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Government CIOs Drive Digital Transformation in 2017

When asked, most senior executives can describe their digital transformation agenda for 2017. In fact, on average, the top-performing commercial organizations will spend 33 percent of their IT budgets on digital business initiatives, according to the latest worldwide market study by Gartner.

Looking forward to next year, IT decision makers at the leading organizations anticipate spending 43 percent of their budgets on digital transformation projects. However, that's compared to just 28 percent for government CIOs. Let's take a closer look at that market data.

Government IT Market Development

Government CIOs anticipate a 1.4 percent average increase in their IT budgets, compared with an average 2.2 percent increase across all industries. Local government CIOs average 3.5 percent growth, which is still less than the average IT budget growth among top-performing organizations overall (4.6 percent).

Average IT spending for state and local governments in 2016 represented 4 percent of operating expenses, which is up from 3.6 percent in 2015. For national and international government organizations, average IT spending as a percentage of operating expenses in 2016 was 9.4 percent, up from 8.6 percent in 2015.

Survey respondents also identified technologies with the most potential to change their organizations over the next five years. Advanced analytics was first across all levels of government (79 percent). Digital security remains a critical investment for all levels of government (57 percent), particularly in defense and intelligence (74 percent).

The Internet of Things is a hot topic for local governments (68 percent), whereas business algorithms are highest among national governments (41 percent). That said, all levels of government are less interested in machine learning or blockchain.

Also noteworthy, the top three barriers that government CIOs report they must overcome are internal skills or resources (26 percent), funding or budgets (19 percent), and culture or structure of the organization (12 percent).

Specific areas where workforce skills are most lacking include data analytics (30 percent), which incorporates information, analytics, data science and business intelligence. Moreover, security and cyber threat risk is ranked second for all government (23 percent).

Government Adoption of Digital Ecosystems

Overall, according to the Gartner assessment, 58 percent of government CIOs report that they participate in digital ecosystems -- that's compared with 49 percent across all other industries.

As digital transformation gains momentum across all industries, the need for government to join an ecosystem -- interdependent, scalable networks of enterprises, people and things -- also seems to increase. "The digital ecosystem becomes the means by which government can truly become more effective and efficient in the delivery of public services," said Rick Howard, research vice president at Gartner.

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