Digital Transformation of Public Services: Institutional Barriers and Policy Implications for Smart Government
Abstract
Digital transformation has become a strategic priority for governments seeking to improve public service delivery and achieve smart governance objectives. However, the successful implementation of digital transformation initiatives is often constrained by various institutional barriers that limit organizational adaptability and innovation. This study aims to examine the influence of institutional barriers on digital transformation and analyze its implications for smart governance in Indonesia. A quantitative research approach was employed using survey data collected from 150 respondents who had experience utilizing digital public services. Data were gathered through a structured questionnaire using a five-point Likert scale and analyzed using Structural Equation Modeling–Partial Least Squares (SEM-PLS 3). The findings indicate that institutional barriers significantly and negatively affect digital transformation, suggesting that regulatory constraints, organizational resistance, inadequate inter-agency coordination, limited digital competencies, and insufficient leadership support hinder the effectiveness of digital transformation initiatives. Furthermore, digital transformation was found to positively and significantly influence smart governance, demonstrating its role in enhancing transparency, accountability, responsiveness, citizen participation, and public service quality. The mediation analysis reveals that digital transformation significantly mediates the relationship between institutional barriers and smart governance. The study contributes to the digital governance literature by integrating institutional barriers, digital transformation, and smart governance into a unified analytical framework within the Indonesian public sector context. The findings emphasize that achieving smart governance requires not only technological advancement but also institutional reforms that support innovation, collaboration, and organizational readiness. Therefore, policymakers should prioritize regulatory harmonization, capacity building, leadership development, and inter-agency integration to accelerate digital transformation and strengthen smart governance implementation in Indonesia.
Keywords
References
- Agus Suharsono. (2023). Desain Pengembangan Kompetensi Pegawai Provinsi Jawa Tengah Melalui Implementasi Jateng Corporate University. Jurnal Litbang Provinsi Jawa Tengah, 20(2), 179–193. https://doi.org/10.36762/jurnaljateng.v20i2.934
- Browne, M. (2021). Artificial intelligence data-driven internet of things systems, real-time process monitoring, and sustainable industrial value creation in smart networked factories. Journal of Self-Governance and Management …. https://www.ceeol.com/search/article-detail?id=965040
- Cooper, D. J., & Robson, K. (2006). Accounting, professions and regulation: Locating the sites of professionalization. Accounting, Organizations and Society, 31(4), 415–444. https://doi.org/https://doi.org/10.1016/j.aos.2006.03.003
- Davies, I. A., Haugh, H., & Chambers, L. (2019). Barriers to social enterprise growth. Journal of Small Business …. https://doi.org/10.1111/jsbm.12429
- Ghobakhloo, M. (2020). Determinants of information and digital technology implementation for smart manufacturing. International Journal of Production Research. https://doi.org/10.1080/00207543.2019.1630775
- Greenstein, S., Lerner, J., & Stern, S. (2013). Digitization, innovation, and copyright: What is the agenda? Strategic Organization. https://doi.org/10.1177/1476127012460940
- Iskandar, Y., Joeliaty, J., Kaltum, U., & Hilmiana, H. (2022). Systematic review of the barriers to social enterprise performance using an institutional framework. Cogent Business & Management, 9(1), 2124592.
- Krasnykov, Y., Ninyuk, I., Storozhenko, L., Marukhlenko, O., & Kruhlov, V. (2024). Impact of digital public services on governance efficiency. Revista De Estudios Interdisciplinarios En Ciencias Sociales/Journal of Interdisciplinary Studies in Social Sciences, 26, 35–51.
- Li, B., Zhuo, N., Ji, C., & Zhu, Q. (2022). Influence of smartphone-based digital extension service on farmers’ sustainable agricultural technology adoption in China. International Journal of Environmental Research and Public Health, 19(15), 9639.
- Madyo, N. J. (2022). Digitalizing Local Government Financial Management (Corruption Impact Assessment of Banggai Laut District Budget 2020). Legal Readiness to Face Digital Transformation. https://books.google.com/books?hl=en&lr=&id=4OyfEAAAQBAJ&oi=fnd&pg=PA68&dq=%22data+driven%22+financial+management&ots=VZhY1vHwfl&sig=Z7qAAZFg1SFbTg7Cs_Svk_cTdT8
- Meyerhoff Nielsen, M., & Jordanoski, Z. (2023). Digital Transformation, Governance, and Coordination in Times of Crisis: An Analysis of Australia, Denmark, and the Republic of Korea. Digital Government: Research and Practice, 4(4), 1–20.
- Muslim, S., Chalim, A., Prasetya, A. A., & Akbarina, F. (2024). Omnibus Law: Effectiveness of Online Licensing and Law Enforcement of the Capture Fisheries Sector in Indonesia. Journal of Progressive Law and Legal Studies, 2(03), 237–253. https://doi.org/10.59653/jplls.v2i03.1082
- Nguyen, T. P. T., Huang, F., & Tian, X. (2023). Intellectual property protection need as a driver for open innovation: Empirical evidence from Vietnam. Technovation, 123, 102714. https://doi.org/https://doi.org/10.1016/j.technovation.2023.102714
- Nica, E. (2019). … production networks and advanced digitalization in Industry 4.0 manufacturing systems: Sustainable supply chain management, organizational resilience, and data …. Journal of Self-Governance and Management …. https://www.ceeol.com/search/article-detail?id=795595
- Oktavianti, A., Alpian, I., Mudzaki, A., & Savitri, E. (2024). Leveraging Environmental, Social, and Governance Perspectives for Enhancing Marketing Strategies in Indonesia’s Small to Medium Enterprises Across Digital Platforms. International Conference on Business, Economics, Social Sciences, and Humanities-Economics, Business and Management Track (ICOBEST-EBM 2024), 4–26.
- Pasenko, N., Krupnyk, A., Chaika, A., Dulina, O., & Svichynskyi, V. (2023). Digitalization of the Management Decisions of Public Authorities as a Tool for Improving the Social Efficiency of Management Activities. Economic Affairs (New Delhi), 68(May), 831–837. https://doi.org/10.46852/0424-2513.2s.2023.28
- Rahman, A. Z., Hanani, R., Warsono, H., Astuti, R. S., & Riswanti, I. (2021). Disaster and New Adaptations: Digital Transformation in Public Services as an impact of the COVID-19 Pandemic in Indonesia. TIC 2020: Proceedings of the 1st Tidar International Conference on Advancing Local Wisdom Towards Global Megatrends, TIC 2020, 21-22 October 2020, Magelang, Jawa Tengah, Indonesia, 225.
- Robinson, J. (2006). Navigating social and institutional barriers to markets: How social entrepreneurs identify and evaluate opportunities. Social Entrepreneurship. https://doi.org/10.1057/9780230625655_7
- Sawir, M., Robo, S., Abubakar, F., & Kamaluddin, S. (2023). Implementation Of Public Services In The Digital Era As A Public Information Media Regional Government Of Jayapura Regency, Papua Province. Jurnal Manajemen Pelayanan Publik, 6(2), 212.
- Silitonga, M. S. (2023). The Public Sector’s Digital Skills Gap in Indonesia: The Challenges and Opportunities. Jurnal Good Governance, 70–79.
- Sneller, L., Bode, R., & Klerkx, A. (2017). Do IT matters matter? IT-related key audit matters in Dutch annual reports. International Journal of Disclosure and …. https://doi.org/10.1057/s41310-016-0017-0
- Sukare, B. M., & Abdullahi, A. (2025). Digital Governance and Public Service Delivery in Nigeria: Opportunities, Challenges, and the Way Forward. Journal of African Innovation and Advanced Studies.
- Zhou, W. K., Yu, Y. L., Peng, Y. M., Liu, M. T., & ... (2023). Data-Driven Environment, Society and Governance: Exploring How Green Finance Sparks Sustainability Based on Scientometric Analysis. … and Smart Finance …. https://books.google.com/books?hl=en&lr=&id=yFHNEAAAQBAJ&oi=fnd&pg=PA249&dq=%22data+driven%22+financial+management&ots=f45h68ZGMa&sig=OYRpTDHjjtjJuF101pGrK-jvhkU
How to Cite
Copyright & License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
