World's governments to keep spending to erase technical debt
Never mind the corporate sector slowdown, taxpayers' wallets open for business
Parts of the commercial world might be saving their money in 2023 with one eye on progress across the economy but the public sector will keep on spending amid continued efforts to reduce technical debt.
According to forecasts conjured by the mystics at Gartner, an estimated $588.9 billion will be spent on technology next year, which if correct – and it's a big if – would equate to a 6.8 percent jump year on year.
Daniel Snyder, director analyst at the market researcher, said:
"Government organizations are continuing to modernize legacy IT and invest in initiatives that improve access to digital services as constituents increasingly demand experiences that are equivalent to online customers interactions in the private sector."
"The total experience framework, which helps agencies manage employee and citizen interactions, is enabling transformation and will remain among the main driver of IT spend in 2023," Snyder added.
According to a paper by Britain's Digital Economy Council titled Organizing for Digital Delivery, in 2019 the UK public sector spent nearly half of its annual £4.7 billion ($5.76 billion) IT budget on keeping the lights on activities on outdated systems. And the authors warned this could cost could have expanded to more than £20 billion ($24.5 billion) over the following five years.
"The challenge is by no means limited to government services as there is a universal temptation to invest in new feature development vs the 'worthy but dull' task of ensuring security and stability in the underlying platforms," the paper states.
UK government began to organize a contracting agreement in August 2022 said to be worth $4.5 billion for application software services for the local tax collection agency, HMRC, with the aim to "become less dependent upon legacy technologies."
Just last week, inadequate IT systems and kit were blamed for Britain's doctors collectively losing 13.5 million working hours annually in the health sector, according to the British Medical Association.
Meanwhile, a study by the Government Accountability Office in the US found the majority of the $100 billon government spent on technology in 2021 went towards operating and maintaining legacy tech. Efforts to bring systems into the 21st century are gaining steam via the Legacy IT Reduction Act of 2022.
CIOs are required to collate legacy inventory – systems and software – used at their departments or agencies, including expected retirement dates, the cost of replacing them and so on.
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The legislation was sponsored by senators including New Hampshire's Maggie Hassan, who said in March: "Updating government technology will save taxpayer dollars, strengthen cybersecurity and improve Americans' interaction with Federal agencies."
"This commonsense bill will help ensure that the Federal government isn't wasting taxpayer dollars or risking cyber attack simply because it hasn't updated the necessary technology systems and equipment," she added.
Gartner says it anticipates government IT spending to increase pretty much across the board – devices being the exception – in terms of product segments. The biggest jumps are tipped to come from IT services and software, which are forecast to grow 7.9 percent and 12.5 percent respectively.
Priorities for public sector CIOs are said to include digital transformation, modernizing applications, fortifying security, and making better use of data. ®