Rising digital friction will derail federal AI transformation
Nexthink warns lack of employee readiness to adopt and confidently use AI could see investments go up in smoke
BOSTON/LAUSANNE - 3rd June 2025 - Nexthink, the leader in digital employee experience (DEX) management, today announced new research exploring the challenges federal/public sector IT leaders face as they prepare for the next wave of AI-driven digital transformation. Most federal/public sector IT leaders (96%) believe this new era of digital transformation will increase digital friction, with only 47% of federal/public sector employees deemed to have the digital dexterity required to adapt to technological change. A further 93% expect workers to be daunted by new technologies such as Generative AI.
Executive Order 14179 and OMB Memoranda M-25-21 and M-25-22 have set clear expectations: accelerate AI adoption, deliver measurable outcomes, and reinforce American leadership in the global AI race. Yet, behind the policy momentum, cracks are emerging. Nexthink’s research shows that 43% of federal IT leaders admit they struggle to put an exact monetary value on AI investments, while 96% want to improve their ability to identify spend on underperforming assets such as applications and enabling technologies.
With limited digital dexterity across the federal workforce and widespread uncertainty over how to quantify AI return on investment, there is a growing risk that federal dollars could be wasted on underutilized initiatives. As federal procurement cycles ramp up and agency Chief AI Officers scramble to adopt AI, the gap between policy ambition and practical delivery will become impossible to ignore, risking both reputational fallout and wasted taxpayer spend.
“Federal departments have a legislative mandate to simultaneously digitally modernize and provide the first-class public services that Americans deserve,” said Chris Sibold, Regional VP, Federal at Nexthink. “Yet if federal employees themselves are struggling with substandard digital experiences, how are they supposed to offer good ones to the citizens they serve?”
The pace of change is relentless
Federal/public sector IT leaders expect a 44% rise in the volume of applications being used over the next three years. In fact, 71% report that their organization rolls out a new application, tool, or platform once a month. But this is impossible to guide employees through, with 68% admitting there are too many users in the organization for IT to provide adequate adoption support for everyone. Without proper guidance, application rollouts suffer, leading to lower productivity (65%), reduced collaboration (54%), increased IT support tickets (47%), and higher employee dissatisfaction (45%).
As the pace of change accelerates, federal/public sector IT leaders recognize the need to improve digital dexterity across the workforce. With AI reshaping the way people work, 98% say they need to enhance digital adoption support to help employees adapt to AI, with 96% highlighting that tailored digital employee experience (DEX) insights are more essential than ever. The benefits of improving digital dexterity are clear: faster adoption of new tools (46%), enhanced innovation (40%), and increased productivity (37%).
“In an era where there is such focus on the cost effectiveness of the public sector and stewardship of taxpayer money it’s critical that every department make the most out of their IT investments,” added Sibold. “Without clear visibility and insight into the user experience, it’s simply not possible. With all departments going through such intense digital transformation, it’s essential to have good DEX metrics in place to drive adoption of new tools as well as identifying and removing cultural or technological barriers to governmental efficiency.”
To read the full report or to find out more about the new era of AI-powered digital transformation in the federal/public sector, click here.
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