Australian Public Sector Innovates to Modernize Services

Agencies advance digital-first engagement as citizens seek secure, efficient, personalized interactions, ISG Provider Lens^® report says

SYDNEY--(BUSINESS WIRE)-- Australia’s public sector is transforming service delivery by replacing outdated systems with tools that let agencies build services around citizen experience, according to a new research report published today by Information Services Group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 While significant progress has been made, the continuing shortfall reflects both outdated systems and fragmented data environments.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Outdated IT systems and siloed data continue to limit interoperability across departments, slowing decision-making and service delivery, the report says.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.

Public sector organizations in Australia are using technology to improve collaboration across agencies and jurisdictions to address complex challenges, the report says. Shared digital platforms and standardized data-sharing protocols enable more integrated services and create more tailored engagement options for citizens. By aligning their systems and resources, agencies position themselves better to handle issues such as climate change, cyber threats and healthcare challenges.

“Australia’s public sector will continue to increase its use of AI to optimize processes and anticipate citizens’ expectations,” said Harish B, manager and principal analyst at ISG and lead author of the report. “Service providers will play a crucial role in this evolution by helping agencies overcome structural inertia and skills shortages.”

The report also explores other technology trends influencing Australia’s public sector, including the growing focus by public agencies on cloud migration and deploying robust, scalable cybersecurity frameworks to protect citizen data and maintain system integrity.

For more insights into the technology challenges facing the Australian public sector, plus ISG’s advice for overcoming them, see the ISG Provider Lens® Focal Points briefing here.

The 2025 ISG Provider Lens^® Public Sector report for Australia evaluates 34 providers across four quadrants: Strategy and Consulting Services, Managed IT Services, Business Process and Other Outsourcing Services, and Digital Transformation and Innovation Services.

The report names Accenture and Capgemini as Leaders in four quadrants each. It names AC3, IBM and Infosys as Leaders in three quadrants each. It names Probe Group as a Leader in two quadrants. Concentrix, Data#3, Deloitte, Fujitsu, KPMG, Mastek, NRI, Optus, Serco, TCS, Telstra, Unisys and Wipro are named as Leaders in one quadrant each.

In addition, Infosys is recognized as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in one quadrant.

In the area of customer experience, Capgemini is named the global ISG CX Star Performer for 2025 among public sector service and solution providers. Capgemini earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, which is part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

The 2025 ISG Provider Lens^® Public Sector Services and Solutions report for Australia is available to subscribers or for one-time purchase on this webpage.

About ISG Provider Lens^® Research

The ISG Provider Lens^® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG's global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG's enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20251008031168/en/

Laura Hupprich, ISG

+1 203 517 3100

laura.hupprich@isg-one.com

Julianna Sheridan, Matter Communications for ISG

+1 978-518-4520

isg@matternow.com

Source: Information Services Group, Inc.