Australian government agencies are spending 80% of their technology budgets maintaining outdated systems, significantly more than their counterparts in banking and finance, according to a new report released by OpenText.

The report, "Retiring Legacy Applications and Databases: Proven Strategies for Government Agencies," provides a blueprint for public sector organizations struggling with technology infrastructure that threatens cybersecurity, hampers service delivery, and prevents innovation.

"Government agencies across Australia are under increasing pressure to deliver faster, more secure, and citizen-centric digital services," said George Harb, Vice President-ANZ at OpenText. "This report provides a clear and practical blueprint for transitioning from outdated legacy systems to agile, future-ready platforms."

The findings come at a critical time for Australian public sector organizations. Recent high-profile incidents have highlighted the risks of maintaining outdated systems. The Royal Commission into Defence and Veteran Suicide found that prior to modernization efforts, half of the Department of Veterans' Affairs systems were considered at high risk of failure, with the agency dependent on "niche ICT skills to maintain many of its applications."

Tight Budgets Demand Strong Business Cases

With governments seeking to scale back digital projects and approving fewer major initiatives, agencies must present compelling business cases aligned with core government priorities, the report advises.

The report identifies four core government investment drivers that agencies should target: attending to neglected core services, managing government finances responsibly, anticipating future needs, and growing the economy.

"By retiring legacy systems, resources can be redirected to solutions that improve service delivery or reduce administrative overheads," the report states.

NSW Government Leading the Way

The NSW Government is highlighted as taking a proactive approach through its Whole of Government (WofG) initiative led by Digital NSW. The State of Legacy program offers valuable insights for agencies across Australia, with recommendations for standardizing legacy definitions, measuring impacts, prioritizing high-risk systems, and building skills in legacy and emerging technologies.

"NSW is at a turning point in its digital journey, and legacy technology, or outdated digital solutions, can be a challenge in this progress," the report quotes from NSW Government workshop materials.

Smaller Projects, Better Outcomes

The report strongly advocates for an iterative approach to modernization rather than "big bang" projects. This approach reduces risk, speeds up benefit delivery, and creates opportunities for smaller Australian businesses to participate in government digital transformation.

This recommendation is reinforced by findings from the recent Capability Review of Services Australia, which revealed that 62 percent of internal respondents identified ICT as a critical area for improvement. The review found that an iterative approach to transformation would better support agency objectives.

Modern Archiving Critical for Compliance

A key strategy identified in the report is the deployment of contemporary archiving solutions that help agencies comply with evolving privacy, security, and data management requirements.

Modern archiving solutions can integrate diverse information sources, preserve context, and provide advanced search functionality while maintaining high security standards. These capabilities are essential for agencies dealing with freedom of information requests, maintaining records compliance, and protecting sensitive information.

The report concludes with practical first steps agencies can take to begin their modernization journey, including creating or updating legacy system modernization strategies, developing comprehensive information and data management plans, securing stakeholder buy-in, and leveraging industry expertise.

The full report is available here.