How Efficient Are Government IT Investments?

17 Feb

How Efficient Are Government IT Investments?

Jan Alexa                                  
Senior Research Analyst, IDC Government Insights
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The efficiency of governmental investment is being scrutinised worldwide. We live at a time when taxpayers increasingly demand transparency and concrete results to ensure that the money they pay is used for their benefit. However, the efficiency (and the related concept of effectiveness) are notoriously hard to assess. The European Union commissioned a research paper on the topic, and many governmental manifestos cite the push for efficiency as one of their key objectives.

Perhaps nowhere is the push for more transparency acuter than in ICT technologies. While investments in general face scrutiny, ICT projects are often harder to explain and defend than for instance traditional infrastructure projects. When governments spend billions on traditional infrastructure, taxpayers can see the results in, say, a new road, and can then gauge its usefulness. For ICT spending, the picture is much more opaque. Investments in egovernment, however, can significantly alter the investment climate and make the interaction between citizens and state much less cumbersome.

Investments in governmental ICT can often be seen with suspicion by policymakers, especially in those countries where transparency issues and corruption are perceived as a serious issue. Assessing if the money is used effectively is, therefore, becoming extremely important for governmental stakeholders, as a lack of clarity can limit further investment.

Understandably, the issue is also very important for vendors, especially non-incumbent vendors that would say their offerings can bring more value for less money to the government. What is therefore needed by both of these groups is some benchmark to assess how particular countries are able to leverage their ICT investments in terms of the quality of their egovernment offerings.

To help governments and vendors assess the efficiency of governmental ICT spending, IDC created the first ever international efficiency benchmark of governmental ICT spending. The combination of publicly available egovernment benchmarks together with IDC’s own data on governmental ICT spending enabled us to look at how the money spent is translating into the quality of services for citizens.

The resulting benchmark holistically assesses how particular countries are doing in terms of efficiency of their ICT spending and how this spending relates to their ability to deliver appropriate egovernment services. The report, The Efficiency of Government IT Investment: An Econometric Comparison of European Countries, provides an overview of the methods and models used as well as results for 21 European countries.

Please contact us if you would like more information, or check out IDC Government Insights’ recent press release Adopting Best Practices Will Enhance Public Sector Digital Transformation, IDC Government Insights Study Finds.

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