The article examines digital transformation in the public sector, focusing on its implementation and impact. A key milestone in Hungary’s municipal digitalization is analyzed through a case study on the document management system of the Application Service Provider. Based on longitudinal data from over 3,000 municipalities, findings show that digital transformation delivers significant value to citizens and shortens administrative lead times. It enhances transparency, comparability, and efficiency in public administration. The study also emphasizes that adopting new technologies, standardizing processes, and centralizing IT management are critical factors in achieving these efficiency gains and modernizing public sector operations.