Public sector CIOs in Australia and New Zealand face a “challenging 12 months” managing their technology estates amid cost constraints, according to a leading Gartner regional analyst. However, some are optimistic that investments in AI will generate the productivity gains that many anticipate.

Gartner recently released the findings of its public sector study Survey of CIO technology leaders. The company found that 94% of ANZ Government CIOs named data analytics as their top technology investment for 2025, followed by investments in cybersecurity (91%) and application modernization (85%).

Dean Lacheca, a vice president analyst at Gartner, told TechRepublic that an austerity mindset was at play in government agencies. “Frustrated” CIOs were faced with another year of relatively stable budgets taking into account inflation, and reluctant to undertake major ICT projects.

“Right now we are probably in one of the most difficult times when it comes to austerity,” he said. “We realize that this will not be a period of massive and accelerated adoption of technology.”

Productivity increases and becomes a key objective for government CIOs

Lacheca said the focus on data analysis and investments in cybersecurity has remained consistent in recent years. However, this reflects slow progress, with investments in these areas facing challenges, such as track the evolving threat vectors plaguing cybersecurity professionals.

“The Australian federal government has done an excellent job on cybersecurity,” Lacheca noted. “But if you look at the Eight Essentials, and the movement towards the Eight Essentialsit’s still…relatively slow in this particular space.

SEE: Private sector technology investment will be led by cybersecurity in Australia in 2025

Compounding the continued focus on data analytics and cybersecurity is a growing desire for “human capital efficiency,” with 94% of CIOs surveyed by Gartner prioritizing productivity-driven outcomes, a significant increase compared to last year. The productivity surge comes as IT and the rest of government are determined to increase efficiency.

“We see a real contrast,” Lacheca added. “We see that some of the most high-profile government projects and efforts and modernization continue to be funded; but if we look at overall IT investments within governments, they (CIOs) have been severely strained in recent years.

Government CIOs rank AI among their top three technologies

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

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

Industrial cloud platforms

Lacheca said the importance of industrial cloud platforms reflects a shift toward adoption of more common platforms in the public sector. While there is no significantly differentiated technology, such as more advanced industry clouds for financial services, this shift promotes greater standardization across agencies.

SEE: How the sovereign cloud boom is happening in APAC

AI and generative AI

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

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

“They are the ones who need to slow this process down, because they are trying to make sure that we approach this from a balanced risk perspective,” he said.

SEE: Generative AI Could Cause Costly Mistakes for Tech Buyers

Low code and no code

According to Lacheca, low code has seen strong growth in recent years. The main reason, he says, is that government CIOs were trying to “prevent the mistakes of the past,” which created “a whole bunch of bespoke legacy technology,” posing a problem they have to deal with now.

Low-code platforms can also help IT teams fill talent gaps, he said: “It’s very difficult to find IT professionals in specific technologies. They therefore see low code as an opportunity to fill certain talent gaps, leveraging their own internal skills.

CIOs must continue to champion the value of IT

Besides managing technology risks (82%), CIOs’ biggest priority is demonstrating the business value of IT in government (68%). Lacheca said ANZ Government CIOs were still trying to change the “enterprise services type mentality” that comes from IT’s past.

“They’re still really trying to educate or communicate the value they bring to the organization itself“, he said.

Looking to 2025, Lacheca said he hopes the government continues to change its mindset about the true cost of existing technologies. He said there was a lot of fear about undertaking major IT investments and projects, which could lead to governments “kicking the can down the road”.

“I think there’s going to have to be some level of ownership on how do we start to mitigate that risk, and how can we do it in a way that actually creates some of that productivity gain.” , explained Lacheca. “There’s a real business case for the gains we’ll get if we start to alleviate some of the (technology) legacy that we have.”