Mr Blair plans to address the public sector’s IT woes with a $9.5 billion plan, including $1.6 billion for connecting services to the Internet. The measures are sorely needed – but while the new investment will create strong opportunities for tech vendors, the government will still lag the rest of the economy in IT spending.
UK Prime Minister Tony Blair has admitted the public sector is in the technological dark ages.
UK Prime Minister Tony Blair has made his first major speech on eGovernment in two years; he admitted that the public sector was in the technological dark ages and reaffirmed his $9.5 billion investment plan for public sector IT.
It’s hard to visualize just how far behind the rest of the economy the public sector’s use of IT has fallen: most European office workers would be shocked at their public sector counterparts lack of IT facilities. However, addressing this problem creates new challenges.
It often seems that governments face particular difficulties in achieving IT success – partly because government IT failures happen in public, while those of other organizations rarely see the light of day. That said, governments certainly can and do run into problems in handling projects and managing contractors.
New NHS IT chief Richard Granger started his well-paid and extremely challenging job at the end of September. The size of the mountain he will be dragging the health service up is reflected in his $400,000 salary – far higher than Mr Blair’s.
The cash injection, alongside appointments like that of Mr Granger, shows that the government at least recognizes the scale of the problem. So what does this mean for vendors? Large central government projects will remain off-limits to all but the largest providers as primary contractors, thanks in large part to the long sales cycles and complex compliance requirement for government contracts.
However, they will still offer significant opportunities to smaller players as secondary contractors. In addition, the funding at institution level, for individual schools and hospitals, offers massive opportunities for smaller providers to offer consolidated outsourced services.
Datamonitor estimates that the UK government will spend $3.9 billion on IT this year – and that this will rise to $4.2 billion annually by 2005. Although these figures represent significant increases, they will still leave the government lagging behind almost all other sectors of the economy in relative IT spending.
Related research: Datamonitor, eGovernment – the path to electronic public service delivery in Europe (BFTC0426)
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