Digital transformation in local government – unpacking challenges in buyer-provider relations

Purpose Public spending on digital technologies is rising rapidly, involving complex procurement and outsourcing processes that challenge public sector organizations. Yet, this remains underexplored, as existing literature largely focuses on the private sector. Addressing this gap, the paper aims to examine perceived challenges in local government information technology and -systems (IT/IS) procurement, offering a foundation for future research. Design/methodology/approach Set in rural Norway, the study draws on 40 interviews with strategic managers from eight municipalities, seven commercial software providers, and three inter-municipal ICT (IMICT) organizations in which the case-municipalities participate. Findings The empirical findings reveal that although providers and IMICT organizations strive to support municipalities, the latter often struggle to manage increasingly complex digital transformation processes, which can become overwhelming. Recommended strategies, such as joint procurement and inter-municipal cooperation, are increasingly pursued by municipalities but only partly alleviate their difficulties. Originality/value The study explores the critical yet underexamined area of challenges in public sector IT/IS procurement and outsourcing. It proposes an integrative framework to guide future research and offers empirical insights into the perceived challenges faced by providers and local government managers.