Legacy System Replacement in Local Government: Lessons from a Digital Decade

In Part 3 of this six-part series, we'll take a look at how councils moved beyond surface-level digital improvements, replacing ageing core systems, embracing integration and discovering that successful transformation was as much about people and process as it was technology.

By the late 2010s, the limits of the early digital changes were starting to become obvious. A lot of Councils I saw were able to put a slick payment portal and a mobile reporting app in front of residents, but the systems behind the scenes (the finance & rating engine, payroll, the assets register, the CRM system) that were fifteen or twenty years old and barely spoke to one another really did restrict progress. And so, what I experienced was a large number of councils confronting this limitation, driven by ratepayer demands for a digital experience they were able to access from the commercial sector (namely banking and retail), and began the mammoth task of replacing the engine rather than putting on a new coat of paint.

When replacing the system became unavoidable

As mentioned, many councils were running core platforms that were a decade or more old, increasingly difficult to support, and built for a world before mobile, cloud and high customer service expectations. In some cases, the decision was forced, rather than chosen as vendors announced the end of life of ERP products and introduced new cloud-based successors, and councils that had run on the same system for years faced a migration whether they wanted one or not. Layered on top was the cost of the doing nothing and staying still. I’m talking about the integrations held together with sticky tape and heroics, the manual workarounds, reports that took days to assemble because the data lived in half a dozen places. The business case for renewal often wrote itself once you accounted for what the old systems were quietly costing in lost productivity and risk.

The hard lesson: transformation is not an IT project

This phase taught the sector its most important and most expensive lesson: a core system replacement is business transformation, not an IT project. I cannot overstate how consequential getting this wrong has been for some councils. The pattern is depressingly consistent. A council frames a major system replacement as a technology procurement, hands it to ICT to deliver, and then underinvests in everything that is not software. The re-engineering of business processes, the retraining of staff, the management of an organisation through significant change, the active governance of the vendor relationship. The system goes in, but the processes around it do not change, the staff are not brought along, and the council finds itself months into a painful stabilisation period, with the new platform formally live but not delivering, and confidence draining away. The technology is rarely the root cause when these projects falter. The root cause is treating people, process and change as someone else's problem.

The councils that got transformation right

The councils that did it well took the opposite approach. They sponsored these programs from the executive, not from ICT alone, so that the service areas whose work was actually changing owned the change rather than having it done to them. They used the replacement as a deliberate opportunity to re-examine and improve processes rather than simply re-implementing old ways of working in new software. They invested time, money and attention, in change management, training and communication, on the understanding that adoption is where benefits are realised or lost. And they managed their vendors actively and contractually, rather than assuming a shared interest in success would carry the project through. The lesson, learned the hard way across the sector, is that the proportion of a transformation budget spent on the technology should be smaller than the proportion spent on everything around it.

Integration becomes the new ambition

During this period, "integration" also matured from a buzzword into a practice. Early in the decade, councils had accumulated point solutions the way a kitchen accumulates appliances, a payroll system here, a CRM there, a separate records solution, a standalone asset tool, each solving its own problem and none of them talking together. The result was siloed data, duplicated effort and an organisation that could not answer simple questions about its own operations without a manual reconciliation. By the end of the 2010s, the councils with large budgets had set their sights on something better: integrated platforms, consolidated vendors where it made sense, and the use of APIs and middleware to make systems share data rather than hoard it. The driver behind all that was the holy grail, the "single view of the customer". Number one of every Councils ICT strategic plan. The goal being every resident's interactions with the council, across rates and requests and applications and payments, could be understood as one relationship rather than a dozen disconnected transactions. That ambition is still being chased in many councils.

From collecting data to using it

Once core systems were modern and integrated, councils had, for the first time, the raw material for genuine analysis. Clean-ish data, in one place, that could be turned into dashboards and used to inform decisions rather than just record them. Some councils began standing up basic analytics capability, building reporting that managers could actually use, and taking the first steps from being organisations that collected data to organisations that used it. It was early and uneven, but it mattered, because the AI agenda we will reach at the end of this series depends entirely on the data foundations that were laid during this period. Modern, integrated, well-governed systems are not just a nicer way to run a council. They are the precondition for everything that comes next.

David Collyer is a recognised advisor in local government digital transformation and ICT strategy. With more than two decades of experience across technology leadership, strategic planningand ERP modernisation, he has helped councils and public sector organisations navigate complex technology change. David is passionate about ensuring technology investments deliver meaningful organisational and community outcomes, and regularly shares insights on the evolving digital landscape within Australian local government.

Connect with David on LinkedIn.