Is Government IT Spending Worth It?

Min-Seok Pang

Temple University

October 2015

Are tax dollars spent on information technologies (IT) worth it? Recent news of notable IT failures in the public sector, including a troubled launch of the Federal Health Insurance Marketplace (Healthcare.gov) in 2013, cast doubts on the government’s ability to manage large-scale IT investments. This report details how much return state governments in the U.S. can generate on IT investments that create greater efficiency. The research shows that, on average, a $1 increase in the budget of state chief information officers (CIO) leads to a $4.05 decrease in current expenses and capital depreciations.

Cost reduction depends on the authority and power a state CIO is given by the state legislature and the source of IT budgets managed by the CIO

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© 2015 The IBIT Report, Institute for Business and Information Technology, Fox School of Business, Temple University, Philadelphia, PA 19122, USA. All rights reserved. ISSN 1938-1271.