top of page
  • Writer's pictureDigital Team

Twenty ideas for Governments seeking to reduce digital expenditure

Digital investment

There are a number of things governments can consider in their efforts to create efficiencies across government digital investment. The following are twenty (20) ideas that could be undertaken in isolation or as part of an overall effort to build investment efficiency. While the focus for these ideas may initially be to drive savings, many will also support the achievement of wider priority government outcomes.

The twenty ideas Governments could use to control digital expenditure are:

(1) Gain the sponsorship and active ongoing support of a senior political leader. This leader should be the Minister of Finance, Senior Minister or closely associated with the Finance Minister in order to guide other political leaders to follow a cross agency approach.

(2) Establish a digital investment oversight function with authority to direct government agencies digital investment. This could be within the central Finance function or in the lead agency for digital government. The oversight function should have the ability to stop or start investments within agencies through the government budget process and baseline expenditure.

(3) Set clear expectations over digital investment with government agencies. These expectations will need to be aligned with an overarching Government digital strategy. Ensure that these expectations are communicated clearly and accessible all agencies via websites, blogs, regular social media postings, and other routine communications.

(4) Require early visibility of agency investment intentions. Collect data and information about government agencies digital investment intentions. This can be through the agencies internal investment planning, the budget process, business strategies. This data/information should be used to: (a) build an agency specific and cross agency investment pipeline (b) support tracking initiatives through the investment lifecycle.

(5) Track investments with a unique identification number. This number should be assigned to digital initiatives and assets as soon as possible in the investment planning phase and be used throughout the other phases of the investment lifecycle. The changeable and modular nature of digital investment will necessitate a serialization approach that supports traceability from planning to asset management.

(6) Build an interoperable cross government investment portfolio management system. This tool will enable the tracking of digital initiatives and assets from planning, resource management, budget management, assurance, and benefits realisation. Over time this system could support the automated sharing of data/information on initiatives from agencies portfolio management tools to the cross-government portfolio management system.

(7) Require standardisation of foundational digital investment categories. A standardised approach should be taken within amenable and appropriate investment categories such as cloud services or back office/corporate services (HRIS, FMIS, Payroll etc). This will allow a cross-government procurement strategy for direct savings and indirect savings through cost avoidance. This does not mean that government should accept a monopolistic supplier model as the focus is upon standardised products/services and not necessarily single supplier(s).

(8) Make the most of tools to optimise cloud computing expenditure. While cloud services may reduce costs in the short term it is essential that ongoing expenditure management tools (FinTech tools) are utilised. The advantages of cloud services such as scalability and pay-as-you-go models will only be realised if they are actively managed.

(9) Consolidation of digital infrastructure There are broader, strategic opportunities to consolidate digital infrastructure at the cross-agency level. This could occur at the most foundational level such as datacentres through to a unified approach to desktop applications.

(10) Government shared services. The active collaboration and sharing of digital resources among government agencies can be undertaken more formally through a shared services model. Shared services are frequently used with the likes of back-office services (such as payroll, HRIS, FMIS etc) and can help reduce the duplication of efforts across staff, processes and infrastructure.

(11) Outsourcing to third parties. Outsourcing digital functions to external service providers can be a cost-effective strategy. This allows governments to focus on their core responsibilities while benefiting from the expertise and efficiency of specialized service providers. This should be undertaken with consideration of where government capability is best placed to manage and where it is not. Datacentres are an example of an area where a government (datacentre) strategy could guide what is managed by government (i.e. classified datacentres) and outside (non-classified) public cloud providers.

(12) Active digital lifecycle management. Government agencies need to follow sound digital asset lifecycle management. This will ensure digital assets are used efficiently and end of life is well managed and avoids the risks inherent with legacy infrastructure. This lifecycle management should be supported by the digital investment oversight function and by modern portfolio tools that allow the tracking of a digital initiative and asset though its lifecycle.

(13) Focus on the human capability underpinning digital government. Digital capability across government is frequently one of the biggest costs and impediments to government digital transformation. Governments need to take a more efficient approach to digital capability deployment so that scarce (human) resources can be effectively utilised in both single agency and cross government initiatives. This requires both (a) investing in training and capacity building for government officials and (b) creating a central capability coordination function across the digital government workforce. This coordinated approach should reduce reliance on expensive external consultants and contractors.

(14) Maximise the value of digital investment through agile methodologies. Agile requires an iterative investment approach designed to reflect the needs of the customer and/or initiative. This means it more accurately reflects the reality of the known/unknown and does not seek full project investment ('big bang') upfront the way traditional waterfall processes do. Smaller fit for purpose investments can be made through the project rather than large speculative upfront investments. This can result in significant direct and indirect savings and better outcomes.

(15) Cybersecurity investments. Investing in robust cybersecurity measures can prevent costly security breaches and data losses. The costs that can be avoided include incident response, recovery costs, organisational reputation damage, and wider business impacts.

(16) Provide support to the end of life processes for legacy digital infrastructure. Government agencies frequently manage legacy digital infrastructure that has rising costs and risks. These assets may not be priorities for replacement or retirement because of the effort required to close them off. Governments should consider establishing a cross agency team that is responsible for working with single government agencies to transition off legacy digital assets. This team would save considerable expenditure on ongoing maintenance costs, cyber security breaches, services delivery failures, and expensive external consultants and contractors.

(17) Set targets and thresholds for digital expenditure. Depending on what the objective is, governments could set targets for government agencies to meet for digital expenditure. This could be savings targets, efficiency goals, reduction in the level of consultants or contractors, or other direct cost savings.

(18) Digitally transform the central government finance function. Building a modern digitally enabled central government finance function could bring together a number of the steps already noted and support savings in digital government and across all asset classes. This function could build a investment portfolio management system that uses automated data collection from agencies to collect real time intelligence over investments. AI tools could be used to manage cross agency risks and identify opportunities. This would allow for a radically streamlined investment process and ongoing oversight for assurance.

(19) Provide cross agency procurement options. Identify digital investment categories where there are opportunities for cross agency economies of scale. Negotiate all-of-government discounts with key suppliers. Supplement the savings achieved through this with embedded standards in priority areas such as cyber security, and certification and accreditation. This will give agencies more confidence with the consumption of cross agencies options.

(20) Take a strategic approach to government data. The sharing of government data with citizens, businesses and between government agencies could enable significant savings across digital investment as well as support better outcomes. By allowing citizens and businesses to have better access to government data, administrative overheads could be reduced (i.e. self service efficiencies) and efficiencies between government agencies could be encouraged. This data strategy could be achieved by identifying the key datasets (including administrative/operational data) and using interoperable platforms and APIs to share the data as appropriate.


There are a number of things governments can consider in their efforts to create efficiencies across government digital investment. This includes ensuring that the efforts to take a more efficient approach to digital investment has the sponsorship of a senior political leader. A digital investment oversight function should be established with authority over government agencies. It should set clear expectations and require early visibility of agency investment intentions and track these with a unique initiative/asset identification number.

There should be an effort to build towards an interoperable cross government investment portfolio management system possibly as part of the digital transformation of the central government finance function.

Governments could consider setting targets and thresholds for digital expenditure across government. Standardisation of foundational digital investment categories should be mandatory as is making the most of tools to optimise cloud computing expenditure. Consolidating digital infrastructure should be considered and where amenable, the establishment of government shared services. The oversight function should provide cross agency procurement options and allow outsourcing to third parties where this is appropriate and more efficient.

To embed these approaches, governments could also promote active digital lifecycle management and provide support to the end of life processes for legacy digital infrastructure. Efforts to foster the human capability underpinning digital government should be prioritised as well as the use of agile methodologies to maximise value. Adequate cybersecurity investments to reduce incident management and recovery costs should be undertaken in parallel as well as the adoption of a strategic approach to government data.

#digitalinvestment #20waysto savegovernmentinvestment


bottom of page