Government IT requires new strategy: Ovum

Must focus on more than cost savings

Industry research firm Ovum has warned the Gillard government to develop a new IT strategic plan in order to remain relevant in 2011.

Ovum research director, public sector, Kevin Noonan, said the political changes of 2010 were likely to cause a shift in the government IT space in the coming year.

“This can provide long-term opportunities for astute IT suppliers, but it means 2011 could be a time of big upheaval in the state government IT market,” Noonan said in a statement.

While Noonan said the Rudd government delivered cost savings in the IT space, he warned that new initiatives must be implemented for the current Labor government to continue delivering IT value.

“Agencies can’t just tread water,” he said. “The government quickly needs to spell out a new multi year IT strategic plan to replace the one that lapsed in 2010.

“This plan needs to focus on delivering greater value and clear government outcomes, not just cost savings.”

The research firm has predicted further cost savings would likely be sought after through a prioritisation of Cloud-based services and business process outsourcing (BPO) contracts from the Federal Government.

“Many will look to their IT vendor to guide them through the new technologies that can help them achieve this and vendors should be ready to do this,” another analyst, Jennifer Hawkins said.

“With governments keen to ensure there’s more visibility and accountability of how taxpayers’ money is spent, in 2011 agencies will look at new ways of procuring services,” she said. “In addition there will be changes in how contracts look – in some cases we will see consolidation.”

However, research director Steve Hodgkinson said Australia remained “asleep at the wheel” on the need to link government procurement and industry development agendas, while Asian countries continued to invest in cloud technologies to boost the competitiveness of their ICT industries.

A report from the firm notes momentum for some application-based shared services will slow in 2011, including areas such as HR, payroll and finance, while momentum for ICT infrastructure-based shared services, including networks, application hosting and office computing, is predicted to soar.

Ovum’s insights come as lead government IT procurement agency, the Australian Government Information Management Office (AGIMO), last week released a draft strategy paper that encouraged adoption of Cloud services.

Several agencies have already begun trialling such capabilities, including the Australian Tax Office, Treasury and the Australian Bureau of Statistics.

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