Government ICT spend to reach $6.2 billion by 2018

Australian Government ICT spending is set to reach $6.2 billion by 2018, with 1.7 per cent five-year compound annual growth rate (CAGR) by 2017, according to research by the International Data Corporation (IDC).

The government's overall ICT spend in 2017 is expected be $6 billion, while in 2014, government ICT spending reached $5.8 billion, representing 8.5 per cent of Australia's total ICT spend.

Recent IDC research, <i>Australia Government ICT Market 2014–2018 Forecast and Analysis</i>, has shown that IT services represent the largest spending category for government spend, valued at $2.75 billion but the strongest five-year CAGR growth is for software at 7 per cent.

The report found projects aiming to drive consolidation, cost savings and efficiency gains will continue to be the primary focus of government ICT spend, but improving service delivery through third platform investments – particularly analytics and mobility – will also be of increasing importance over the next three years.

A central theme for state governments

ICT is currently a central theme all state government service transformation roadmaps, with Queensland, Victoria, and New South Wales leading the race in terms of transformation maturity and strategic agility. Cloud solutions have also gained momentum over the past 12 months, with cloud-first policies in place for most states.

Despite existing plans for eService transformations, most state governments are taking the time to re-evaluate their cloud-first investments due to the immediate operational and organisational complexities needing to be addressed, according to the report. This is expected to put a greater impetus on IT procurement accountability and transparency.

Recent security breaches are placing pressure on government bodies to enhance cyber and data security measures across all government and citizen datasets.

Smart city investments are also developing, though at a slow pace compared to peer Asia/Pacific cities.

Innovative and sustained investments

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

"Although overall ICT budgets are tight, Australian government organisations need to take advantage of the long-term benefits and cost saving opportunities offered by cloud and mobility for their organisations,” said Bonnie Li, IDC analyst.

"While ICT cost containment weighs strongly for current Australian Federal Government priorities, it is important to note that investments for future service transformations and sustainability are long-term priorities not to be neglected,” added IDC government insights research manager Gerald Wang.

“Beyond transparency and accountability prerogatives, public sector agencies are also accountable for boosting domestic socio-economic growth through innovative and sustained ICT investments."