When a resident moves to a new state, they shouldn't have to prove their identity seven times across seven agencies. When a small business owner applies for a state license, they shouldn't need to upload the same tax documents to three separate portals that can't talk to each other. Yet this is the reality in most state and local governments today, not because staff don't care, but because the systems can't share verified information.
Interoperability is the ability of different IT systems to exchange data and use that data without custom integration work, manual re-entry, or loss of meaning. In government digital services, it means a digital identity credential issued by the DMV can be verified by the Department of Social Services. It means a birth certificate authenticated by the Department of Health doesn't require re-verification when that same person applies for unemployment insurance.
Interoperability is not about connecting everything to everything. It's about building systems on shared technical standards so agencies can validate credentials, verify identities, and exchange records without vendor-specific APIs or one-off integrations that break during upgrades.
Most state IT budgets dedicate 70–80% of spending to maintaining existing systems, according to NASCIO research. A significant portion of that maintenance burden comes from integration debt: the custom connections, middleware layers, and manual workarounds required to move data between systems that were never designed to communicate.
Each new service launch requires fresh integration work. Each vendor upgrade risks breaking existing connections. And when an agency finally retires a legacy platform, the integrations built around it often need to be rewritten entirely.
This creates three compounding problems:
True interoperability is built on open technical standards that define how credentials are issued, how identity attributes are structured, and how verification requests are handled, regardless of which vendor built the underlying system.
Consider mobile driver's licenses. If a state DMV issues a mobile driver's license using the ISO 18013-5 standard, any agency or business can verify it using the same standard without contacting the DMV's IT vendor, without a custom API contract, and without building middleware. The credential itself carries cryptographic proof of authenticity. Verifiers don't need access to the DMV's database.
Contrast this with proprietary approaches, which require API access to the issuing vendor's cloud platform, ongoing subscription fees, and integration updates whenever the vendor changes its protocols. That's not interoperability. That's a bottleneck with a recurring licensing fee.
Standards-based interoperability also supports modernizing government systems without replacing them. Agencies can add new credential issuance capabilities or verification services alongside legacy platforms, connecting through standard interfaces rather than waiting for a full system overhaul.
Interoperability isn't just a technical problem for IT staff to solve. It's a policy choice that determines whether agencies can meet federal mandates, whether procurement remains competitive, and whether constituents can access services without unnecessary friction.
REAL ID compliance, for example, requires secure credential issuance and verification across state lines. States that built REAL ID systems on proprietary vendor ecosystems now face high costs to enable reciprocal verification with other states. States that use open standards can interoperate with minimal additional investment.
Federal guidance is increasingly explicit. OMB M-19-17 directs agencies to adopt federated identity models and standards-based credential formats. NIST SP 800-63 specifies technical requirements for digital identity assurance. These aren't suggestions. They're compliance requirements that many proprietary systems can't meet without expensive retrofitting.
As interoperability is fundamentally a policy decision, not just a technical one, procurement language must explicitly require the use of open standards. Otherwise, vendors will deliver "interoperability" that only works within their own product suite.
When reviewing proposals for digital identity systems, credentialing platforms, or service modernization projects, ask:
Interoperability isn't optional anymore. Federal mandates require it. Constituents expect it. Budget constraints demand it. The only question is whether agencies will build interoperability on open standards that preserve flexibility and competition, or on proprietary platforms that deliver short-term convenience at the cost of long-term lock-in.
Legislators and program managers don't need to become technical experts. They need to demand that procurement requirements explicitly call for standards-based interoperability, that vendor responses demonstrate compliance with named open standards, and that contracts include performance requirements for credential exchange and verification without vendor-specific APIs.
The systems we build today will shape service delivery for the next decade. At SpruceID, we work with governments and enterprises to implement open, standards-based digital identity infrastructure that modernizes systems without replacing them—preserving flexibility, competition, and long-term public trust.
Building digital services that scale take the right foundation.
About SpruceID: SpruceID builds digital trust infrastructure for government. We help states and cities modernize identity, security, and service delivery — from digital wallets and SSO to fraud prevention and workflow optimization. Our standards-based technology and public-sector expertise ensure every project advances a more secure, interoperable, and citizen-centric digital future.
