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 THE STAT 26Percentage of wireless customers who use their cell phones to take picturesMore Vitals
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OCTOBER 29, 2002 SPECIAL REPORT: GOVERNMENT.COM The New Push for E-Government From Washington, D.C., to Washington State to your hometown, Net-based efficiencies are luring more and more entities online He bought the permitting unit a laser printer and a copy of OmniForm, a $500 piece of software that creates interactive forms. Harrington's coders then tapped into the in-house transaction system Honolulu uses to process payments for everything from motor-vehicle registrations to water bills -- and gave citizens a way to use the Web to request park permits, which the department then snail-mails. "We're saving $70,000 to $75,000 per year in that one little office," says Harrington. "It wasn't a big project. It didn't cost millions of dollars. It didn't require consultants." Harrington thus regards it as a textbook case of successful e-government. "People tend to forget that sometimes the simplest things are the ones that give you the best benefit," he says. WIZARDS ON CALL. Simplicity is also a favorite theme of Jim Van Wert, chief of e-government initiatives at the Small Business Administration in Washington -- which administers programs for the 25 million small businesses that employ more than 50% of the U.S. workforce. Van Wert oversaw development of www.businesslaw.gov, a site designed to help small-business owners find answers to their questions on state and federal laws. The site, which launched in December, 2001, boasts Web tools called wizards that can help prospective business owners decide whether to remain a sole proprietor or create a limited-liability partnership to minimize their legal exposure. Numerous hyperlinks direct visitors to places where they can find everything from state tax identification numbers to federal Labor Dept. rules. "It's the opposite idea of what Yahoo! might do," says Van Wert. "The goal isn't to have people stay on the site. It's to provide answers to their questions." The site cost $100,000 to build and very little to maintain, and it gets 150,000 visitors per week, says Van Wert, who this year received a $740,000 grant for pilot programs to help trucking and mining companies streamline their filing of required federal and state paperwork. EMPOWERED CITIZENS. Technological innovation in government has long been an oxymoron. Bureaucrats hate change -- and the very concept of streamlining. But what happens when the immovable object meets an irresistible force called the Internet? The cheap computing, fast connectivity, and easy-to-use interfaces that characterize the Web are just too powerful to ignore as tools for making government more efficient. Among other things, they allow citizens to take over tasks -- such as deciding what types of benefits or grants they should apply for -- that once were the domain of clerks. Give government agencies the ability to easily share data and communicate, moreover, and they'll enjoy the same productivity gains that the Net has produced for businesses. Over the past couple of years, the push for e-government has taken on a new sense of urgency. A ballooning federal budget deficit and the looming retirement from the taxpaying ranks of the massive baby-boom generation mean that over the next 20 years, governments at all levels will probably have to accomplish far more with relatively stagnant revenues and resources (except for the military, of course). SHARING VITAL DATA. At state and local governments, many of which are required by law to balance their budgets, the pressure will arrive this year. According to William Eggers, an analyst at the Manhattan Institute, those governments face a $40 billion shortfall this year. Just as important is the crucial information sharing by federal agencies that seemed so lacking before the terrorist attacks on New York and Washington. For all those reasons, plus various federal and state level mandates to get rid of paper (including the Government Paperwork Elimination Act of 1999), agencies at all levels are trying to move to a world in which most of their internal processes are put online. Some are moving slowly, fearful of the security risks that come with the Web. Others -- particularly small municipalities -- are having trouble paying to deploy systems that make possible Web-based bill-payment and electronic signatures for every manner of document. In Washington, where a consensus is often harder to find than a government employee at work after hours, e-government's spread has been slowed by the need to coordinate the efforts of multiple agencies. By fits and starts, however, the structure of e-government is taking shape. Gone for the most part are the disorganized, Kafkaesque Web sites of the late '90s. Replacing them are user-friendly, transaction-enabled, and relatively efficient online entities that in many ways are comparable to private-sector sites. Not that this movement is living up to the dot-com buzz that had entire motor-vehicle departments transferred onto a few servers and the clerks all fired. Rather, the overall effort has been low-key, relatively low-cost, and surprisingly short on catastrophes. FOUR-LEVEL PATH. In part, that's because government has less to spend on tech than the private sector. Most municipalities put 1.5% of their total budget into info technology, vs. the usual 8% for corporations and 2.5% for the federal government -- some $48.4 billion, according to the Government Electronics & Information Technology Assn. As a consequence, most governments have yet to tackle the really tough tasks. According to Todd Ramsey, general manager of global government industry at IBM (IBM ), the path to e-government has four levels. The first is slapping information up on the Web, something that has already happened. Next is organizing that information into more useful forms -- such as wizards that answer common questions in place of long lists of hyperlinks that readers have to search through to find answers. Third is transactions -- heavy use of interactive forms and digital signatures for such routine tasks as registering a business, getting a building permit, or filing for unemployment benefits. And fourth, says Ramsey, is building communities of citizens who'll use the more effective government sites. At the moment, he says, "most governments are somewhere between the second and third levels." That's where the most challenging work lies. Providing basic forms is a no-brainer, but building digital-signature systems bogs things down. In Washington State, almost anyone using a state site can use a digital signature. But that seems to be an exception. In Honolulu, Harrington hasn't enabled those on city sites because he's waiting for direction on how to implement digital signatures from the state government. PRIVACY MINEFIELD. At the federal level, digital-signature standards are just coming together. On Oct. 17, Energy Secretary Spencer Abraham cut the blue ribbon on a system that works as a plug-in with Adobe Acrobat files (called PDFs) and can be used across a wide range of agencies. Still, plenty of government bodies, from the Securities & Exchange Commission to the Air Force, employ slightly different signature technologies -- and integrating them into a common system remains a future task. Governments are starting to bump into bigger problems than that. For instance, they're tiptoeing across a minefield of privacy regulations that inhibit the personalization of Web services. And turf wars still make cross-agency initiatives a tough slog, September 11 and budget crises notwithstanding. A major problem is getting aged government computer systems to talk to modern ones. Putting up a Web page is no problem. But tying new software into mainframes coded in ancient programming languages is far more complex. In those old machines, business processes often have to be stripped out and reworked to accommodate the new flexibility demanded by e-government initiatives. An e-procurement record might need to be tracked and accessed simultaneously in four different agencies when old database systems allowed access only to a single viewer. STATES' EDGE. "The problem is huge," says Vivek Wadhwa, the CEO of Relativity Technologies, a Cary (N.C.) software concern that makes programs designed to convert legacy code into modern business applications. "To reach a point where you start seeing some real dollar savings, governments will have to invest heavily in new systems." That will require "a massive amount of funding up-front," says William J. Cull, e-government program manager for the city of San Diego, Calif. Generally, the states have been able to retool their infrastructures faster than the federal or local governments: They're less bureaucratic than Washington and better able than municipalities to achieve economies of scale, says Genie Stowers, director of the public administration program at San Francisco State University and an expert on e-government practices. Washington State, home to Microsoft, is a good example. It made a concerted effort early on to build an infrastructure for paperless transactions. Initial investments were less than $50 million. As a result, Frances Hinson could relax after she broke her ankle six weeks ago. She's the controller at Seattle-based SeaPort Petroleum, which supplies fuel and lubricants to aircraft maker Boeing, to the Port of Seattle, and to Amtrak. The privately held company, which has annual sales of about $15 million, must file taxes monthly. Thanks to Washington's new system, Hinson didn't have to bother filling out and mailing forms. Instead, she sat at home in front of her PC, her leg propped up, and filed her company's tax documents online. As important as the convenience of that is the efficiency, says Hinson. "This industry is so competitive, these little things can make a big difference." DEFENSE'S CHARGE. In fact, Hinson says government-related tasks that used to take a week now take hours. Others are catching on. More than 250,000 people have used Washington State's Revenue Dept. site to pay taxes, and 500 more start doing so each month. By yearend, the department will serve an estimated 18% of its 220,700 monthly and quarterly filers online. This will free staffers to spend more time on customer service and other tasks. Such success stories are becoming more common, even in Washington, D.C. The Defense Dept. started working on e-government initiatives sooner than most federal agencies -- out of necessity. When requisitions and payments stacked up during the Persian Gulf War and disrupted supply chains, the Pentagon realized it was time to overhaul its business processes. The Defense Information Systems Agency (DISA), which serves as the IT provider for the four military services, has built systems that do everything from letting contractors peruse requests-for-proposal online to permitting multiple entities inside the Defense Dept. view the same electronic tranmit invoices. That cuts down on paper waste and lets Defense pay its contractors sooner, says Ray Lewis, acting deputy chief of the center for e-business at DISA. PUBLIC ACCEPTANCE. "In a lot of cases, we have gotten it down to days from weeks or months," says Lewis. "Interest payments for late contract disbursments have gone down as a result." Currently, the Pentagon's e-Business Exchange System processes 1.4 million transactions each day. Next comes the hardest part: The community building -- getting large numbers of people to use the new tools, as IBM's Ramsey envisions. While many government Web sites have lots of visitors, many others are having more trouble than Washington State's tax department when it comes to jump-starting transaction activity. In Honolulu, Harrington is mystified as to why only 1% of drivers have chosen to renew their licenses online. "It takes time to build," he says. Worse, e-government can be a partisan football on Capitol Hill, where next year's funding request for e-government programs administered by the White House's Office of Management & Budget (OMB) has been slashed from $20 million to $5 million by congressional committees. At the same time, Democrats complain that the Bush Administration isn't throwing nearly enough weight beyond e-government. "NOT DOING ENOUGH"? They note that of 24 proposed e-government projects, the OMB plans to fund only three in the coming fiscal year. "There's no one in the Bush Administration who is willing to make it a first priority. It's really a bunch of disconnected projects, and they are not doing enough of them," says Rob Atkinson, a vice-president of the Democratic Leadership Council's Progressive Policy Institute. The Bush Administration, however, claims that it's pushing as hard for e-government as anyone. The President has made e-gov one of his top five initiatives for improved management. And he has appointed the first governmentwide chief information officer in history, Mark Forman. As for the seemingly low amounts of money being spent on e-gov, that doesn't reflect big outlays coming from program budgets in specific agencies that are part of IT modernization plans. Forman thinks things are moving along well and points to successes such as the Energy Dept.'s recent e-signatures rollout. The program is designed to let people make official electronic signatures for government documents and functions, and will eventually work across the whole federal government. "As a whole, we've made tremendous progress. We are the most Web-savvy government in the world," says Forman. BEYOND WAIT-AND-SEE. Partisan sniping aside, e-government has a long way to go to fulfill its promise. But folks like the SBA's Van Wert are pushing hard. Next up for the SBA are the pilot programs that will allow mining and trucking companies to use single-stop compliance portals to tell them what forms they need to fill out, then distribute those forms automatically to state and federal entitites including the Transportation Dept., state revenue departments, and the federal Environmental Protection Agency. Says Van Wert: "There are people in the government who are still in a wait-and-see mode. But more and more, they're willing to say, 'There's something in this for me.'" That's a sign that the irresistible force -- the Internet -- is nudging government beyond its paperbound roots and into a more flexible, more responsive, and ulimately, more efficient era.  By Alex Salkever in Honolulu and Olga Kharif in Portland Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | OCTOBER |
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