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Summary

We all know that governments around the world are spending big on stimulus packages, including direct and indirect payments and rebates to individuals and businesses. At this stage it is difficult, if not impossible, to predict government expenditure over this period of crisis and recovery. Individual countries will have different levels of stimulus measures focusing on their individual country’s priorities and ideologies. This commentary takes an initial look at the conflicting impacts of the COVID-19 pandemic on government IT spend.

Operational costs are increasing in the short term

Many governments have implemented direct payments and new rebates to assist the economy through this time. The last two weeks in March saw more than 10 million people in the US apply for unemployment assistance. This is on top of the additional crisis management and logistical tasks that all levels of government are now undertaking.

To deliver existing services and to define, implement, and roll out new programs and payments, governments across the world are increasing their workforce. As an example, thousands of jobs have been created in Australia to ensure welfare payments are processed and that call centers cope with the increased load.

All countries are redeploying staff from less-critical functions and into frontline operations as the work increases drastically. Many government workers who cannot be redeployed but can still be productive are being asked to work from home. Some jurisdictions have been slower than others with remote working, partly due to their deployed technology capability and partly due to cultural and organizational limitations. This is driving a rapid increase in demand for remote working technology, including secure internet gateways, VPNs, collaboration tools, video conferencing, and virtual desktop environments.

Also, where the architecture allows it, compute power is being turned up on critical processing systems within government agencies. Mainframe-based systems are coping well in this environment, with the “golden screwdriver” being used to unlock unpaid for but installed capacity within many agencies. New systems using scalable cloud architectures are also coping well, with capacity being scaled up as needed. Midrange-based, three-tier systems running on-premises have been hardest hit, with no fast way to scale and many bottlenecks inherent in the designs.

Many vendors are working in good faith with government agencies, with an expectation that the market for these technologies will maintain higher levels after the pandemic and that governments will “pay the piper” then.

Will short-term actions lead to long-term change?

Delivering change within this environment with short timeframes and significant impacts has required agencies to streamline decision-making and governance processes. Cross-functional executive teams are working within and across agencies to prioritize resources and implement government directions.

Some government agencies are looking forward and are already formulating ideas to create a more resilient and flexible service-delivery capability. Most of these are built around fast-tracking existing plans aimed at modernizing legacy systems and delivering on digital transformation promises. One central agency in Australia has just advertised 30 senior consulting roles that will be the core of a multidisciplinary approach to drive its transformation agenda. These roles include data analysts, lawyers, user researchers, developers, governance and risk specialists, and policy specialists, to name a few.

As with the nation-building exercises after World War Two, governments will look to continue some of the new practices that have been applied during the crisis. An increase in remote working, more flexible work allocations, simplification of services, and support for local industries are likely to be pursued. Certainly, the COVID-19 crisis is an enormous disruption to the way governments deliver services, but it is also an equal opportunity to take short-term advances into the future.

Appendix

Further reading

Global Government Technology Spending Through 2024, ENV006-000090 (April 2020)

Tech companies pitch in to fight COVID-19, INT002-000279 (March 2020)

COVID-19 is an opportunity to change the workplace, INT004-000058 (April 2020)

Author

Tony Castley, Principal Analyst, Public Sector

[email protected]