If you have engaged us for IT strategy work, you may have heard me talk about the magic 3% – where the average annual IT spend for government agencies is around 3% of annual revenue. Although there may appear to be lots of change in the IT sector, many things stay the same. And this magic 3% has stood the test of time. Based on research done in the US in the mid 90’s, we test this theory with the clients we work with. Drop below this and you start to see cracks showing in IT capability – old infrastructure, regular maintenance long overdue, and an unsettling experience for users. Rise above this and it usually indicates a focus on digital transformation and automation.
The magic 3% applies to a government entity of medium complexity (like a Vic LGA) and smaller than 1000 seats. If a business is more complicated than this (like a Water Corp or NSW LGA), then spend increases to somewhere between 5 and 6%. The percentage spend depends on the amount of information work needed to generate revenue.
This is a guide only and needs to be considered against your specific business complexity and size. The magic 3% describes the norm. But, it does make me wonder, would it be possible to spend less than 3% and provide better systems?
Across the Industry
Get tickets for LoRaWAN: The Things Conference, running from 22nd to the 23rd September, 2022
The National Bank of Australia (NAB) is now the most certified Microsoft customer in Australia & New Zealand
Attend a free webinar on strengthening your cyber defences with guest speakers Eric Lee and Scott Hesford
Recent Government Tenders
Mitchell Shire Council: Integrated Strategic Planning and Reporting Software (eProcure)
Melbourne Health: EOI Nephrology System (Buying For Victoria)
Mildura Base Public Hospital: Unified Communications Infrastructure and Management System (Buying For Victoria)
VicTrack: New Fibre Links in Regional Victoria (Buying For Victoria)
Austin Health: Enterprise Data Warehouse (Buying For Victoria)
Gippsland Water: Website and Content Management System (CMS) (Buying For Victoria)
SA Health: Oracle Corporate System (OCS) Upgrade (Consolidated Tenders)
Microsoft and the University of Technology Sydney (UTS) are launching the Biz Apps Graduate Certificate, designed to increase the number of skilled technology workers in Australia
BeyondTrust has released their Microsoft Vulnerabilities Report 2022, which provides an overview of vulnerabilities as well as strategies to address them
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