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

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.

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.

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.

"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.

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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.

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CIOs need to work in collaboration with their executive peers to strike the optimal balance of 'grow' and 'transform' with running the business.

Rick Howard, Gartner

"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."

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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.

Government organisations with chief digital officers (CDOs) stand at nearly 5 per cent in 2014, lagging slightly behind the 6.6 per cent global figures.

Gartner believes this is neither surprising nor unexpected, because in the public sector, it is extremely difficult to make the business case and to obtain sustained funding for any new IT or business C-level position.

However, in municipalities where the digital acumen of elected officials is high and economic development is a top priority, there is a willingness to hire the digitally proficient talent needed to support initiatives.

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"The exponential availability of government open data fuels a burgeoning marketplace of services and apps that exploit the unprecedented convergence of citizens, information, business and things," says Howard.

"Government agencies should sustain this initial burst of innovation, while ensuring accountability for the management of government's information assets, by establishing clear boundaries among the roles of CIO, CDO and chief technology officer (CTO), even when these duties are the responsibility of one person."

Send news tips and comments to divina_paredes@idg.co.nz

Follow Divina Paredes on Twitter: @divinap

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