This article addresses the challenges and capability gaps confronted by public administrations concerning digital transformation and the use of novel tools in the context of land use, facilities and urban services planning. The present state of planning and management processes in Finland is introduced and reflected through experimental piloting conducted in two Finnish cities. Participatory action research and design research methodology was utilised to identify the main challenges as well as unravel the possibilities of digital transformation in the context of public services planning. The resulting analysis revealed the critical importance of facilitating integrative policies and coordination when working across knowledge boundaries between administrative domains. The paper contributes to a wider theoretical and conceptual understanding, as it discusses the advantages and feasibility of digital tools as boundary objects for cross-sectoral work in smart, people-centred urban governance. The authors see this direction of research as a fruitful ground for further investigations within the interdisciplinary urban planning research context.