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75% of Govt CIO budgets flat or increasing

15 Aug 13

Despite a continuing drive to lower the cost of IT services, nearly 75% of government IT budgets globally were reported as flat or increasing in 2013.

“After years of being told to "do more with less," Gartner research director Rick Howard believes many government CIOs report that budgets have stabilised or are now increasing.

A plus point of such findings place CIOs in a better position to deliver and manage IT services more effectively and efficiently.

"These CIOs are now poised to boost the business value of IT by radically restructuring their services portfolio to drive innovation and improve the performance of government," he says.

Howard says the findings are in contrast to the private sector, which is significant as management practices, financial indicators, business metrics and the adoption of IT in government generally lag behind those of the private sector.

When compared to other sectors of the economy, the relatively brighter IT budget outlook in government may be short-lived, according to Gartner analysts.

Gartner's study indicates that private-sector business leaders are poised to boost investments in e-commerce, mobile, cloud, social and other major technology categories.

But despite this, the company projects a modest compound annual growth rate of 1.3% for IT spending in the government and education sectors through to the end of 2017, with increased spending for IT services, software and data centres.

These increases are offset by reductions in internal technology services, devices and telecom services.

Reducing enterprise costs

For the third consecutive year, reducing enterprise costs ranks among the top three business priorities for government CIOs in 2013.

In conjunction with the imperative to deliver operational results and the need to modernise IT applications and infrastructure, CIOs have affirmed the means by which IT can be used to transform government agency operations and their own bottom-line accountability to do so.

“When faced with unsustainable business models, government executives are more willing to make targeted technology investments and undergo the extensive organizational change necessary to achieve the productivity and quality gains made possible by IT,” Howard says.

“Introducing new technology services and workforce capabilities will establish IT as a key partner in achieving business results that matter to citizens and agency employees.”

The top three technology priorities in 2013 have all changed since 2012, with business intelligence and analytics moving from No. 5 to the top spot, followed by legacy modernisation and IT management.

By placing analytics and business intelligence at the top of the list, government CIOs are addressing government's need to proactively manage programs and services.

As part of the CIO agenda survey, strategic priorities are also investigated and ranked. Improving the government IT organisation and workforce has moved to the No. 2 spot in 2013 from No. 9 in 2012, which shifts the responsibilities of CIOs and IT professionals away from most legacy technology services to underserved areas of business need.

“To support broad institutional change, CIOs recognize they must invest in a workforce that can collaborate effectively with agency leaders and program managers to identify business priorities, as well as design and implement solutions that match those priorities,” Howard says.

The CIO Agenda Survey also indicated that 76% of government CIOs have significant leadership responsibilities outside of IT, with only 24% having no responsibilities beyond IT. The average tenure of government CIOs is 3.8 years, compared to an average of 4.8 years across all industries.

“What is certain is that many of the information, business process and project management roles that have been developed over time by IT on a default or "best fit" basis are now being embraced as competencies by business units, as a result of consumerisation and the commoditisation of technology,” Howard adds.

“Rather than viewing these trends as a threat, astute CIOs will embrace them as a means to extend their influence and value to areas outside of traditional IT.”

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