Government IT spending forecast to approach $17b

Australian governments will spend almost $17 billion on IT in 2023, according to a forecast by research and consulting firm Gartner.

Dean Lacheca

The latest update represents a total increase of 8.4 per cent from the previous year, Gartner’s analysis shows.

Spending on software will slow somewhat, but with a $6 billion outlay forecast, it remains the biggest area of expenditure behind IT Services, which will account for $6.5 billion government dollars.

Commenting on the latest figures, which were released on Thursday, VP Gartner analyst Dean Lacheca said the economic disruption and inflation pressures across Australia are keeping state and federal governments focused on austerity.

He says with public sector efficiency drives and consultants increasingly on the nose, state and federal governments will be looking to digital investments, particularly automation, to improve services delivery.

The Australian forecast follows global trends, with Gartner predicting IT spending by governments worldwide to hit $US589.8 billion ($AU916.6 billion), a 7.6 per cent increase from 2022.

Principle analyst at Gartner, Apeksha Kauship says the post-covid ‘great resignation’, competing demand from the private sector and a global need to replace legacy systems is forcing government CIOs around the world to re-examine their approaches to digital investment.

“Government CIOs who are moving beyond scaling digital solutions across their critical services are ensuring that further investment in digital solutions can directly impact how they achieve the mission or public purpose of their organisation,” he said.

A 2023 Gartner survey of CIOs and tech executives showed that 57 per cent of government CIOs plan to increase funding for application modernisation in 2023, up from 42 per cent in 2022, Mr Kaushik said.

Government organisations will also continue to invest in products to improve access to digital government services for the public, he says.

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