Australian Government ICT Spending is set to exceed A$6.2 billion by 2018: Cost Efficiency, Productivity Gains and Improved eServices are the Focuses

Australian Government ICT Spending is set to exceed A$6.2 billion by 2018:Cost Efficiency, Productivity Gains and Improved eServices are the Focuses

Sydney, Australia, 18th May 2015

Government ICT spending growth will reach 1.7% five-year compound annual growth rate (CAGR) to 2017. IT investments aiming to drive consolidation, cost savings and efficiency gains will continue to be the primary focus, but improving service delivery through third platform investments – particularly analytics and mobility – is of increasing importance. In 2014, the Australian government’s ICT spending reached A$5.8 billion, representing 8.5% of the total ICT spend. It is forecasted to grow to A$6.2 billion by 2018. IT services represents the largest spending category valued at A$2.75 billion but the strongest 5-year CAGR growth is for software at 7.0%.

“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. Understanding how these technologies can support cost savings through process change, transformation road maps and education across the organization is critical.”, says IDC market analyst Bonnie Li.

Australian State government organisations have placed their ICT strategies centrally within their service transformation roadmaps. However, their progress varies with Queensland, Victoria, and New South Wales leading the race in terms of transformation maturity and strategic agility. Smart City investments are developing also, although at a slower pace as compared to peer Asia/Pacific cities. These investments will be an increasingly important way to manage operational efficiencies while delivering improved service capability.

All State Government have taken big steps towards driving Cloud investments within their overall ICT stack over the last 12 months and cloud solutions are gaining momentum, with cloud-first policies in place for most States. Notably, despite these exiting plans for eService transformations, most State Governments are taking more time to re-evaluate their cloud-first investments due to the immediate operational and organizational complexities that needs to be addressed, thereby highlighting a greater impetus for IT procurement accountability and transparency. In addition, the recent security breaches are placing pressure on Government bodies to enhance cyber and data security measures across all government and citizen datasets. This will continue to be a critical area of focus for government like all other customers/citizen-facing organizations that deal with customer data.

“While ICT cost containment weigh 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. Beyond transparency and accountability prerogatives, public sector agencies are also accountable for boosting domestic socioeconomic growth through innovative and sustained ICT investments,” says IDC Government Insights research manager Gerald Wang.

Australia Government ICT Market 2014–2018 Forecast and AnalysisThis media release relates to document: Doc #AU251011, Australia Government ICT Market 2014–2018 Forecast and Analysis.

For further information, please contact

Gerald Wang

Research Manager, IDC Government Insights

Tel: +65 6829 7742

E-mail: gwang@idc.com

Bonnie Li

Associate Market Analyst, Vertical Markets, IDC Australia

Tel: +61 2 9925 2262

E-mail: bli@idc.com

Emilie Ditton

Head of Vertical Markets, IDC Australia

Tel: + 61 2 9925 2211

E-mail: editton@idc.com

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