Challenges concerning ICT investments in public sector

The paper will be devoted to the main challenges concerning information and communication technology (ICT) investments in public sector. Those investments are very risky and very often not-successful  due to many reasons. Selected problems (listed below) will be discussed.

1. All ICT investments are risky because of an information asymmetry between an investor and providers. The investor does not know among other things about:

• some limitations, which can come to light after system start-up (for example too low speed of processing)
• provider strategy, which could mean for example deferment of future system improvements
• future pricing policy of the providers, which could mean for example a big increase in prices of the next system’s modules.
• Total costs of system’s ownership (TCO)

 

1. ICT investments in public administrations are especially risky because of the fact that:

• public (European) money spent on investments are treated by some people as no-one's
• pressure of time – European projects can be realized just now or…never
• short term of office (4 years) requires from politics quick, spectaculars effects
• lack of knowledge about administrative processes among decision makers (they rely on ICT experts)
• lack of knowledge among decision makers about ICT components, which could be used to improve these processes (they rely on ICT experts)

 

1. Lack of analysis of investment efficiency is an additional, important problem because:

• there is a lack of knowledge about methods of efficiency analysis
• there is no tradition in Poland of treating this analysis seriously: in Western Europe and in USA only ca. 5% of investors do not make such an analysis, but in our country it is ca. 70%

In the paper a methodological discussion of this subject will be included.