Governments to favour cloud over in-house IT

Public cloud offerings will account for more than 25% of government business services in domains other than national defence and security, according to newly released research.

In its latest global report on government IT and transformation to digitalised business models, analyst firm Gartner says that governments will increasingly favour cloud computing over long-running in-house IT deployments to contain costs and increase predictability.

“Nevertheless, the heightened sensitivities of many governments, particularly in Europe, will act as the limiting factor on the speed of take up as new, more stringent policies, and possibly legislation on cloud adoption, are developed and implemented,” said Rick Howard, research director at Gartner.

According to Howard, government CIOs should “insert themselves into public cloud sourcing decisions, lead discussions of available sourcing strategies with political leadership in the wake of higher levels of concern, and review current cloud migration activities in light of potential legislative changes.

“It’s essential for CIOs to recognise that they have a proactive role in ensuring that public confidence in government data handling is maintained by ensuring that data protection policies, contractual arrangements and practices are sound and aligned.”

In its report, Gartner says that, faced with relentless pressure to reduce costs and improve the performance of government agencies, CIOs must choose between maintaining current operations or transforming government services with fully digitalised business models.

According to Gartner, in this environment, government CIOs are uniquely positioned to assume a critical leadership role in cultivating the necessary digital knowledge, competencies and expertise to place technology at the core of every government process.

“Governments at all tiers and in all regions of the globe continue to operate in the long shadow cast by the global financial crisis, negotiating growing demands for public services with economic uncertainty and a perpetual state of austerity,” Howard said.

“There is an acute need to reduce the overall cost of providing government services while remaining responsive to citizen expectations. But the need to manage risk while taking steps to fix broken models with new digital innovations is equally important. CIOs will need to make the case to invest in digital capabilities by recapitalising stressed IT budgets and optimising technology portfolios to provide more stable operations at a lower cost.”

In another prediction for the government sector, Gartner forecasts that by 2016, at least 25% of government software development positions will be eliminated to fund the hiring of business intelligence and data analysts.

According to Gartner, cloud economies dramatically reduce the need for internal software development. Howard says that “while the conversion to private and public cloud is growing more slowly in government than in the private sector, the need for internal custom software development is being eradicated.

“Information availability is exploding to make data analysis the priority skill. Without analysts and business intelligence, the tidal wave of big data will lead to overload rather than progress,” Howard cautions.

“The key is to use the new tools to solve business problems and to use improved productivity to fund priority innovations. CIOs can use the productivity made possible by cloud to fund the transitional work required to make the new capabilities operational.”

Howard stresses that Gartner’s 2014 predictions for government highlight the “logical consequences and impacts that flow from the adoption of cloud computing, mobile devices, social media and accessibility to new sources of information.

“By embracing and not obstructing these disruptive technological changes, government CIOs can pursue opportunities to transform their agency into a digital business.” He says that by 2017, more than 60% of government open data programs that do not effectively use open data internally will be downscaled or discontinued.

Externally focused government open data programs have sparked some interesting application development initiatives, but have not delivered sustainable value for government itself in terms of improved business performance or outcome management.

“Open data is considered a nice-to-have activity or a compliance exercise that is often delegated to a specific role (such as chief data officer), but has yet to become an essential element of routine business processes. Most open data programs are narrowly approached as an end in itself rather than a means to an end.

“By 2017, as many as 35% of government shared-service organisations will be managed by private sector companies. Government agencies will increasingly find themselves paying a premium for IT services unless they become more adept in their contract and vendor management abilities.

“CIOs and shared-service executives must seek to preserve the relevancy of their service by maintaining or enhancing investment in the enterprise’s skills and service offerings, developing multi-sourcing capabilities and regularly evaluating their sourcing decisions,” said Howard. “It’s essential to develop the dialogue with existing agency leaders and program managers concerning which services are inherently governmental and need to be maintained internally for reasons of security, mission sensitivity or other factors.”