CIOs across Australia and New Zealand’s public sector face a “hard 12 months” managing their technology estates amid cost constraints, according to a leading regional Gartner analyst. However, there is optimism that investments in AI will deliver the productivity gains many anticipate.

Gartner recently released the public sector findings from its CIO Technology Executive Survey. The firm found that 94% of ANZ government CIOs named data analytics as their top technology investment for 2025, followed by investments in cyber security (91%) and application modernisation (85%).

Dean Lacheca, a Gartner VP analyst, told TechRepublic that an austerity mindset was in play across government agencies. “Frustrated” CIOs were facing another year of relatively flat budgets when accounting for inflation, with little appetite for undertaking large ICT projects.

“Right now, we’re probably in one of the leanest periods with austerity,” he said. “There is a realisation that this isn’t going to be a period of massive, accelerated adoption of technology.”

Productivity rises to become a key outcome for government CIOs

Lacheca said that the prioritisation of data analytics and cybersecurity investment has remained consistent in recent years. However, this reflects slow progress, with investments in these areas facing challenges, such as keeping up with the changing threat vectors plaguing cybersecurity professionals.

“There’s been some great work done by the Australian federal government with their cybersecurity efforts,” Lacheca noted. “But if you look at the Essential Eight, and the movement towards the Essential Eight, it’s still … relatively slow going in that particular space.”

SEE: Private sector tech investment to be led by cybersecurity in Australia in 2025

The steady focus on data analytics and cybersecurity is now being joined by a growing desire for “human capital effectiveness,” as 94% of CIOs surveyed by Gartner prioritise productivity-driven outcomes, up significantly from last year. The productivity push comes as IT and the rest of the government are driven to increase efficiency.

“We see a real contrast,” Lacheca added. “We see some of the high profile government projects and efforts and modernisation continue to be funded; but if you look at overarching IT investment across governments, they [CIOs] have been really hard pressed in the last few years.”

Government CIOs name AI among their top three technologies

According to the Gartner report, the top three technologies ANZ government CIOs said they have deployed or plan to deploy in the next 12 months are:

• Industry cloud platforms (59%).
• Generative AI (56%).
• Low-code/no-code platforms (53%).

Industry cloud platforms

Lacheca said the prominence of industry cloud platforms reflects a shift towards adopting more common platforms across the public sector. Although there isn’t significantly differentiated technology, such as more advanced industry clouds for financial services, this shift promotes greater standardisation across agencies.

SEE: How a sovereign cloud boom is happening In APAC

AI and generative AI

Lacheca said the “surprisingly high levels of interest in AI” seen in government are primarily driven by the hope that it can help with agencies’ productivity demands. However, after a period of hype around generative AI, CIOs have become more realistic about the implementation challenges.

Although CIOs want AI to deliver more productivity, Lacheca said their current role is often one of a “risk mitigator” in that space.

“They have to be the ones that are slowing that process down, because they are trying to make sure we are approaching this with a balanced risk perspective,” he said.

SEE: Generative AI could be source of costly mistakes for tech buyers

Low code and no code

According to Lacheca, low code has been a big growth area in recent years. He said the main reason for this is that government CIOs were trying to “head off the mistakes of the past,” which created a “whole heap of bespoke legacy technology,” causing a problem they have to deal with now.

Low-code platforms can also assist IT teams in bridging talent gaps, he said: “It’s very hard to find IT professionals in specific technologies. So they look at low code as an opportunity for them to maybe bridge some gaps in terms of talent, where they can leverage their own internal skills.”

CIOs to continue to champion the value of IT

Aside from managing technology risk (82%), CIOs’ biggest priority is demonstrating IT’s business value in government (68%). Lacheca said ANZ government CIOs were still trying to change the “corporate services-type mindset” that comes from IT’s past.

“They’re still really trying to educate or communicate the value that they contribute to the organisation itself,” he said.

Looking ahead to 2025, Lacheca said he hopes there will be a continued shift in government mindset around what legacy technology is really costing. He said there is much fear around undertaking large IT investments and projects, which can lead to governments “kicking the can down the road.”

“I think there’s going to have to be a level of ownership around how we start to mitigate that risk, and how do we do that in a way that we actually create some of this productivity gain,” Lacheca explained. “There’s a real business case for the gains we will get if we start to relieve some of the the legacy [technology] that we have.”