Thursday, 08 May 2014 14:29

Tough times continue for government CIOs, IT Featured

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Government agencies, including in Australia, remain under pressure to cut IT program budgets and services, with many CIOs expecting they will have less money for IT throughout this year, according to a global report just released.

Gartner’s latest global survey of IT executives found that CIOs working in government are expecting the budget cutting of 2013 to continue this year, with around a quarter of them – or 26% - bracing for more cuts this year. This compares with a global average of all CIO of 17% expecting budget cuts.

"Reflecting the extended budget development and appropriation cycles that are typical of public-sector institutions, 26% of government CIOs anticipate a budget decrease in 2014, as compared to the 27% who expected to be working with lower IT budgets in 2013," said Rick Howard, research director at Gartner.

"However, with nearly 75% of government CIOs reporting flat or increasing IT budgets for the second year in a row, many government CIOs have an ongoing opportunity to build capacity in high-value areas — such as mobile services and business analytics — while retooling IT portfolios to include more software as a service (SaaS) and public cloud solutions."

According to Howard, the picture is less optimistic, however, among those federal and national governments that remain under intense pressure to cut programs and services, including defence. “Throughout 2013, rapid shifts in IT management, spending and sourcing took place most acutely at these levels of government, driven, in part, by mandated moves to low-cost, commercial alternatives.”

There’s also pressure on CIOs in government to demonstrate the worth of IT, according to Gartner.

The analyst firm says that, overall, government CIOs estimate that at least 33% of IT expenditures are now being made by the business units, and outside the authority of the IT organisation.

Howard says this indicates a need for government CIOs to “quickly and clearly differentiate their portfolios of high-value IT solutions and products” from the commoditised IT services traditionally associated with in-house IT organisations.

"Regardless of how much IT spending happens outside of the IT organisation, CIOs must address the presence of shadow IT by affirming their position as the designated and recognised point of IT management responsibility," Howard cautions.

"This doesn't mean CIOs should attempt to restrict business-managed IT acquisitions and services. However, accountability for the information assets of a government agency cannot be distributed, and governance will ensure a corporate officer, the CIO, is at the table whenever or wherever an IT investment is being considered.

“To maintain organisational relevance in today's digital industrial economy, CIOs need to work in collaboration with their executive peers to strike the optimal balance of 'grow' and 'transform' with running the business."

The Gartner survey shows that, as digital opportunities and threats pervade every aspect of business and government, the IT and digital agenda for each country, industry and enterprise is becoming more specialised.

And, Howard says that Governments are at risk of entering a long-term state of technological deficiency if they fail to develop and reward digitally savvy executives and IT professionals.

According to Gartner, its survey reveals that government organisations with chief digital officers (CDOs) stand at nearly 5% in 2014, lagging slightly behind the 6.6% global result.

Gartner believes that this is neither “surprising nor unexpected”, because in the public sector, it is extremely difficult to make the business case and to obtain sustained funding for any new IT or business C-level position.

Howard says, however, that in municipalities where the digital acumen of elected officials is high and economic development is a top priority, there is a willingness to hire the digitally proficient talent needed to support initiatives.

"The exponential availability of government open data fuels a burgeoning marketplace of services and apps that exploit the unprecedented convergence of citizens, information, business and things," Howard says.

"Government agencies should sustain this initial burst of innovation, while ensuring accountability for the management of government's information assets, by establishing clear boundaries among the roles of CIO, CDO and chief technology officer (CTO), even when these duties are the responsibility of one person."

Howard also stresses that digital is not the only area expected to undergo rapid transformation, and according to the survey, over 75% of government CIOs indicate that they will change their technology and sourcing approach within the next three years.

Of government CIOs, 60% currently manage a "mixed model" of providers, with 26% depending on a mainly or wholly insourced approach and 13% taking a mainly or wholly outsourced approach. “This overall pattern is consistent with the global view,” Howard says.

"With three quarters of government CIOs reporting that they will change their technology and sourcing approach within the next three years, the need for the role of IT broker will significantly increase," Howard says.

"At the same time, government CIOs are restructuring their IT portfolios to provide higher-value-added business services and technology capabilities, such as advanced analytics and business process management (BPM).

”The most successful government CIOs will relish the opportunity to manage IT effectively in an increasingly diverse ecosystem of vendors and solutions by combining specialised knowledge of government business practices and policies with the executive role, in order to promote architecture standardisation, interoperability, robustness, agility and security,” Howard concludes.

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Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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