IDC Brasil: Government to Increase Technology Spending by More Than 14% in 2006

SAO PAULO, April 20, 2006 – Unlike traditional election years, in which almost all Government funding is driven to works that ensure visibility and immediate support to collect votes, such as highways, hospitals, and bridges, the plan in 2006 is to benefit from the dollar's downfall and improve transparency by investing more on technology. IDC Brasil understands that the government sector, taking county, state and federal levels into consideration, expects to increase IT spending by 14% to approximately R$4.9 billion.

After a large number of CPIs (Congress Inquiry Commissions) ended up directly or indirectly paralyzing several projects, government sector investments shifted toward the development of accounts rendering portals, as well as payment services, certificate requests, and virtual offices of public notary in order to meet the growing demand for transparency.

According to the new report, Brazil IT Investment Trends: Government 2006, investments in security solutions, VoIP, and Access Portals to Citizens are government priorities along with continued investments in installed base renewal aimed at server consolidation and standardization. IDC Brasil interviewed 112 organizations from November to December 2005 to provide a picture of how government-owned companies will allocate their IT investments in 2006.

"In face of the recent corruption cases in the sector, there is a strong call for improving public support in 2006, as well as for the adoption of tools to combat fraud on public tenders and illegal payments performed to ghost-employees. According to the CIOs interviewed, the pressure will be even more intense in 2006 due to political reasons. It is an election year after all, and all projects are supposed to be delivered before the second semester," says Luciano Crippa, IDC's market analyst.

The government sector spent R$4.3 billion on IT last year, which made it Brasil's third highest technology investing sector. From this total, the federal government accounted for more than 60% of the investments, focusing its efforts on acquiring analytical enabled tools, such as the fraud preventing software popularly known as "Tamandua."

"The sector has also been pressured to develop citizen relationship and services-oriented Web tools, which includes the consolidation of large databases spread throughout the many areas of the sector," Crippa added.

Fuente: IDC