Getting a grip on ICT spending

Getting a grip on ICT spending

Gershon’s findings could give this industry a shake-up

After months of speculation, the Gershon review into the Federal Government’s ICT procurement strategy hit the streets last week.

While the industry is still debating the ramifications of the many comprehensive recommendations made by Sir Peter, what’s clear already is ICT procurement and spending is set for a shake-up. And given government is the largest ICT purchaser in this country, whatever happens in the public sector is sure to cause waves in the private arena.

Gershon is not one to mince words and his concerns over the lack of whole-of-government governance and frameworks for ICT spending were clear. The importance he placed on ICT for government policy and strategy should also bring joy to the hearts of most in the industry.

But as with any review, there will be winners and losers if Gershon’s report is implemented. According to Intermedium, those who could lose out from across-the-board spending cuts will be outsourcers and managed services providers delivering “business as usual” services. The report has recommended $140 million be slashed from agency budgets in the first year, followed by over $400 million in following years.

However, Gershon has recommended half the money saved be channelled into strategic projects. If achieved, this could prove a wealth of opportunity for systems integrators and software developers who offer an innovative approach and something that benefits business practices.

There were some interesting statistics included in the report around completed agency projects which could also be used as benchmarks by those providing products and services anywhere.

For instance, in its review of 193 completed projects, only 5 per cent of respondents reported actual, measurable benefits realised in comparison to anticipated benefits. Forty-four per cent did see some benefits but were unable to provide evidence, while 45 per cent couldn’t measure outcomes. Some used software to measure capabilities, or ITIL, while others relied on staff surveys.

Given the current state of the economy, I would argue most private organisations aren’t going to be so lenient in how their ICT projects turn out. As the market continues on its slippery slope, all businesses are going to fret about costs, company strategies and overall risk exposure.

Those who can show tangible benefits and measurements to their customer’s organisation from new ICT implementations and projects will be able to prove why they’re still vital to business success despite what the dollar is doing.

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