IT spends by governments could reach $589 billion in 2023

Gartner predicts global government IT spending to reach $589.8 billion in 2023, up 7.6 percent from 2022.

“Global challenges like inflation and workforce scarcity and their local repercussions are testing the abilities of government CIOs to respond with appropriate service delivery mechanisms and organisational accountability,” said Apeksha Kaushik, Principal Analyst at Gartner. “In addition, the 'great resignation' and the competing demand from the commercial sector have forced governments to re-examine their approaches to counterbalance internal talent scarcity.”

According to Gartner, government organizations will continue to invest in digital programs in 2023. “Governments are increasingly spending their IT budgets to replace legacy applications. Gartner’s 2023 CIO and Technology Executive Survey showed that 57 percent of government CIOs plan to increase funding for application modernisation in 2023, up from 42 percent in 2022,” said Kaushik.

Gartner predicts that governments worldwide will ensure their digital projects endure mission impact in this year. Over 75 percent of governments will measure the enduring impact of digital transformation by 2026, according to the company.

The Gartner report said Indian businesses will spend $108.5 billion on IT in 2023, while global IT spending will reach $4.6 trillion in 2023, an increase of 5.5 percent from 2022.

Global economic turbulence continues, but Gartner projects IT spending growth in every region in the next year. Software to remain highest spending segment in 2023

According to Gartner, software will continue to grow at the fastest rate this year. "Application modernization investments will increase supported by more software-as-a service-based solution offerings. The use of low-code application platforms (LCAPs) is also on the rise and will further accelerate legacy modernization efforts," it added.

“Compensation constraints and limited resources to attract and retain IT talent is becoming an even bigger challenge today as many governments are facing IT talent shortage,” said Kaushik.

As part of Gartner's multi-sourced workforce strategy, organisations will optimise internal IT talent and invest in employee experience tools for empowering and sparking innovation, as well as partnering with external IT service providers to speed up time to value, in order to increase productivity and innovation in IT.

In 2023, government organisations will continue to invest in initiatives that improve access to digital services as constituents increasingly expect the same level of service as online customers.

Despite digital transformation being a top priority for most governments, some CIOs are not maximizing their digital investments.

“Government CIOs who are moving beyond scaling digital solutions across their critical services are ensuring that further investment in digital solutions can directly impact how they achieve the mission or public purpose of their organization,” said Kaushik.