Monday, May 14th, 2012 - Ovum
Melbourne, May 14, 2012 – The recent Federal Budget delivered government agencies a clear message about be a tough year ahead, driven by staff cuts and efficiency savings. With a forecast drop in GST revenues, state governments are also unlikely to escape a year of tight government funding. Given the realities of the financial outlook many CIOs will be stuck with an ongoing spiral of IT cost savings. However, a growing number of CIOs are breaking free by repositioning themselves as a big contributor to agency wide productivity savings, according to Ovum.

In a new report*, the independent technology analyst firm found recent agency productivity agendas go beyond earlier approaches involving slogans, staff cuts and belt tightening. Today, it is about finding practical ways to make savings through better risk management and better delivery of outcomes for government.

Kevin Noonan, Research Director, Public Sector at Ovum and author of the report said: “based on detailed interviews with senior executives and CIOs from federal and state government agencies, Ovum found that productivity is becoming a top of mind issue. For savvy CIOs, IT is repositioning as a source of thought leadership and change.”

According to the report, a number of themes have emerged where CIOs have successfully made the change:

  • These CIOs are no longer focusing on IT role definitions, but are redirecting efforts to working as part of the executive team to deliver outcomes.
  • Package solutions (such as COTS) are being favoured in preference to bespoke solutions. In a world where packaged solutions are preferred, interoperability becomes a key requirement
  • Agencies are differentiating their actions, taking a tactical approach to individual disruptive technologies, while focusing their efforts on the bigger picture of disruptive business processes.
  • Size of project is not necessarily a good indicator of value. There is growing interest in smaller, well targeted, low risk solutions
  • The role of the Business Owner has become problematic for some agencies. Some agencies are refocussing Business Owner attention toward accountability.
  • Governance arrangements in most agencies have evolved over time. Some are also evolving to reflect the changing role of IT within the agency.

Noonan added: “There is also a big message for vendors”

“It is no longer sufficient to have a solid product and a great vision. Agencies are taking a much harder look at the actual roadmap linking today’s reality and tomorrow’s vision. Agencies are looking for substance over hype. Unfortunately, a number of vendors have been found to be papering over a number of big cracks and orphans within their product range.”

“Interoperability is a growing area of vendor differentiation. There is an increasing trend to favour more integrated and interoperable offerings over individual product excellence. The push for interoperability has seen ‘Best Practice’ give way to a more pragmatic push for ‘Most Common Practice’.



*Bridging the gap: IT cost cutting to agency productivity

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Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is an Informa business.
Jennifer Duraisingam
P: +61 (0) 3 9601 6723


Ovum, productivity, Federal Budget, risk management



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