Technology is the enabler for state government’s next chapter
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COMMENTARY | With tightening budgets and rising expectations, automation and data-driven insights can help leaders be efficient and expand their digital services.
States are at a pivotal moment of leadership and financial change. With new federal and state leaders taking office, this year brings a mix of reflection and renewed energy, vision and commitment to advancing government for the people.
Key initiatives and principles aimed at improving the efficiency, transparency and responsiveness of government services seem to be moving to the forefront for policymakers. However, this enthusiasm will be tempered by the complex realities of dwindling federal funding streams and the growing responsibility placed on state resources to deliver more with less.
States drafting budgets will require fiscal discipline and innovation to meet financial challenges. In this context, technology will play a pivotal role in empowering state leaders to deliver on their promises while navigating the pressures of budgetary constraints and increasing resident expectations. By advancing data and analytics, process automation and digital service delivery, state government can bridge the gap between leadership enthusiasm and fiscal pragmatism.
Harnessing Data and Analytics for Smarter Decisions
Data-driven insights are the cornerstone of modern business decision-making. Improvements in analytics capabilities can provide policymakers with a clearer picture of how well government programs are meeting public needs.
For example, performance dashboards can illuminate spending and where the dollars are flowing to maximize impact while sharing on public websites for transparency. Leveraging past investments in a modern fiscal management system, combined with nation-leading analytic capabilities, could bring financial dashboards forward quickly.
Furthermore, advanced data analytics plays a critical role in statewide fiscal management. By identifying inefficiencies and spotlighting areas for potential cost reduction, analytics can help allocate resources more effectively. Whether streamlining health care delivery, optimizing transportation infrastructure or pinpointing budget overages in state operations, data will inform strategies that align with both their residents’ priorities and fiscal realities.
Driving Efficiency Through Automation and AI
The adoption of process automation and artificial intelligence offers an opportunity to enhance efficiencies across both back-office functions and resident-facing services. In government administration, automation can take on repetitive, time-consuming tasks such as grant processing, procurement and compliance reporting — freeing up staff to focus on higher-value activities that require human judgment. There are many proof points underway in states ready to be deployed enterprise-wide and at scale with proper investments.
When applied to resident-facing processes, these technologies can significantly improve service delivery. AI-powered chatbots, for instance, can manage routine queries, allowing agencies to respond to residents more quickly while reducing operational costs.
Automation can also accelerate processing times for applications, permits and benefits, reducing wait times and improving the overall customer experience. The result is a government that functions more efficiently and feels more responsive and accessible to its constituents.
Expanding Digital Services to Meet Demand
The shift toward digital service delivery is imperative. Constituents expect state governments to offer the same level of convenience and accessibility they experience in the private sector.
Expanding the resource and investment in digital to progress from informational to transactional online services can quickly jump-start this imperative. Expanding the state’s portfolio of digital services will be critical to meeting these expectations while simultaneously reducing the costs associated with maintaining brick-and-mortar facilities.
Online services for payments, business licensing and other essential services can significantly cut costs by reducing reliance on physical office space and in-person interactions. These savings can then be reinvested in critical areas, like education, health care or infrastructure, thereby maximizing every taxpayer dollar. Moreover, the reduction in real estate reliance can unlock opportunities for repurposing state-owned properties for other public or private use, creating additional economic value.
State leaders must leverage technology as a strategic enabler of progress. Data and analytics will empower leaders to make smarter, evidence-based budget decisions. Automation and AI will enhance government efficiency, delivering better outcomes at a lower cost. Digital services will modernize how the state interacts with its residents, meeting the demands of a rapidly evolving world.
In the years to come, the state’s ability to adapt and thrive in the face of change will be defined by the choices its leaders make today. By embracing technology and innovation as enablers between budgetary realities and visionary leaders, states can chart a course toward a stronger, more resilient future.
Chris Estes is EY’s Technology Leader, State, Local & Education, and a former state chief information officer and secretary at the North Carolina Department of Information Technology.
The views reflected in this article are the views of the author and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.