This year, the obstacles for the IT industry and UK channel partners have been many, from soaring inflation to supply chain issues, resourcing, massive spikes in energy prices, and the continuing regulatory changes following the UK’s withdrawal from the European Union.
These challenges, and the repercussions of ongoing financial instability in the UK and abroad, are expected to last into 2023 and beyond. Compounded by recent political instability, uncertainty over the direction of policy and the tenure of ministerial positions remains. This means that decisions on technology spending risk being delayed or even abandoned – especially in the public sector and related industries.
However, ongoing investment in digitalisation and the rush of organisations looking to protect themselves from economic headwinds mean we can expect strength in the UK IT software and services market in the year to come. Crucially, technology businesses vending to public sector organisations should focus on five key service areas.
Data and analytics
Vendors with ready-to-go and cost-effective answers for automation, hyper-automation and the personalisation of citizen-centric services will continue to be of value to the UK government. The need for timely data and insights to support critical decision-making through this time of economic turmoil will also continue to be a top priority. This will likely spur spending in data and analytics.
Bridging the digital divide
Enabling growth by tackling social inequality, promoting regional representation, and investing in continued digitisation across public services will be highly valued throughout 2023. Addressing the UK’s digital divide was identified as a key priority by the government during the Covid-19 pandemic, and there will continue to be interest in solutions for the UK’s digital skills gap, regional disparities in digital connectivity, and the provision of affordable broadband connections.
Increasing competition for talent across all sectors, combined with continued demand for remote-enabled employment opportunities, and the current high costs of running large buildings, will boost the growth of modern collaborative workplace technologies that enable homeworking. We also expect continued support for emerging innovations such as virtual reality and the metaverse, which have the potential to boost morale and productivity.
The circular economy
Achieving climate neutrality by 2050, preserving our natural environment, and strengthening our economic competitiveness requires a major shift to a circular economy. Government organisations will be increasingly looking at how to operate in a way that preserves resources, makes good business sense, and reduces environmental impact. There is an opportunity for IT vendors who can guide government organisations in this shift and build digital foundations – a digital backbone – to accelerate the journey to a resource-efficient economy.
Smart technologies and cybersecurity
Regional governments and smaller organisations face increased pressure to improve services while significantly reducing operating costs. That said, we anticipate continued investments in essential areas, such as defence and healthcare, where organisations are looking to increase efficiency and resilience though embedded smart technologies and cybersecurity solutions. Vendors must look to align their services with this requirement.
In parallel to these five service areas, organisations should look for opportunities to develop social value programmes, especially in areas that are commercially viable. For example, at DXC we have rolled out an international initiative called Dandelion that provides neurodiverse individuals with training and career opportunities in various fields, including data analytics, software automation, user experience and cybersecurity. It’s a win-win arrangement for the participants in the programme, for DXC in our search for talent, and for our customers, like the Department of Health and Social Care (DHSC), who have opted in to be part of the scheme.
Despite budgetary pressures, strategic and trusted technology and IT services providers that recognise the pressures brought by increased public borrowing will have the advantage as we progress into next year. To stay relevant, however, they must make clear their impact on agility, cost savings, and social value – while at the same time aligning their wider offerings with the policy, spending priorities and aims of government departments.
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