Gi 2012 Predictions Presentation Final v3 13dec2012

IDC Government Insights Predictions 2012: EMEA Government
December 13, 2011
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IDC Government Insights Analyst Team
Over 20 analysts focused on government sector backed by over 1,000 IDC analysts and their coverage of technology and economic trends around the world
IDC Government Insights Predictions 2012: EMEA Government
Why Predictions?
Goal: Identify trends that impact government business and Information Technology decisions. Preview our research agenda Process: Drawn from IDC and IDC Government Insights studies, industry contacts, and our own government experience Bias: We focus on the transformation of major business processes and how IT enables that transformation Time Frame: Predictions are focused on 2012, but will have a long range impact beyond 2012
EMEA is Definitely Not Homogeneous

Significant cultural, economic, geographic, institutional maturity and political differences from region to region and from country to country Ease of doing business and availability of funding varies widely from country to country Economic crisis has affected countries and regions in different ways Different regions have different goals for public administration
EMEA is Definitely Not Homogeneous

Significant cultural, economic, geographic, institutional maturity and political differences from region to region and from country to country Ease of doing business and availability of funding varies widely from country to country Economic crisis has affected countries and regions in different ways Different regions have different goals for public administration
Across the Regional Economies

Western Europe budget deficits soared as a result of the recession, bank rescues and fiscal stimulus packages mounting public debt jeopardized the sustainability of economic recovery ending the fiscal and monetary stimulus proved to be much harder than starting it every policymaker recognized that the situation was unsustainable Central and Eastern Europe Increased unemployment, austerity budgets and a lack of government transparency continue to dog Central and Eastern Europe
Middle East economic crisis was not particularly acute across the region political and social turmoil disrupted business and threatened to divide the region into winners and losers
Africa Economies proved resilient through the financial crisis, but growth is hampered because of skills scarcity and weak infrastructures
For Many Eurozone Countries the Economy Continues to Unravel
EU writes down debt

Slow to negative growth in Eurozone
EU writes down debt

Slow to negative growth in Eurozone Taxes increasing government spending declining
EU writes down debt

Slow to negative growth in Eurozone Taxes increasing government spending declining
EU writes down debt
Stock markets fragile

Slow to negative growth in Eurozone Taxes increasing governmen t spending declining Stock markets fragile
EU writes down debt
Consumer purchasing stagnates

Slow to negative growth in Eurozone Taxes increasing governmen t spending declining Stock markets fragile
EU writes down debt
Consumer purchasing stagnates
Euro remains volatile
Governments are Engaged in a Delicate Balancing Act
Reducing the deficit
Pumping money into the stagnant economy
Assuring voters that they feel their pain
Governments Struggle to Co-ordinate Service Delivery With Budgets
Citizens Must Be At the Centre of Service Delivery

Citizens with the authority and desire to participate Available, accessible, relevant information Dynamic, flexible, innovative services
3 2 1
The risk of losing sight of this is enormous...

Its All About Operations that Deliver Cost Effective Citizen Services
Traditional Business/IT Conversation Evolving Business/IT Conversation New Business/IT Conversation
Data....................Analysis..................Decision..................Action
Device Action
Data Collection
Device
Transactional Workflow (ERP, etc)
Abstraction
Analysis
Device
Push information to middle layers of the organization to facilitate decisionmaking and encourage action
Provide citizens and businesses with the information and capabilities needed to encourage and facilitate self-service
Device
Awareness
Data collection at point of creation (sensors, compliance issues, branches, kiosks, etc)
Management dashboards, strategic decision support tools, analytics
...and Providing an IT Infrastructure That Supports This...

Collaboration Real-time data collection, analysis, access Scale Integrated structured and unstructured data
This is Creating a Major Challenge for Government CIOs...

Systems arent adaptable IT costs are too high Processes are too cumbersome Theres too much waste Service delivery is too slow
Data isnt being protected

Projects are too big, take too long New services are needed now Rigid systems dont adapt to flexible processes
Government CIOs Recognize the Need for a New Approach to IT

Commercial arrangements that offer value for money
Cross-departmental projects that deliver systems that are fit for purpose without extensive customization
What IT is used for is of critical importance, but in todays economy how IT is used is just as important simultaneous leverage of both is the best approach Along with fleet services, energy, and other services, ICT is now considered to be a commodity and will be procured accordingly
Last but certainly not least, government investment in IT is significant
2012 Government IT Spending Forecast: Western Europe Total US $53.7 billion
UK 24% Spain 5% Other European Countries 36%
France 13% Germany 17%
Italy 5%
2012 Government IT Spending Forecast: Central and Eastern Europe

Total 2012 forecast for government IT spend, all CEE: US $6.90B Five biggest 2012 government IT spenders in CEE: US $5.51B
Russia Poland Czech Republic $697 $1,064
$3,157
Hungary
Slovakia $-
$356
$240 $500 $1,000 $1,500 $2,000 $2,500 $3,000 $3,500
2012 Government IT Spending Forecast: Middle East and Africa

Total 2012 forecast for government IT spend, all MEA: US $7.41B Five biggest 2012 government IT spenders in MEA: US $5.15B
South Africa Saudi Arabia Israel $912 $875
$1,960
Turkey
United Arab Emirates $$500
$706
$694 $1,000 $1,500 $2,000 $2,500
Smart IT is Cost Effective...

In 2012 what will make Government IT
Smart?
Smart Delivery
Cloud Services Open Source Software Shared Services Centralization/ Virtualization/ Consolidation BPO
Smart Procurement and Commissioning

New Procurement and Commissioning Practices Payment on Priority-based Outcomes SLAs
Smart Information Management
Information management and security Big data leverage
SMART DELIVERY
Delivery Pressure Points

In Western Europe the major issue continues to be about money ICT costs are perceived to be higher than necessary given the availability of alternative delivery mechanisms In CEE the push from the European Union to get government spending under control (despite the weak economy) means reducing costs will be the top priority and one of the biggest challenges for IT departments in the public sector. There is increasing vigilance and calls by citizens across the MEA region for improved transparency and accountability from their governments. At the same time, there is an acute lack of IT human resources to support development requirements.
Use of Cloud Services is On the Rise

In Western Europe the move to cloud services will continue to be led by the UK at both the central and local government levels with emphasis on private cloud Rationale for cloud is spread equally across cost efficiency, scalability, faster deployment of applications, and support for establishing standard processes In CEE and MEA, cloud services will continue to attract attention, but widespread adoption will be hindered by security concerns and legal requirements and constraints.
In much of EMEA, 2012 will see a dramatic increase in government use of private cloud services, particularly in Western Europe
Open Source Software Becomes Mainstream

The open source software (OSS) movement has gained ground in WE, the UK is the most recent government to announce plans for its use, although there are still questions about the validity of claims re lower costs we expect the use of OSS to increase
The perception of lower cost and increased flexibility will drive higher government interest in the use of open source software in 2012
In CEE growth in the use of OSS has been organic, but the recession has intensified pressure to use OSS to cut costs and we expect the move to OSS to increase, more slowly in some countries than in others In MEA, the public sector will continue to be a key proponent of OSS, however government IT decision makers still consider it to be risky and are more likely to use OSS for back end systems rather than client-facing solutions
Shared Services Increasingly Favoured

We expect the shared services model to be pushed to its limits to satisfy the need to cut costs pooled resources. There will be increasing exploration of service sharing across organisational and geographic boundaries as well as sharing services will the private sector. Services will be performed in-house, shared or outsourced . In CEE, central governments will expand existing services or create new shared services options for government entities working at the ministerial to municipal level, emphasizing the benefits of common platforms and scalable functionality.
As the belt-tightening continues there will be a marked increase in the adoption of shared services in many shapes and sizes at all levels of government, across all public sector organizations, departments and functions
Centralization/Virtualization/ Consolidation Top of Mind

Once the poster-child of Green IT, virtualization and consolidation are now considered key to optimized resource use and cost reduction and we expect governments to accelerate the reduction in the number of servers and data centers
It is not unusual for governments to experience short term (almost immediate) savings as a result of server virtualization Cost savings through desktop virtualization has proven to be a slower process, but has delivered lower expenses associated with desktop support, application delivery, desktop provisioning and application and operating system maintenance A return to all-encompassing IT centralization is unlikely, but there is a definite trend towards centralization of specific activities, IT procurement for example
BPO Will be the Option of Choice in Many Situations

Staff reductions, budget cuts, and skills shortfalls will increase government interest in outsourcing generally and BPO in particular BPO providers are expanding European operations expectations re growth are high, both from the public sector and other industries Experience will prove that effective BPO required more hands-on management than IT outsourcing Governments will increasingly expect BPO to deliver innovative service delivery, but this will require a change in incentives and the need for a more concerted partnering effort
Interest in BPO will increase across governments in Europe, particularly if there are obvious cost savings
SMART PROCUREMENT AND COMMISSIONING

Procurement and Commissioning Pressure Points

Governments in WE are facing the biggest financial squeeze in living memory, but there has been insufficient focus on achieving and leveraging cashable savings opportunities offered by improved procurement commissioning practices Lengthy ICT outsourcing contracts have come under fire rising costs, goals not met, difficult to manage are just some of the reasons governments are exploring alternatives In MEA, there are efforts to bridge the public sector financing gap for infrastructure projects with contributions from the private sector and there is also pressure for greater transparency and corruption prevention.
New Procurement and Commissioning Practices Will be the Order of the Day
Public sector contracting authorities differ greatly in size, culture and objectives and range from the very large to the very small and the experience of those responsible for initiating and managing the procurement process vary widely. More transparency, improved commercialism, new provisioning models, new financing models all are on the table, but all involve significant change
Single contracts for routine commodities has proven to save money and makes sense governments will increasingly negotiate for the same or similar services across multiple departments
Governments will continue to re-write the procurement and commissioning rules and ICT and related services will be subjected to changes including innovative funding, multiparty joint ventures, pay as you go, and cross-agency contracts
Payment on Priority Based Outcomes Will Become More Palatable

Payment for inputs is no longer acceptable it exposes the government to the risk of over-payment and payment for services it doesnt use or need and stifles innovation Payment for results or outcomes transfers the risk of delivery to providers, it empowers and provides incentives for them to succeed Priority based outcomes will undoubtedly be driven by business processes that cross departmental structures and budget, however the potential for innovation and rethinking service delivery is enormous Defining measurable business benefits is critical to the success of outcome based commissioning
To minimize the risk of inappropriate public sector spending, in 2012 we expect to see more contracts based on payment for priority-based measurable outcomes
SLAs: It Will be More Obvious that the Devil is in the Details

Governments continue to favor systems that are externally hosted and managed CIOs will need to pay closer attention to all contracts that require specific services and specific performance levels as part of their delivery government-wide standardization evolves and grows As transition occurs, IT centers in government agencies will become less about systems operation and maintenance and more about serving as centers of information technology expertise
Increased use of cloud computing will require more time to be spent on reviewing the terms and conditions of service-level agreements to ensure needed services are properly covered
SMART INFORMATION MANAGEMENT

Information Management Pressure Points

The Internet of Things has the propensity to create extraordinary volumes of data, offering significant potential for re-use and unprecedented analytical opportunities and present real-time and future leverage Much of the data available for collection and analysis is personal, its ownership is ill-defined, but its sensitivity is without doubt. There are benefits to be gained from its capture but there are enormous risks involved in paying little attention to the need for privacy and security. Ongoing investment in information management is vital. The risk of non-compliance with increasing regulation and legislation as well as the risk of political embarrassment are sufficient to warrant ongoing investment in information security.
Investment in Information Management and Security will be Paramount

The right to privacy and to the protection of personal data are fundamental rights in the EU which must be also online effectively enforced using the widest range of means To ensure the availability of missioncritical systems, and also build confidence amongst the citizenry and trust in the various online services that governments are promoting, security solutions will be seen as a critical investment The push for paperless administration will increase use of e-filing and e-signatures and enhance the need for document management solutions; but uptake will be slower than in WE, as converting paper to electronic formats remain a major challenge
The volume of digital information will continue to grow but, in a world of changing technologies and increasing threat sophistication, government investment in organizing, managing, and securing this data will receive high priority and continue to increase
Big Data Analysis will Introduce New Opportunities for Innovation

Governments have the ability to assemble more detailed pictures of their citizens and business than ever before There will be increased investment in solutions that address the need for realtime, streaming data analysis such as complex event processing, rules engines, and related software for real-time monitoring, alerting, analytics, and intelligent process automation Turbulent social environments and the need for improved transparency will force public-sector organizations to reconsider and potentially revise their business models and strategies based on real-time data. In MEA, governments will start to leverage online social media as a preferred platform for citizen engagement
Governments will develop plans that allow for easy access and analysis of both data and content to better support the most appropriate distribution of social, healthcare, and educational services and resources
Advice for Government IT Buyers

Operational efficiency, program performance outcomes, and services delivery capabilities via new and emerging service channels are the keys to IT investments Require continual strategy innovations, highly focused IT solutions and services investment, collaboration across agencies and governments, and new partnering schemes with IT vendors Focus on Smart Government maturity and the opportunity to capitalize on Big Data, open data and transparency innovations, and the acceleration of personal mobile technologies to leverage value from social networking and collaboration with their workforce and citizens
Integrate metrics and frameworks for evaluating and incorporating IT services into their portfolios that extend the full life cycle of lines of business and services and deliver measured value-based outcomes
Build reliable return on investment (ROI) models that will help agencies analyze new IT service models, and help build business cases for new types of IT investment (and migration away from older legacy systems)
22
Advice for Vendors to Government

Align solutions and services offerings to broader government operational efficiency (as opposed to narrower cost savings) and business outcomes
Agile and innovative solutions that focus on government lines of business (human services, public safety, etc.) and emerging technologies (mobile devices) and that maximize government program and service outcomes will win
Analyze where funding and programs are strategically positioned, as well as careful and serious consideration of how to advance Smart Government collaboration that gives governments new opportunities to achieve their goals Help government organizations leverage existing legacy investments and create the longer-term view for them to migrate to the nextgeneration infrastructure/service environment
23
IDC Government Insights Upcoming Western Europe Research (Q1 2012)

Document Title Next Generation ERP Applications Next Generation CRM Applications Western Europe Government IT Spending Forecast 2011 - 2015 Pivot Table Western Europe Education IT Spending Forecast 2011 - 2015 Pivot Table Western Europe Government IT Spending Forecast 2011 2015 Report 2012 Top Ten Government Predictions for Western Europe Cloud Computing in the Public Sector -- Investment and Adoption Trends Government use of social media: Investment and Adoption Trends The Pulse of IT in the Western Europe Government Sector: Major Deals Signed August - December 2011 IT and Managing Money: Financial Management Solutions Priorities and Trends 2011-2012 Wireless and Mobile Technologies in the Public Sector: Investment and Adoption Trends 2011-2012 What IT Investments are Local Governments Planning for 2012? Publish Date Published Published Published Published Dec 2011 Dec 2011 Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012 Jan-Mar 2012
IDC Government Insights CEE Upcoming Research for 2012

Document Title Top IT Vendors in the Government Sector in Central Europe Publish Date Dec 2011
2012 Top Ten Government Predictions for Central and Eastern Europe
More with Less in Central Europe: To What Extent Can Governments Tackle the IT Challenges Facing Them? More Bricks Than Bits? The State and Future of e-Government in Central and Eastern Europe Core Central Europe IT Spending in Government 2011 and 2012-2016 Forecast Beyond the Firewall in Central Europe: Government Planning and IT Security Strategies Vendor Assessment: Leading Central European Government Sector Vendors eUsing the EU: Central and Eastern European Government IT Priorities and Visions Still in School, but Learning Fast in Central Europe: Smart Cities Create Business Opportunities
Jan 2012
Apr 2012 Apr 2012 Jul 2012 Jul 2012 Oct 2012 Oct 2012 Nov 2012
IDC Government Insights MEA Upcoming Research for 2012

Document Title 2012 Top Ten Government Predictions for Middle East and Africa Publish Date Jan 2012 Jan 2012 Middle East and Africa Government IT Spending Forecast 2011 2015 Report Mar 2012 Profiling the Leading IT Services Vendors within the MEA Public Sector May 2012 MEA Government IT Investment and Spending Trends (based on end-user survey) The Smart Government Maturity Model: Evolving towards Transparent and Open Governments in MEA Cloud Computing in the MEA Government Sector MEA IT spending in Government 2011 and 2012-2016 Forecast Update Oct 2012 Innovative eGovernment Service Delivery within the MEA region Leveraging ICT to Enhance Transparency in MEA Governments Nov 2012 Jun 2012 Aug 2012 Sep 2012
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Appendix
IDC Overview
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Insights are a series of industry-focused lines of business within IDC Each Insights focuses on technology-enabled business innovation within a single industry Insights leverage 40+ years of IDC research methodologies and processes
Each Insights division is an agile start-up with a global footprint

IDC Government Insights covers: Infrastructure consolidation Open Governments North America, Europe, Asia Pacific, Latin America. Middle East and Africa Advanced and Emerging Markets
IDCs IT Executive Programs

IDCs IT Executive Programs consists of a family of research programs intended to help todays time-constrained IT executives make more effective technology decisions. The goal of the program is to offer accurate and timely research that will assist IT executives in mitigating technology risks, maximizing the effectiveness of IT investments, identifying and capitalizing on new opportunities, and bringing forth solutions that are aligned with the organizations business objectives. Our flagship offering in the series, the Executive Technology Advantage Program, includes a strategic partnership with IDGs CIO Executive Council, a global peer advisory community of 750 global enterprises and more than 1,400 IT leaders. Through this new partnership, IT executives will have exclusive access to IDCs team of 1,000+ global analysts, IDC Insights industry specific research, and the CIO Executive Councils member CIOs, offering a global resource to help accelerate the decisionmaking process. The new offering brings together two of the most powerful brands in the IT industry. Our IT Executive Programs offer a range of services that align with the needs of IT executives - from very personalized guidance with a CIO advisor to specific research to assist with critical decision making. For complete details visit: www.idc.com/iep
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IDC Government Insights Predictions 2012: EMEA Government

December 13, 2011

IDC Insights Community: http://idc-insights-community.com

IDC Government Insights Analyst Team

IDC Government Insights Predictions 2012: EMEA Government

EMEA is Definitely Not Homogeneous

EMEA is Definitely Not Homogeneous

Across the Regional Economies

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

Stock markets fragile

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

Consumer purchasing stagnates

For Many Eurozone Countries the Economy Continues to Unravel

EU writes down debt

Consumer purchasing stagnates

Euro remains volatile

Governments are Engaged in a Delicate Balancing Act

Reducing the deficit

Pumping money into the stagnant economy

Assuring voters that they feel their pain

Governments Struggle to Co-ordinate Service Delivery With Budgets

Citizens Must Be At the Centre of Service Delivery

The risk of losing sight of this is enormous...

Transactional Workflow (ERP, etc)

Management dashboards, strategic decision support tools, analytics

...and Providing an IT Infrastructure That Supports This...

This is Creating a Major Challenge for Government CIOs...

Data isnt being protected

Government CIOs Recognize the Need for a New Approach to IT

Last but certainly not least, government investment in IT is significant

2012 Government IT Spending Forecast: Western Europe Total US $53.7 billion

UK 24% Spain 5% Other European Countries 36%

France 13% Germany 17%

2012 Government IT Spending Forecast: Central and Eastern Europe

2012 Government IT Spending Forecast: Middle East and Africa

Smart IT is Cost Effective...

Smart Procurement and Commissioning

Smart Information Management

Information management and security Big data leverage

Delivery Pressure Points

Use of Cloud Services is On the Rise

Open Source Software Becomes Mainstream

Shared Services Increasingly Favoured

Centralization/Virtualization/ Consolidation Top of Mind

BPO Will be the Option of Choice in Many Situations

SMART PROCUREMENT AND COMMISSIONING

Procurement and Commissioning Pressure Points

Payment on Priority Based Outcomes Will Become More Palatable

SLAs: It Will be More Obvious that the Devil is in the Details

SMART INFORMATION MANAGEMENT

Information Management Pressure Points

Investment in Information Management and Security will be Paramount

Big Data Analysis will Introduce New Opportunities for Innovation

Advice for Government IT Buyers

Advice for Vendors to Government