Public sector IT spend to surge in 2007: report

03-01-2007

by Ciara O'Brien

IT consolidation is expected to drive global IT investment in the government sector in 2007, according to new research.

The report from research house IDC's public sector subsidiary Government Insights also predicts that the standardisation of IT will heavily influence state investments.

"The government market, with over USD150 billion targeted for technology spending in 2007, is among the top three vertical industries worldwide," said Teresa Bozzelli, chief operating officer and managing director of Government Insights.

"With a USD9.1 billion dollar increase in technology investments from 2006 to 2007 and a compound annual growth rate projected at 4.1 percent through 2010, this is both a high-value and high-growth industry that is typically less volatile that many other IT industry markets."

Although it will differ according to region, the research indicates that this trend towards consolidation will be driven by the desire to reduce operational costs, improve service delivery and therefore increase government value.

Countries such as the US, for example, will have its technology budget come under increased scrutiny in the next budget cycle, as Bozzelli predicts priorities change after forthcoming elections.

Other predictions from the report posit information sharing and interoperability will help improve governments' service delivery, while also generating a demand for new business and decision-making models that will maximise the value of IT. New procurement models and strategic sourcing strategies will also be created by governments, as collaborative business processes influence public bodies and how they work.

"Each technology program must be defined, justified, managed, and measured within the context of citizen-centric, value creation," said Bozzelli.

"Governments will pursue standardisation and consolidation to maximise value from these efforts. Vendors must increase their understanding of government interoperability as it evolves, as well as the appropriate technologies, services, and partnering strategies that will help governments achieve this universal government priority."