European government IT spend to reach US$49bn

4 Aug 2005

Western European governments’ investment in IT is set to grow over the next four years, according to IDC. The analyst firm predicts governments are set to invest US$49bn in IT by 2009, compared with US$38bn in 2004.

It is understood the growth rate will continue to stay above the IT market average, with local authorities representing the strongest driver.

IDC’s study shows that government IT spending will grow at an average of 5.3pc between 2004 and 2009, compared with 4.5pc for the total IT market.

Local authorities will grow from US$18.7bn in 2004 to US$24.8bn in 2009, a compound aggregate growth rate of 5.8pc. Over the same period, central government spending will grow 4.8pc.

IDC warns IT vendors that intend to gain a share of this fast-growth market must provide IT solutions that support business process transformation.

“IT vendors that want to sell their products and services in the government sector must provide solutions that match the requirements of that long-term transformation,” said Massimiliano Claps, programme manager at IDC Vertical Markets.

According to Claps, vendors will need to develop value propositions that match government requirements. Vendors that target electronic service delivery initiatives must package citizen interfacing technologies, such as portals and call centres, with solution bundles that can securely handle all citizen cases on a customised basis.

Customer relationship management, for example, with comprehensive case management functionalities and document and record management tools will ensure efficiency and effectiveness of workflows between the front and backend.

Vendors that target back-office reengineering must offer traditional accounting, payroll and human resources solutions with business intelligence/analytical tools necessary to review performance and plan for future government activities.

By John Kennedy