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More than a quarter of government CIOs expect budget cuts this year: Gartner

Divina Paredes | May 8, 2014
Annual CIO survey also finds at least a third of IT expenditures are now being made by business units outside the authority of the IT organisation.

budget

Government agencies around the world remain under pressure to cut IT program budgets and services, reports Gartner.

Gartner's 2014 CIO survey finds that 26 per cent of government CIOs expect a budget decrease in 2014 compared with the global average of 17 per cent of CIOs.

"Reflecting the extended budget development and appropriation cycles that are typical of public-sector institutions, 26 per cent of government CIOs anticipate a budget decrease in 2014, as compared to the 27 per cent who expected to be working with lower IT budgets in 2013," says Rick Howard, Gartner research director. The annual survey had 2339 respondents, of which 288 were from government in all jurisdictions, regions and domains, including defence.

"However, with nearly 75 per cent of government CIOs reporting flat or increasing IT budgets for the second year in a row, many government CIOs have an ongoing opportunity to build capacity in high-value areas -- such as mobile services and business analytics -- while retooling IT portfolios to include more software as a service (SaaS) and public cloud solutions."

Gartner notes a number of federal and national governments remain under intense pressure to cut programs and services, including defence.

Throughout 2013, rapid shifts in IT management, spending and sourcing took place most acutely at these levels of government, driven, in part, by mandated moves to low-cost, commercial alternatives.

Shadow IT

Overall, government CIOs estimate that at least 33 per cent of IT expenditures are now being made by the business units, and outside the authority of the IT organisation. This indicates a need for government CIOs to quickly and clearly differentiate their portfolios of high-value IT solutions and products from the commoditised IT services traditionally associated with in-house IT organisations.

"Regardless of how much IT spending happens outside of the IT organisation, CIOs must address the presence of shadow IT by affirming their position as the designated and recognised point of IT management responsibility," says Howard.

"This doesn't mean CIOs should attempt to restrict business-managed IT acquisitions and services. However, accountability for the information assets of a government agency cannot be distributed, and governance will ensure a corporate officer, the CIO, is at the table whenever or wherever an IT investment is being considered.

To maintain organisational relevance in today's digital industrial economy, CIOs need to work in collaboration with their executive peers to strike the optimal balance of 'grow' and 'transform' with running the business."

The survey shows that, as digital opportunities and threats impact all areas of business and government, the IT and digital agenda for each country, industry and enterprise is becoming more specialised. Governments are at risk of entering a long-term state of technological deficiency if they fail to develop and reward digitally savvy executives and IT professionals.

 

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