Redalyc.Analysis of the use of the worlwide web and internet ...

Revista Opera

ISSN: 1657-8651

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Universidad Externado de Colombia

Colombia

Cohen, Steven; Eimicke, William

Analysis of the use of the worlwide web and internet in government service delivery. A report to the

Pricewaterhouse Coopers Endowment for the business of government

Revista Opera, vol. 1, núm. 1, marzo, 2001, pp. 301-328

Universidad Externado de Colombia

Bogotá, Colombia

Available in: http://www.redalyc.org/articulo.oa?id=67510116

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P O L Í T I C A S P Ú B L I C A S C O M P A R A D A S

analysis of the useof the worlwide weband internet in governmentservice deliveryA report to the Pricewaterhouse Coopers Endowmentfor the business of government

steven cohen and william eimicke*

1. INTRODUCTION

1.1. Background

A wide variety of governments have be-gun to use the worldwide Web to assist inservice delivery. This includes, but goesfar beyond the dissemination of informa-tion to the general public and includes avariety of other governmental functions.Examples include:

• Obtaining passport applications andother federal tax forms.• Contesting or paying traffic fines.• Ordering government publications.

• Filing requests for zoning variances.• Reserving space for athletic events ortee times for public golf courses.

In reviewing some federal, state andlocal government Websites it is clear thatthe use of the Web for service delivery isstill in its infancy. Nearly any function thatnow requires a person to stand in a lineand submit a paper form could be deliv-ered to the Web. The issue of verificationof identity is undoubtedly subject to tech-nological innovation. Personal Identifica-tion Numbers, scanned fingerprints andother techniques will soon make it possi-ble for licensing and minor police and

*Graduate Program in Public Policy and Administration School of International and Public Affairs, Co-lumbia University, November, 2000.The authors are grateful for the research assistance of two students in Columbia University’s GraduateProgram in Public Policy and Administration: Candace Winkler (lead researcher), Kelly Christensen andLisa Dimas.

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adjudication processes to be deliveredthrough the Web.

The type of services that can be de-livered through the Web are still in theprocess of being imagined and organizedby both governments and the private sec-tor. Over the next decade we can expectto see a great deal of experimentation andorganizational learning in this area. Thepurpose of this report is to accelerate thislearning process by studying several note-worthy current government efforts to usethe Web for interactive functions.

1.2. The study

The methodology of this study is to selecta number of illustrative case studies on theuse of e-commerce and the Internet ingovernment service delivery and commu-nications. The

Study includes a content analysis ofselected state, local and federal govern-ment web sites and where available, ananalysis of the cost and benefits of switch-ing to web-based service delivery.

The analysis describes and comparesthe ways in which different governmentsplan to use the Web in improving level ofcustomer satisfaction as well as the effec-tiveness and efficiency of the services theydeliver. The specific research questions wewould address include:

• What content does government in theUnited States now provide on the Web?• What transactions with government

can customers use the Web to complete?• What government services are provid-ed through the Web?• How are these services funded? Whatare the costs and benefits of service deliv-ery through the Web?• What new information and services dothey plan to deliver through the Web overthe next 1-2 years? Over the next 3-5years?• Do governments plan to increase theuse-mail to communicate and interactwith citizens? If so in what ways?

We have selected cases in Alaska, theU.S. Internal Revenue Service, the city ofBoston, the States of Florida, Indiana,Texas and Utah. In Section II we discussthe lessons learned from the cases and theirbroader implications for government ser-vice delivery In section III of the report,we provide background on the Websiteswe reviewed, discuss the development andimplementation of the site and analyze itscosts and benefits.

2. Lessons learned from the cases:implications for government servicedelivery

In researching these cases we disco-vered that most governments in the Uni-ted States were are beginning to utilize theWeb for both service delivery and infor-mation dissemination. We did not havethe resources in this study to conduct asystematic survey of government Web si-

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tes and believe that a systematic samplesurvey should be conducted. Nevertheless,to produce the seven case studies repor-ted in this study we contacted well overfifty government organizations that hadWeb sites we considered well developedand that provided citizens with a directservice. We found that less than 15% ofthe government organizations we contac-ted to conduct this study had collected dataon the costs and benefits of using the Webas a means of delivering services. Very fewof the organizations we contacted hadanalyzed the costs and benefits of using theWeb before launching their sites.

Most of these organizations had ob-tained funding for their sites by convinc-ing senior management that the Web wasthe “wave of the future” and Web-site de-velopment was a defensive reaction to theneed to appear to be on the cutting edgeof this new trend. Funding was more afunction of fashion than a result of ananalysis of cost savings of expected bene-fits. Most officials assumed that the use ofthe web would increase customer satisfac-tion and was self-justifying.

When costs were assessed in the casespresented in this report, we found that typ-ically services delivered over the Internetwere less expensive to deliver than thosedelivered in-person. In one instance wefound that it cost less to process mail-informs than either Web-based or in-personform processing. The unit costs of electron-ic service provision benefited from econo-mies of scale, due to the large cost of setting

up infrastructure and the relatively low costof operation and maintenance. We foundthat as an agency’s customers got more com-fortable with Web-based service deliveryand used it more frequently, unit costsdropped dramatically.

We also found that electronic servicedelivery could change human resourcedeployment patterns and improved orga-nizational performance. It freed up staffto provide better service to in-person cus-tomers, and allowed workers to focus lesson routine tasks that could be easily han-dled by computers.

The business potential of electronicservice provision was highlighted by theIndiana case. Since service recipientswould pay for the ease of use, and lowercosts of obtaining service through the web,a revenue source was found to fund thecapital, operation and maintenance costsof a Web site. Many government licens-es, permits and services require user fees.An additional fee can be charged for theconvenience and potential time/labor sav-ings of on-line processing.

A second source of revenue for elec-tronic service provision is savings gener-ated from reduced costs. There are severalproblems with this source of “revenue”.First, it may take several years to materi-alize. E-services require an investment incomputers, communication infrastruc-ture, software, and Web design and ex-pert staff. Once the service is up andrunning it will take time before custom-ers are aware of the service and feel capa-

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ble and comfortable enough to use it. Thebenefits of reduced service costs will tendto occur in a different fiscal year than theyear that costs are incurred.

If our impressions are correct, mostadvocates of web-based service delivery donot collect or use data on unit costs whenplanning these service enhancements.Moreover, it is not clear that data is col-lected or projections are made on benefitseither. The absence of business planningwill almost certainly lead to mistakes indeveloping these services. When sites donot produce immediate benefits, or otheroperational problems develop, sites thatmay have great potential may be aban-doned prematurely.

The seven cases we analyzed demon-strate the potential for lower costs andimproved services through the use of theWeb. In several of the cases we see gov-ernment moving into new areas with careand thoughtful planning. Among the caseswe reviewed but did not write-up werenumerous examples of Web-based servic-es developed without a business plan andwithout a projection of costs and bene-fits. We conclude therefore, that govern-ment must obtain additional managementassistance before launching these new en-terprises. Consulting firms and expertswith experience in launching these newventures should be hired by agencies thatare planning to deliver service using theWeb. An effort should be made to assesscosts and benefits and use that analysis toshape the form of the site, the services of-

fered, the fee structure and the phasing.Some analysts of government opera-

tions have considered the Web as a po-tentially revolutionary force in servicedelivery. The impression we gain from thisstudy is that the impact of the web ongovernment service delivery will be slowand incremental. It will likely result ingradual, small scale service enhancements.Customers will be provided with alterna-tive modes of access to government andwill notice some improvement in servicedelivery. In some instances the cost of ser-vice delivery will be reduced. When mis-takes are made, or when redundant pointsof access are provided to please custom-ers, the costs of service delivery will rise.

3. THE CASE STUDIES

3.1. The case of Alaska

www.state.ak.us/

Site accommodates two Department of Motor

Vehicle (DMV) transactions: renewal of motor ve-

hicle registrations and ordering personalized li-

cense plates.

Worthwhile project due to increased customer

satisfaction. As core services are streamlined

through web-based service delivery, employees

benefit from increased opportunity to meet more

challenging responsabilities.

Background

Motivated by negative newspaper articles,long lines and dissatisfied customers, Gov-

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ernor Tony Knowles of Alaska issued anexecutive order, in January of 1997 to re-engineer the Department of Motor Vehi-cles (DMV). The first stage of creating amore efficient and effective DMV was tomove it from under the Department ofPublic Safety, whose first concern waspolice functions, to the Department ofAdministration, where it would receivemore attention. Once under the Depart-ment of Administration, DMV underwenta critical analysis of its core functions inorder to develop a new approach to ser-vice delivery. Two transactions were iden-tified as targets for Internet delivery: (1.)Renewal of motor vehicle registrationsand, (2.) Ordering personalized licenseplates. These were simple services thatwere performed daily and were selectedfor pilot project experiments.

Previously, DMV conducted thesetwo transactions through the mail orthrough in-person counter transactions inthe DMV offices. Registration renewalsthrough the mail could take anywherefrom several days to 3 weeks. Similarly,ordering personalized license platesthrough the mail took from 4-6 weeks tocheck name availability and order theplates. While counter transactions weresignificantly quicker for both services, theystill could take anywhere from 15 min-utes to 1 and 1/2 hours for registrationrenewals and several weeks to check nameavailability and order personalized plates.

Currently, DMV e-services have de-creased the time spent per transaction.

Registration renewals take approximately100 seconds over the Internet and person-alized license plate transactions take about30 seconds. Not only did the introduc-tion of e-services for these two transac-tions decrease the amount of time pertransaction, but they also enabled counteremployees to deal with more complextransactions, such as the issuance of driv-er’s licenses.

The Emission Inspection (I/M) sta-tion registration process also uses the In-ternet to facilitate transactions, is apublic-private partnership between DMV

and private I/M stations in Anchorage andJuneau, enables the private partners to re-new vehicle registrations while the vehi-cle receives a mandatory emissions test.The private stations access the DMV da-tabase through the Internet at the end ofeach day to update the registration sys-tem and to transfer the funds they collectthroughout the day. This brief, daily in-teraction enables the stations to conductthe transactions without DMV assistanceor interference. The stations use their owncredit card machines, contracts, and labor.Some I/M stations charge for the registra-tion service, while others view the in-creased number of customers who use theservice and may buy other products asadequate compensation.

Finally, the DMV Website also in-cludes video footage of the office sites andthe customer lines. The video frameschange every 5 minutes between 8:30 amand 4:30 p.m. They enable the consumer

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to identify ideal times to go to the DMV

office for counter transactions.

Development

Before conducting registration renewals orordering personalized plates online, DMV

had to create the infrastructure to supportthese transactions. DMV hired SAGA Soft-ware, a consulting firm based in Reston,Virginia, to create the systems program.For this initial stage, the consultants werepaid a one-time fee of $50,000. In-houseemployees from both DMV and the In-formation Technology Group (ITG), an-other governmental agency also housedunder the Department of Administration,wrote the web scripting. It was estimatedthat an additional $250,000 was spent onemployees and equipment, making thetotal set up costs $300,000.

ITG employees are responsible formaintaining the site, which costs approxi-mately $440 per month (3 hours per weekof analyst programmers time at $100 and$40 per month of regular employees time)and DMV employees are responsible fortransactions and responding to customers.

Implementation

Registration renewals and search and or-der of personalized plates were availableas online transactions by the end of 1997.In 1998, 4,828 customers used the Inter-net to reregister their vehicles, a numberthat rose to 10,115 in 1999. While this

was only 4.7% of the DMV registrationrenewals for that year, the alleviation ofthose 10,000 transactions influenced theentire registration process. By diverting aportion of the overall transactions, in-per-son and mail-in services were providedmore quickly.

More significantly, in 1999, privateI/M stations renewed 24.2% of the vehi-cle registrations for that year. In 2000, I/M stations have already completed 25.7%of the total registration renewals. Thispartnership has diverted and consolidat-ed a significant proportion of DMV trans-actions into single daily transfers fromeach partner.

Prior to the new registration options,DMV received negative press about theirinefficiency and long lines. While theDMV did not formally measure customersatisfaction with the Internet transactions,they have noticed significant improve-ment, indicated by increased utilizationof e-services and an increased number ofunsolicited customer compliments. MaryMarshburn, Director of the Departmentof Motor Vehicles, has found that eachyear more customers are using the Inter-net to renew their vehicle registrations.

In addition, most customers emailsare no longer negative, they tend to thankDMV, “for the most pleasant vehicle reg-istration process of my life” and for “anoutstanding, informative and useful web-site.” Since Internet transactions were be-gun, the DMV is a very different place;lines are shorter, customers are happier,

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and staff are more accessible because theydo not have to spend as much time re-sponding to complaints.

In addition to these improvements,the Internet services also cost less than thein-person transactions. An Internet reg-istration renewal costs $3.62 per transac-tion, while a counter registration renewalcosts $7.74 per transaction. Mail-in reg-istration is still the most cost effective at$3.35; however, this method has the long-est turn around time. Furthermore, asmore individuals use e-services, they willbecome more cost effective because theprimary incremental expense is the creditcard cost that decreases when a highervolume of transactions are completed.

Analysis

This project was worth doing because cus-tomers are more satisfied because servicesare quicker and more convenient as a re-sult of the new e-services. The Internet

Exhibit 1: Automobile Registration Renewals in Alaska2

allows customers to perform transactionsin a variety of different venues, which in-creases access to DMV. Similarly, employ-

ees are more satisfied because they are nolonger spending as much time dealingwith dissatisfied customers and servicecomplaints. As core services are stream-lined, the employee’s role is slowly shift-ing away from direct customer servicetoward more challenging roles as trainersand auditors for the I/M station registra-tion renewal program. As a result of thisredistribution of tasks, DMV reclassifiedtheir positions and all employees receiveda two-grade increase.

In addition to customer and employ-ee satisfaction, this initial program putsin place the infrastructure to expand ser-vices. The Alaska DMV plans to increaseservices to include renewal of drivers li-censes and address changes online. By in-creasing services provided over theInternet, the entire program becomesmore cost effective. Furthermore, as ser-

2. Data appeared in an unpublished memorandum sent from Mary Marshburn, Director of Departmentof Motor Vehicles in Alaska, on June 14, 2000.

# of Online Registration % of Total DMVYear Renewals Registration Renewals

1998 4,828 2.06%

1999 10,115 4.73%

2000 (Jan. to April) 4,691 7.195%

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Exhibit 2: Cost of automobile registration Renewals in Alaska3

Type of Direct Direct Development Credit TotalTransaction Labor* Materials** Overhead*** Cost Card Cost Unit

Cost

Counter 4.15 .11 3.48 - - 7.74

Mail-in 1.56 .48 1.31 - - 3.35

e-service .52 .53 .40 .85 1.32 3.62

3. Figures on e-service transactions, appear in an unpublished memorandum written by Mary Marshburn,Director of the Department of Motor Vehicles in Alaska, on 6/14/2000. Figures on Counter and Mail-intransactions appeared in a memorandum written by Tom Cherian, Finance Officer for the Department ofAdministration in Alaska, on 10/13/97.*Direct labor costs are assumed to consist of 80% of total personal service expenditures for the DMV FieldService component. Direct labor costs are allocated to each major class of transaction based on the amountof time required to process the transaction type and the total number of transactions processed during theyear.**Direct materials include the cost of postage, license plates, license tabs, photo costs, and forms. Directmaterials costs data were obtained from DMV Deputy Director Chuck Hosack.***Overhead is determined using the same methodology that was used to allocate direct labor. That is,overhead is allocated to transaction classes based on processing time and number of transactions. Thecomponents consist of building lease costs, equipment amortization costs, and three support staff from theDriver Services component.

vices are new, there is still room for im-provement. Currently, about 95% of atransaction is completed through the In-ternet, with only 5% of the process com-pleted manually. The manual labor isneeded when an error occurs in the sys-tem and someone must investigate andcorrect the inaccurate data. In addition,someone must manually change disks andenter forms. While DMV has automatedmost of the process, their goal is to havetransactions that are 100% automated.This would result in even more efficienttransactions.

Alaska’s long term goal is to developa portal system that can accommodate all

state government Internet transactions ata single point of contact. Currently, eachdepartment is responsible for the devel-opment and maintenance of their specif-ic transactions, which has resulted in asignificant amount of duplication andcompetition between varying state agen-cies. This case raises the issue of coordina-tion of the technical infrastructure neededto support internet-delivered services. Italso indicates that electronic service deliv-ery effects both customers and administra-tive operations. In this case, the Internetreduced demands on administrative staffand allowed them to provide better serviceto customers who did not use the Internet.

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locations and hours, and even find greatlocations for film shoots if they are visit-ing from Hollywood.

Residents have several areas in the site.Most popular is the “Mayor’s Food Court,”containing the recent inspection reports forall restaurants in Boston, with explanationsof violations and total scores. There arealso pages where residents can manage ob-ligations to the city; the section for excisetax payment, for example, has been suc-cessful. On this page, you can pay yourmotor vehicle excise tax with a credit card,a tax that previously had to be paid inperson or by mail. Similarly, citizens canpay their parking tickets on line, using acredit card, and file for dismissal as well.Even more information can be accessed.Missing a dog license? Looking to registerto vote? There are few city services notavailable online here.

Businesses also have a thorough se-lection of available services. As in the res-idential section, users can both accessforms and conduct transactions. For theformer, over 20 different forms are avail-able, the vast majority of the paperworkneeded to conduct business in the city.Transactions online are similarly compre-hensive, allowing businesses to search foravailable real estate or bid on city contractsvia an online RFP process.

Development

One of the most interesting aspects of theBoston site is that its development is com-

3.2. The case of Boston

www.ci.boston.ma.us

Boston site offers good content, serves as an

engaging information resource, and provides an

impressive list of online services like paying

parking ticket fines, registering to vote, obtaining

dog license and more.

Successful project of interest to casual informa-

tion seekers and those seeking access to Boston

city government services. Conveniently and

efficiently facilitates a variety of services for

citizens. Excellent example of well-funded and

well-designed e-government.

Background

Boston’s overall city web site has a clearmission of delivering good content to cit-izens, it is an excellent example of how e-government can work if well funded anddesigned. Beyond the typical features forobtaining forms and reviewing restaurantinspection reports, Boston offers a greatdeal of serious information as well as in-teresting background on the city, andmany onerous city-related tasks can betaken care of here as well.

Set up clearly and logically, the firstarea of the site directs different categoriesof users to different parts of the site basedon whether they are residents, businesspeople or visitors. Each type of user canthen access a wide range of useful infor-mation pertinent to their needs. Visitors,for example, can find out historical infor-mation on the city, popular tourist sites’

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pletely in-house. Boston recognized theneed for a Website as vital, and created apartnership with Hitachi who has becomeits single private provider, and provides allhardware (Web servers, e.g.), in exchangefor prominent mention on the Boston site.The equipment is very cutting edge, ableto facilitate over 1 million hits a day; thevalue of the donation exceeded $200,000.

The development costs also includedthe two full-time in-house staff, whichtoday has grown to a full-time staff of six.Additionally, they purchase some softwareupgrades. Boston uses the latest Web tech-nology, using ASP programming languagefor example).

The Boston site, however, is deter-mined to not be driven by costs, and tokeep tight control over the content, devel-opment and maintenance. According to themanager of the site, this is how the site hasbecome so successful, winning many awards.

Implementation

By all accounts, Boston’s is a successful site.According to the site’s managers, manyfeatures have shown significant increasesin use since the site was launched. Motorvehicle excise tax payment, for example,increased by 300% from mid 1999 to mid2000. In the year 2000, an average of threethousand tickets were paid over the inter-net each month. Although no specific datawere provided to us, people managing thesite believe that the site saves governmentmoney. With the motor vehicle excise tax,

for example, the city formerly saw manypayments at city hall, and as a result, hada huge backlog of paperwork. It is esti-mated that about 6000 payments weremade online during the first year of ser-vice, with about $500,000 of paymentsmade. The time administrative staff hashad to spend on filings related to the taxhas decreased substantially since the pay-ment option has gone online. Such a de-crease certainly opens the opportunity formore efficient staff allocations.

Analysis

The success of Boston’s site is evident evento the first time user. Compared to a site’ssuch as New York’s, for example, Boston’sis aesthetically more pleasing, easier tonavigate, and provides more options. Thesite can have an effect on the public’s per-ception of government, as citizens cometo see that the government has becomeeasier to work with.

3.3. THE CASE OF FLORIDA

www.fhs.net

Florida High School site seeks to build on and

expand the traditional idea of the online school

and can serve any student in the state.

Ambitious attempt to use Internet technology for

high school education that achieves outstanding

success in its graduation rates and other

measures. Pushes the envelope on e-government.

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Background

To equalize access to education for all Flor-ida residents, The Florida Department ofEducation initiated a transition from thetraditional learning environment to TheFlorida High School (FHS) online envi-ronment. The Florida High School’s goalis to build a quality education system thateliminates the shortcomings of the tradi-tional educational delivery system. This sitecan in fact serve any student in the state,from rural students who need more courseselection, to working students who needhours that are more flexible. The FHS hashad a major impact on Florida education,with teachers from all over the state pro-viding curricula for the school. Studentparticipation has grown, perhaps drawn bythe freedom implicit in the motto, “anytime, any place, any path, any pace.”

The program seeks to build on andexpand greatly the traditional idea of theonline school. One example of such aschool was the Orange County PublicSchool’s 1996 experimental online pro-gram, the “WebSchool,” This school of-fered SAT Preparation and ComputerProgramming to Orange County students.These specialized programs have beenavailable for some time; in disk form be-fore online, but did not have broadenough offerings to replace actual highschool course work.

While Orange County piloted its“WebSchool, Alachua County proposeda statewide online high school. This was

a more ambitious idea, with the goal ofdelivering actual high school course ma-terial to students on line. The Depart-ment of Education identified the two sitesas having similar goals, and suggested col-laboration, offering a seed grant as a cata-lyst. The counties met and decided tocollaborate, and created the Florida HighSchool, originally offering five onlinecourses. According to the web site, theproject’s mission “is to place a completehigh school online by the year 2001 andwill include those student services that willenable students to successfully transitionto postsecondary educational institutionsand to the workplace.” To ensure highquality of course content, the program willaim to meet the Florida Sunshine StateStandards and other more stringent crite-ria supported by the education and busi-ness communities. It will also use theInternet to deliver facilitated instructionto students, an innovative use of the Web.

The program has both a brick-and-mortar location and Website. The site isorganized around the coursework andcurriculum, the integral part of the pro-gram. Each course has its own section ofthe site, accessed from the main course area.The online syllabus shows the assignmentsand required reading for the course. Thehigh school has aimed to have as much ofthe required activity available on the site aspossible; links take students to other sitesfor articles, and textbooks are offered onCD-ROM. There are also additional linksfor students with a particular interest in

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topics covered, making it easy for studentsto explore topics in as much depth as theylike. The school appeals to and createsself-motivated students with a drive tolearn. It also helps develop solid technicalskills and facility with the Internet.

Class discussion is clearly not possi-ble in this environment, a potential draw-back. The Florida High School tries toreplace classroom discussion with e-mailand a virtual “CourseRoom”. The Cour-seRoom is a chat-room where studentsare expected to join in discussion of top-ics, asynchronously. This concept has thelimitation of not effecting actual discus-sion, which is clearly hard to approxi-mate, but fits within the overall mottoof the school of 24/7 access, not limitedby any schedule.

In addition to the Web-based servic-es available to students, teachers are alsoaccessible by telephone. Furthermore,some classes work with traditional bricks-and-mortar classes to support their activ-ities, such as the drama class thateventually meets together with a non-Webclass to watch a production.

The Florida High School claims thatthe overall approach is more student-cen-tered than that offered in a traditional highschool, since students are free to move attheir own pace, without being required tostay with the group in-class discussions.In turn, it claims more success in devel-oping higher learning skills as well as morepractical, employment-related skills due tothe technical literacy required to succeed.

Development

The FHS developed its Web capabilitythrough a partnership of public and pri-vate sources. As mentioned earlier, fund-ing came originally from the federalDepartment of Education with a $200,000starter grant via the “Break the Mold” pro-gram. This was followed by a $1.3 millionappropriation from the Florida Legislature.The first $1.5 million, however, primarilywent to staff and curriculum development.Costs for the actual Web site developmentwere approximately $350,000, providedfrom in-kind donations from private sourc-es, Lotus Development and IBM. A ser-vice provider, Interalia, maintains and hoststhe site on its servers in an ASP solution.

Technical problems often developwith the site, as noted on several of thepages. To overcome these, the Schoolmaintains a technical support staff (viaInteralia) that troubleshoots bugs.

Implementation

The Florida High School grew significant-ly in its first three years from 150 studentsin 1997, to 2,300 in 2000. Additionally,the number of school districts affiliatedwith FHS has grown to include all but twoof the state’s districts, and includes 3 char-ter and 25 private schools.

The “customers” of the site appear tobe doing well in school, based on theirhigh grades and test scores coming out ofthe program. In 1999-2000, 59% of all

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students earned A’s and 24% B’s, a figurethe School attributes in part to the exten-sive personal attention given each student(although it must be pointed out the FHS

student body is probably not similar to atypical high school’s). Advance placementscores are also impressive, with 72% pass-ing these tests at FHS.

Costs are another matter, with Flori-da mentioning in its literature, “cost-ef-fectiveness studies that focus only ondollars probably will not capture [all the]… data.” However, even if the school isnot producing savings now, it is clear thatthe costs are decreasing as the schoolgrows; there are clearly economies of scalefor this sort of endeavor. It is also difficultto quantify the benefit side of the equa-tion that will come over the long run dueto improved grades and test results.

Analysis

The Florida High School project has beenone of the most ambitious attempts to wedInternet technology and high school edu-cation. The school uses several progressiveeducation methods, self-paced learning,personalized attention, and technology,and has achieved outstanding success inits graduation rates, average grades andsuccess at placement exams. Similarly, ed-ucators have flocked to the program – thefaculty has tripled over the course of thesite’s development – and report high satis-faction with the flexibility of the scheduleand the motivation of the students.

Beyond the good marks from stu-dents and faculty, the School has built aninfrastructure that will allow expansionover the years. Specialized courses holdparticular promise for expansion, andseem to be a goal of the school, since tra-ditional high schools that may not haveon their own enough student interest forLatin or Economics can direct their stu-dents to FHS, and this offers a source ofgrowth. In addition, the school has movedto offer a full range of courses with thegoal of providing the complete high schoolexperience for full-time students.

Florida’s venture into cyberspace tocreate an entire high school is notewor-thy because it pushes the envelope on e-government to offer an expensive andcomplex service over the Web. The dan-ger is that the state, currently led by a fis-cally-minded governor who vetoed arecent bill calling for education budgetincreases, may not have the patience tosee out the expansion of the school to ef-ficient, and money-saving, scale. Educa-tors should hope this does not happen,and that FHS can continue to innovate.

3.4. THE CASE OF INDIANA

www.state.in.us/

Site provides residents with access to thousands

of web pages and over 175 interactive services

including income tax filings and renewal of

professional or recreational licenses.

Indiana has one of the most (siguiente página)

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comprehensive state sites: it serves customers

well and can be used by all of its departments and

agencies. Because a creative public-private

partnership produced the site, the government

did not incur development and capital costs.

Background

Recognizing the need to increase citizen’saccess to the government, but wishing toreduce the capital expenditures to govern-ment, Indiana formed a creative public-private partnership to deliver services overthe Internet. Indiana contracted with aprivate partner who provided start up cap-ital, covered development costs, as paidthe costs of marketing and managementof the site in return for the right to chargeservice fees to its customers. This enabledcitizens to have one point of contact for allgovernment transactions, and also deployedadvanced technological resources withoutmajor capital investments to the state. In1995, Indiana engaged in a public-privatepartnership with Indian@Interactive, Inc. toform Access Indiana, the Internet portalfor the state. Through Access Indiana, res-idents can utilize 130,000 web pages andengage in over 175 interactive services.4

Internet services provided throughAccess Indiana range from filing incometaxes to renewals of professional and rec-reational licenses. One simple transactionthat has resulted in significant savings is

the online physician license search. Hos-pitals, clinics, and physician’s offices arerequired by law to verify the licenses of allhealth care providers: physicians, nurses,LPNS, and physical therapists. Prior toonline verification, medical facilities hadto contact the Health Professional Bureauand request verification of an employee’slicense. Then the office had to access thelicense, print a verification form and mailit to the requesting agency. Since accredi-tation requirements mandate that medi-cal facilities update their licenses every twoyears, this resulted in at least 100,000 re-quests per year.

Three years ago, online verificationof medical licenses simplified this process.Now, Access Indiana enables subscribersto access the state database of medical li-censes and download the needed verifica-tions immediately. Not only does this savethe government money in printing costsbut it also saves time for both state andmedical personnel.

Development

In order to conduct this exchange, theHealth Professions Bureau needed accessto the technology that would support thisprocess. The State of Indiana was able toobtain this infrastructure through the pub-lic-private partnership, Access Indiana.Instead of creating the infrastructure for

4. Personal e-mail communication with Robert Knapp, Director of Marketing for Access Indiana,July 18, 2000.

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Internet transactions in-house, they uti-lized the technology and knowledge of theprivate industry. As Indian@Interactive,Inc, the private partner is responsible forall capital and developmental costs, theState government incurs no capital expens-es from this project. However, while thegovernment has no financial investmentin the project, the partnership insures thatthe state owns the site and has oversightpowers with regards to content and trans-action fees. The state established a gov-erning board that reviews the transactionand subscription fees to ensure that thefees are reasonable and that the privatepartner complies with state policies andprocedures.

The private partner is responsible forall costs, which they recoup through “mar-ket-driven convenience fees” on some ofthe services. Approximately 95% of theinformation on the 130,000 Internet pag-es is free, while approximately 5% of theservices charge a fee. Most of these trans-actions traditionally carried a fee for theservice or information provided throughmore traditional methods. The programuses a self-funded model that leverages therevenues of the portal to assist in the de-velopment of applications and content foragencies without using government funds.

Implementation

The online license verification process hascompletely eclipsed the traditional verifi-cation process due to its ease and conve-

nience. As a result, the Health ProfessionsBureau no longer verifies individual li-censes through the traditional process.Instead, all transactions are accomplishedthrough verbal verification over thephone or through Internet verification.In its first year, the program resulted insavings of $86,000 in copier and paperexpenses alone, not including savings inlabor and postage. Furthermore, as therewere no investment costs to implementthis program, the savings to governmentwere immediate.

This new transaction is not only eas-ier and more convenient, but can also re-sult in overall savings to medical facilities.With the traditional method, requestingparties could access 1 to 50 licenses at atime for $30 or they could purchase theentire list of licenses following a renewalperiod. Before, undergoing the online li-cense verification project, Access IndianaInformation Network conducted a survey,where they found that on average, it costthe requesting agency $3 to process a ver-ification. This is because most agenciesdo not need to update 50 licenses at a timeand with the traditional system you couldnot pay per verification. With online ver-ification, hospitals or other large medicalfacilities can subscribe to Access Indianafor $50 per year and that enables the fa-cility to download verifications immedi-ately for $1 per verification. As a resultagencies can save money by only havingto pay for the verifications needed. Simi-larly, individuals do not have to pay the

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subscription fee, and can access a verifica-tion for $2.20 with a credit card.5

Analysis

The Indiana State government has creat-ed a system that can be used by all of itsdepartments and agencies. This will alle-viate any duplication that might otherwiseoccur if each department developed itsown individual web-site, which happensin many states. This model results in gov-ernmental savings, as agencies and con-stituents have access to cutting edgetechnology without any capital expenses.

In addition, customers are more sat-isfied because they are able to access need-ed information more quickly andconveniently. Agencies are able to quick-ly access important information that pre-viously took two to three weeks to obtain.Furthermore, hospitals now receive indi-vidual verification sheets for each licenseethat can be placed in the individual’s per-sonnel folder, as compared to the oldersystem with a sheet containing anywherefrom one to fifty verifications.

In the future the Health ProfessionalBureau plans to expand the transactionsavailable on the Internet. They are in theprocess of increasing the downloadableinformation on the web-site to includestatutes and board rules. Furthermore,

5. Source of data in this section: personal e-mails from Herb Price, Systems Analyst for the Health profes-sions Bureau, September 13 and October 2, 2000.

they plan to make applications and otherforms available via the Internet. This willreduce the amount of time lost betweensending and receiving information andwill result in additional savings in postageand staff time.

The public-private partnership be-tween the government of Indiana andIndian@Interactive, Inc. has provided thegovernment with the technological infra-structure to provide Internet services tothe public, with no developmental or cap-ital costs. As a result, Indiana has one ofthe most comprehensive state Websiteswithout the expenditure of government’sfunds. The only people charged for thisservice are those who use the service. Thisis an important model that other statesand larger jurisdictions would be well ad-vised to at least consider.

3.5. THE CASE OF THE U.S. INTERNAL

REVENUE SERVICE (IRS)

www.irs.ustreas.gov

Site enables individuals to file their taxes online

and provides downloadable forms and

instruction booklets.

The Internal Revenue Service’s electronic filing

initiative is faster, more convenient for customers

and saves government money. Additionally, less

paper use complies with the Paperwork

Reduction Act.

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Background

The Electronic Tax Administration (ETA)is part of the Internal Revenue Service(IRS) and is critical to their mission, ofproviding quality service to Americantaxpayers in communicating better with theIRS. Every year the IRS receives over 200million tax returns, over 1 billion informa-tion returns, issues 88 million individualreturns, answers over 110 million assistancecalls and collects $1.7 trillion dollars. Inlight of the tremendous amount of custom-er transactions, the IRS’s reliance on re-source-intensive processes for interactingwith taxpayers is costly. Paperbound anderror-prone processes divert critical re-sources from areas such as customer ser-vice and compliance.

The ETA was created in 1986 to helprevolutionize how individuals, business-es, and tax practitioners transact and com-municate with the IRS. This includes howAmericans file tax returns, pay what isowed, and receive assistance and informa-tion to comply with tax laws. In the late1980’s the IRS conducted its first pilot testof electronic filing. In 1986, approximate-ly 25,000 individual tax returns were filedby a handful of professional tax practitio-ners. By 1999, thirteen years later, oneout of every 4 individual tax returns is filedelectronically.

Prior to 1986, all federal tax formswere filed through the mail. Individualseither prepared their own paper tax formsor they paid an accountant or tax practi-

tioner to prepare the forms for them. In-dividuals who prepared their own taxforms usually went to the library, the postoffice, or other government agencies wherethey could get copies of the forms neededalong with lengthy instructions bookletsfor each form. While this method is stillthe most prevalent, increasing numbers oftaxpayers are utilizing one of the three elec-tronic methods to file their federal taxforms. Individuals can choose to file viathe telephone utilizing the TeleFile system,over the Internet via a personal computer,or electronically through an IRS-authorizedElectronic Return Originator (ERO).

While these new methods are moreconvenient for taxpayers, there are stillmany supplemental forms that cannot befiled over the Internet, and most transac-tions are not completely paperless. In 1999one million taxpayers participated in twopilot projects, which enabled them to havea totally paperless filing experience. How-ever, most taxpayers must still mail in W-2 forms, along with certain paper-onlyforms and schedules. As a result, manytaxpayers continue to use the traditionalmail-in method.

In addition to enabling individuals tofile their taxes over the Internet, the IRSWebsite also provides downloadable formsand instruction booklets. Similarly, tax-payers can email questions to an IRS rep-resentative and a “What’s Hot” page alertstaxpayers to current problems and issuesaffecting them. All of these new toolsenable the IRS to reduce the amount of

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paperwork that they produce to assist tax-payers. This is in accordance with the Pa-perwork Reduction Act that attempts tominimize the burden of federal paperworkdemands through use of technology.

Development

Before taxpayers could file their taxes overthe Internet, the IRS had to create theinfrastructure to support these transac-tions. Much of the initial work was donein-house, however as the demand for e-filing has increased and the options avail-able have become more complicated, theIRS recognized the need to rebuild thecomputing infrastructure of the ETA. Atthe end of 1998, the IRS awarded a con-tract to Computer Service Corporationand a team of leading technology and con-sulting firms to be major partners in man-aging the modernization of IRS’s corebusiness and technology systems.

In developing an e-filing system, therewere many problems. For instance, theneed for authentic W-2 forms, and thetaxpayer’s signature have deterred manyfilers from using the online options be-cause they would be forced to send in thenecessary paper after completing the on-line transaction. The ETA is dealing withthis problem by conducting pilot projectsthat enable small numbers of taxpayers towork around these issues. By piloting dif-ferent options, the ETA is able to deter-mine the best ways to improve the systemto make it more user friendly for everyone.

An additional barrier for e-filing, isthe public’s perception that they are morelikely to be audited if they file electroni-cally. To combat this obstacle, the ETAdeveloped a marketing campaign thathighlights this false perception. The cam-paign explains that audit selection criteriadoes not take into account how a returnwas filed. Furthermore, the campaignpoints out that those who file using tradi-tional mail-in methods are actually 40times more likely to receive subsequentcontact with the IRS than those who fileelectronically. Another obstacle that ETAfaces concerns the privacy and security oftaxpayer’s personal information. The ETAis working on safeguarding taxpayer’s in-formation. Simultaneously, they arestreamlining forms to minimize theamount of personal information neededto file electronically. Finally, they are im-plementing pilot projects to develop a safeand secure method for using PersonalIdentification Numbers (PIN) to enableindividuals to file electronically.

Implementation

In 1999, online filing increased 161% over1998 filings with 2.5 million taxpayersutilizing this option. The IRS is project-ing continued increases in the utilizationof e-filing services, as the services improveand as customers become more familiarand more confident in electronic filingmethods. In addition to the transaction-al increases, in 1999, the IRS homepage

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received over 1 billion hits for informa-tion or downloadable tax forms. The in-creased utilization of the Internet toprovide instructions and information hasreduced the amount of paperwork the IRSproduces and processes.

In addition to decreasing the amountof paperwork, these new filing optionshave extremely high accuracy rates andcustomer satisfaction reports. The IRS hasconsistently achieved a 99% accuracy rateon all electronically filed tax returns, witha 99.2% rate in 1999. As a result, custom-er satisfaction is also very high. In 1999the Russell Marketing Research, Inc. con-ducted a satisfaction survey on the threemethods of e-filing. Of those who used thepractitioner file and online file, 75% re-ported that they were “very satisfied”, co-inciding with 85% of those who usedTeleFile. Furthermore, when you includ-ed those who claimed that they were “some-what satisfied” the scores increased to 95%

for practitioner file, 97% for online and99% for TeleFile. These figures were con-firmed by the President’s ManagementCouncil (PMC) Customer Service Results.

The IRS recognized that customersatisfaction was only one way to measuresuccess, and therefore also conducted sur-veys to rate the satisfaction of tax practi-tioners and ETA employees with e-filing.The ERO survey found that tax practitio-ners believed that the e-file program wasfast, accurate, and improved customer sat-isfaction. Of those surveyed, 75% were“very satisfied” with the practitioner fileand approximately 95% were at least“somewhat satisfied” with this service.Similarly, employees were surveyed to de-termine their level of satisfaction on 12different indices, ranging from training toempowerment to performance measure-ment. The overall scores on the 12 indi-cators ranged from a low of 55% to a highof 74%. The IRS is using the employee

Exhibit 3: Individual IRS Tax Filings6

(In thousands)

Year TeleFile Practitioner Online File Total IRS Total TaxFile (ERO) e-file Forms Filed

1998 5,955 17, 669 942 24,580 1,225,0001999 5,664 21,223 2,458 29,346 1,251,000

2000 7,000- 25,000-31,000 (projections 33,600 1,269,000(projected) 7,800 combined)

2003 8,000- 31,800-43,000 (projections 44,100- 1,321,100(projected) 9,6000 combined) 45,600

2007 9,400- 40,000-57,000 (projections 55,500- 1,386,000(projected) 12,700 combined) 64,300

6. All IRS Data drawn from: IRS, Electronic Tax Administration “A Strategy for Growth” , WashingtonD.C., December 1999.

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survey and the information it uncoveredto create new initiatives for employees, suchas training programs and communicationefforts. Furthermore, managers have in-corporated the 12 indicators into theirwork groups and were held accountablefor acting on the indicators in FY2000.

In addition to the high levels of satis-faction with the e-file methods, they alsocost less than traditional mail-in services.In 1999, a unit mail-in transaction cost$4.28 per 30 million transactions. Sim-ilarly, a unit e-file transaction cost $4.14per 30 million transactions. While thesesavings are relatively small, the projectedsavings over the next several years are muchmore significant (see Exhibit 2). These sav-ings are based on the assumption that asthe volume of e-transactions increases, theIRS should be able to amortize its fixedcosts, which will allow the per transactioncost to decrease. Furthermore, the IRS alsohas a number of techniques to increasecustomer usage, which will in turn de-crease unit costs. These include deploy-

ing an authentication approach, enablingdebit and credit card payments, automat-ing the ERO application and suitabilityprocess, and consolidating and modern-izing service center assets.

Analysis

The Internal Revenue Service’s electronicfiling initiative must be judged a success.First, it is faster and more convenient forcustomers, thereby increasing their cus-tomer satisfaction. Similarly, it saves mon-ey per transaction. Furthermore, thisproject is in compliance with the Paper-work Reduction Act that attempts to re-place paper transactions with paperlesstechnological transactions. While mostusers are currently satisfied with their e-filing experiences, future enhancementsshould make the experience even better.Finally, this project is consistent with thegoal of the federal government to increasethe use of the Internet to provide govern-ment services.

Exhibit 4: IRS Transaction Costs7

(Unit cost per 30 million transactions)

Year Mail-in Electronically FiledTransaction Transaction

1999 $4.28 $4.14

2003 (projected) - $3.50

2007 (projected) - $2.00

7. Source: “A Strategy for Growth”: OP. CIT.

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Over the next several years, the ETA

plans to make electronic filing, payment,and communication so simple, inexpen-sive, and trusted that taxpayers will preferthese methods to phone and mail options.They are currently developing a compre-hensive plan to remove barriers, increasebenefits, and broaden the appeal of elec-tronic transactions to all segments of thepopulation. IRS plans to expand the pi-lot projects that enable taxpayers to havea completely paperless filing process andto acclimate more individuals to this newoption. Similarly, they plan to increasethe number of forms and schedules thatindividuals can file online. This shouldincrease the number of taxpayers optingto use one of the e-filing methods. Theoverall goal is to have 80% of individualsfiling their taxes online by the year 2007.This increase in usage should result in largereductions in costs per transaction, be-cause the fixed development and imple-mentation costs will be spread across moretransactions.

Over the last fourteen years the IRS,

and specifically the ETA, have greatly im-proved electronic filing. They have ex-panded and enhanced the servicesprovided. Both experience and new tech-nology have contributed to better, morecomprehensive options for taxpayers.With electronic filing customers and prac-titioners more satisfied, and costs pertransaction are decreased. While the ETA

improved e-filing significantly, there aremany improvements to come. The ETA’s

strategic plan outlines a comprehensiveplan that should result in 80% IRS trans-actions occurring electronically by the year2007. In order to accomplish this, theyplan to continue to invest time and re-sources into the infrastructure and mar-keting of the project.

3.6. THE CASE OF TEXAS

www.state.tx.us/

Site streamlines the oil and gas permit process by

improving communication and saving both time

and money for government and private industry.

While this pilot program incorporates a long-

term strategy to reduce administrative

complexities and costs of drilling in Texas, initial

results include a more flexible, accurate approval

process that requires less time and money to

complete.

Background

In 1998, the oil and gas industry in Texaswas facing historically low oil prices anddeclining production. In an attempt toreduce the cost of regulatory processes andencourage the drilling of new wells, theTexas Railroad Commission in conjunc-tion with the oil and gas industry that itregulates, proposed a pilot project tostreamline oil and gas permits, the Elec-tronic Compliance and Approval Process(ECAP). This technological solution iscomprised of an integrated database linkedto an Internet-based interactive permittingsystem. The overall goal is to use Internet

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technology to improve communication,save money and time for both the Com-mission and industry operators, and tostreamline regulatory compliance process-es through electronic workflow systems.

The Commission chose the drillingpermit application as the first transactionto streamline into a completely electronicprocess. It was the ideal transaction touse in the pilot project because it is com-plicated, involving signatures, electronicfund transfers, and record archiving andstorage. In addition, it is the first step inregulatory process. Prior to the ECAP pro-cess, drilling permits were either processedthrough the mail or through an expeditedwalk-through process at the Commission-er’s Austin office. It takes approximately4 days to process mail-in applications, andan expedited mail-in application takesabout eight hours. A walk-through appli-cation takes about two hours dependingon the number of applications being pro-cessed on a particular day. The drillingpermit process is linear in nature, thusdelays are experienced in approvals of ap-plication, if one step in the process is notworking or hits a bottleneck. Further-more, once an application is approved,industry operators either wait several dayswhile the approval is returned through themail or they can pay the $50 expedite fee.Finally, once applications are approved,they are either stored in paper format,which makes it difficult to access valuableinformation in the future, or the infor-mation is keyed into a computer database,

which is time consuming and can resultsin clerical errors.

In May 2000, the ECAP project pro-vided an alternative method for industryoperators to submit the drilling permitapplication. Now, the Commission utilizesthe Internet to accept, file, review, andapprove a portion of the approximately15,000 drilling permit applications re-ceived per year. This new process not onlyreduces the amount of time and moneyspent processing an application, but alsoreduces errors and mistakes. The on-lineapplication form asks for key data thatenables the program to fill in other fieldson the form. This streamlined applica-tion reduces the time spent filling outforms and increases the data accuracy.Similarly, it reduces the time spent pro-cessing incorrect forms and resubmittingcorrections. Furthermore, the electronicapplication allows the various steps in theprocess to occur simultaneously, furtherexpediting the process. Critical correspon-dence previously performed through themail or in-person now take minutesthrough the Internet and permits are usu-ally approved within 24 hours. Finally, theCommission receives data in the same for-mat that it will be stored, eliminating theneed to store paper documents or com-puterize paper data.

Development

The development process for this projectis broken down into three separate phas-

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es. The estimated cost for developing andimplementing the entire ECAP pilot pro-gram is $1.4 million. In February 1999,the Texas Railroad Commission receiveda $700,000 grant from the US Departmentof Energy to use towards this project andin May 1999 the Texas Legislature appro-priated $1.4 million. This funding enabledECAP to begin the developmental processand in April 2000 they completed the firstphase. Phase 1 cost approximately$333,000, which included contracting outthe initial development costs including pro-gramming services to four independentcontractors. The labor costs for this phasewere based on 15 person months of pro-gramming time at $100 for analysis andwork design and $75 for pure program-ming services. Capital expenditures, suchas increased server storage capacity wereestimated at $37,000. The completion ofthis stage took approximately 8 months andnow enables the Railroad Commission toaccept, process, and approve drilling per-mit applications. This phase focused onbuilding the primary infrastructure, suchas secured system access, credit-card pay-ments, mainframe database updates via theInternet, and limited on-line data valida-tion and editing capacities.

In late 2000, the Electronic Compli-ance and Approval Project (ECAP) wasworking on the second phase of the pilotproject, which would take approximatelyfive months to complete and cost an esti-mated $516,000. This phase expands thecore systems to include full editing capa-

bilities and a comprehensive workflowsystem. It will require approximately 11man-months of programming, for$254,000, to enable the system to pro-cess more complex work permits. In ad-dition, the procurement of commerciallyavailable workflow software would enablemultiple processes to occur simultaneous-ly. Software expenses and additional con-tracted programming services to adapt thesoftware to the Commission’s process wereestimated at $262,000.

The third and final phase of thisproject should take approximately 7months to complete and is estimated at$555,000. During this phase, contractorswill complete the development processand will fully integrate the new systemwith the existing mainframe databases.This will enable ECAP to provide com-prehensive on-line permit approvals. It willrequire approximately 5 man-months tocomplete and will cost approximately$107,000. The main expense incurredduring this phase is the procurement of acommercial bridging software, which willenable the new Internet based system toreplace the manual process while still main-taining the accuracy of the Commission’sfiles. The estimated capital expenditure,including hours required to implement andtest the software is $448,000.

During the three-phase developmentand implementation plan, contractors willparticipate in the maintenance of the site;however, they will be under the directionof Commission personnel. Once develop-

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ment process is complete, the Commissionstaff will be responsible for maintainingthe site. The on-going maintenance costswill be approximately $322,000 per year.

The Commission encountered severalobstacles through the initial phase of de-velopment. These included delays in thegovernment procurement process andcompatibility issues with change technol-ogy. As a result, they established a projectmanagement team that reviewed the im-pact of the varying problems and devel-oped solutions. For instance, whendealing with technical compatibility is-sues, they defined change managementprocesses and escalation procedures. Inaddition, they ensured that future stepsin the project had contingency plans andtimeframes for sufficient testing of appli-cation issues.

Implementation

Since phase one was completed in May of2000, one consulting firm and thirty-four

Exhibit 5: Estimated Costs of ECAP’s Pilot Program8

ECAP Labor Capital Total

Phase 1 $296,000 $37,000 $333,000

Phase 2 $254,000 $262,000 $516,000

Phase 3 $107,000 $448,000 $555,000

Total Project $657,000 $747,000 $1,404,000

organizations have filed the necessaryagreements and security forms required forutilizing the ECAP system. However, thereare over 8000 operators in the state, sothe Commission expects more registra-tions to occur in the following months.Since the ECAP project was actually initi-ated by industry operators and not theCommission, high enrollment is expect-ed to follow, as operators become morefamiliar with the new system. Similarly,once industry operators realize the savingsthat will result from this new approvalprocess, more will register.

During the development phase of thisproject, the Commission worked with in-dustry representatives to determine theadministrative savings that operators willrealize when applying for permits electron-ically. They determined that the reduc-tion of processing and approval timewould result in a $200-400 savings perpermit. If there is a 25% utilization of elec-tronic filing, then total annual industrysavings is expected to reach $17 million.

8. Source: The Railoroad Commission of Texas, “ECAP (Electronic Compliance and Approval Project”Report, December 15, 1998.

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This saving helps meet the Commission’sgoals of decreasing industry costs in an ef-fort to ensure continued drilling in Texas.

While savings for industry operatorsis the primary goal of the ECAP project,the Commission projects savings for thegovernment in later years. Initially, theCommission will have to maintain twoapplication processes until the electronicprocess is completely operational. How-ever, once the system is finalized, thestreamlined approach will save the gov-ernment time and money, especially ascapital costs are dispersed among moretransactions.

Analysis

This project will immediately begin tomeet the Commission’s overall goal to re-duce the administrative costs for industryoperators. The electronic process not onlysaves time and money for the governmentand private industry; it also provides amore flexible and accurate approval pro-cess. In addition, permit information ismore consistent and accessible due to thedatabase system.

The Commission should completethe second phase of the ECAP project bythe end of 2000, which will allow the pro-cessing of more complex drilling permitsand attachments. This addition shouldincrease the utilization of electronic filing.Similarly, utilization and savings shouldincrease further as the third phase is com-pleted. Phase 3 is scheduled for comple-

tion by September 2001, ending the de-velopment process and resulting in a fullyintegrated database system. Once the sys-tem is complete, the Commission plansto expand ECAP to include compliancepermits and performance reports. Thegoal is to have a 50% paperless regulatoryenvironment by the year 2005.

Over the last two years, the RailroadCommission has worked closely with in-dustry operators to develop a streamlinedpermit application process. The projectwas primarily driven by the private indus-try and should result in savings for opera-tors and eventually for the government.Utilizing the expertise of private operatorsenabled the Commission to create a com-prehensive, long-term strategy to reduceadministrative costs of drilling in Texas.

3.7. THE CASE OF UTAH

www.utdcfsadopt.org/index.html

One of the first state-sponsored online adoption

sites, it serves as a matching tool that aids families

in finding a child. Basic information is provided at

first, and a password-protected area is available to

key individuals working with families interested in

sensitive details.

Utah’s effort to make the social services side of

government more efficient is distinctive: e-

government activity to date focuses on easing the

administrative burdens. Future plans include

accessing other states’ adoption listings and more

links to supportive resources such as medical sites.

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Background

The State of Utah, in an effort to improvethe information market for adopted chil-dren, has developed the Utah Child andFamily Connection. The Adoption Ex-change, a private non-profit organization,has helped to set up an online database ofadoption information, essentially a match-ing tool that allows families to enter theirinformation and criteria and find the childthat most fits these criteria. Similarly, theDepartment of Child and Family Servic-es caseworkers can find matching familiesor screen interested applicants. The goalis to have the system clear children andfamilies from the list more quickly, andhave a repository of the most recent in-formation always available.

Although other sites are followingsuit, Utah’s is one of the first state-spon-sored online adoption sites. In the site,all children in the state are listed who arelegally free for adoption. The informa-tion on the children, completed by theagency in charge of each child, is present-ed to the families searching the database.Basic information is provided at first, anda password-protected area can be access-ed with information that is more sensi-tive. Only key individuals working withthe families could access this information.

The goals of the Website are as to:

• Decrease the time children must waitin foster care for a permanent family;

• Increase the ease of accessing possiblefamilies for waiting children;• Make it easier for social workers to findout about possible families for their chil-dren statewide;• Encourage workers to consider fami-lies outside their own geographic region;• Decrease the time approved familieswait for the placement of a child.

For families, the site provides links toresources supporting the adoption process,as well as explanation of technical termsranging from adoption terms to medicaland mental health terms, again with fur-ther links if more information or supportis needed.

For children and their caretakers, thesite works on two tasks simultaneously.The child’s information is entered, and thecaretaker can view information on thefamilies that express interest. Since thecaretaker is likely to be part of the largernetwork of child care providers in the state,social workers can use the site to commu-nicate with the caseworker (if any) who issupporting the family, or with the familydirectly. Furthermore, and significantly,social workers from outside the state canuse the site, and even obtain a passwordvia e-mail if needed.

Some of the service provided is simi-lar to services available pre-Web, sincemany organizations kept databases of avail-able children. However, the Internet trulyhas the potential to accelerate the processof finding homes for children, as well as

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broaden it. The Web also allows familiesto complete the entire process from theirhome computers, with more privacy as wellas efficiency, finding all available resourc-es, definitions and information.

The site was developed from an ideafrom the Utah DCFS, which wanted tooffer a capability similar to that of theNational Adoption Exchange, and im-prove on the functionality of that site (byoffering, for example, the matching tool).In addition, the state wanted to be able tomanage the adoption process in Utahmore efficiently.

Development

The site was created at relatively low cost,primarily because the Adoption Exchangeset it up using its own facilities and equip-ment. In total, the costs amounted to justunder $25,000, and maintenance is estimat-ed at $13,000 per year. The State pays thehosting fee to the Adoption Exchange. TheAdoption Exchange remains responsible forthe site, and to date has not encounteredany problems with its functioning, againperhaps due to the fact it is an extension ofthe Exchange’s Web offering.

Implementation

So far, the information on use for the Utahsite is anecdotal. The project manager isworking to train caseworkers across thestate of Utah to use the site and commu-nicate with other caseworkers in the state

on the site itself. Interestingly, althoughcost may be a criterion for evaluation ofsome sites, the Utah group is unconcernedabout the cost/benefit analysis of the adop-tion Website. The Project Manager, KathySearle, indicated that the primary focusof the Utah site is to find homes for kids.

Analysis

Much e-government activity to date fo-cuses on easing the administrative burdenof constituents, making it easier to dothings like pay parking tickets or get taxforms. While these functions may pleasemore of the people more of the time, therehas been relatively little use of the Web tomake the social services side of govern-ment more efficient. The Utah site is aneffort to do this.

In the future, the site plans to accessother states’ listings, so that children andfamilies will not be limited to Utah alone.Additionally, the site will offer more links tosupportive resources such as medical sites.

4. CONCLUSIONS

AND RECOMMENDATIONS

The seven cases we analyzed indicate thatthe Web can serve as a mechanism forimproving government service delivery.

While some of government’s devel-opment of web based services has followedthoughtful planning more often Web-based services are developed without abusiness plan and without costs and ben-

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efit analysis. The principle conclusion ofthis study is that government must obtainmanagement assistance when they beginto develop these web-based services. Con-sulting firms and experts with experiencein launching these new ventures shouldbe hired by any government organizationsthat are planning to deliver service usingthe Web. An assessment of costs and bene-fits should be conducted which should beused to shape the form of the site, the ser-vices offered, the fee structure and timing.

The potential of the World Wide Webfor government is great, but should notbe overestimated. Just as Barnes and No-ble bookstores benefit from having bothvirtual physical stores, government shouldassume that different type of customerneeds should be addressed through differ-ent modes of interaction. Face-to-face con-tact and physical presence is sometimesrequired for effective transactions. Web-based service delivery can relieve pressurefrom the physical “store”, by removingsome general traffic and people who’drather “shop at home”. It can also savemoney when properly managed.

Even if Web-based government ser-vices were a bad idea, many governmentwould still need to explore them due tocitizen demand. Fortunately, there is am-ple evidence that the Internet can be avaluable aid to government. It is impor-tant to ensure that services are carefullyplanned, and that costs and benefits areconstantly evaluated. Poorly plannedWeb-based services can increase an agen-

cy’s costs without significantly improvingcitizen satisfaction. The Internet is a tooland not a cure-all. It is a complex under-taking. When used with care it can helpgovernment improve its ability to serve thepublic. Its use however, is not self-justify-ing and it is not self-implementing.

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