Private sector IT chiefs are spending a greater proportion of their IT budgets on digital initiatives than government CIOs, a global Gartner study has found.
Gartner’s ‘2017 CIO Agenda: A Government Perspective’ revealed top-performing organisations in the private and public sectors, on average, spend a greater proportion of their IT budgets on digital initiatives (33 per cent) than government organisations (21 per cent).
Specifically, the survey of 377 government sector CIOs in 38 countries has found that 95 per cent of government organisations operate at “typical” or “trailing” performance levels and remain focused on modernising their technology core, instead of making digital-business-style investments to become “top performers.”
The survey includes the views of 2,598 CIOs from 93 countries, representing US$9.4 trillion in revenue or public sector budgets and $292 billion in IT spending, including 377 government CIOs in 38 countries. Government respondents were segmented into national or federal, state or province (regional) and local jurisdictions, to identify trends specific to each tier.
Looking ahead to 2018, top-performing organisations anticipate spending 43 per cent of their IT budgets on digitalisation, compared with 28 per cent for government CIOs.
Gartner said government respondents find themselves in the lower ranks of performance when compared with other industries, with only five per cent categorised as top performers, compared to 22 per cent in the media sector, 15 per cent in service industries and 10 per cent in the banking, retail and communications sectors.
Gartner research vice-president, Rick Howard, said 2016 proved to be a watershed year in which frustration with the status quo of government was widely expressed by citizens at the voting booth and in the streets, accompanied by low levels of confidence and trust about the performance of public institutions.
“This has to be addressed head on,” Howard said. “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. They must commit to pursuing actions that result in immediate and measurable improvements that citizens recognise and appreciate.”
Howard noted how the top performers in the survey all managed to secure greater budget increases.
Gartner noted government CIOs as a group anticipate a 1.4 per cent average increase in their IT budgets, compared with an average 2.2 per cent increase across all industries. Local government CIOs fare better, averaging 3.5 per cent growth, which is still more than 1 per cent less on average than IT budget growth among top-performing organisations overall (4.6 percent).
“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 said.
Meanwhile, Gartner also asked respondents to identify technologies with the most potential to change their organisations over the next five years.
Advanced analytics takes the top spot across all levels of government (79 per cent). Digital security remains a critical investment for all levels of government (57 per cent), particularly in defence and intelligence (74 per cent).
“The Internet of Things will clearly drive transformative change for local governments (68 per cent), whereas interest in business algorithms is highest among national governments (41 per cent). All levels of government presently see less opportunity in machine learning or blockchain than top performers do. Local governments are slightly more bullish than the rest of government and top performers when it comes to autonomous vehicles (9 per cent) and smart robots (6 per cent).”
Additionally, skills or resources was cited as the biggest barrier to government CIOs achieving their objectives.
Drilling down into the areas in which workforce skills are lacking, the government sector is vulnerable in the domain of data analytics (30 per cent), which includes information, analytics, data science and business intelligence. Security and risk is ranked second for government overall (23 per cent).
The top three barriers that government CIOs report they must overcome to achieve their objectives are skills or resources (26 per cent), funding or budgets (19 per cent), and culture or structure of the organisation (12 per cent).
“Bridge the skills gap by extending your networks of experts outside the agency,” Howard said. “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.”
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, he added.
But there’s hope on the horizon, Howard said, explaining government CIOs can seize the digital ecosystem opportunity.
The concept of a digital ecosystem is not new to government CIOs. Government organisations participate in digital ecosystems at rates higher than other industries, but they do so as a matter of necessity and without planned design, according to Gartner. Overall, 58 per cent of government CIOs report that they participate in digital ecosystems, compared with 49 per cent across all industries.
“As digitalisation gains momentum across all industries, the need for government to join digital ecosystems — interdependent, scalable networks of enterprises, people and things — also increases. The digital ecosystem becomes the means by which government can truly become more effective and efficient in the delivery of public services,” Howard said.
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