Managing urban infrastructure assets in the digital era: challenges of municipal digital transformation

1. Introduction

Municipalities face multiple challenges in maximizing the value they provide to and generates for their citizens. Moreover, they must contend with growing resilience and sustainability concerns. Recognizing these challenges, the United Nations (UN) has identified 17 sustainable development goals (SDGs) including, industry, innovation and infrastructures (no. 9), sustainable cities and communities (no. 11), and sustainable consumption and production (no. 12). Municipalities not only have to plan, deliver and maintain critical assets but are also responsible for the regulation and approval of all construction within its boundaries. Moreover, studies by the G20 Global Infrastructure Hub, the UN and McKinsey & Company confirm that the infrastructure financing gap is significant, amounting to trillions of dollars per year (World bank blogs, 2022). The UN’s 2020 report on financing sustainable development suggests accelerating long-term public investment in resilient infrastructure that contributes to sustainable development. It also provides policy options for harnessing the potential of digital technologies. Yet, achieving this requires operating significant, long-lasting change.

The digital transformation (DT) of the municipalities’ planning, delivery, management practices as well as the optimization of its services to its citizens can help them achieve these goals (Shkabatur, 2010; Beaudet & Shearmur, 2019; Pereira, Luna-Reyes, & Gil-Garcia, 2020). Indeed, if well executed, through the implementation of digital tools and technologies supported through a reconfiguration of practices, DT can potentially help more effective decision-making through structured and accessible information. However, to achieve this, DT must be well planned, executed and managed, which is no small feat given that municipalities not only struggle to keep pace with the transformative changes needed to align their old practices, operations and emergency response with this new evolving digital age but also lack the necessary resources to do so (Mcgill, 2019; Divay, 2020).

DT in governmental and municipal settings consists in a fundamental change in business processes with the objective of creating more value for the community. DT is driven by the introduction and accessibility of new ideas and trends driven by novel information and communication technologies. As these are constantly evolving, DT must also evolve accordingly. More seminal concepts and paradigms, such as the “cyber city” (Scime, 1994), are being replaced by concepts such as “open government” (Mergel, 2015) or “governance in the digital age” (Roberge, Jamet, Nantel, Senneville, & Tchéhouali, 2019), “the digital city and the smart city” (Lafioune & St-Jacques, 2020) and the “digital twin” of a city (Shahat, Hyun, & Yeom, 2021).

Municipalities implement a variety of technology tools to benefit urban infrastructure asset (UIA) lifecycle activities for existing and to-be-constructed built assets, such as buildings, roads, railways, sewer and water systems. UIA management activities include project portfolio planning and management, construction project management, and the operation, maintenance and use of urban built assets. The aim of this massive use of technology is to structure and connect information more effectively, in order to facilitate decision-making for urban development planning. It also helps to optimize the use of existing urban infrastructures and improve the services offered to citizens, both present and future.

An increasing number of municipal authorities have started to experiment with several technologies, such as Geographic Information Systems (GIS) and Building Information Modeling (BIM). Nevertheless, a significant number of municipalities are experiencing difficulties in undertaking DT (Ringenson, Höjer, Kramers, & Viggedal, 2018), even though DT is progressing in many areas, including public infrastructure (Apraez & Lavrijssen, 2019). Although some UIA management activities are being reorganized at the municipal level through the implementation of various technologies (Proulx, 2005), but DT is essentially a strategic relocation of organizational activity (Bloomberg, 2018) and is not limited to technologies. It lacks a long-term vision and a holistic understanding of needs, barriers and challenges.

Moreover, municipalities appear to be undertaking DT in a haphazard and ad-hoc manner. Thus, there is indeed little theoretical underpinning to support DT for integrated UIA management within municipalities. Consequently, there is a need to frame DT and what it means for municipalities given their strategic importance. Current governance considerations do not take into account the core values specific to public organizations, such as public value (Broucker, De Wit, & Verhoeven, 2018), nor the federation of DT. Thus, municipalities also need help to better frame DT, its implications and address its challenges and obstacles to ensure its success. Although the issue of DT has been addressed in many areas, there is a lack of such investigation at the municipal level, particularly in relation to UIA management (AM).

The research presented in this paper is part of a longitudinal study on the DT to support integrated UIA planning, delivery, management and use within municipalities. This study focuses on the development and validation of a preliminary theoretical framework that aims to articulate the barriers and challenges that prevent successful DT from supporting lifecycle activities relating to UIAs in municipalities. Addressing the challenges and barriers laid out in the framework, namely by increasing a municipality’s digital maturity, can help to transform the decision-making process and, consequently, the quality and promptness of service delivery to citizens. This research incites reflection as to how cities resolve to undertake DT but without prior planning or organizational frameworks. It demonstrates how a city’s operational needs create pressure on its data management to initiate DT and how ad-hoc DT initiatives reinforces silos between departments. Therefore, the framework provided by this research will seek to mitigate and/or eliminate the issues that hinder successful DT.

The objectives of the research presented in this paper are: (1) to identify and categorize the barriers and challenges to DT for municipalities pertaining to the UIA domain, (2) to articulate these barriers and challenges within a framework and (3) to test and validate this framework as an input in the subsequent phases of the longitudinal research project.

To achieve this, a systematic literature review was performed,and a series of workshops were held with two large Canadian municipalities. The research presented in this paper thereby offers an investigation into the phenomenon of DT in the context of the public sector at the municipal level. The research discusses how a municipality can keep pace with technological developments while anchoring its day-to-day UIA lifecycle practices. This paper contributes to the literature on DT in municipalities to support the planning, delivery, management and use of municipal built assets or UIAs. The proposed framework articulates challenges that municipalities face in their DT. It also provides a guide and analytical tool for the DT of public organizations and demonstrates its potential application in practice.

The article begins with a review of the literature on the concepts of DT and its impact within the municipal domain, the barriers and challenges of DT, existing DT frameworks, and how public organizations are adapting to developments in the field of digitalization, as well as the guidelines they use for DT. The literature review supports the proposal of a theoretical framework that articulates barriers and challenges to DT in the municipal built asset domain. The application and validation of the framework is then presented, including the detailed methodology, the method of analysis and the results, and the findings and conclusions of the analyses. The implications of the results for research and practice are discussed and the limitations of the study are highlighted. A series of recommendations and future areas of study conclude the paper.

2. Systematic review of the literature and methodology

3. Framework design

Past research has investigated drivers and barriers to DT within governmental and/or municipal contexts. As mentioned, these have not focused on municipal built assets and their related services. Thus, a framework has been developed based on a systematic literature review to define a set of elements that can serve to assess the level of integrity of the DT process or initiative and the barriers and issues that can hinder it.

Some 160 barriers and issues were identified and, when relevant, were combined into subcategories. As shown in Table 3, 22 subcategories of barriers divided into six categories have been defined and constitute the proposed theoretical framework.

Table 4 shows the occurrence of barriers identified with the framework within the literature. At a glance, none of the studies identify all 22 barrier subcategories. Alawadhi et al. (2012) identified the largest number of barriers, with 14 of the 22 identified. The studies by Aidanpää and Sjöberg (2021) and Van Veenstra et al. (2011) identified 13 barriers. The remaining studies identified less than nine.

The most frequently mentioned barrier in the review was “lack of organizational change management,” which was highlighted in 18 studies. Indeed, the management of organizational change and the reconfiguration of organizational structures are the process of overall or substantial modification of an organization, regardless of its type. The reconfiguration of organizational structures and its business practices and the underlying change management required to achieve it should technically lead to a transformation organization which would have a positive impact, namely on performance. Organizational change is characterized by the pace, willingness and magnitude of change. According to Kurt Lewin (1991), change management goes through three phases: awareness, implementation and adaptation. Moreover, significant organizational change is considered necessary to realize the benefits of DT within organizations (Sun et al.; Klievink, Romijn, Cunningham, & de Bruijn, 2017; Surbakti, Pinem, Sembiring, Hamzah, & Nabeshima, 2019). Consequently, the different service lines of an organization must cooperate and integrate their activities by leveraging the possibilities offered by DT in a structured manner, at a pace and within a scope that makes sense for the organization (Layne & Lee, 2001; Dhillon, Weerakkody & Dwivedi, 2008).

Three barriers tied for second place: “absence of data management,” “misalignment of current practices and management” and “lack of training”; each was cited in 13 studies. While being identified as a critical aspect of DT by many, effective data management is neglected in the literature (Maciejewski, 2017; Sun, Cegielski, Jia, & Hall, 2016; Surbakti, Wang, Indulska, & Sadiq, 2020). Therefore, the effective use of data requires changes in roles, routines, practices and decision-making within an organization (Klievink, Bharosa, & Tan, 2016; Sun et al., 2016). Also, there are several concerns about security and over-reliance on data for complex problem solving (Giest & Samuels, 2020; Manny, Duygan, Fischer, & Rieckermann, 2021). In addition, data privacy issues lead to distrust (Matheus, Janssen, & Maheshwari, 2020) and poor data management leads to data waste (Mergel, Rethemeyer, & Isett, 2016). In parallel, lack of training also hinders effective DT (Giest, 2017).

The third most mentioned barriers were “non-conducive organizational culture,” “lack of human resources” and “ incompatibility and/or inadequacy of existing information systems,” which were identified in 10 studies. Indeed, the set of attitudes and modes of operation influence behaviors and, consequently, practices in cities. The rational behavior of individuals is influenced by the institutional context and cultural norms of an organization (Scharpf, 2018). Lack of human resources is also one of the most important barriers influencing successful DT (Sun et al., 2016; Ingildsen & Olsson, 2016; Giest, 2017; Manny et al., 2021). However, the availability of IT resources and knowledge does not necessarily imply knowledge in other areas of DT. Lastly, information systems exist to support decision-making and legacy systems are adapted to a context that is no longer suitable. To ensure successful DT, IT departments should work in collaboration with other domains to define a good strategy for data management and use (Klievink et al., 2016).

Building off the notion of change management, “resistance to change” was mentioned in 9 studies. Indeed, reluctance is generally inherent to any change process. Generally, new initiatives and changes are unwelcomed in the public sector for a number of reasons: lack of understanding of the meaning of change, lack of skills (Surbakti et al., 2020), fear of the unknown, lack of trust, personal relationship with old ways of doing things (Alawadhi et al., 2012; Weerakkody, El-Haddadeh, Sivarajah, Omar, & Molnar, 2019) and poor communication (Alawadhi et al., 2012; Walport & Craig, 2014; Tangi et al., 2020). Thus, several behaviors and attitudes indicate an unwillingness to support change or make changes. Employees at the operational level feel that they are neglected when implementing digital technologies (Klievink et al., 2016). Also, many digital initiatives are used to control the work of employees, which leads to distrust (Alawadhi et al., 2012); the latter is becoming evident in the public sector.

A “lack of collaboration,” which was mentioned in 8 studies, and working in silos are identified as barriers. They often stem from existing administrative and institutional structures that define the way of working (Giest, 2017).

A “lack of guidance and/or leadership” and “inadequate policy and support from elected officials” are mentioned in 7 studies. These barriers are significant as DT can potentially affect the whole political cycle (Höchtl, Parycek, & Schöllhammer, 2016), on the input side, from policy processes, (Janssen & Helbig, 2018), to its end, through the implementation of policies through online public services or data-driven policy evaluation (Lavertu, 2016). Established structures and procedures are generally incompatible with today’s transformative context. Indeed, public administration actors generally rely on established traditions and “ways of doing things,” which can hinder innovation (DiMaggio & Powell, 1983).

While technical advances in digital technologies promise multiple benefits, their implementation in existing organizational structures is often difficult (Wang & Feeney, 2014; Shearmur & Poirier, 2016). Several barriers pertain to the technology and limitations of current operating systems as well as a large number of systems, even though “inadequate technology and tools” are only mentioned in 7 studies. Digital initiatives being implemented are sometimes not tailored to the employees who use them and do not create value for citizens which causes issues in the DT process.

The realization of DT initiatives is often hampered by insufficient financial support. As such, “funding issues” are identified in 6 studies as major barriers. Moreover, in most of the research reviewed, DT is motivated by financial reasons. Some research indicates that city employees interviewed see DT initiatives, such as the smart city, as good for maintaining or even improving the quality of the city. For example, the case study of Värmdö kommun in Sweden shows that as the demographics are changing, the city may not be able to afford to take care of its aging population, as it is not able to increase the number of tax-paying citizens to cover the growing costs, and it has to seek ways to transform its organization (Aidanpää & Sjöberg, 2021). While funding of a DT initiative by the city has allowed for the implementation of digital initiatives, these have been criticized by employees and the media. This criticism is partly because employees and external stakeholders do not realize that financial resources are being allocated to projects to improve the services the municipality offers.

“External pressure” is mentioned in 5 studies. Beyond funding and external perceptions, cities are governed by laws and regulations, which can impede planned changes. Public organizations control resources, procedures and demands. Thus, the organization is limited in what initiatives it can develop and implement. As such “incompatible laws and regulations” appear in 5 studies.

Manager belief and vision are very important for organizational innovation (Rogers, 2003). According to Guenduez, Singler, Tomczak, Schedler, and Oberli (2018), a vision for DT is to provide more well-being with less financial resources. A “limited vision” for DT and a “lack of a strategic plan” are mentioned in 4 of the studies. In addition, the appropriate use of large amounts of data is still very limited in the public sector and this is largely due to manager perception toward digitization and data management (Mergel, Kleibrink, & Sörvik, 2018).

Moreover, some public agencies are less inclined to change because of the citizens’ concerns. Investments and efforts are being made to improve the performance of cities, according to citizens (Waddock, 2000). However, the trend is to generate more value to justify the funneling of tax dollars toward DT, which implies less spending on initiatives that citizens do support (Knobloch, Gastil, Reitman, & Farnea, 2019).

4. Framework validation

5. Discussion

An analysis of the workshop data revealed that the greatest concentration of barriers and issues is in “process/practice/management,” with 34% and 26% for subcategories “misalignment of current practices and management” and “data management,” respectively. Just as in the literature review, “absence of data management” ranked second, while “managing structural and/or organizational change” ranked first.

Compared to the results of the literature review, there are very few or no responses in more than seven subcategories. This may be due to the context of the responses, namely that respondents simply did not think about these issues and/or the responses do not apply to the specific context of these two cases (municipality A and B), without generalizing.

There are subcategories with a minimal percentage of occurrence, for example, “financing” has a score of 0% (municipality A) and 1% (municipality B). But given that their impact and value are important, neglecting them is a major issue.

Four subcategories emerged, the most cited of which were “AM maturity level” and “digital maturity level”. Compared to the results of the literature review, they are considered “inputs” because the percentage of citations in the workshops is still significant compared to the citations of the other subcategories.

This lack of knowledge about AM and DT and how to link the two areas are two emerging inputs and their importance is paramount. Moreover, they can be considered in the training subcategory. Literature in this domain is relatively new and both inputs are constantly evolving. Therefore, it is not surprising that they were mentioned in the workshop more than in the literature.

Even if the distribution of the two cities’ percentages of responses is close, there is still a gap between some of the responses, such as for example, in the area of “existing information systems.” Also, for city B, such a low percentage (2%) at the level of “resistance to change” is dubious. These results are understandable, as each city represents a particular context. Each city has its own strengths and weaknesses, and the framework is indeed “agnostic,” meaning it is applicable to a wide range of cases.

There is a positive relationship between training, lack of human resources and level of maturity/expertise. The literature also mentioned these as the most important barriers.

The “limited vision” subcategory is moved to the “Strategy/Governance/Pilot” category of the framework. The vision will define where the organization should go, clearly communicate what it wants to achieve as objectives, mobilize and motivate employees to follow this vision, and all this helps to develop the strategy.

6. Conclusion

In response to growing financial, social, and environmental pressures, cities are increasingly turning toward the DT of urban infrastructure AM activities. DT can have a great impact on the organization and its activities and is constantly changing as technology and industry evolve.

This paper presents the results of a first stage of a longitudinal research project aimed at helping cities conduct a planned and structured DT. This DT will lead to the integration of information sources and implementation of digital twins to better meet the needs of citizens and maintain the quality of service over the long term.

As a first step, a systematic literature review was conducted to identify the barriers and challenges in initiating and sustaining a DT. Some directions were also identified to help cities undertake a sustained and structured DT and a picture of the barriers and issues that cities face today and need to reduce and/or eliminate was drawn. A DT framework comprised of 22 areas articulated into six categories was devised. It was validated and refined during two workshops with two large Canadian municipalities.

In the literature review, first 202 scientific studies were identified and examined that discussed the concepts of DT and its impact on cities, its obstacles and challenges, existing DT frameworks and how public organizations adapt to digital development, as well as the guidelines they use for DT. After a refinement process, the number of papers was reduced to 63, in which 9 existing frameworks were presented.

The literature review led to the design of a DT framework that was validated and improved through two workshops in two major Canadian cities. The analysis of the workshop data revealed that the greatest concentration of barriers and issues lies with “misalignment of current practices/management” and “absence of data management.” Like the literature review, “absence of data management” ranked as the most important barrier, while “structural and/or organizational change management” ranked first.

Two challenges emerged from the workshops: the level of AM maturity and the level of digital maturity. The lack of knowledge about AM and DT and how to link the two areas is a priority and of paramount importance.

This article contributes to the body of knowledge by shedding new light on the DT at the municipal level. While DT is addressed in the literature from several angles, for example, e-government, the digital city, the smart city, DT projects in municipalities, digitization of administration, and ICT in public administrations, among others, the present research explores a rarely addressed angle, that of DT for AM at the city level and rarer still, urban infrastructure assets. The expected scientific contribution thus covers part of the gap identified during the literature review.

Moreover, the present research approaches DT of municipal built assets in a systemic way and draws the attention of the practical world to the value that the framework can bring to undertake a pre-planned and federated DT.

7. Limitations and future work

The developed framework offers guidelines that governments can benefit from by anticipating specific barriers and challenges. Limitations include limited experimental conditions, small sample size and a relatively short timeframe. Further work is needed to validate the framework, which is currently underway and presented in part II of the paper. Other approaches are advocated to complement the data collection and analysis to generate more convincing results.

A potential sampling bias could be found with the current study seeing as the sample is limited to two large cities. During data collection, the questions asked of participants are about their perceived impact on their practice. The questionnaire needs to be further developed and written in such a way as to evaluate the framework for validation.

Future research is currently underway to test the generalizability and usability of the findings from the framework and the method used to ensure its validity in real-world conditions, and to adapt it to the context of different types and sizes of municipalities.