Governments are increasing digital investments
According to Gartner, worldwide government IT spending is projected to reach $US589.8 billion in 2023, representing a 7.6 per cent increase from 2022. Government organizations are facing challenges such as inflation, workforce scarcity, and competition from the commercial sector, which are testing their abilities to deliver services effectively and maintain organizational accountability.
In response, government CIOs are focusing on digital programs and investing in the replacement of legacy applications. Gartner’s survey revealed that 57 per cent of government CIOs plan to increase funding for application modernization in 2023. Governments are also adopting digital metrics tied to the outcomes and mission impact of their projects. By 2026, over 75 per cent of governments are expected to measure the success of digital transformation based on enduring mission impact.
Software spending is anticipated to continue its growth trajectory in 2023, with investments in application modernization supported by software-as-a-service (SaaS) solutions and the adoption of low-code application platforms (LCAPs) to accelerate legacy modernization efforts.
IT services will also see continued investment as governments face constraints in compensating and retaining IT talent. To address this challenge, some government organizations are adopting a multi sourced workforce strategy, optimizing the use of internal IT talent, investing in employee experience tools, and partnering with external IT service providers.
Improving access to digital services remains a priority for governments as constituents increasingly expect online experiences equivalent to those in the commercial sector. However, some government CIOs have acknowledged falling short in maximizing the benefits of their digital investments. To address this, they are focusing on ensuring that further investments in digital solutions directly impact their organization’s mission or public purpose.