The use of information technology (IT) is increasingly important for local governments (municipalities) in adhering to their responsibilities for providing services to citizens and this requires effective IT management. We present an engaged scholarship approach to formulating the IT management problems with local government – not for local government. We define such engaged problem formulation as joint learning and definition of a contemporary and complex problem by researchers and those who experience and know the problem. This engaged problem formulation process was carried out as an initiation of action research and design science research activities at multiple levels in Danish municipalities. In this paper we present the IT management problems identified in our study and discuss the engaged problem formulation process in relation to engaged scholarship and implications for action research and design science research activities.