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Government CIOs spending 21% of IT budget on digital initiatives - tipped to grow

27 Apr 2017

A recent global Gartner survey (2017 CIO Agenda) has made some interesting revelations.

On average, top-performing organisations in the private and public sectors spend a greater proportion of their IT budget on digital initiatives (33 percent) than government organisations (21 percent).

With eyes towards 2018, top-performing organisations anticipate increasing that number to 43 percent, as opposed to 28 percent for government CIOs.

Research vice president at Gartner, Rick Howard says 2016 was somewhat a ‘watershed’ year in which frustration with the status quo of the government was widely expressed, accompanied by low levels of confidence and trust about the performance of public institutions.

"This has to be addressed head on. Government CIOs in 2017 have an urgent obligation to look beyond their own organisations and benchmark themselves against top-performing peers within the public sector and from other service industries,” says Howard.

“They must commit to pursuing actions that result in immediate and measurable improvements that citizens recognise and appreciate."

Respondents to the survey (2598 CIOs from 93 countries, including 377 government CIOs in 38 countries) were categorised as top, typical and trailing performers in digitalisation.

In line with their performance was a common factor - top performers secure greater budget increases. Government CIOs as a group anticipate a 1.4 percent average increase in their IT budgets, compared with an average 2.2 percent increase across all industries and 4.6 percent among top-performing organisations.

"Whatever the financial outlook may be, government CIOs who aspire to join the group of top performers must justify growth in the IT budget by clearly connecting all investments to lowering the business costs of government and improving the performance of government programs," Howard says.

Gartner was also able to determine the technologies that government CIOs believe have the most potential to transform their organisation over the coming five years.

Advanced analytics takes the top spot across all levels of government (79 percent). Digital security remains a critical investment for all levels of government (57 percent), particularly in defence and intelligence (74 percent).

The Internet of Things has a large part to play (68 percent), while interest in business algorithms is highest among national governments (41 percent). All levels of government presently see less opportunity in machine learning or blockchain than top performers do. 

The top three barriers that government CIOs report they must overcome to achieve their objectives are skills or resources (26 percent), funding or budgets (19 percent), and culture or structure of the organisation (12 percent).

"Bridge the skills gap by extending your networks of experts outside the agency," Howard says.

"Compared with CIOs in other industries, government CIOs tend not to partner with startups and midsize companies, missing out on new ideas, skills and technologies."

According to Gartner, there is a huge opportunity within the digital ecosystem. While the concept is not new and government organisations do in fact participate in digital ecosystems at rates higher than other industries (58 percent compared to 49 percent), they do so as a matter of necessity and without planned design.

Howard says the need for government to join digital ecosystems increases as digitalisation gains momentum.

"The digital ecosystem becomes the means by which government can truly become more effective and efficient in the delivery of public services," Howard concludes.

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