A. Executive Summary
The Intergovernmental Advisory Board (IAB) undertook this study to identify
prime examples of "high-payoff" electronic government (E-Gov) programs
to share the secrets of their successes, and to determine how they measure
the results achieved from investments made.
Defining High-Payoff E-Gov Programs
As a new and powerful concept, E-Gov promises many benefits to its government
sponsors. It can reduce costs of government operations; open new sources
of revenue; attract businesses, tourists and new residents to the area;
make it easy for citizens to do business with the government; and reinforce
the relationship between the citizen and democratic government. As with
any government program, the value of E-Gov is in the benefits it delivers
to the public and the new avenues it opens to create value. But E-Gov
can be costly, and its value to the public that supports it must be shown.
We found E-Gov programs offer many types of benefits to a government.
They can be distilled into five categories. Any successful E-Gov program
should address at least one of these areas, but the most successful will
probably deliver benefits in multiple ways.
1. Financial: Reduced costs of government operations/enhanced revenue
2. Economic development
3. Reduced redundancy: Consolidating and integrating government systems
4. Fostering democratic principles
5. Improved service to citizens and other constituencies.
Financial: Reduced Costs of Government Operations/Enhanced Revenue
Collections. The low-hanging fruit of electronic government are the
programs that automate routine government processes and eliminate paperwork,
printing and mailing costs, check processing, document storage and retrieval,
and the need for personnel to interact with citizens in person or on the
telephone. This type of savings is available to every jurisdiction that
implements an E-Gov program. E-Gov eliminates the need for staff intervention
in online programs that provide government forms, and those that permit
citizens to obtain and renew licenses and registrations, apply for government
grants and benefits, and get information over the Internet.
E-Gov programs make it easier for the public to pay permits, licenses
and registration fees, fines, and taxes owed to the government. These
programs eliminate the need for check processing, time delays in handling
checks, receipts and other paperwork. Many jurisdictions employ contractors
to create and maintain the E-Gov programs used to process these payments-some
of which incur no cost to the government. The use of these programs is
increasing over time, although there are some indications that citizens
will resist making payments online if the "convenience fee" assessed to
pay for online processing is more than a nominal $1 or $2.
Economic Development. E-Gov programs designed to promote economic
development are a boon to businesses, both small and large, thereby increasing
their contribution to the local economy. One of the earliest and most
popular types of E-Gov program reduces the amount of regulatory paperwork
of doing business in a community by permitting online document searches
and filings, tax and wage reporting, employee background checks, workers'
compensation claims, and one-stop regulatory submissions. Other E-Gov
programs foster economic development by promoting the beauty, benefits,
historic and recreational attractions of the area to potential visitors,
businesses and residents.
Reduced Redundancy: Consolidating and integrating government systems.
E-Gov programs that integrate systems and databases and provide one-stop
sources of government information enable government to operate more responsively
and more efficiently. Governments that have already achieved the "low
hanging fruit" of automation recognize the payoff that will come with
the next big step toward integration and transformation of government
services. National E-Gov strategies recognize the benefits of achieving
economies of scale and reducing the number of duplicative systems, stressing
the benefits of implementing modular applications ("build it once, use
it often") and a centralized infrastructure to reduce the national investment
in IT. Other benefits of consolidating and integrating E-Gov systems include
the ability to provide high quality, multi-channel, user-centric services
to citizens and to ensure the security of E-Gov systems.
Fostering Democratic Principles. The free flow of information permitted
by the Internet facilitates transparency and accountability in government.
It also increases the accessibility of government at all levels. Developing
countries, especially, value E-Gov for making government more transparent
and more democratic, and for encouraging citizen education and participation.
Improved Service to Citizens and Other Constituencies. Service
to citizens is the primary purpose for E-Gov programs in most countries.
National and state portals make government information readily available
and online services accessible. Benefits delivered by these programs are
defined in terms of convenience, time savings, quality and completeness
of information. In past years, the focus on delivering benefits to citizens
in general or specific constituencies (e.g., vacation planners, students,
seniors) has been so intense that costs were often not considered.
Measuring E-Gov Programs
Regardless of the type of benefits, the best way to measure the performance
of E-Gov programs is relative to the objectives of the program itself
and the public agency that sponsors it. The number of ways to measure
a government program is growing daily. One or more of these programs are
used in most governments including national, state, county, municipal,
and tribal governments. We reviewed a wide range of processes developed
to evaluate E-Gov programs, including:
a) Cost-benefit analysis, net-present-value and internal rate of return
b) Return on Investment
c) Customer Satisfaction
d) Take-up Rates
As the need for performance measurement and accountability has increased,
many jurisdictions are performing more complex and multifaceted analyses
to determine the relative value of different E-Gov programs. The United
States government requires the development of convincing business cases
for large E-Gov programs, and for all crosscutting E-Gov initiatives.
These business cases require extensive analysis of the costs of each alternative
(including "do nothing") for satisfying a business need weighed against
the total benefits. Costs, benefits and risks of each alternative are
evaluated in the context of the current situation. Potential funding sources,
sponsors, partnerships, and synergies are considered. Market demand and
promotions are also considered in developing a business case.
Many jurisdictions use Portfolio Analysis to assess the risk inherent
in all of their E-Gov programs viewed as a whole. This kind of analysis
permits the funding of a high-cost program as long as other E-Gov programs
that deliver high benefits relative to their costs offset it. It is measured
by quantifying the aggregate risk relative to expected returns of an entire
Risk Management is a part of all comprehensive analyses. A risk analysis
considers the impact and probability that specific factors will impede
the organization's ability to realize the benefits of an E-Gov program.
These include the risks of cost overruns, of technical obsolescence, or
of becoming misaligned with political priorities. They also include the
risks that program managers will not leverage the technology or that the
target audience will reject a program. Risks of security and privacy violations
must also be assessed.
The balanced scorecard is a conceptual framework for translating an organization's
strategic objectives into a set of performance indicators distributed
among four perspectives: Financial, Customer, Internal Business Processes,
and Learning and Growth. First proposed in a Harvard Business Review article
in 1993, it has become a popular measurement methodology in governments.
A scorecard is only appropriate for organizations with a well-defined
strategy with which the performance indicators can be aligned.
These assessment methodologies have been used around the world, to a greater
or lesser extent in different jurisdictions. Many E-Gov pioneers agree
with the assertion made by Public Sector CXO magazine that "E-Government,
like politics, is 'local.'" There is no uniform "cookie cutter" approach
to determining the E-Gov program that will have the highest payoff for
a jurisdiction. Accordingly, there is no single measurement method that
will apply as well for one government or agency as for another.
Any definition of "high payoff" represents value for taxpayers, through
cost savings, economic development, synergies achieved through integration
of government processes, strengthened democratic processes, and service
to citizens and other constituent groups. Many tools can be used to measure
the performance of these programs, with different tools for different
values. In each case, the strategic decision-making process should determine
the appropriate metrics.
In these times of tight budgets, measuring E-Gov benefits is a growing
priority in governments, although the state of the art appears to be in
a fairly primitive stage. Investments in E-Government, like other government
investments, traditionally have not been driven solely, or even generally,
by the prospects for financial return; rather, these programs have been
created to deliver better services to citizen/business/interest group
constituencies. Each case requires a tailored measurement approach that
considers the quality, speed and comprehensiveness of services to citizens,
economic efficiencies, alignment with government's strategic/political
priorities, and the risks of changing technologies, potential cost overruns
and changing needs.
To maximize the benefits from E-Gov technology and increase the use of
E-Gov programs, governments must market them broadly. Not all E-Gov programs
are welcomed enthusiastically, despite the benefits they promise to deliver,
and gaining full acceptance for E-Gov will require marketing, information
and education campaigns. Citizens must be made aware that they can interact
with their government online and that it is advantageous to do so. E-Gov
managers must continuously assess the citizens' level of acceptance through
preference polling, customer satisfaction surveys and online trend monitoring.
The important economic value of E-Gov will be the transformational value
of re-engineering crosscutting government processes, and integrating IT
investments into business processes. There are formidable organizational
impediments to this significant change-management objective, however,
and internal factors are more important than competition as indicators
of transformational readiness.
The full report can be downloaded at:
Payoff in Electronic Government (PDF,491 KB).
take a look at the:
the Club of Amsterdam Forum
and the Club of Amsterdam
event about 'Re-Inventing
Democracies for the Future'