Drive mission impact and cut costs with GenAI

The promise of generative AI (GenAI) in government is vast, but the reality is far more complex.

According to a recent Gartner survey, 80% of government CIOs will increase funding for GenAI by 2026, an increase of 38% from 2025. This suggests mounting pressure to scale its use to deliver faster, more efficient public services — even as agencies grapple with tighter budgets and political scrutiny.

Yet despite increased investment, bureaucratic environments constrained by regulation and legacy systems mean early productivity gains rarely translate into measurable outcomes. Time saved on routine tasks is quickly absorbed elsewhere, with little effect on service delivery, costs or mission impact.

The true value of GenAI emerges when it is applied to bottlenecks that limit government performance, such as lengthy approval workflows, repetitive data entry or compliance-heavy processes. By addressing these systemic inefficiencies, governments can move beyond isolated wins to unlock broader organisational benefits.

Shifting focus from productivity alone to financial efficiency and mission impact is critical. To deliver a real return on investment, GenAI use cases must be tied directly to strategic priorities, such as mitigating risk, strengthening workforce capabilities and achieving mission-critical objectives.

Reduce double handling

Double handling of paperwork such as applications or submissions, due to communication errors or unnecessary steps, delays service delivery, creates cost overruns and slows work queues. The rejection of submissions costs stakeholders time and money, negatively reflecting on government services.

GenAI excels at identifying patterns and correlating disparate data with accuracy. If used as part of a pre-processing or triaging step for submissions, it will reduce internal processing costs and overall costs to the community. Examples of this have already been implemented in the building application processing space by state and local governments across Australia.

All historical submission data, relevant policies, guidelines, regulations and legislation must be secured and curated so the GenAI model works from an accurate, up-to-date knowledge base. It’s equally important to track the time reduction of submission cycles and the cost reduction of internal processing, as well as where these time and cost savings get reinvested.

Lower cost of access

Many government agencies remain burdened by manual processes and sprawling workforces, which drive up operating expenses and slow down program delivery. GenAI offers a scalable alternative by automating routine tasks, generating content and translating communications at speed. By embedding GenAI into existing digital infrastructure, technology shifts from a cost centre into a value creator, enabling faster program rollouts, higher citizen engagement and more inclusive service delivery.

In addition, clear metrics — reduced processing times, error rates, wait times or increased service usage — must be established to quantify improvements in efficiency, accessibility and overall reach.

Increase operational efficiency

Government employees spend countless hours on record keeping and report writing, such as file notes for case managers, incident reports from regulatory inspectors, clinical notes in hospitals, all the way to ministerial briefings. This delays critical services and drives up labour costs.

GenAI, combined with deterministic AI models, can transform audio and video feeds into accurate, structured text in real time and across multiple languages. This can reduce human requirements, directly impacting tangible savings of time spent on report writing and transcribing. As models improve, so will output accuracy. This will overcome challenges such as misinterpreting words and contextual misalignment.

Compliance monitoring must be established to triage risk and data classifications, while maintaining security measures to protect sensitive information. As AI adoption increases, ‘human in the loop’ should also be prioritised for explainability.

Pursue cost reduction within IT

Gartner research indicates that outsourcing represents over 15% of IT budgets on average. GenAI offers government CIOs the opportunity to renegotiate contracts based on the benefits service providers are gaining. By using it as a bargaining chip, price cuts of 5–20% can be secured in areas such as application support and service desk operations.

A good place to start is to benchmark existing supplier agreements and performance metrics. Seek alternative providers at lower price points that can capitalise on scale efficiencies in implementing productivity programs. Once armed with competitive bids, negotiate price cuts from incumbent vendors — it’s more attainable when strong alternative offers are in hand!

Reduce third-party variables

Many government agencies rely on small, variable-cost contracts for specialty work such as design and communication campaigns. Though each invoice may be modest, the cumulative impact strains tight budgets.

GenAI provides on-demand expertise in areas that are currently given out to external specialists. Whether drafting a standard contract or generating content for communication campaigns, GenAI tools let internal teams handle these tasks immediately. Those direct cost reductions are real and measurable. As employees grow more comfortable using GenAI, internal capacity expands and reliance on outside vendors shrinks, compounding savings over time.

Enforce a strict internal policy on spend reduction, which sees internal teams consult GenAI first. If they can resolve a request, then no external contract is engaged. Mechanisms must be put in place to monitor adherence regularly, otherwise they’ll risk losing momentum.

Stronger contracts and cost inflation reduction

Inflated costs, caused by weak contract terms, poor compliance or unenforced pricing adjustments, are a significant drain on government finances. This impacts revenue and creates compliance and reputational risks.

GenAI provides a scalable fix. It can digest thousands of past contracts, case rulings and billing records, then instantly highlight vague language, overlooked penalty or escalation clauses and signs of under-billed invoices.

Government CIOs can partner with legal and finance teams to use GenAI tools to identify ambiguous language, missed escalation clauses and unenforced penalty terms. They can then renegotiate stronger clauses or enforce existing provisions and uncover unpaid revenue.

*Dean Lacheca is a VP analyst at Gartner, focused on supporting public sector CIOs and technology leaders on the transition to digital government and the potential impact of emerging technology trends such as AI.

Image credit: iStock.com/Parradee Kietsirikul