Thursday, May 10th, 2012
OVUM COMMENT: Kevin Noonan, Research Director
There are opportunities if you follow the money

This was always going to be a tough Budget for IT. The November mini-Budget announcements saw to that. Business as usual will not be a happy place in government agencies, as the combined impact of the Efficiency Dividend and the Capex cuts start to bite in 2012-13. But it is not all gloom. Indeed there is a lot of new work for IT project managers coming out of this Budget.

Managers and vendors need to follow the money. Significant investment in new programs has delivered a positive message of action and opportunity, against overall backdrop of funding cuts.

Broad estimates would put the size of IT project money at least equaling projects coming out of the 2011-12 Budget. That’s a lot of money. Tax, Health and welfare did particularly well, but there was a good smattering of money going to other agencies.

Government staffing will take a significant cut in 2012-13. Overall, government positions will be down by about 3,000. Ovum analysis indicates this will be compounded by a significant reduction in staff numbers against earlier government projections for 2011-12. The government sector is a particularly technology intensive business. Fewer staff generally translates into a drop in technology requirements. However, the impact of staff cuts this year will be offset by a renewed focus on productivity. Recently completed Ovum research into the Australian government senior shows a growing push for IT enabled productivity.

Budget analysis supports the push for productivity. Customs has identified productivity savings through its SmartGate initiative, and additional funding is now being directed to SmartGate. The Budget also outlined a strategy involving a number of Digital Productivity trials spanning government agencies. These include videoconferencing to streamline the delivery of Human Services to remote areas, telehealth for veterans, videoconferencing and online services to support children in remote areas with disabilities, and online remote access to cultural institutions.


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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, Ovum press office
P: +613 9601 6723


Federal Budget, IT industry



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