Rebooting government IT: clearing the way for citizen‍-‍centric innovation

Government agencies across Australia are under growing pressure to modernise their IT systems, yet many remain stuck with aging infrastructure. These legacy systems are not only costly to maintain and incompatible with emerging technologies like AI and advanced analytics — they’re actively stalling reform and blocking progress toward citizen-centric digital services.

While sectors like banking and finance have embraced flexible, modern platforms, government agencies still spend 80% of their tech budgets just keeping outdated systems running, according to OpenText and Intermedium’s new report ‘Retiring legacy applications and databases: Proven strategies for government agencies’.

Agencies know they need to move, but many are trapped by complexity, cost and competing priorities. The longer they hold on, the harder — and more expensive — these systems become to replace. A strategic, phased approach to modernisation is now essential.

Legacy applications and databases: why we’re still holding on to them

Transitioning from legacy infrastructure is, without question, a lengthy process. These systems have been heavily customised over time to support evolving policy, compliance and service delivery needs — forming the backbone of government operations and processes. Over decades, many of these platforms have become deeply embedded in day-to-day workflows, critical reporting systems and interagency coordination.

This deep integration makes decommissioning especially complex, requiring significant planning, resources and coordination to avoid disruption and ensure continuity of essential services.

Yet the risks of relying on outdated systems continue to grow at the cost of cybersecurity, efficiency and service agility. They increasingly limit an agency’s ability to respond to policy shifts, adopt new technologies or meet rising citizen expectations.

Agencies need to take that first step to modernisation. Enabling technologies, such as contemporary archiving solutions, play a critical role in making that transition achievable. They help agencies reduce risks and manage compliance with information preservation, accessibility, privacy and security requirements — all while laying the groundwork for more agile service delivery.

Here are some strategic pillars government agencies should follow to provide a foundation for transitioning safely and effectively toward citizen-focused digital government.

Developing a rock-solid business case to secure support

With governments scaling back digital projects and tightening approvals, agencies must be more strategic than ever to secure support.

When pitching to executives or competing in the Cabinet budget process, it’s effective to frame proposals around the government’s four core investment drivers:

• Attend to neglected core services
• Manage government finances responsibly
• Anticipate future needs
• Grow the economy
   

By framing proposals through this lens, decision-makers can more easily assess whether an initiative delivers long-term public value and aligns with national or state strategic goals — increasing the chances of getting it across the line.

Using value for money to guide modernisation decisions

When planning the transition away from legacy systems, agencies must clearly understand the strategic benefits of the shift. Weighing costs against risks is essential to ensuring the timing and approach align with broader organisational priorities. A value-for-money assessment helps confirm that retiring a legacy system supports long-term goals and delivers measurable impact.

A good approach is to compare the lifetime benefits — often non-financial factors including improved security, compliance and service delivery — against the lifetime costs, including financial factors such as migration, integration and ongoing maintenance.

While each situation is different, it’s important to look at factors like whether it will reduce costs over time, whether it will lower security and compliance risks, where it will meet business needs for efficiency and service, and whether it’s built to last. It helps agencies better decide which modernisation efforts should be prioritised and make sure that project planning and expected outcomes match the real cost and risk benefits of moving away from legacy systems.

Leveraging WofG directives to unlock funding and reform

Agencies are more successful in decommissioning legacy systems when their strategies closely align with whole-of-government (WofG) directives. This alignment allows them to leverage reusable components and shared resources, including hands-on support from WofG digital agencies, significantly increasing their chances of accessing much-needed funding through digital investment pools such as Digital NSW and the Office of Digital Government in Western Australia.

Several states — including New South Wales, Western Australia, Tasmania and South Australia — have introduced dedicated funding mechanisms specifically designed to encourage innovative ICT and digital transformation projects that align with WofG priorities. These funding pathways not only drive long-term strategic digital reform but also carry the authority to reject proposals that do not align with broader government-wide objectives.

As more Australian jurisdictions reinforce their ongoing commitment to WofG strategies, it becomes increasingly clear that agencies should proactively align their initiatives accordingly. Doing so not only improves access to available funding but also helps secure executive support, reduce duplication, encourage interagency collaboration, strengthen accountability and accelerate long-term digital growth.

Transforming in phases: why iteration beats the big bang

Governments no longer have an appetite for ‘big bang’ projects. Instead, they favour smaller, more manageable initiatives that reduce risk and deliver measurable benefits faster. For agencies looking to retire bulky and complex legacy systems, an iterative approach enables phased modernisation — changing one step at a time while learning, adapting and building momentum along the way.

In addition to minimising disruption, this method creates opportunities for smaller businesses that may lack the capacity to compete for large-scale tenders. It helps diversify the supplier base, offering greater flexibility to respond to shifting policy priorities and evolving community and sector-specific needs.

By adopting this approach, agencies can accelerate time to value, strengthen stakeholder engagement, and maintain greater control over both costs and project outcomes.

Looking ahead

For Australian government agencies, modernising legacy IT is no longer a question of when, but how. The cost of maintaining outdated systems continues to climb, delivering diminishing returns while increasing risks to service continuity, cybersecurity and public trust.

By taking a strategic, phased approach that aligns with investment priorities, applies value-for-money principles, embraces whole-of-government directives and adopts iterative delivery, agencies can unlock funding, reduce risk, and build a foundation for long-term digital transformation.

The path forward is clear — now is the time to act and deliver the citizen-centric services Australia deserves.

Image credit: iStock.com/piranka