Government IT Spending Gains New Momentum

Many government CIOs often struggle with legacy system issues. Their quest for digital business transformation may be the most highly motivated, compared with their peer group in private business.

Meanwhile, forward-thinking government leaders are planning to support the selective investment in business technology that enables more digital government services. It has become a strategic priority.

Worldwide government information technology (IT) spending is forecast to total $588.9 billion in 2023 -- that's an increase of 6.8 percent from 2022, according to the latest global market study by Gartner.

Government Technology Market Development

"Government organizations are continuing to modernize legacy IT and invest in initiatives that improve access to digital services as constituents increasingly demand experiences that are equivalent to online customer interactions in the private sector," said Daniel Snyder, director analyst at Gartner.

The total experience (TX) framework, which helps government agencies manage employee and citizen interactions, is enabling transformation and will remain among the main drivers of IT spending in 2023.

Along with improving the citizen experience and engagement, a cohesive TX strategy will help governments advance digital skills and literacy in their workforces by providing modern tools and approaches to lessen friction in government work.

According to the Gartner assessment, failing to build a solid TX strategy increases service friction, leading to the risk of service delays and underwhelming service experiences.

In 2023, government IT spending is forecast to increase across all segments except devices, as government end-users extend the useful life of their devices that were acquired at the onset of the pandemic.

Enterprise software will be the highest-growing segment in 2023, followed by IT services and internal services.

Initiatives such as migrating services to the public cloud, modernizing applications, and fortifying network security are among the primary innovation priorities that governments are focused on to improve public engagement and satisfaction.

According to the 2023 Gartner CIO and Technology Executive Survey, digital transformation, leveraging and using data effectively and technology modernization are the top three priorities of government CIOs.

"Delivering on these priorities depends on establishing a shared, organization-wide digital vision and integrating that vision into enterprise-level strategies," said Apeksha Kaushik, principal analyst at Gartner.

Outlook for Government IT Investment Growth

In alignment with these priorities, investments will increase in cybersecurity, application modernization, cloud computing platforms, integration technologies such as artificial intelligence (AI) or machine learning (ML), and business or data analytics tools.

However, government CIOs will have to tackle challenges such as varying stakeholder expectations and developing action plans accordingly. They must address concerns of digital transformation with mission objectives, and work closely with others to ensure a shared understanding and close linkage to priorities.

That said, starting in 2023, I believe government CIOs will reassess their workforce policies, increase IT investment in remote work infrastructure, and recruit the best developer and operations talent they can attract -- regardless of the candidate's geographic location.