Navigating the Future Of Local Government: 5 Financial Trends


It’s no secret that local government finance is becoming increasingly complex and dynamic.  


As a government agency looking to maintain success throughout 2023 and beyond, adopting new technology that reflects the changing financial environment is the most effective way to maximize efficiency and streamline your financial management strategy.  


So, how can your agency adapt to the rapidly evolving world of local government finance and ensure financial success?    


In our recent webinar with GovExec, Questica Senior Consultant Charlie Francis explores five key trends that can empower your local government to secure its financial future: 


1. Emphasizing value-based budgeting


“One of the most significant trends in local government finance is a shift away from a focus on inputs and outputs, and towards an emphasis on values and outcomes,” says Charlie.  


Implementing value-based budgeting allows your organization to focus on what your agency can achieve with available resources, rather than the amount of spending. 


“The trend towards an emphasis on values and outcomes in local government finance requires a proactive and collaborative approach,” he continues.  


Shifting towards value-based budgeting requires a proactive and collaborative approach. This means involving stakeholders in prioritizing your community goals and evaluating performance, while providing a more flexible and responsive approach to budgeting and resource allocation.  


To successfully implement value-based budgeting, Charlie recommends using budgeting and performance management software, public budget simulators, transparency dashboards, community feedback software, and citizen engagement surveys and workshops to gather input and feedback.


2. Enhancing customer experience 


To meet the changing expectations of customers, local governments are adopting a customer-centric approach.  


“This can involve gathering customer feedback, conducting customer journey-mapping, and using data analytics to identify areas for improvement,” says Charlie. He also recommends investing in technology and training to better meet and understand the needs of your customers.  


By gathering feedback and identifying areas of improvement local governments can make necessary changes within their service delivery model to enhance customer satisfaction.  


“Local governments can also use digital technologies to improve service delivery and customer experience,” Charlie continues. For example, using online portals and mobile apps can provide your citizens with easily accessible information and services.  


Additionally, data analytics and machine learning can provide personalized services and communication based on customer needs, boosting their overall experience.


3. Increasing data analytics, AI and machine learning 


Using data analytics, artificial intelligence, and machine learning allows local governments to analyze large amounts of information, gaining valuable insights to make the most informed decisions.  


Data analytics accurately tracks the performance of your government programs and services, identifies areas for improvement, and optimizes resource allocation. Working alongside it, artificial intelligence and machine learning automates tasks, improves forecasting accuracy, and enhances decision-making processes.  


Here’s how your organization can successfully leverage data analytics, AI and MI: 


  • Invest in the proper infrastructure and training, such as finance automation to free up resources; data management and visualization tools to organize and understand large amounts of data; and data governance policies to ensure data is used ethically and responsibly.
  • Hire specialized staff to help implement and manage these technologies.
  • Develop a clear plan for how technologies will be used and regularly assess their effectiveness to improve operations.


When the City of Greensboro, North Carolina found their previous system was hindering their budgeting processes, they implemented Questica Budget to leverage data and achieve streamlined workflows, robust reporting, and enhanced forecasting.  


“As local government finance becomes more digitally enabled,” Charlie notes, “the use of data analytics, artificial intelligence (AI), and machine learning (ML) is becoming increasingly important.” 


By investing in these technologies, your local government can make more informed decisions that boost your agency’s services.


4. Equipping the Public Finance Workforce 


As government finance continues to evolve, so do the skills of your finance professionals.  


“These professionals now need to be proficient in data analytics, digital technologies, and customer experience management,” says Charlie.  


To successfully navigate this trend, he recommends investing in training and professional development for your finance staff. This can include offering in-house learning sessions, encouraging staff to pursue certifications and advanced degrees, or partnering with other organizations to provide instructional programs.  


In addition, Charlie emphasizes the importance of an environment that promotes collaboration, creativity, and innovation. 


This can be achieved by fostering a culture of continuous learning and development, recognizing and rewarding employees, and providing opportunities for career advancement, allowing your agency to enhance service quality, retain top talent, and improve service to your communities. 


The trend towards equipping the public finance workforce,” Charlie asserts, “requires a proactive and ongoing investment in training and professional development, as well as creating a positive and inclusive work environment.”  


By building the necessary capacity and skills, your local government can improve service quality to maximize community impact.


5. Evolving strategic financial management 


“As local government finance becomes more complex and dynamic,” says Charlie, “it’s  important for agencies to adapt their financial management strategies to keep pace with the changing landscape.” 


Charlie suggests three ways to do this:

  1. Implement new budgeting approaches and software, such as performance-based budgeting or scenario planning.
  2. Utilize financial planning workshops or tools to help identify and prioritize financial objectives, assess current financial position, and build effective strategies for achieving goals.
  3. Regularly review and update financial management strategies that align with agency goals and adapt as needed 


Evolving your government’s financial management strategy requires a proactive and ongoing approach.  


By adopting these methods, Charlie believes agencies like yours “can successfully position themselves to make better informed decisions that lead to more efficient and effective services. 


Ready to secure your government’s financial future? Schedule a demo with a member of our Solutions team today.  


Interested in viewing the full webinar? You can access the recording here.