Analysis of Obstacles and Challenges of Digital Transformation of AIS in Local Government

Abstract

Digital transformation is a strategic agenda that encourages reform of government governance through the comprehensive use of information technology, including in regional financial management. This change shifts the financial recording and reporting system from conventional mechanisms to a digital-based Accounting Information System (AIS), which is considered capable of improving operational efficiency, information accuracy, and transparency of public accountability. Although conceptually, the digital transformation of the AIS has a significant positive impact, the reality of its implementation in local government environments has not fully run as expected. Various structural and technical obstacles and challenges still frequently arise, hindering optimal system utilization. This study aims to examine in depth the characteristics of obstacles that influence the successful implementation of digital AIS in local governments by conducting a critical review of scientific findings, theoretical concepts, and developments in the latest public sector financial management practices.

Using a descriptive approach based on literature review, this study evaluates the trends of issues emerging from various reference sources to identify patterns of gaps between digital transformation goals and their implementation in the field. The analysis shows that the main obstacles to AIS digitalization originate not only from the technological aspect but also involve the overall organizational readiness. The most dominant obstacles include: limited human resource competency in digital accounting technology, employee resistance to changes in work culture, unpreparedness of technology infrastructure and funding allocation, suboptimal alignment of procedures and regulations with digital system needs, as well as information security threats and data integration issues between government financial applications. These factors directly impact the effectiveness of AIS use, potentially giving rise to recording errors, reporting delays, and low-quality information that should be the basis for strategic decision-making. The findings of this study underscore that successful AIS digital transformation requires interventions that focus not only on providing technological tools but also prioritize human resource capacity building, improving institutional governance, strengthening regulations, and developing structured change management strategies. This research is expected to provide theoretical contributions to the literature on public sector digital transformation and offer practical insights for local governments in designing more adaptive, planned, and sustainable AIS implementation policies in the future.