New Zealand govt IT spending to plummet compared to global average

New Zealand govt IT spending to plummet compared to global average

Expected to decline by 5 per cent in 2020

Credit: Dreamstime

New Zealand government services are forecast to cut back on IT spending in 2020 at a rate of more than eight times the global average.

In New Zealand, spending on IT by the government is predicted to decline by 5.0 per cent year-on-year, to $1.2 billion, according to research firm Gartner.

This is opposed to global government IT spending, which is estimated to drop just 0.6 per cent year-on-year, to US$438 billion.

Irma Fabular, senior research director at Gartner, said the global priority in IT spending would be directed towards public health and wellness, including telecommuting. 

Spending on measures towards community and national resilience through improving disease and other threat surveillance systems were also predicted to be a focus.

In addition, Gartner research indicated other global focus areas include digital government services, data and analytics, cybersecurity, citizen engagement and experience and building health system resilience to prepare for future pandemics.

While spending for these areas is likely to be bolstered, it is predicted to come at a cost to projects.

“Important but less urgent IT projects, such as enterprise resource planning (ERP) and robotics process automation (RPA), will be delayed to make room for immediate and critical spending in digital workplace support, public health response and economic growth,” Fabular said.

“Adoption of cloud services will continue to accelerate while spending on in-house servers and storage will continue to decline.”

Out of all the sections within New Zealand government IT spending, the device market is estimated to take the biggest hit, dropping 18.9 per cent, to $77 million.

Spending on internal services, data centres, telecommunications services and IT services are also forecast to decline by 15.3 per cent, 9.7 per cent, 7.9 per cent and 5.3 per cent, respectively.

Software is the only government IT spending area expected to grow in the country with 4.7 per cent anticipated, to $332 million.

Meanwhile, global government IT spending is forecast to see declines on devices, data centres, telecom services and internal services by 8.3 per cent, 7.2 per cent, 2.4 per cent and 0.9 per cent, respectively.

On the global scale, spending on software is anticipated to grow by 4.4 per cent and the IT services market is predicted to remain steady.

Despite the declines, there is growth on the horizon for both New Zealand and worldwide, with a 2021 forecast for growth of 5.8 per cent for New Zealand, to $1.28 billion, and 3.3 per cent for global spending, to US$452.3 billion.

North America is predicted to be the largest global regional government IT spender this year, at US$191 billion. 

Western Europe is forecast to follow at US$94 billion, and then Greater China at US$39 billion.

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