South Hams District Council and West Devon Borough Council have signed a £1.5 million shared services deal with Civica.
The two councils said the deal will allow them to digitise and re-design internal operations and public services, to "cut costs, improve efficiency and create a sustainable customer-facing model".
The two authorities have worked together for eight years and merged their management structures in 2007.
As part of the new agreement, Civica will supply the councils with a range of its electronic document management, telephony, workflow, payment, CRM and mobile working solutions.
Its Contact Management tool will be used in conjunction with Civica EDM and workflow systems to create an online portal - whereby members of the public can create an account to interact with the authority and use services.
These processes will be integrated into back-office processes in real-time, giving council staff better access to accurate information, which promises to increase productivity and service-levels.
Darren Cole, head of ICT and customer services at South Hams District Council, said: “We recognised that with ever-increasing financial challenges and the changing needs of our customers, a more transformational approach was needed.
"It became clear that technology should play a key role in this. We wanted a trusted ICT partner with the skills and knowledge to help us achieve our goals with minimal disruption to our customers and staff."
Georgina O'Toole, an analyst at TechMarketView, said of the deal: "The market for Citizen Experience Management solutions is getting increasingly competitive.
"And while several suppliers have developed, or are developing platform based solutions, there are still authorities that will opt for a range of ‘best of breed’ point solutions, integrated to achieve a similar ‘citizen interaction’ outcome as the one promised at South Hams District Council."