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27th July 2022 Newsletter

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

Recent Government Tenders

Microsoft News

  • 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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