The economic benefits are revealed in a report produced by IBRS and Insight Economics and commissioned by enterprise software firm TechnologyOne and quantify for the very first time the $224bn economic opportunity that can be unlocked if the public and private sectors embrace new innovations and replace redundant IT platforms with next-gen Software as a Service (SaaS) technology.

According to the report, every year more than $70bn of the $98bn spent in Australia on software is directed towards legacy on-premise platforms, which costs the economy billions and has a detrimental environmental impact through higher emissions.

“Alternatively, Australian GDP will grow by 1.3% over a decade by embracing this $224bn digital transformation dividend, which is more than six times the GDP boost Australia was expected to realise from the Olympic Dam Expansion,” the report says.

“This transformation will be driven by SaaS, with substantial cost savings from eliminating the cost of software ownership, along with productivity benefits driven by the automation, scalability and security of SaaS.”

The report notes that the $224bn economic savings can be redirected to other productivity enhancing infrastructure and services.

“For example, the $62bn economic opportunity for federal and state governments over a decade is the equivalent of being able to build more than 11,500kms of new roads or four new Sydney Harbour tunnels.

“Alternatively, it’s funding an additional 11 million Australian hospital services, 90,000 registered nurses, 883,000 residential aged care places or 87,000 teachers over a decade,” the report says.

TechnologyOne CEO Edward Chung said: “The $224bn digital dividend ready to be unlocked by government and business is simply too big to ignore. With the research quantifying the economic benefits for the first time, it should spur action at every boardroom and for governments at all levels in Australia around how they think about their technology priorities.

“While this transformation is already underway for many in Australia, for some it’s still happening too slow.

“As a nation, we have a choice. We can continue to waste money on redundant on-premise technology, or we can fast-track the digital transition to SaaS where a $224bn economic windfall can be reinvested back into Australia.

“The reinvestment of these funds could transform the lives of Australians for generations.”

TechnologyOne notes that according to the “The Economic Impact of SaaS” report, the economic benefits of accelerating cloud technology investments and innovation will be felt nation-wide.

“Victoria’s economy will receive a $60bn economic benefit over a decade due to the scale of opportunities available to the state’s higher education, retail, manufacturing and asset and project intensive industries. This is followed by New South Wales ($50bn), Queensland ($31bn), West Australia ($30bn), ACT ($20bn), South Australia ($18bn), Tasmania ($11bn) and the Northern Territory ($4bn).

“These headline numbers would be accelerated by $9.7 billion if Australian providers secured just 10% more of available contracts. Currently, 85% of all SaaS sales go to foreign entities, coming at the expense of local jobs, local taxes and the local Australian technology industry,”

“This research highlights the enormous potential that technology has to futureproof our nation’s economic interests and to build much-needed sovereign capabilities,” says Chung.

“Build-it-here technology capability would rapidly shift the balance of power towards domestic providers who currently win only 15% of SaaS contracts.

“The research also clearly highlights the substantial costs savings and other business benefits of SaaS including increased productivity, an enhanced customer experience and reduced cyber security risks. We also know SaaS will reduce Australia’s carbon footprint and is one of the most efficient and rapid pathways of achieving net zero.

“However, we understand the challenge for businesses and government agencies when it comes to digital investments, especially when the economy is still in recovery mode. To navigate this, the industry needs to step up and do more to support business and government to simplify this transition.

“TechnologyOne has made significant investments and will continue to invest to reduce cost pressures and to simplify the transition process. We are doing this because we know this is the answer to kicking this digital transition into a higher gear and I encourage other business leaders to do the same,” Chung concluded.