Embracing Cloud and AI technologies could lead to savings of AUD $13.5 billion for Australia by 2035.
New data from Microsoft and Mandala indicates that accelerating cloud adoption in the Australian Government could yield significant financial benefits, potentially saving AUD $3.4 billion over four years and AUD $13.5 billion by 2035. The report, titled “Unlocking the Productivity Dividend of Digital Government,” highlights the advantages of modernising legacy IT systems and transitioning to cloud and AI-enabled platforms. This digital transformation could result in average annual savings of AUD $1.4 billion, representing a 13% reduction in overall government IT costs. Key savings sources include over AUD $10 billion in reduced infrastructure and software costs, AUD $2.1 billion in lower external IT labour costs, and AUD $1.3 billion from increased productivity among internal IT staff. Depending on the size of the agency, IT budgets could decrease by up to 28% over the next decade, with larger agencies expected to experience the most significant gains.
The report emphasises that only 10% of government IT spending currently goes towards public cloud solutions, leaving agencies reliant on outdated systems that cannot support necessary AI tools and productivity enhancements. Accelerating cloud adoption is projected to unlock AUD $1.4 billion in annual productivity gains, allowing staff to concentrate on higher-value tasks and transforming service delivery to the public. Furthermore, the report notes that over 70% of Commonwealth entities still utilise legacy IT systems, which are costly to maintain and vulnerable to cyber threats. In contrast, cloud-based infrastructure offers secure, scalable public services and fosters collaboration while enabling pay-as-you-go models to avoid unnecessary costs. The report also asserts that cloud technology is essential for deploying AI at scale, potentially unlocking an additional AUD $5 billion in productivity gains by 2035.
Categories: Cloud Adoption, Digital Transformation, Cybersecurity Risks
Tags: Cloud Adoption, Digital Transformation, Productivity Gains, Legacy IT Systems, Cost Savings, Cybersecurity, AI Integration, Government Services, Infrastructure Modernization, Public Sector Efficiency