Agencies Embrace AI for Better Productivity
The U.S. public sector is transforming its approach to work, leveraging AI and integrated workplace strategies to boost productivity and service delivery, according to a new report by Information Services Group (ISG).
Organizations are building connected digital ecosystems to improve mission execution, with a focus on aligning people, processes, and digital capabilities to achieve measurable outcomes.
Redefined Workplaces
The 2026 ISG Provider Lens Future of Work — Services report finds that state, local government, and education organizations are refocusing workplace strategies from technology deployment to orchestration of work, people, and environments.
Agencies are modernizing mission-critical services while managing budget constraints, workforce shortages, and expanding requirements for security, accessibility, and responsible AI.
Through workplace initiatives spanning IT, HR, and facilities functions, organizations are coordinating investments to improve operational performance and citizen experience.
AI Integration
AI is becoming a pervasive element of daily operations in the U.S. public sector, with agencies incorporating AI capabilities into collaboration platforms, service desks, and workflows to automate routine activities and improve decision-making.
Related: AI Reshapes Broker Client Ties
To maximize long-term benefits from these technologies, organizations are investing in reskilling initiatives and establishing responsible AI practices that address transparency, accessibility, and security requirements.
Nathan Frey, partner at ISG, noted that U.S. public sector organizations are redefining the workplace as a strategic operating environment rather than a collection of technology tools.
Success increasingly depends on aligning people, processes, and digital capabilities to achieve measurable outcomes, Frey said.
Hybrid Work Evolution
Hybrid work continues to evolve across offices, campuses, field locations, and remote settings, requiring agencies to deliver consistent experiences for distributed workforces.
Organizations are integrating digital collaboration platforms with physical workplaces to enhance productivity and employee engagement.
Budget pressures and talent shortages are driving agencies to adopt automation, standardized platforms, and lifecycle-based service delivery models to reduce complexity and increase efficiency.
Related: Alipay expands with new bank partners
One notable trend is the increasing use of digital employee experience metrics and experience level agreements to assess productivity, workforce engagement, and service responsiveness.
Bruce Guptill, lead author of the report, observed that agencies making the greatest progress treat digital workplaces as living environments that require continuous measurement and adjustment.
They will help organizations achieve sustained operational improvement from workplace modernization, Guptill said, by combining experience metrics, responsible AI practices, and cross-functional execution.
The report also explores other trends affecting U.S. public-sector digital workplace services, including the increasing importance of sustainability in workplace strategies and the growing investment in change management to help agencies realize the full value of transformation programs.
Smart workplace technologies that improve energy efficiency and optimize space utilization are becoming more common in large government facilities and education campuses, ISG says.
