Scraping the bottom of the savings barrel

As the government looks mournfully at what it's pulling in through taxes, but still wants to hit its goal to achieve surplus by 2012-2013, IT vendors will have to pull in their belts, according to Ovum.

As the government looks mournfully at what it's pulling in through taxes, but still wants to hit its goal to achieve surplus by 2012-2013, IT vendors will have to pull in their belts, according to Ovum.

"Along with a number of program cuts, the treasurer announced a big increase in the government's efficiency dividend. This is effectively across the board cut to headline budgets in most government agencies," Ovum research director Kevin Noonan said.

"Government IT will not be able to escape the cuts. This is likely to drive another lean year for IT vendors."

And this will follow with some lean years for companies selling to government, which were affected by the Gershon review and then the blow that IT savings that were intended to be spent on IT projects, were to be put into a general project pot.

I personally worry that government IT is stretched to breaking point, and that some time in the future we will have to pay for our stinginess with interest.

A small point of hope is that technology could be used to spearhead productivity increases, and Noonan asks himself in his post whether this is likely to happen. I tend to think not; the low-hanging technology fruit has already been grabbed. New projects would have to be wide reaching, and thus have the chance of failure, like the Victorian IT projects detailed by the ombudsman just recently.

So, IT vendors. Are you ready for another slim government year? Where are you going to make up the shortfall? Or do you think technology will yet again be the white knight, which gets invested in to produce efficiency gains?

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