Australian government ICT spending to surpass $6.2 billion by 2018

Australian government ICT spending to surpass $6.2 billion by 2018

IT services represents the largest spending category valued at $2.75 billion

Australian Government ICT spending is set to soar past $6.2 billion by 2018, according to analyst firm, IDC.

IT investments aiming to drive consolidation, cost savings and efficiency gains will continue to be the primary focus, but improving service delivery through third platform investments – particularly analytics and mobility - is gaining importance.

IDC found that government ICT spending growth will reach a 1.7 per cent five-year compound annual growth rate (CAGR) to 2017.

In 2014 the Australian government’s ICT spending reached $5.8 billion, representing 8.5 per cent of total ICT spend.

IT services represents the largest spending category valued at $2.75 billion, but the strongest 5-year CAGR growth is for software at 7 per cent.

IDC market anlayst, Bonnie Li, said although overall ICT budgets were tight, Australian government organisations needed to take advantage of the long-term benefits and cost saving opportunities offered by Cloud and mobility for their organisations.

"Understanding how these technologies can support cost savings through process change, transformation road maps and education across the organisation is critical." she said.

Australian state government organisations have placed their ICT strategies centrally within their service transformation roadmaps.

However, their progress varies with Queensland, Victoria, and New South Wales leading the race in terms of transformation maturity and strategic agility.

Smart city investments are also developing, although at a slower pace as compared to peer Asia/Pacific cities.

These investments will be an increasingly important way to manage operational efficiencies while delivering improved service capability.

All State Governments have taken big steps towards driving Cloud investments within their overall ICT stack over the last 12 months and cloud solutions are gaining momentum, with cloud-first policies in place for most States.

Despite these exiting plans for eService transformations, most state governments are taking more time to re-evaluate their cloud-first investments due to the immediate operational and organisational complexities that need to be addressed, thereby highlighting a greater impetus for IT procurement accountability and transparency.

In addition, the recent security breaches are placing pressure on government bodies to enhance cyber and data security measures across all government and citizen data sets.

This will continue to be a critical area of focus for government like all other customers/citizen-facing organisations that deal with customer data.

IDC government insights research manager, Gerald Wang, said while ICT cost containment weighed strongly for current Australian federal government priorities, it was important to note that investments for future service transformations and sustainability were long-term priorities not to be neglected.

"Beyond transparency and accountability prerogatives, public sector agencies are also accountable for boosting domestic socioeconomic growth through innovative and sustained ICT investments," he said.

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