Gartner: More Than a Quarter of Federal and National Government CIOs Anticipate Budget Decreases in 2014

Every year, Gartner surveys the membership of its Executive Programs to expose key priorities, opportunities and threats facing its members across the globe. Of the 2,339 respondents to the 2014 Gartner CIO Agenda Survey, 288 were from government in all jurisdictions, regions and domains, including defense. "Reflecting the extended budget development and appropriation cycles that are typical of public-sector institutions, 26 percent of government CIOs anticipate a budget decrease in 2014, as compared to the 27 percent who expected to be working with lower IT budgets in 2013," said Rick Howard, research director at Gartner. "However, with nearly 75 percent of government CIOs reporting flat or increasing IT budgets for the second year in a row, many government CIOs have an ongoing opportunity to build capacity in high-value areas - such as mobile services and business analytics - while retooling IT portfolios to include more software as a service (SaaS) and public cloud solutions."

The picture is less optimistic among those federal and national governments that remain under intense pressure to cut programs and services, including defense. Throughout 2013, rapid shifts in IT management, spending and sourcing took place most acutely at these levels of government, driven, in part, by mandated moves to low-cost, commercial alternatives. Overall, government CIOs estimate that at least 33 percent of IT expenditures are now being made by the business units, and outside the authority of the IT organization. This indicates a need for government CIOs to quickly and clearly differentiate their portfolios of high-value IT solutions and products from the commoditized IT services traditionally associated with in-house IT organizations.

"Regardless of how much IT spending happens outside of the IT organization, CIOs must address the presence of shadow IT by affirming their position as the designated and recognized point of IT management responsibility," said Mr. Howard. "This doesn't mean CIOs should attempt to restrict business-managed IT acquisitions and services. However, accountability for the information assets of a government agency cannot be distributed, and governance will ensure a corporate officer, the CIO, is at the table whenever or wherever an IT investment is being considered. To maintain organizational relevance in today's digital industrial economy, CIOs need to work in collaboration with their executive peers to strike the optimal balance of 'grow' and 'transform' with running the business."

The survey shows that, as digital opportunities and threats pervade every aspect of business and government, the IT and digital agenda for each country, industry and enterprise is becoming more specialized. Governments are at risk of entering a long-term state of technological deficiency if they fail to develop and reward digitally savvy executives and IT professionals.