution:

Structure your payment schedule so that a significant portion is paid only after key milestones are achieved. This keeps the vendor motivated to stay on track and helps ensure they’re delivering quality work. Additionally, negotiate a detailed contract that includes timelines, deliverables, and penalties for missed milestones. Clear expectations and milestones are your best friend here—they’re key to holding vendors accountable and keeping your project moving forward.

Common Problem #6: Poor Communication and Change Management during Digital Transformation

One of the quickest ways for a project to go off track is through poor communication. Without regular, clear updates and a well-thought-out change management plan, it’s difficult to keep everyone on the same page.

Risks:

Poor communication often leads to confusion, resistance, and delays. Staff may not understand why changes are happening or how to use the new system. If stakeholders feel excluded, they may start pushing back or even trying to undermine the project.

Solution:

Establish a change management plan with regular updates, clear timelines, and a structured way to address questions and concerns. Make sure everyone—from top-level stakeholders to end-users—stays in the loop. Training sessions, frequent check-ins, and clear documentation all help maintain communication and ensure everyone feels involved and prepared. On top of everything else, it's important to meet clients where they're at and talk to them like they're people.

Best Practices for Avoiding Digital Transformation Pitfalls

With so many potential pitfalls, how can you keep your project on track? With the right approach, it can be done successfully.

Here are a few best practices to help:

Proactive Vendor Management: From contract negotiation to post-go-live support, regular check-ins with vendors are essential. Define and communicate expectations clearly from the start to build a strong partnership. Staying engaged keeps both sides aligned and accountable.

Comprehensive Risk Assessments: Conduct a thorough risk assessment before launching to identify potential challenges. This way, you can set up contingency plans and prepare for any obstacles. Planning for issues early on helps prevent major disruptions.

Involve a Knowledgeable Advisor: Bringing in a public sector advisor makes a big difference. They guide you through planning, contracting, and implementation, helping you avoid common mistakes. An experienced advisor ensures smoother, more efficient project execution.

By implementing these practices, you can set a strong foundation to keep your project running smoothly.

Conclusion: Creating a Successful Digital Transformation

Navigating a digital transformation in the public sector is a big challenge, but with the right strategies, it doesn’t have to be overwhelming. By staying proactive with vendor management, conducting thorough risk assessments, and bringing in experienced advisors, you can keep your project on track and avoid these mistakes.

Remember, clear communication, careful planning, and detailed contracts are your best friends throughout this journey. These steps not only help you avoid delays and extra costs but also set you up for long-term success. Digital transformation is a big shift, but by laying a solid foundation, you can lead your organization into a more efficient, secure, and modern future.

To learn more about digital transformation in the public sector download our 2025 Report: https://conference.averoadvisors.com/2025report

We hope you found this information helpful. If you have any feedback or questions or just want to chat about potential optimization strategies, please reach out to us at info@averoadvisors.com or message us on social media. Our mission is to provide more transparency and access to public sector technology, so we invite you to follow us on social media, LinkedIn, and YouTube and listen to our weekly podcasts for daily Govtech thought leadership.

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