**Developing a Business Case for Electronic Commerce Project Selection**

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> **Robert H. Smith School of Business**

**University of Maryland**

**Management Consulting**

**Project Team**

Hsin-Yi Chen

Patrick Hawke

Yung-Ren Lai

Diego Maramba

Justin Osborne

Karen Rigby

> **Faculty Advisor:** David Darcy

# December 7, 2000

Executive Summary [4](#executive-summary)

Government-to-Business (G2B) [7](#government-to-business-g2b)

Methodology [8](#methodology)

Case Studies [9](#case-studies)

Case Analyzed -- Universal Licensing System (ULS)
[9](#case-analyzed-universal-licensing-system-uls)

Lessons Learned [10](#lessons-learned)

Agency - Joint Electronic Commerce Program Office (JECPO)
[11](#agency---joint-electronic-commerce-program-office-jecpo)

Case Analyzed - Central Contractor Registration System (CCR)
[11](#case-analyzed---central-contractor-registration-system-ccr)

Lessons Learned [12](#lessons-learned-1)

Agency - General Services Administration
[13](#agency---general-services-administration)

Case Analyzed - Access Certificates for Electronic Services (ACES)
[13](#case-analyzed---access-certificates-for-electronic-services-aces)

Lessons Learned [14](#lessons-learned-2)

Case Analyzed - Access America for Students (AAFS)
[15](#case-analyzed---access-america-for-students-aafs)

Case Analyzed - First Gov [16](#case-analyzed---first-gov)

Lesson Learned [16](#lessons-learned-3)

Case Analyzed - Electronic Asset Sales Initiative
[17](#case-analyzed---electronic-asset-sales-initiative)

Lessons Learned [17](#lessons-learned-4)

Case Analyzed -- GSA Advantage [18](#case-analyzed-gsa-advantage)

Lessons Learned [19](#lessons-learned-5)

Agency -- National Science Foundation (NSF)
[20](#agency-national-science-foundation-nsf)

Case Analyzed -- FastLane System [20](#case-analyzed-fastlane-system)

Lessons Learned [21](#lessons-learned-6)

Agency - The Social Security Administration
[22](#agency---the-social-security-administration)

Case Analyzed - Overview of initiatives
[22](#case-analyzed---overview-of-initiatives)

Lessons Learned [23](#lessons-learned-7)

Agency - United States Postal Service
[25](#agency---united-states-postal-service)

Case Analyzed - GovKey [25](#case-analyzed---govkey)

Lessons Learned [25](#lessons-learned-8)

Results from Research [25](#results-from-research)

*Step 1: Identification of sustainable projects*
[25](#step-1-identification-of-sustainable-projects)

*Step 2: Value Chain Analysis* [26](#step-2-value-chain-analysis)

*Step 3: Implementation* [28](#step-3-implementation)

*Step 4: Feedback and review of success or failure*
[29](#step-4-feedback-and-review-of-success-or-failure)

[Project]{.underline} [Dimension]{.underline} [Results]{.underline}
[30](#project-dimension-results)

Idea Generation [30](#idea-generation)

Customer / Market Research [30](#customer-market-research)

Technology Development [31](#technology-development)

Risks [31](#risks)

Approval Process [32](#approval-process)

Success Measures [32](#success-measures)

Recommendations [33](#recommendations)

*Idea Generation* [33](#idea-generation-1)

*Customer / Market Research* [33](#customer-market-research-1)

*Technology Development* [34](#technology-development-1)

*Risk Management* [35](#risk-management)

*Success Measures* [36](#success-measures-1)

Conclusion [38](#conclusion)

Appendix A - Interviews [39](#appendix-a---interviews)

Appendix B - Question Resources [40](#appendix-b---question-resources)

Appendix C -- Interview Questions [42](#appendix-c-interview-questions)

Appendix D - History of FastLane [44](#appendix-d---history-of-fastlane)

Appendix E -- Key Legislative Mandates
[48](#appendix-e-key-legislative-mandates)

#   {#section .unnumbered}

# Executive Summary

Electronic commerce has enabled the Federal government to meet the
demands of an ever changing marketplace for its services. There are some
broad differences between the private and public sectors with respect to
e-commerce and information technology, but at the same time, there are
some commonalties that allow for a good comparison between the methods
used by corporations in selecting and launching e-commerce projects
versus the methods used by government. Since government moves at a pace
that is not influenced by market forces or competitive pressures, there
is a better chance to implement projects gradually with specific focus
on sustainability, customer needs and goals, as well as the project life
cycle.

In this report, we outline some of the processes involved with
selecting, implementing and reviewing e-commerce projects throughout the
Federal government. By conducting primary and secondary research into 11
different e-commerce initiatives within the government, we have been
able to identify six case dimensions that tend to overlap almost every
e-commerce project that we have studied. These dimensions are: idea
generation, customer and market research, technology development, risk,
approval process and success measures. There are two other dimensions
that we identified---funding and development process---but we chose not
to incorporate these topics within the scope of this report.

Having identified these areas, we were then able to develop a four step
process that may be used in building a business case for an e-commerce
project within the government. The steps are: identification, value
chain analysis, implementation and feedback. These steps produce an
iterative loop which can give life to new projects or reengineer old
ones.

The last portion of this report lists our recommendations, which are
broken down into each of the six case dimensions. For each one, we chose
to focus on an aspect that occurred most commonly across the different
cases and how best to develop that aspect further into the future. We
believe that this report should serve not as a road map, but as a
helpful tool for government project managers who are charged with
developing, launching and maintaining e-commerce initiatives.

**Elements of a Business Case**

There are many elements to consider when developing a business case for
the implementation of an e-commerce project or, for that matter, any
type of information systems project. Although there are some unique
differences between the private and public sectors, agencies within the
federal government face many of the same issues and challenges that
private firms must deal with when developing and launching a new
project. The following diagram illustrates some recommended steps in the
development of a business case for government e-commerce initiatives:

Step 1: Identification of sustainable projects

Step 2: Value chain analysis

Step 3: Implementation

Step 4: Feedback and review

For each step in this process, it is necessary to evaluate a project
based on a number of different issues. The following is a list of topics
that pertains to public e-commerce projects:

  -------------------------- --------------------------------------------
  Case Dimension             Description

  Idea Generation            the source and impetus for a new project

  Customer and Market        an evaluation of the intended potential
  Research                   users and beneficiaries of a project

  Technology Development     an analysis of the technological resources
                             necessary to build and service a new project

  Risk                       uncontrollable factors that may jeopardize
                             implementation or customer adoption of a
                             project

  Approval Process           the level of authority within the government
                             required for project initiation

  Success Measures           tools used to assess whether or not a
                             project has met its intended goals
  -------------------------- --------------------------------------------

The main focus of this paper will be on the first six topics and the
relative importance and impact that each topic has on developing a
successful public e-commerce project. Two additional
topics---development process and funding---were discussed in a previous
consulting project conducted by students at the Robert H. Smith School
of Business, and are thus beyond the scope of this paper (interested
readers are urged to review the previous report). The goal of this paper
is to compliment and add value to the earlier project as well as provide
a lasting and useful guide for the development, implementation and
maintenance of public e-commerce initiatives.

# Government-to-Business (G2B)

One of the main differences between the public sector and the private
sector concerns profit motive: a private firm will not undertake an
expensive and risky project if there is no prospect for a substantial
future return on such an investment. This is a critical and overwhelming
concern for a private company and in the development process, many of
these companies attempt to make reasonable assumptions about future cash
flows and expenses in order to justify any initial expenditure of
capital. Frequently, if the net present value of a project is positive
and its internal rate of return exceeds the firm's cost of capital, a
project will go forward given that all of the assumptions about revenues
and costs have been properly examined and the risks and uncertainties
surrounding a project have been minimized.

Agencies within the public sector must consider many different variables
other than profitability when deciding whether or not to launch an
e-commerce project. Certainly, cost reduction is important, but profits
are not necessarily the driving force behind getting a project approved
and launched. To the contrary, it may be a *disincentive* to launch a
project that generates an overly positive cash flow, since the excess
profit will generally not be retained by the agency responsible for
implementation. This can also result in a reduction of future operating
budgets and perhaps a formal audit or review of the budgetary needs for
an agency. Clearly, there may be a penalty for success (or at least the
belief that there is one) and this factor can draw away from the other
positive benefits that a project may yield. Just as private companies
must serve the interests of their shareholders, Government agencies are
accountable to many different stakeholders, including Congressional
oversight committees, task forces and taxpayers. Due to this fragmented
constituency and the absence of a profit motive, there are many
different qualitative factors that generally take precedence in the
development of a business case for public e-commerce projects.

## 

Aside from these concerns, there are other significant differences and
similarities between the government and private corporations with
respect to the six case dimensions. Quite often, entrepreneurial idea
generation is rewarded in the private sector, but at the same time,
there is clearly more risk-tolerance in this sector which allows for
these types of projects. Additionally, private firms are acutely aware
of who their customers are and how best to address their needs in the
marketplace. In contrast, some government agencies serve either huge,
undistinguishable markets or tiny, focused segments. Finally, the
private sector may put a greater emphasis on financial success measures
while the public sector frequently chooses to value more qualitative
measures.

# Methodology

This report was produced through a combination of secondary and primary
market research. Secondary research consisted of researching industry
journals, reports, web sites, and recent articles on e-commerce projects
and business cases. Primary research consisted of conducting telephone
and face-to-face interviews with government agencies that engaged in
e-commerce project development as well as subject matter experts.
(Please see Appendix A).

Secondary research was initially conducted in order to gain a better
understanding of e-commerce business models as well as successful and
unsuccessful government projects. In addition, five (5) government
agency officials who implemented government e-commerce projects were
interviewed. Once this data was collected and analyzed, the findings
were delivered to the Office of Electronic Commerce team members via a
mid-project oral presentation held in the GSA building in Washington,
D.C. on October 27, 2000. Feedback on our findings and additional
industry contacts were collected during this meeting. This provided a
good basis for the next phase of the project, which entailed collecting
additional qualitative data via six (6) additional interviews with
Federal Government agencies.

A list of agencies to be interviewed was obtained through John Thomas,
Team Leader for the Federal Electronic Commerce Program. Federal agency
projects were recommended for interview by the GSA team based on their
knowledge of these projects. A total of ten (10) interviews with
government executives, three (3) interviews with private consultants and
two (2) interviews with subject matter experts were conducted. The
interviewees are current employees of the Federal Government or
professors at the Robert H. Smith School of Business, University of
Maryland, College Park. Interviews were attended by two consulting team
members and scheduled for approximately thirty minutes each, though most
interviews went beyond that time period. Nine (9) of the fifteen (15)
total interviews were conducted via telephone and lasted between thirty
to sixty-minutes each. The five (5) face-to-face interviews that were
conducted lasted between twenty to sixty-minutes each.

The interview protocol utilized in this process was developed based on
interviews with subject matter experts in the field of E-Commerce,
Strategic Management, Decision and Information Technology, and
Accounting. In addition, various MBA textbooks and e-commerce and
business web sites were used in developing the interview protocol
(referenced in Appendix B). The interview protocol covered broad topics
such as idea generation, technology development, project approval
process, development process, customer/market research, success
measures, business and political risks, and additional personal comments
that may be useful (please see Appendix C).

The qualitative data gathered via the interview format was synthesized
with the data collected via secondary research and analyzed in order to
determine trends and opportunities for developing a comprehensive
e-commerce business case development scenario.

# Case Studies

For each case that we examine in this section of the report, we have
provided a standard format. First there is a brief description of each
agency. Within each agency group is a discussion of each individual
project as well as a section in which we examine the lessons learned
with respect to the six case dimensions that we have already defined.

## Agency - Federal Communications Commission (FCC)

### The FCC regulates the telecommunications industry in addition to a large number of media companies that utilize the broadcast airwave spectrum in the United States. For the projects outlined below, Kimberly Hancher provided information about the background and strategies involved with the FCC's e-commerce initiatives.

### *Case Analyzed -- Universal Licensing System (ULS)*

The FCC has implemented several e-commerce initiatives with a high
degree of success over the past four or five years. One project in
particular, the Universal Licensing System (ULS), was created to
streamline the processing of license applications for telecommunications
providers. The project has been brought forth and developed through the
efforts of the Wireless Telecommunications Bureau (WTB) and it is
estimated that ULS will save over \$7 million annually in filing costs
to telecom providers. Also, the ULS severely reduced the number of forms
that were required to apply for a license; under the old system, a
company would need to fill out and process roughly 40 forms, but with
ULS these companies merely need to process five. In addition, the system
is thought to provide millions of dollars in cost savings to the WTB and
the FCC. As of late 1999, the system had over 2 million subscribers and
adoption and usage are expected to increase as the telecom industry
continues to grow very rapidly.

#### Automated Auctions System

Another e-commerce initiative that the FCC has installed is its
Automated Auctions System. Using this system, telecom providers can make
bids for a designated part of the telecom spectrum. In the past, these
auctions had been conducted using sealed bids or open, in-person forums.
One main challenge to the new system has been security: it would put a
company at a disadvantage if its bids were known to its competitors
ahead of time. With this in mind, the FCC has wisely chosen to conduct
these auctions only over an intranet, which is only accessible through a
dial-up connection. In addition, bidders are required to enter a PIN in
order to gain entry to the system. While there are many encryption and
security systems in development, the use of PINs and intranets (or wide
area networks) are believed to be sufficient defenses against the risks
and security hazards posed by the Internet.

# One of the critical factors for the success of these systems has been the FCC's insistence upon improving how it interacts with the companies that use its services. These telecom companies have gained significant cost savings and improved their own business processes through the use of ULS and the Automated Auctioning System. Another factor for the success of these projects has been consistent management (i.e. low turnover among the principals who oversee these projects) as well as a well-thought out plan for implementation. In addition, these projects were implemented in phases, which broke the projects down into manageable tasks; this gave the agency the option to abandon the project in midstream, if necessary, without making it a total loss had the projects been implemented in full from the start. (Fortunately, this option was never exercised.) Finally, since these projects were internally generated, there was little need to find cross-departmental support and assistance. Rather, the agency was able to fund these projects using its own budget and outside of the statutory budgeting process.

### *Lessons Learned*

-   Idea Generation: projects conceived and developed internally

-   Customer / Market Research: transactions with large and small
    telecom companies, projects are meant to reduce customer filing
    costs and automate different application processes

-   Technology Development: agency as well as the market it serves are
    very technologically capable

-   Risks: user adoption, security of transactions

-   Approval Process: discrete phasing of project as well as consistent
    management aided in getting projects approved

-   Success Measures: increased customer satisfaction, savings and
    number of applications processed online

# 

# 

## Agency - Joint Electronic Commerce Program Office (JECPO)

The Joint Electronic Commerce Program Office was created by the
Secretary of Defense in 1998 to serve as central point through which
electronic commerce will be accelerated into Department of Defense
operations. The Joint Electronic Commerce Program Office (JECPO) was
envisioned as a single office that would manage all aspects of DoD
electronic commerce acquisitions. JECPO brought together formally
fragmented e-commerce operations at the Defense Logistics Agency and the
Defense Information Systems Agency to form an integrated electronic
commerce office. In regards to JECPO, we had the opportunity to
interview Matthew Maginniss of Price Waterhouse Coopers who had worked
with the Central Contractor Registration system discussed below.

# 

### *Case Analyzed - Central Contractor Registration System (CCR)*

The Central Contractor Registration system (CCR) is a registration
database for Department of Defense contractors. As of June 1, 1998, all
vendors must register with CCR in order to conduct business with the
Department of Defense. The database is accessible online and is managed
within the Joint Electronic Commerce Program Office. The Director of
Defense Procurement and Secretary of Defense for Acquisition spearheaded
the CCR initiative to streamline the acquisition process. Thus, the
approval and funding process for this system was not a problem because
top people in the organization championed the initiative. The interest
in streamlining the acquisition process was born out of the Federal
Acquisition Reform and the Debt Collection Improvement Acts, which
basically requires vendors to be paid through electronic funds transfer.

When this system was deployed, vendors were not ready to be online. A
great majority of vendors did not have access to the Internet. However,
the JECPO made sure that customers had enough room to adapt to the new
system. Help desks were utilized, which allowed vendors to call or fax
in their information. Additionally, vendors received help from
Electronic Commerce Resource Center and Procurement Technical Assistance
Center, which facilitated the ramp up process. Of course, when such a
system is first introduced there some initial concerns about the
security of vendor's data are to be expected. There may have been the
perception that someone may steal a vendor's bank account number.
However, once the specifics of the system security were explained, fears
were quenched.

The CCR system has been a seemingly successful endeavor for the JECPO
because it eliminated the paper trail that accompanied government
vendors. Information is now easily updated because the vendors simply do
it themselves. Streamlining this aspect of the procurement process also
facilitates other aspects of procurement such as electronic payment
because accurate vendor information on the front end of the process
means that there is less room for error and duplication of effort in
processing awards and payment.

Success is measured according to the total number of vendors registered
on the system. Additionally, since CCR is integrally linked with
electronic funds transfer, the percentage of payments that are processed
through electronic transfer is indicative of the use of the CCR system.
As a result of this system, the time it takes to service a customer has
fallen dramatically, from approximately 30 days to 5 hours.

The Joint Electronic Commerce Program office would like to extend this
system to many other government agencies. CCR is currently being used
within the Department of the Interior, the Department of the Treasury,
NASA as well as the Department of Transportation.

### *Lessons Learned*

-   Idea Generation: based on legislation

-   Customer / Market Research: government aided the customer in
    technical development

-   Technology Development: did not jump out as a significant issue in
    this case

-   Risks: general security and privacy of issues in terms of the
    protection of sensitive financial information

-   Approval Process: top down

-   Success Measures: example of an e-commerce implementation providing
    efficiencies for an existing system (CCR facilitates processes
    relative to electronic funds transfer); success based on quantity of
    registrants

## 

## Agency - General Services Administration

The General Services Administration (GSA) was established in 1941 by
President Herbert Hoover to consolidate efforts with regard to handling
the supplies and office space that the government requires. Today, GSA
serves individual Federal government agencies by providing workspace,
products, services, technology and guidance on policy. GSA is one of
three central management government agencies whose services blanket the
entire Federal government

### *Case Analyzed - Access Certificates for Electronic Services (ACES)*

ACES is the government\'s digital signature certificate program that
allows the public to deal with the government electronically in a secure
and protected manner. Federal agencies and entities are offering ACES
certificates to the public and business trading partners on a no-cost
basis, providing them with the capability to authenticate electronic
digital signatures. The ACES project is currently under the management
of the GSA.

The idea of this project came from the Social Security Administration
(SSA) case three and a half years ago known as PEBES. The SSA came up
with the idea of putting personal earnings and statement information
online to let the public have access to that information, with a more
user-friendly interface. However, USA Today reported the story and
questioned the risks of privacy and security issues. After a
Congressional hearing, the SSA was forced to take the website down.
Since then, the government started to take interest in what Public Key
Infrastructure (PKI) can do to facilitate secure online communications.

To put the information online, some agencies went to the GSA for a
government-wide infrastructure solution of which they could take
advantage of. Meanwhile, half of the US households were ready to be
online.

The goal of the ACES project is to entice more agencies to use PKI and
participate in online transactions. This project is supported by the
GSA, which plays a government-wide role, the CIO Council and the
Government Information Service Group. GSA's Office of Government-wide
Policy was also involved on the policy side of things, such as
certificate policy for access of PKI access and liability issues.

Each agency evaluated its own needs and makes its own decision about
whether or not to participate in ACES. Agencies are obligated to pay
transaction costs according to the proportion of certificates used, once
they signed on to use ACES.

The ACES team used the following criteria to select industry partners:
the ability to deal with liability issues, the ability to schedule
timetables quickly and the ability to maintain the best transaction cost
structure.

Agencies can expect lower transaction costs by using ACES. Potential
risks to implementing ACES include conflicting agency cultures,
bureaucratic issues and the concerns posed by stakeholders and interest
groups.

Many of the success measures used for analyzing ACES are qualitative
including: the level of support for the project, the number of people
and agency participants (currently 20 agencies) as well as feedback from
citizens and corporations.

### *Lessons Learned*

-   Idea Generation: top-down idea generation

-   Customer / Market Research: customer and market are well defined

-   Technology Development: high technology. ACES project is the first
    mover of PKI and digital certificate technology among government
    agencies

-   Risks: privacy issues, conflicts between agencies

-   Approval Process: interagency coordination and development

-   Success Measures: lacks clear success measures

### *Case Analyzed - Access America for Students (AAFS)*

Access America for Students (AAFS) is a project aimed at post-secondary
students who wish to access government information and services
electronically. Serving as an online "yellow pages," the site helps
students to navigate through different educational programs offered by
various Federal agencies. This project brings together a number of
agencies and departments including: Education, Labor, Treasury, the
Internal Revenue Service (IRS) and the SSA. In addition to providing
student financial assistance, schools and other organizations and
partnerships are involved in this project to improve the services that
they provide to post-secondary students.

# 

AAFS is part of a broader program called "Access America" which began
out of the National Partnership for Reinventing Government. The plan
aimed to provide Americans with better access to Federal services and
benefits, and specifically, it called for Federal agencies to work
together to develop improvements in government services to citizens,
business, and other Federal and state government agencies.

The project enjoyed widespread support across the government and was
guided by a task force composed of officials from different agencies
involved. Among the risks involved were: privacy concerns, reengineering
business processes and "upsetting" the culture of different agencies.

*Lessons Learned*

-   Idea Generation: top down initiation and support

-   Customer / Market Research: post-secondary students tend to be
    highly computer literate and have easy access to the Internet

-   Technology Development: high technology sophistication; multi-agency
    task force

-   Risks: Privacy Act requirements, securing on-line transactions

-   Approval Process: had various high-ranking "champions" around the
    administration as well as Congressional support

-   Success Measures: mainly involve qualitative measures such as
    customer service

### *Case Analyzed - First Gov* 

The First Gov system is a portal that links individuals to various
government sites and allows users to search for different websites
within the government. The portal includes a search index,
organizational directory, topic category, featured subjects and feedback
areas. First Gov was pushed by the President's Management Council, which
consists of representatives from 26 leading government agencies.
Furthermore, the First Gov board of directors and development team were
put together to implement the Council's vision.

The purpose of this system is to provide a centrally located source of
information about the government for citizens, other government agencies
and businesses. As with projects that have high-ranking champions,
initial funding and approval was not necessarily an issue. In fact, the
cost to develop the portal was minimal due to intense interest from
project contractors who waived their fees to be involved. However, a
major stumbling block is the difficulty of updating agency websites that
are linked to First Gov.

Interaction with customers was critically important to the development
of First Gov and customer focus groups were utilized in order to gain an
understanding of the need for an online government portal. Additionally,
the feedback feature on the website facilitates continued interaction
from individual users in terms of what is working and what is not
working.

Success for First Gov is primarily anecdotal. Time savings to customers,
including other government agencies, is an outcome of the searching
capabilities of this portal. Possible future measures of success may be:
how may people come and stay at the site, how many people return to the
site, and how many people come back to reroute to other sites. With the
enforcement of the Government Performance Results Act in 2001, success
for projects in general may be focused on improving efficiencies and
responsiveness rather than on return alone. In future upgrades to the
system, GSA hopes to include an interactive feature to the site that
allows users to complete transactions online.

### *Lessons Learned*

-   Idea Generation: task force idea generation origin

-   Customer / Market Research: focus groups in all stages of this
    project as well as feedback areas on the website keeps this program
    focused on what works for the customer

-   Technology Development: outside technical support to build the
    actual portal, but interagency coordination is critical

-   Risks: not many since the portal system is based merely on providing
    aggregated access to information

-   Approval Process: based on the consensus of the President's
    Management Council

-   Success Measures: mostly qualitative

### *Case Analyzed - Electronic Asset Sales Initiative*

The purpose of this project is to build an auction website that enables
assets sales between government agencies and the private sector. The
project has been out-sourced by GSA and the timeline of the project has
not yet been finalized.

The idea behind the electronic asset sales initiative originated from
NSF's auction website. Different agencies basically have varying outlets
in which to sell assets (real estate, financial and personal
properties). Based on NSF's online auction site, the Office of
Government-wide Policy decided to investigate the potential of a site
for online asset sales. The goal of this inquiry was to make the case
for developing a government-wide portal that can provide a single source
for Federal asset sales.

Originally, the project was meant to be a public service, but it has
begun to provide a new source of revenue for many different agencies.
Currently, the project is still in the approval stage, and has yet to
become fully operational.

There are some risks present, such as consistency of leadership,
political fallout and agency technological capabilities. The project
depends to a large extent on project leaders from each agency can work
can together. Other risks include the possibility that this model may
not meet expectations concerning revenue growth and cost reduction.

### *Lessons Learned*

The Electronic Asset Sales Initiative has not yet been implemented, so
it is premature to apply the case dimensions to this project.

### *Case Analyzed -- GSA Advantage* 

The Federal Supply Service (FSS) coordinates the procurement and
delivery of physical supplies that are needed by various agencies and
departments throughout the Federal government.

# 

The planning behind the GSA Advantage system began in 1994 when the FSS
decided to investigate the potential to expand and redesign its services
through the use of the Internet. Although this was a time when there was
still a lot of uncertainty about the future of electronic commerce, the
FSS thought it was wise at the time to begin a thorough assessment of
this new technology and the possibilities it would hold for various
agencies in the government to procure needed supplies. Over the last six
years, more and more federal agencies have become involved with GSA
Advantage and have updated their technological capabilities and
information systems in order to participate in this online procurement
system. However, not all agencies are fully able to utilize this
service; in addition, some agencies have logistical barriers to online
procurement.

With approximately \$200 billion in annual procurement expenses by
various Federal agencies, there is clearly a strong need to streamline
the way that these agencies research, order and take delivery of the
products that are necessary for their operations. Before the Internet
became available for online ordering, there were a number of systems
that were in place to handle procurement, including the Federal Standard
Requisitioning and Issue Procedures System (FEDSTRIP) and Multi-Use File
For Interagency News (MUFFIN). However, these legacy systems did not
have a graphical user interface, nor were they capable of handling HTTP
and other Internet protocols. In addition to these systems, agencies
were also able to order through paper catalogs, which could not be
updated as frequently as an online system.

Although it would seem like a certainty that the FSS was justified to go
through with its plan to implement GSA Advantage, there are some risk
factors that were present and needed to be addressed thoroughly.
Specifically, there was the risk that agencies would not use the new
online system, electing instead to stick to the legacy systems. In
addition, since there was a wide range of technological proficiency
across different agencies, it is clear that some agencies may not have
the capability to integrate GSA Advantage into their current operations.
However, one of the clear benefits to the system is that it could be
implemented at a very low cost in addition to the methods of procurement
that were already available at the time. Also, since the project was
generated internally, there were fewer layers of management from which
the project would require approval; in fact, the project was given the
green light by the commissioner of the FSS, which paved the way for a
full-scale implementation of GSA Advantage. Finally, since over \$300
million worth of goods has been ordered through the system (at a cost
equal to a small fraction of this amount) it is clear that the project
has paid for itself and will continue to provide the FSS, along with the
agencies that take part in GSA Advantage, clear benefits long into the
future.

### *Lessons Learned*

-   Idea Generation: grew out of in-depth study of the Internet

-   Customer / Market Research: varying technological capabilities among
    agencies, but many have gotten up to speed quickly

-   Technology Development: depends on each agency that uses GSA
    Advantage; some are more capable than others

-   Risks: lack of user adoption, inability to meet demand

-   Approval Process: aided by the need to update government procurement
    systems as well as the support of the Commissioner of the FSS

-   Success Measures: metrics include total dollar value of sales,
    number of orders, users and "hits" to web site

## Agency -- National Science Foundation (NSF)

### 

### The National Science Foundation is an independent government agency responsible for promoting science and engineering through programs that invest over \$3.3 billion per year in almost 20,000 research and education projects in science and engineering.[^1] It was established by the National Science Foundation Act of 1950 in order to promote the progress of science; to advance the national health, prosperity, and welfare; to secure the national defense; and for other purposes.

### *Case Analyzed -- FastLane System*

The National Science Foundation\'s Fastlane System is one of the earlier
on-line grant systems in government, formally originating in 1994 with
predecessors that date back to 1985. The purpose of FastLane is to
experiment with ways to use the World Wide Web to facilitate business
transactions and the exchange of information between the National
Science Foundation and its client community including researchers,
reviewers, research administrators, and others doing business with
NSF.[^2] For greater detail regarding the history of FastLane, see
Appendix D.

The National Science Foundation had several unique advantages that
helped facilitate the creation of FastLane. First and foremost was their
core initiative to promote innovation through the funding of merit-based
research and education projects in science and engineering. For example,
the NSF funded a project with the University of Illinois that created
Mosaic, the first web browser. The NSF also worked with MIT in
developing FastLane, though the project was eventually developed
internally within the NSF using internal funds. This type of access to
Internet related innovation placed the NSF in a unique position as it
relates to developing its own e-commerce initiatives.

The level of technological development for the NSF and its customer
universities is similar given the nature of their interactions. This
also provided an advantage in knowing and intimately understanding the
level of their customers technological development so that any
e-commerce system developed by the NSF would be immediately useable by
their customers.

Involving customers directly in development process was one of several
critical success factors for the FastLane project. NSF sought customer
buy-in for smaller segments of the project first, then gained support
for more ambitious segments of project. The NSF had the luxury of
continually working with its customer base throughout the development of
FastLane as there was no specific time limit set for final construction.
It was an ongoing project that was looked upon as an experiment.

Some other helpful information that was offered through our interview
with the NSF follows: internal systems need to be integrated into front
end of e-commerce architecture, don't overlook user support/training, IT
people need to work with policy people, need success metrics on front
end, think of interoperability, and the need to anticipate customer
support needs.

### *Lessons Learned*

-   Idea Generation: continuous customer feedback

-   Customer / Market Research: able to receive iterative customer
    feedback due to long, open ended system development process

-   Technology Development: invested in internal systems improvements

-   Risks: anticipate maintenance cost of large, heavily trafficked
    system (more lines of code, more maintenance)

-   Approval Process: leverage government support (had good support all
    along)

-   Success Measures: technologically enabled customer base

##  

## Agency - The Social Security Administration

The Social Security Administration (SSA) provides public information
materials concerning Social Security, supplemental security income
programs, and information on Medicare. Social Security is generally
viewed as a retirement program in part due to 61% of its beneficiaries
receiving retirement benefits. The remaining percentages of
beneficiaries encompass the disabled, spouses and dependents of someone
who receives Social Security, widows, widowers, and children of the
deceased. Currently 44 million Americans receive Social Security
benefits. Franklin D. Roosevelt's message to Congress on June 8, 1934
summaries the original intent of Social Security.[^3]

\"SECURITY was attained in the earlier days through the interdependence
of members of families upon each other and of the families within a
small community upon each other. The complexities of great communities
and of organized industry make less real these simple means of security.
Therefore, we are compelled to employ the active interest of the Nation
as a whole through government in order to encourage a greater security
for each individual who composes it\.... This seeking for a greater
measure of welfare and happiness does not indicate a change in values.
It is rather a return to values lost in the course of our economic
development and expansion.\"

In government to business transactions, the major driver of idea
generation comes from legislative mandates. The legislative mandates
that have shaped idea generation within our study are listed below.

**Government Paperwork Elimination Act (GPEA)**

**December 17, 1999 White House Memorandum**

#### *Federal Acquisition Reform and the Debt Collection Improvement Acts*

**President's Management Council**

**National Partnership for Reinventing (NPR) Government**

### 

### *Case Analyzed - Overview of initiatives*

The electronic commerce initiatives created by the SSA consist of a wide
variety of issues and customers. The SSA is faced with the daunting task
of uncovering the needs and wants of the citizens and businesses of the
United States. To assist the SSA with these tasks they have
compartmentalized the needs of citizens into three sub suites consisting
of the post entitlement suite, the retirement suite, and the disability
suite. Within each suite the needs of the citizens are researched
through workload studies, customer focus groups and usability studies.

The majority of electronic commerce projects conducted by the SSA have
been driven through legislation. The current administration at the SSA
works in a top-down approach in dictating the direction of electronic
commerce projects. The executive steering committee distributes the
goals for e-commerce projects with working level implementation teams
carrying out the initiatives. The remaining electronic commerce projects
flow from the Government Paperwork Elimination Act, the Vision for 2010
for electronic service, and the December 17, 1999 Presidential
Memorandum. These legislative mandates have lead to the creation of more
information sharing between the SSA and its constituency. Furthermore,
this has created programs that decrease transaction times and increase
efficiency for all parties involved. Some of the more widely used
initiatives include the following:

-   Ability to apply for Social Security retirement benefits online
    requests for replacement Medicare Cards

-   Up to date cost of living information

-   Programs to help citizens prepare and plan for retirement.

-   Changes to social security cards

-   Complete Benefit Information Publications

-   Requests for a Social Security Statement -- requests are mailed to
    respondents.

The request for a social security statement is very popular and this
information was once available online. Unfortunately, at the time it was
provided, security and the Internet were sensitive subjects. This
service was discontinued due to political pressures. While there were no
reported cases of privacy invasion, the Personal Earnings and Benefit
Estimate State (PEBES) was shut down. There are however, lessons that
can be learned from this miscalculation. Well-intentioned and researched
projects are often at the mercy of public and political opinion, leading
us to conclude that project selection should be carefully screened as to
how the political environment may react to them. Timing can be critical
when potentially sensitive projects are undertaken. It should be noted
that if PEBES was proposed later, the backlash against it might not have
materialized. PEBES in essence became a lightening rod that people
embraced during a period of uncertainty surrounding the Internet.

The SSA is now cautious when providing possibly sensitive information
over the Internet. They now conduct risk assessments with respect to
privacy and are working on improving authentication, and Internet
security. In addition, the SSA now attempts to foresee the political
implications of its Internet projects while providing services the
public desires.

Currently the SSA has been exploring how to measure the success of their
Internet projects. They realize the need for both qualitative and
quantitative benchmarks for success. Furthermore, the SSA expressed the
understanding that the public's benchmarks for success are based on what
is expected in the private sector. The SSA is striving to match that
level of customer service and satisfaction. The public is very vocal
about its desires, and the SSA strives to provide a level of support the
public requests. In providing this level of service, the SSA on occasion
benchmarks itself with the best practices from states that have
implemented successful Internet initiatives.

### *Lessons Learned*

-   Idea Generation: top down approach

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-   Customer / Market Research: success using workload studies, customer
    focus groups and usability studies to gauge customer needs and
    expectations

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-   Technology Development: SSA attempts to match the needs of citizens
    and businesses. It understands that the technical comfort level
    varies widely among citizens which makes it best to make simplicity
    a goal in e-commerce.

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-   Risks: due to political pressures from the PEBES project, the SSA
    strives to forecast all potential roadblocks to electronic
    initiatives

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-   Approval Process: approval for projects is not a major issue because
    project selection is guided from the top

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```
-   Success Measures: SSA understands the need for success measures and
    is currently looking into developing and implementing measures
    before projects begin

## Agency - United States Postal Service

William J Henderson, Postmaster General and CEO of the US Postal Service
said, "Only the United States Postal Service provides the American
people with a secure and efficient connection that binds our nation
together. Only the Universal Postal Service is the gateway to the
American Household."[^4] According to statistics from 1999, the U.S.
Postal Service delivers mail to over 134 million different addresses
around the country. The USPS is also a large provider of business
services, including correspondence and transactions, advertising,
express delivery, publications delivery, standard package delivery, and
international mail.

### 

### *Case Analyzed - GovKey*

The GovKey system is a pilot program within the United States Postal
Service that facilitates the generation and use of digital certificates
(PKI). Currently, a private company named Imigtas is responsible for
funding and implementing the GovKey system. The GovKey initiative is
similar to the ACES digital certificate initiative within the GSA.
However, GovKey also encompasses state and local governments and has a
different technical infrastructure.

In general, GovKey is likely to be adopted by individuals with some
amount of technical savvy and who are enthusiastic about doing business
online. Several rounds of focus groups were formed in order to
understand potential customers and their needs.

The primary risks involved with this project concern privacy and
security of sensitive information. Technology in this case was not a
risk in and of itself.

## 

### *Lessons Learned*

-   Idea Generation: idea presented by an outside entity

-   Customer / Market Research: customer focus groups

-   Technology Development: not a significant issue in this case

-   Risks: general privacy and security concerns

-   Approval Process: top down

-   Success Measures: qualitative for customers; qualitative and
    quantitative for individual agencies

# Results from Research

#### *Based on all of the interviews and secondary research conducted throughout this project, we have outlined many of the recurring and significant data into the four-step process involved with a business case. In addition, we have grouped much of our findings within the six separate categories that are outlined above.*

#### 

## *Step 1: Identification of sustainable projects*

Ideas for new projects may come from a variety of sources. Either a
top-down or bottom-up approach may be used within an agency to identify
and select potential e-commerce projects. Alternatively, the idea for a
project may be mandated by law or by executive order: these types of
projects mainly involve wide-scale and inter-departmental cooperation
and implementation. Once a project idea has germinated, there are
several steps that may be used at this stage either to develop a project
further or to reject it without investing any more time or money. In the
private sector, it has generally been found that projects which come
from top-down managerial directives usually have an overarching
strategic purpose, while those that come from individual departments or
smaller corporate units have more of a tactical purpose and a more
narrow scope. Once several potential ideas have been brought forth,
through any of these methods, it is necessary to rank and prioritize
each one, given budgetary limitations, agency resources and the
potential for the project to fulfill an agency's mission. Some of the
issues that must be considered at this stage involve the intended
benefits and beneficiaries, scope, duration and technological
requirements.

The following table illustrates some of the aspects and the rationale
that may be used for identifying and selecting a new e-commerce project
within the government:

+------------------+---------------------------------------------------+
| Project Idea     | Rationale                                         |
| Source           |                                                   |
+------------------+---------------------------------------------------+
| Top Tiered       | Strategic focus / Large scale and scope / Long    |
| Leadership       | duration                                          |
+------------------+---------------------------------------------------+
| Government Task  | Interdepartmental cooperation / Detailed use of   |
| Force            | financial payback measures                        |
|                  |                                                   |
|                  | Large scale and scope                             |
+------------------+---------------------------------------------------+
| Individual       | Tactical mission / Migration of legacy systems to |
| Agency           | Internet ready and capable interfaces / Further   |
|                  | development and fulfillment of agency's goals     |
+------------------+---------------------------------------------------+
| Agency Sub-unit  | Surgically focused / Short-term or possibly       |
|                  | temporary duration / Below the radar screen of    |
|                  | budgetary decision makers                         |
+------------------+---------------------------------------------------+

There are several possible outcomes to this first step in identification
and selection. A project may be given approval and proceed immediately
toward funding and implementation. Alternatively, a project may be
rejected out of hand and not be given further analysis for approval. A
third decision would be to delay implementation of a project until
further data are collected concerning the needs of stakeholders,
available resources or the "fit" that the project may have with an
agency's mission. Finally, a project may be deemed necessary at this
stage, but not in its current form. It is then up to the participants
who have identified the project to regroup and fine-tune a better and
more feasible plan so that the project may go forward at a later time.

## *Step 2: Value Chain Analysis*

A critical step in assessing the importance and scope of an e-commerce
project involves analyzing what value a project can add to the current
operations of an agency and how a project can streamline and reduce
costs involved with the different functions and systems that an agency
maintains. The following diagram illustrates the value chain and the
various steps involved with providing goods and services to the public.

> The Government Value Chain

Value chain analysis may be conducted at three different levels:

-   The micro level - involving just one agency or a bureau within an
    agency

-   The general level -- covering a number of agencies with a
    cross-functional scope

-   The macro level -- spanning the entire federal government

At the micro level, an agency must consider how a project will reduce
costs or add value at any one of the steps outlined above. If an agency
spends a large portion of its budget on procurement each year, it may
want to focus on e-commerce projects that minimize costs in the inbound
logistics link in the value chain. Alternatively, if an agency incurs
high labor and overtime expenses, it might look to projects that
automate parts of the processes involved with operations.

In terms of the general level, there are many e-commerce projects that
have involved a high degree of inter-agency cooperation and
coordination. Clearly, some agencies have competing interests in that
they are constrained by limited resources, statutory regulations or
budgetary guidelines, but there are possibilities to create systems that
benefit all agencies involved with launching a project. The goal at this
level should be to realize synergies that may be gained from combining
and sharing resources.

At the macro level, a project must have a far reaching purpose and
function so that potentially all stakeholders as well as the various
different areas of the Federal government may realize a number of
benefits. Procurement at this level is another type of activity that can
potentially affect how many different agencies conduct business in
addition to how private contractors interact with the range of agencies
that they serve. Additionally, there may be a government-wide
transformation of how documents and traditionally paper-intensive
systems are structured. Digital receipt and distribution of
applications, documents and records will enable the government to
realize substantial cost savings at the macro level. Also, e-commerce
initiatives can provide excellent opportunities to add value and
minimize costs at this level.

## *Step 3: Implementation*

There is a striking difference between e-commerce projects within the
private sector versus those within the public sector. As the last five
years has shown, many corporations have rushed to build themselves a web
presence with little regard for cost, duration, scope or overall
purpose. The general sense concerning electronic commerce has been a
feeling of urgency and a need to outmaneuver one's competitors. In this
climate of a "gold rush," countless start-up companies have entered and
occupied markets that have previously had very high barriers to entry.
It seems clear that many private companies have implemented e-commerce
web systems without using a gradual, strategic approach; this is due in
large part to competitive forces, profit motives and the need to meet
the expectations of shareholders.

Fortunately, the Federal government does not compete in these types of
competitive markets and there is more of an opportunity to plan and
implement e-commerce projects with a great deal of thought by using a
methodical and strategic approach. Once a project has been identified,
selected and analyzed as to its contribution to the value chain, it may
then be implemented in a variety of ways. Most importantly, projects
should be divided into discrete phases with clear and firm deadlines.
Within each phase, a project should be broken up into manageable stages
of development, whether this involves securing resources, installing new
software or systems or rallying different champions around the
government to promote a certain project and solicit the support of other
agencies that may be linked to the value chain.

Another key factor during any phase is consistency of leadership and
management. Project development often involves competing time
requirements: phases of a project should be long enough so that there is
sufficient time to complete all the steps necessary for implementation
but these phases also need to be short enough to ensure quality and
consistency of management. It is extremely detrimental to any project to
have a high degree of turnover among those involved with implementation.
It is especially detrimental to have turnover at the managerial level.

Perhaps the most critical factor in the implementation stage concerns
the market and the characteristics of the customer base for which a
project is intended. Although there should be much consideration for
market segmentation during the identification and selection process,
this issue becomes critically important during implementation. For one,
there may be a long time lag between when a project is conceived and
when it is implemented. In this interim, project developers must ask
themselves:

-   Has the intended market for this project changed in any meaningful
    way?

-   If we build it, will they use it?

-   Are my customers ready, knowledgeable and enthusiastic about being
    online?

-   How can I minimize the risks that a customer may feel, especially
    related to privacy and security?

One part of examining the market for a project concerns where intended
customers fit on the "technology adoption curve." The following diagram
lists five types of customers based on how quickly and readily they
adapt to and use innovative technological systems:

###### 

###### Technology Adoption Curve

Recognizing that in order for a project to be successful, a thorough and
well-thought out analysis of the customer base must be completed. If the
intended market consists of a segment that has no history of using or
adopting technology, then will there be a sufficient installed user base
for the project to succeed? Also, although a group may be currently
averse to technology, will the dynamics of the group change over time as
more people and corporations rely on information technology in their
daily lives?

## *Step 4: Feedback and review of success or failure*

A final step in any e-commerce project concerns an analysis of a project
from a number of different angles. It is critical to know at this stage
whether or not:

-   A project met the goals that were outlined in its original plan

-   Costs and revenues were accurately forecasted

-   The project should continue in its current form

-   The project should continue in any form

Many different tools can be used at this stage to evaluate and benchmark
projects and recommend a future strategy based on these results. For
projects that generate significant revenue, any financial payback
measure, such as NPV and IRR, would be suitable for determining the
project's costs and benefits. Other quantitative measures such as,
percent increase in customer adoption, percent decrease in labor and
other expenses are also suitable at this stage.

#### *There are a number of qualitative and anecdotal measures that also must be used at this stage. Customer satisfaction, acceptance, experience and positive public awareness are all essential to success, but these qualities are very difficult to measure. However, there are opportunities to interview potential customers and solicit feedback from current ones.*

A final method of evaluation should encompass an entire organizational
or multi-agency scope. Generally speaking, once a project has reached
this stage of review after several years of operation, it is necessary
to determine whether the project is still aligned with the goals of the
agency that developed it in the first place. One common difficulty
related to e-commerce is that agency needs and goals tend to change as
rapidly as the technology that supports them. Projects must be reviewed
constantly in order to see that the bases upon which they are founded
are capable of meeting the dynamic goals of the agency.

## [Project]{.underline} [Dimension]{.underline} [Results]{.underline}

#### 

### *Idea Generation*

Idea Generation throughout the agencies we reviewed is predominately
derived through legislative mandates. The remaining agencies we
interviewed had successful projects that originated from different
sources. The United States Postal Service (USPS) started an e-commerce
project from an idea that arose from the private sector. Imagitas, a
private company just outside of Boston, MA, presented the idea of making
postal services more accessible to the everyday citizens through on-line
transactions. The Federal Supply Service (FSS) started one of its major
initiatives by proactively looking at the changing environment and how
the Internet could improve their procurement processes. We have also
found instances where agencies have learned from each other, or from
their own internal e-commerce projects. This concept was apparent in the
formation of ACES, which was initiated from the privacy concerns
surrounding the SSA's PEBES project.

### *Customer / Market Research*

Customer or market research has been a recurrent theme in the decision,
planning, and evaluation phase of e-commerce projects. One of the more
prevalent sources of customer research we uncovered in our interviews is
the focus group. Focus groups have been used to evaluate the potential
of proposed initiatives and to determine whether the operational systems
continue to meet customer needs.

In our interviews, two main issues surfaced with regard to market
research. The issues are as follows:

-   Customer's Technical Sophistication

-   Interaction with Customers

Customer Technical Sophistication

Through our interviews we discovered differing levels of customer
technical sophistication. Some of the businesses that the government
works with were ahead of the curve in terms of e-business and therefore
eager to conduct online business with the government. However, there
were instances in which customers had low technical sophistication, were
unsure about the idea of changing current practices, and were concerned
about security issues.

Interaction with Customers

In our interviews, we discovered that a majority of the agencies had
strong relationships with their customers. These agencies knew whom
their customers where, whether they were academic institutions or other
industry vendors.

### *Technology Development*

There are two topics analyzed in this dimension: the *level of
technology sophistication* and *approach of technology development*.
From our interviews we found close relationships between the two issues.
The level of technical sophistication for an e-commerce project is
significantly influenced by the technological experience of the agencies
involved. There are three separate characteristics involved: number of
people responsible for a project, technological maturity and the nature
of the agency's business. Projects that have a set level of technology
sophistication followed a developmental approach. With respect to
agencies approach to technology development there are three options.
These options are internal development, outsourcing, and multiple agency
task forces.

### *Risks*

Government e-commerce projects face a multitude of risk factors, many of
which are not present in the same magnitude as in the private sector.
How well an agency manages these risks frequently determines the success
or failure of a project. Risk is a major factor to be considered. One of
the most often encountered risk factors surrounds the uncertainty of
user adoption. Agencies risk total failure when they are unaware of
their customers' needs and abilities to interact online.

A second risk factor has to do with security. One large challenge in the
private sector has been the difficulty of assuring consumers that it is
safe to make purchases online with their credit cards. It seems that the
private sector has confronted and, for the most part, resolved this
feeling of doubt for the consumer, but there is still room for
improvement in both the private and public sectors as far as security is
concerned.

### *Approval Process* 

The approval process refers to the process through which Federal
Government agencies navigate in order to receive permission to move
forward on a project. Based on the eleven projects studied within this
report, we found that the vast majority of projects were implemented
under a top down approval process environment**.** Several different
methods were employed in order to navigate this approval process. GSA
Advantage, for example, employed a six-month study in 1994. This study
helped the commissioner of the FSS gain support in getting the GSA
Advantage project approved. Other agencies, such as the FCC, made a
\"compelling case\" for getting projects approved by phasing-in the
project so that each part was manageable. The ACES project was supported
by the GSA's FTS, CIO Council, and Government Information Service Group.

A bottom up approval process exists when it is possible for a project to
be pushed up through the organization chart in order to receive
approval. The environment for such an approval process would have to be
highly entrepreneurial, encouraging all employees to contribute their
ideas with a strong possibility for adoption.

## Based on the projects studied within this report, we found that the vast majority were implemented under a top down approval process environment, with many agencies implementing their projects in response to the Government Paper Elimination Act. 

## 

### *Success Measures*

There is an overriding trend among different projects concerning success
measures and the difficulty involved with developing reliable and
measurable goals for the various e-commerce projects. Some agencies
preferred to use cost-benefit analysis, while others ignored this method
altogether. There are a number of other tools, including percent and
rate of customer adoption, "eyeballs," cost reduction and time savings.

##  

## 

# Recommendations

## *Idea Generation*

Idea generation throughout the agencies we studied was generally
initiated through legislative mandates. While this may appear to limit
entrepreneurial spirit, this method is actually helpful because the
mandates are designed from the desires of the government's
constituencies. Furthermore, idea generation can be encouraged on an
agency level through the creation of an entrepreneurial culture, and by
focusing on the agencies' customer needs.

The NSF is a prime example of a culture that fosters ideation -- idea
generation. Employees at the NSF understand their customers and what
they desire. Further, setting the NSF apart is the culture within the
organization. It can be compared with highly successful and very
innovative companies such as Intel and 3M. The cultures within these
companies foster idea creation among their employees. Agencies should
strive to compare themselves with the best practices in the private
sector with respect to ideation.

## *Customer / Market Research*

#### *Customer's Technical Sophistication*

Customers with high technical sophistication may appear more apt to be
able to accept e-commerce solutions that change the way they conduct
business with the government. However, that doesn't mean that e-commerce
initiatives should exclusively serve the needs of customers who are
ready to be online and ready at that point to take advantage of the
system. In some of the cases presented, agencies have developed systems
before customers have been ready to adapt to the new procedures, but
have been able to help customers to develop the needed level of
technical maturity in terms of general education about the issues,
privacy and otherwise, as well as actual technical capabilities.

## Thus, the current level of customer technical maturity is not necessarily indicative of successful e-commerce initiatives. Technical sophistication of the customer seems to be most useful in determining the extent to which the customer can be made comfortable with the concept of e-government or the appropriate timing of the project based on the customer's technical maturity.

#### *Interaction with Customers*

An agency's relationship with the private sector says a lot about its
ability to understand needs as well as its ability to design a system
that is likely to be adopted. If an agency's interaction with its
customers is merely transactional and distant, then the system's impact
on that customer and the system's ultimate success is difficult to
predict. Whereas, if a particular agency has a relationship based
interaction with customers, the agency is more likely to be able to
judge an e-commerce initiative in terms of bringing value to the
relationship.

#### *In conclusion, customer needs should be the foremost thought in evaluating the potential of an e-commerce initiative. Once a need is determined, then one can better evaluate how potential initiatives can or will serve the customer. In evaluating these customers, their technical sophistication should be evaluated to determine the appropriate timing of the project or needed technical support. Additionally, the level of the relationship with customers may serve as an indicator of the agency's ability to educate the customer and aid in their technical development.* *In evaluating customers relative to these issues, one may be able to decipher the possible impact of e-commerce initiatives on the people whom the system is intended to serve.*

Needless to say, interaction with the customer should not end at any
stage of an e-commerce project. Continued feedback from customers like
the feedback garnered from the First Gov website serves as a reality
check for the project. Focus groups as well as other customer research
methods can be utilized throughout a project's life cycle.

## *Technology Development*

The level of technical sophistication for an electronic commerce project
will be significantly influenced by the technological maturity of the
agencies involved. This involves three separate characteristics: number
of people involved with a project, technological maturity and the nature
of the business solution. For example, a project involving a single
agency will frequently require fewer technological resources than a
multi-agency project.

Combining the critical factors outlined above, technology development of
an electronic commerce project can be viewed by using the following
diagram:

-   Region A - Overlap of all factors. Projects falling into this area
    require the highest level of technology sophistication.

-   Region B - Overlap of two factors. Projects in this area are
    identified to be moderately sophisticated in technology.

-   Region C -- In one factor only. Projects in this area need the
    relatively low level of technology sophistication.

Basically, there are three approaches toward technology development for
agencies involved in a specific electronic commerce project: internal
development, outsourcing or multi-agency cooperation; there are also
hybrids of each of these approaches.

According to the case studies, agencies that use internal development
are generally have cutting-edge resources and facilities under their
command. Frequently, outsourcing and multi-agency approaches are
preferable for e-commerce involving some agencies that lack sufficient
technological resources. Depending on the state of an agency's
technological development, a hybrid approach may be taken.

## *Risk Management*

To overcome this uncertainty, the private sector has implemented some
very effective educational programs aimed at assuring consumers that
their account information will remain intact. Also, there have been
advancements in encryption technology as well as certain alliances in
the financial services industry that have enabled far greater security
in online transactions. For instance, Visa and MasterCard have
instituted the Secure Electronic Transactions (SET) initiative, which
uses digital certificates transmit credit card numbers. SET is based on
four underlying security principles:

-   Authentication -- ensuring that users are who they claim to be

-   Confidentiality -- making it impossible to view secure data by using
    encryption

-   Integrity -- having certainty that data has not been altered during
    transmission

-   Non-repudiation -- guaranteeing that a user who initiates a
    transaction cannot later deny that they have done so

These four principles should guide government project coordinators in
their management of risk. Also, it is important to consider that
security for credit card transactions in the private sector may not
always be translatable to the public sector since these transactions
often involve far more sensitive and critical information, including a
person's social security number, and other highly confidential
information; G2B transactions also involve very sensitive corporate
information, such as company secrets, sealed bids for auctions, and
financial information.

## *Success Measures*

Through studying the various cases, it appears that the following list
relating to success measures can be reviewed in many e-commerce
projects:[^5]

-   A clear and concise definition of the project's goal and strategic
    objectives

-   A well-researched definition of the project's target market (i.e.
    Who are the customers and end-users for the project? What are their
    requirements?)

-   An effective measurement system must build upon consistent and
    well-understood operational definitions for the performance criteria
    (e.g., effectiveness, efficiency, and profitability/budgetability).

-   Measure intermediate-term and longer-term outcomes. Set dates for
    revision of intermediate-term outcomes to reinforce the perception
    of their temporary status.

-   Do not stop with measurement. Take time to analyze results of
    measurement, changes in behavior, etc. Also take time to communicate
    results and propose improvements.

In "Performance Indicators", Ian McDonalds describes the elements of
good metrics: 1) directional - to confirm that you are on track to reach
the goals, 2) quantitative - to show what has been achieved and how much
more is to be done, and 3) worthwhile - adding more value to the
business than they cost to collect and use. Based on these factors,
agencies should use the following set of criteria:

#### *Quality of the projects*

-   Functionality - capabilities, compatibility, privacy and security

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-   Usability - human factors, consistency and documentation of the
    product

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-   Reliability - frequency and severity of failures as well as
    consistency of success

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-   Performance - the speed and efficiency of the project as well as the
    resource consumption

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-   Supportability -- maintainability, serviceability and needs
    concerning installation

Quality of the relationship with the customer

-   Anticipation - the ability to identify, understand and help solve
    customer needs before they become problems

-   Availability - the degree to which the projects for uninterrupted
    usage at full functionality

-   Responsiveness - the ability to provide timely, accurate and
    complete information and/or solutions to customer initiated requests
    for help

-   Transitions - the ease of initial startup and of ongoing changes as
    the projects evolve and conform to new needs and technologies

# Conclusion

Although there are some large differences between private and public
sector electronic commerce, there is still an opportunity to use the
private sector as a model by which government information technology
managers can gauge the development of their own projects. With respect
to privacy, cost reduction and security of online transactions, the
private sector can clearly give public managers some valuable insight
into the technologies and the resources that are required.

# The model that our group has developed can be used to address some of the issues that are unique to government e-commerce and the expanded role that public agencies can serve in cyberspace. We have identified six important areas that are critical to taking an e-commerce project from the idea stage to the finished product. In addition, we have outlined a four step process that can be used to select and launch a project, once these six areas have been thought through. Finally, we have made recommendations based on the best practices that we have observed in each of the six case dimensions. 

# Appendix A - Interviews

**Beecher, Tom.** Imagitas, "GovKey".

**Diaz, Deborah.** General Services Administration. *"FirstGov".*

**Dugger, Brad**. Chief of Information Officer. State of Tennessee.
*Multiple projects.*

**Hall, Cynthia**. Department of Depense Joint Electronic Commerce
Program Office. *"Contractor Central Registration System".*

**Hancher, Kimberly.** Federal Communication Commissions. *Multiple
projects.*

**Iagnemmo, Al.** Federal Supply Service. General Services
Administration. *"GSA Advantage"*

**Kannan, P.K**. Associate Professor of Marketing. Robert H. Smith
School of Business, University of Maryland. *Multiple projects.*

**Maginniss, Mathew**. PriceWaterhouseCoopers. Joint Electronic Commerce
Program Office. *"Central Contractor Registration System."*

**Rindova, Violinda.** R.H Smith School of Business, Strategy Professor.

**Roach, Harold**. Federal Supply Service. General Services
Administration. *"GSA Advantage"*

**Skyrme, Leslie**. Booz-Allen-Hamilton. *"Electronic Asset Sales
Initiative".*

**Spencer, Judith**. General Services Administration. *"Access
Certificates for Electronic Services".*

**Stuck, Gerry.** Deputy Director. Division of Information Systems.
National Science Foundation. *"Fastlane*".

**Temoshok, David**. General Services Administration. *"Access America
for Students".*

**Trenkle, Tony.** Director. Electronic Services Staff. Social Security
Administration. *Multiple projects.*

# Appendix B - Question Resources

1.  **Interviews with Experts**

-   Dr. Violina Rindova, Professor of Strategic Management at R. H.
    Smith School of Business.*(Questions 24, 25, 27, 28, 29)*

-   Dr. Partha Sengupta, Assistant Professor of Accounting Department at
    R.H. Smith School of Business. *(Questions 13, 14, 15, 16 )*

2.  **Secondary Research**

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(1) **Reference Literature**

-   E. Raymond Corey, "MBA Field Studies-A Guide for Students and
    Faculty", Harvard Business School Publishing Division, Boston,
    Massachusetts, June 1998.

-   Virgil R. Carter and Robert A. Falin, "A Framework for Project
    Management", Project Management Institute Education Department,
    Newtown Square, Pennsylvania, 1999. *(Questions 1, 9, 23)*

-   Stephen A. Ross, Randolph W. Westerfield and Jeffrey Jaffe,
    "Corporate Finance", The McGraw-Hill Book Co., Singapore, 1999.

-   Larry L. Duetsch, "Industry Studies", M.E. Shape, Inc., Armonk, New
    York, 1998.

-   Tevfik Nas, "Cost-Benefit Analysis: Theory and Application", Sage
    Publications, 1996. *(Questions 13, 14, 15, 16)*

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-   GSA, Access America for Students, "Access America For Students
    Strategic Plan", July 30 1999.

-   GSA, Access America for Students, "Report on The Access America For
    Student Pilot Program", September 29 2000.

-   Ward Hansen, "Principles of Internet Marketing", South-Western
    College Publishing, 2000. *(Question 3)*

-   Shikhar Ghosh, "Making Business Sense of the Internet", Harvard
    Business Review, March-April, 1998. *(Question 3)*

-   Paul Timmers, "Business Models for Electronic Markets", European
    Commission, Directorate-General III, April 1998. *(Questions 9, 12,
    26)*

-   Volpe Brown, "B2B Commerce: The Next Frontier", Business 2.0, Sep.
    1999.

-   Jeffery F. Rayport and John J. Sviokla, "Managing in the
    Marketplace", Harvard Business Review, Nov.- Dec., 1994.

-   Philip B. Evans and Thomas S. Wurster, "Strategy and the New
    Economics of Information", Harvard Business Review, Sep. -- Oct.,
    1997.

-   Jonathan Palmer and Maryam Alavi, "Use Information as a Catalyst for
    Organizational Change", Blackwell, Sep. 1999. *(Questions 7, 11)*

-   Philip Kotler, "Marketing Management", Prentice Hall, Aug. 3, 1998.
    *(Questions 6, 8, 17, 20, 21)*

(2) **Reference Web sites**

-   Center for Technology in Government of University at Albany-SUNY,
    "And Justice for All: Designing Your Business Case for Integrating
    Justice Information",
    (<http://www.ctg.albany.edu/resources/htmlrpt/justice_for_all/index.htm>)

> *(Questions 2, 7, 10, 11)*

-   The Deciding Factor (TDF), "The Business Case Answer Place",
    (http://[www.decidingfactor.com/about.htm](http://www.decidingfactor.com/about.htm))
    *(Question 4)*

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-   U.S. Office of Management and Budget, "Government agencies
    Guidelines and Discount Rates for Benefit-Cost Analysis of Federal
    Programs",
    (http://www.whitehouse.gov/WH/EOP/OMB/html/circulars/a094/a094.html)
    *(Questions 13, 14, 15, 16, 18, 19, 22)*

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-   Economic Development Research Group, "Economic Impact Analysis --
    Models, Guides", (http://www.edrgroup.com/B23.html) *(Question 10)*

**(3) Case Study**

# Freddie L. Robinson at University of Miami, "Building a Business Case for Imaging/Document Management at the University of Miami", (<http://palimpsest.stanford.edu/bytopic/imaging/business.html>) *(Questions 5, 9)*

#  

# Appendix C -- Interview Questions

Project Specific

**Idea generation (for new projects)**

1.  Where did the idea of this project come from?

2.  What were your business goals for the technology solution?

**Customer/Market Research**

3.  To what extent are your customers ready to be on line?

4.  How much of an impact did the size of the market have on the
    likelihood of the project being approved?

**Development process**

5.  What is the predecessor to your current e-commerce model?

6.  What alternative solutions did you consider and why did you choose
    this project?

# 

**Technology development**

7.  Describe your agency's technology sophistication at the time?

**Risk**

8.  What were the risks and how did you evaluate and handle them?

**Approval process**

9.  What was the approval process for this project?

10. What justification was needed?

    11\. What type of support (management or otherwise) did you have in
    getting the project off the ground?

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12. What is the current cycle time for e-commerce project
    approval/completion?

**Funding (financial)**

13. Was funding an issue?

14. What strategy did you employ in funding this project?

15\. Did you have alternative funding strategies?

16. Why did you choose the current funding strategy?

**Success measures**

17. How do you measure success?

18. What is the performance measurement tool? (NPV, ROI, cost-benefit
    analysis)

19. How do you quantify your intangible benefits and costs? (EVA,
    index/scoring program)

20. How frequently do you evaluate the success of your project?

21. What are your expected benefits?

22. What are your benchmarks for success?

# [General for persons who have had experience with several e-commerce initiatives:]{.underline}

**Idea generation (for new projects)**

23. In general, where do the project ideas come from?

**Project Goals**

24. How do you align agency goals with e-commerce initiatives?

25. Which goals take priority?

**Approval Process**

26. In general, what is the approval process?

**Funding**

27. Which projects rise to the top and receive funding?

28. What sets these apart?

29. Can you please give us some examples from start to finish.

# Appendix D - History of FastLane

# 

(from NSF website -
https://www.fastlane.nsf.gov/a0/about/fastlane_history.htm)

Introduction

The origins of the FastLane Project can be found in NSF\'s response to
the dramatic growth in workload and budget levels experienced during the
1980s. During that period, the NSF budget nearly tripled to \$3 billion
and the number of fully reviewed proposals increased by 40%, while
personnel resources remained level. NSF\'s solution for handling
increasing workloads with level staffing resources was to become a
leader in the use of information technology to perform critical business
activities, much as NSF is viewed as a leader in funding merit-reviewed
scientific and engineering research.

One area of the Foundation\'s focus was the application of advanced
information technology to support proposal processing activities. In
1985, initial plans for experiments in electronic proposal submission
were developed. This eventually led to the initiation of the EXPRES
(EXPerimental Research in Electronic Submission) project in 1986.

EXPRES

In 1986, the Division of Information Systems (DIS) developed the concept
for a research project to be conducted by universities to explore
electronic proposal submission capabilities. Working jointly with the
Directorate for Computer and Information Science and Engineering (CISE),
DIS participated in the proposal competition to award grants under the
EXPRES project. In October 1986, two awards were made (to Carnegie
Mellon University and the University of Michigan) to create an
interoperable environment which would enable scientists and engineers to
exchange multimedia documents freely among dissimilar hardware and
software platforms. The NSF proposal preparation, submission and review
process was chosen to be the experimental testbed, partly because this
process offered many challenges common to electronic document exchanges:
high volume of activity, geographic dispersion, and heterogeneous
environments.

The EXPRES project was ahead of its time in some respects. Some of the
technical hurdles to the electronic transmission of compound documents
(i.e., those including text, graphics, equations, etc.) among computers
using different operating systems (DOS, Mac OS and UNIX) could not be
overcome at that time.

EPS (Electronic Proposal Submission)

A pilot program was begun in 1988 (and coordinated with the EXPRES
Project) to experiment with online proposal and forms submission. The
following year, NSF management reduced funding for the EXPRES project.
At the same time, the scope of the project was reduced and
responsibility transferred to DIS. The NSF Director approved the
establishment of the EPS program in DIS. This new program was to focus
on a lower cost experiment to establish a technological base for
exchanging proposals electronically between NSF and the university
community. NSF-to-university electronic transmission activities were
increased over the next several years.

FastLane

In 1994, an NSF Task Force on Electronic Proposal Processing was formed
and chaired by the Director, DIS. This task force evaluated the past
experiments with electronic proposal submission and recommended a new
approach. Rather than focus strictly on proposal submission, the task
force recommended that NSF invest in automating all business
transactions with the research, engineering and education communities.
The Director, NSF, approved the task force report. The project was named
FastLane and would utilize the Internet, World Wide Web and browser
technology.

FastLane continued NSF\'s long-standing emphasis on reducing the
administrative burden on NSF staff and institutions, and improving
business processes through the application of advanced information
technology. FastLane was intended as an experimental program to explore
methods to redesign and streamline the way NSF does business with its
customer communities. The program strategy was to create pilot projects
that would demonstrate in the early phases the technical feasibility of
various approaches, and test new processes for exchanging information
among proposers, reviewers, university research administrators and NSF
staff. The early pilot systems were tested with subsets of the NSF
research community. Successful pilots were then implemented more widely.

FastLane was central to NSF\'s government re-invention initiatives. The
Report of the National Performance Review cited \"NSF\'s efforts to
automate grant management activities\...as an example of an effective
way to keep up with increasing workload by handling program
administration more efficiently.\" FastLane was also one of 53 projects
selected to test measurement provisions of the Government Performance
and Results Act of 1993. Performance indicators have been developed to
measure the effectiveness of the FastLane pilots.

As originally conceived, many existing paper or telephone interactions
would be re-designed to allow computer access to NSF via a dial-up or
Internet connection to World Wide Web (WWW) servers. Anyone using
standard PC technology would have \"point and click\" access to software
that would facilitate most of NSF\'s business transactions - from
completing proposal forms to inquiring about the status of proposals.

Doing business with NSF would be simpler, faster, more accurate, and
less expensive. Proposers, reviewers and awardees would have more
choices in how to do business with the Foundation and would be provided
greater access to information and more control over their transactions.
Most applications would be designed with a \"smart form\" that uses
information already available in the NSF database in order to minimize
the time and effort required to complete transactions and the amount of
redundant information collected during proposal submission. Internal NSF
systems were also re-designed to accept data entered directly from
FastLane, thereby improving data quality and the productivity,
timeliness, and effectiveness of the proposal and review system.

A FastLane Internal Review Committee (FIRCOM) was formed in May 1994 to
provide guidance to the FastLane Project and to resolve policy issues.
This steering committee includes representatives from NSF directorate
management, program management, grants and contracts, financial
management and information systems. That same year, development started
on the first six pilot applications:

Electronic Proposal Forms Submission - provides the capability for
electronic submission of administrative information related to
proposals;

Proposal Status Inquiry - allows PI\'s and other authorized individuals
to review the current status of a pending proposal;

Submission of Final Project Reports - provides an electronic version of
the final project report and enables electronic submission of the form
and attachments (in a future release, project results information will
be made publicly available);

Cash Transaction Request - allows access to the cash request system;

Submission of Review Information - allows reviewers to enter ratings and
review comments or to cut and paste from a local word processing
document; and

Announcements of Award Actions - provides a list of recent awards,
including information on the institution, principal investigator,
amount, and duration.

Software development efforts for these systems were funded from the
program accounts, reflecting the experimental nature of the FastLane
Project and the fact that it supported programmatic requirements.

NSF worked with initial group of 16 universities to evaluate FastLane
prototype activities. NSF directly involved these colleges and
universities, representing a broad cross section of the grantee
community, in the design and pilot testing of each application.

NSF established working relationships with other Federal agencies that
are developing similar systems, including the Department of Energy, the
National Institutes of Health and the Department of Defense. FastLane
has been used as a model to ensure the development of systems
government-wide that will promote a seamless interface between research
institutions and Federal grant-making agencies.

In 1995, FastLane development included a voice response system for the
status of proposals, a Graduate Research Fellowship Application, and the
initial capabilities in the Electronic Jacket System. In July 1995, NSF
established a FastLane Internal Implementation Group (FIIG) to provide
advice on internal implementation issues, as more FastLane modules
became operational. This group consists of program and administrative
staff from each directorate at NSF.

In 1996, FastLane development continued and was made available to all
NSF institutions. By the end of the year, nearly 400 institutions were
registered. A pilot of a fully electronic jacket for internal NSF
processing was implemented in ten NSF programs.

In March, a meeting was held at NSF with all research grant agencies and
OMB to evaluate the technical approaches being developed for Federal
electronic research administration. The Department of Energy had
sponsored a demonstration with eight institutions of the use of EDI to
transmit grant information. The FastLane Project was the primary World
Wide Web approach. The consensus was that both approaches had merit for
various applications and customer groups. Agencies were encouraged to
work together to adopt the best of both technologies. NSF committed to
the acceptance of EDI transactions for grant applications for those
larger institutions capable of using that technology. Other agencies
were encouraged to collaborate with NSF on common WWW implementations.
In May, the Electronic Commerce Committee issued a Strategic Plan
endorsing both technologies for implementation of electronic research
administration.

In the fall of 1997, NSF formed a FastLane Divisional Experts Group
consisting of representatives of each NSF division. The members of this
group are expected to become FastLane experts and serve as a resource
both to their divisional staff and to their research community for
FastLane. This group meets bimonthly to discuss recent changes and share
experiences.

In FY 1998, FastLane acceptance by the research community expanded
rapidly. Over 17% of all full proposals (5,100 proposals) and over
17,000 reviews were submitted to NSF via FastLane in FY 1998. More than
1,000 institutions are registered. Major solicitations that required
full or partial FastLane submission included IGERT, KDI and CAREER. A
FastLane Implementation Plan, calling for full implementation by the end
of FY2000, was published.

Project information is being disseminated widely through the
Foundation\'s regular publications, via the NSF Home Page, and in
presentations and site visits. NSF customer survey instruments and other
feedback mechanisms have been used to solicit feedback on FastLane
objectives and plans.

NSF staff conducted 60 outreach activities in FY 1998 to help the
research and education community learn more about FastLane. Workshops
were conducted in 21 states and Puerto Rico. These activities ranged
from formal presentations and demos to workshops for hands-on training
of Principal Investigators and institutions\' Sponsored Research
Offices.

In September 1998, NSF\'s Director, Rita Colwell, issued Important
Notice 123 outlining NSF\'s goals for a paperless proposal and award
system. A study of the impact of FastLane on Program Assistant positions
was begun. Formal training and orientation activities for NSF staff were
expanded. Performance goals under the Results Act for receipt of
proposals via FastLane for both FY1999 and FY2000 were raised based on
the excellent rate of acceptance of FastLane by the research community.

# Appendix E -- Key Legislative Mandates

**The Government Paperwork Elimination Act (GPEA)**, signed into law
October 1998, directs federal agencies to provide public access to
government services and documents by 2003. Furthermore, GPEA fosters the
development of electronic transmissions between the public and the
government. The legal framework dictated by the GPEA instructs agencies
to develop and implement information systems that enable online
submission of materials such as government documents and data.

**The** **December 17, 1999 White House Memorandum** was instituted "to
help our citizens gain one-stop access to existing Government
information and services, and to provide better, more efficient,
Government services and increased Government accountability to its
citizens."(William J. Clinton, White House Memorandum) Listed below is a
summary of the major goals this memorandum stipulates government
agencies to complete by October 2003. (December 17, 1999 White House
Memorandum)

-   The heads of agencies shall promote the use of electronic commerce,
    where appropriate, for faster, cheaper ordering on Federal
    procurements that will result in savings to the taxpayer.

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-   The heads of agencies shall continue to build good privacy practices
    into their web sites by posting privacy policies as directed by the
    Director of the Office of Management and Budget and by adopting and
    implementing information policies to protect children\'s information
    on web sites that are directed at children.

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-   The head of each agency shall permit greater access to its officials
    by creating a public electronic mail address through which citizens
    can contact the agency with questions, comments, or concerns.

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-   The Director of the National Science Foundation, working with
    appropriate Federal agencies, shall conduct a 1-year study examining
    the feasibility of online voting

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-   Make a broad range of benefits and services available though private
    and secure electronic use of the Internet.

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-   The development of private, secure, and effective communication
    across agencies and with the public, through the use of public key
    technology. In light of this goal, agencies are encouraged to issue,
    in coordination with the General Services Administration, a
    Government-wide minimum of 100,000 digital signature certificates by
    December 2000.

-   The heads of agencies shall develop a strategy for upgrading their
    respective agency\'s capacity for using the Internet to become more
    open, efficient, and responsive, and to more effectively carry out
    the agency\'s mission.

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-   Mechanisms for collecting input from the agency\'s stakeholders
    regarding agency use of the Internet.

**Federal Acquisition Reform and the Debt Collection Improvement Acts**
www.fms.treas.gov/debt/dmpca.html) DMS website

The Debt Collection Improvement Act of 1996 provides the impetus for the
Federal Government to move toward its goal of using electronic commerce
to assist in improved cash and debt collection practices. This act
mandates the use of electronic fund transfer (EFT) for Federal payments.
This act has seven purposes that include: (DMS website)

1.  Maximizing collections of delinquent debts owed to the Government
    through the use of appropriate collection tools and quick action in
    recovery of debts.

2.  Minimizing the costs of debt collection through consolidation of
    related functions and activities and by utilizing inter-agency
    teams.

3.  Reduction of losses arising from debt management activities. This is
    accomplished by requiring proper screening of potential borrowers,
    aggressive monitoring of all accounts, and the sharing of
    information within and among Federal agencies.

4.  Ensuring that the public is informed of the Federal Government\'s
    debt collection policies. Furthermore, debtors understand their
    obligations to repay amounts owed to the Federal Government.

5.  Ensuring debtors have all appropriate due process rights, including
    the ability to verify, challenge, and compromise claims, and access
    to administrative appeals procedures.

6.  Encouragement of agencies to sell delinquent debt, particularly
    debts with underlying collateral.

7.  Reliance on the experience and expertise of private sector
    professionals to provide debt collection services to Federal
    agencies.

**President's Management Council** (policyworks.gov)

The Electronic Processes Initiatives Committee (EPIC) of the
President\'s Management Council was formed in 1997 as the Federal
government\'s premier cross-functional interagency policy coordinating
organization for electronic commerce and electronic government. The EPIC
is central to coordinating the government\'s 1998 electronic commerce
strategic plan. The EPIC concentrates on areas such as electronic funds
transfer (EFT), purchase cards, smart cards, electronic identification,
electronic benefits transfer (EBT), and electronic contractor
registration.

**Partnership for Reinventing (NPR) Government**

The National Partnership for Reinventing Government, formerly known as
the National Performance Review, is the longest running government
reform effort. This program targets areas in need of reform and develops
initiatives to solve these issues. Listed below are some of the recent
initiatives. (www.npr.gov)

> **[Access America]{.underline}** -- Program for using information
> technology to deliver government services electronically.
>
> **[Benchmarking]{.underline}** -- Used in measuring government\'s
> practices and performance against the best in the world.
>
> **[Conversations with America]{.underline}** - Encourages federal
> workers to discuss how to improve customer service with the American
> public.
>
> **[Community]{.underline}**: Involving cross-agency federal and local
> partnerships to demonstrate services that get results at less cost.
>
> **[Managing for Results]{.underline}** - Using the Results Act of 1993
> to develop a high-performing, outcome-driven, fully accountable
> federal government.

## Agency - Federal Communications Commission (FCC) 

### The FCC regulates the telecommunications industry in addition to a large number of media companies that utilize the broadcast airwave spectrum in the United States.

**Cases Analyzed -- Universal Licensing System (ULS) and Automated
Auctions System**

The FCC has implemented several e-commerce initiatives with a high
degree of success over the past four or five years. One project in
particular, the Universal Licensing System (ULS), was created to
streamline the processing of license applications for telecommunications
providers. The project has been brought forth and developed through the
efforts of the Wireless Telecommunications Bureau (WTB) and it is
estimated that ULS will save over \$7 million annually in filing costs
to telecom providers. Also, the ULS severely reduced the number of forms
that were required to apply for a license; under the old system, a
company would need to fill out and process roughly 40 forms, but with
ULS these companies merely need to process five. In addition, the system
is thought to provide millions of dollars in cost savings to the WTB and
the FCC. As of late 1999, the system had over 2 million subscribers and
adoption and usage are expected to increase as the telecom industry
continues to grow very rapidly.

Another e-commerce initiative that the FCC has installed is its
Automated Auctions System. Using this system, telecom providers can make
bids for a designated part of the telecom spectrum. In the past, these
auctions had been conducted using sealed bids or open, in-person forums.
One main challenge to the new system has been security: it would put a
company at a disadvantage if its bids were known to its competitors
ahead of time. With this in mind, the FCC has wisely chosen to conduct
these auctions only over an intranet, which is only accessible through a
dial-up connection. In addition, bidders are required to enter a PIN in
order to gain entry to the system. While there are many encryption and
security systems in development, the use of PINs and intranets (or wide
area networks) are sufficient defenses against the risks and security
hazards posed by the Internet.

# One of the critical factors for the success of these systems has been the FCC's insistence upon improving how it interacts with the companies that use its services. These telecom companies have gained significant cost savings and improved their own business processes through the use of ULS and the Automated Auctioning System. Another factor for the success of these projects has been consistent management (i.e. low turnover among the principals who oversee these projects) as well as a well-thought out plan for implementation. In addition, these projects were implemented in phases, which broke the projects down into manageable tasks; this gave the agency the option to abandon the project in midstream, if necessary, without making it a total loss had the projects been implemented in full from the start. (Fortunately, this option was never exercised.) Finally, since these projects were internally generated, there was little need to find cross-departmental support and assistance. Rather, the agency was able to fund these projects using its own budget and outside of the statutory budgeting process.

**Lessons Learned:**

# 

# [AGENCY]{.underline}: Joint Electronic Commerce Program Office

The Joint Electronic Commerce Program Office was created by the
Secretary of Defense in 1998 to serve as central point through which
electronic commerce will be accelerated into Department of Defense
operations. The Joint Electronic Commerce Program Office (JECPO) was
envisioned as a single office that would manage all aspects of DoD
electronic commerce acquisitions. JECPO brought together formally
fragmented e-commerce operations at the Defense Logistics Agency and the
Defense Information Systems Agency to form an integrated electronic
commerce office. In regards to JECPO, we had the opportunity to
interview Matthew Maginniss of Price Waterhouse Coopers who has worked
with the Central Contractor Registration System discussed below.

# 

# [CASE ANALYZED]{.underline}: CCR -- Central Contractor Registration System

The Central Contractor Registration System (CCR) is a registration
database for Department of Defense contractors. As of June 1, 1998, all
vendors must register with CCR in order to conduct business with the
Department of Defense. The database is accessible online and is managed
within the Joint Electronic Commerce Program Office. The Director of
Defense Procurement and Secretary of Defense for Acquisition spearheaded
the CCR initiative to streamline the acquisition process. Thus, the
approval and funding process for this system was not a problem because
top people in the organization championed the initiative. The interest
in streamlining the acquisition process was born out of the Federal
Acquisition Reform and the Debt Collection Improvement Acts, which
basically requires vendors to be paid through electronic funds transfer.

When this system was deployed, vendors were not ready to be online. A
great majority of vendors did not have Internet connection. However,
JECPO made sure that customers had enough room to adapt to the new
system. Help desks were utilized, which allowed vendors to call in their
information or fax it in. Additionally, vendors received help from
Electronic Commerce Resource Center and Procurement Technical Assistance
Center, which facilitated the ramp up process. Of course, when such a
system is first introduced there some initial concerns about the
security of vendor's data are to be expected. There may have been the
perception that someone may steal a vendor's bank account number.
However, once the specifics of the system security were explained, fears
were quenched.

The CCR system has been a seemingly successful endeavor for JECPO
because it eliminated the paper trail that accompanied government
vendors. Information is now easily updated because the vendors simply do
it themselves. Streamlining this aspect of the procurement process also
facilitates other aspects of procurement such as electronic payment
because accurate vendor information on the front end of the process
means that there is less room for error and duplication of effort in
processing awards and payment.

Success is measured according to the total number of vendors registered
on the system. Additionally, since CCR is integrally linked with
electronic funds transfer, the percentage of payments that are processed
through electronic transfer is indicative of the use of the CCR system.
As a result of this system, the time it takes to service the customer
has reduced dramatically, from approximately 30 days down to 5 hours.

The Joint Electronic Program office would like to extend this system to
many other government agencies. CCR is currently being used within the
Department of the Interior, the Department of the Treasury, NASA as well
as the Department of Transportation.

**[LESSONS LEARNED]{.underline}:**

-   **Idea Generation**: based on legislation

-   **Customer /Market Research**: aid in customer technical development

-   Approval Process: top down

-   **Success Measures**: This case is an example of an e-commerce
    implementation providing efficiencies for an existing system (CCR
    facilitates processes relative to electronic funds transfer).
    Success is based on the quantity of registrants.

-   **Technology development**: didn't jump out as a significant issue
    in this case

-   **Risks**: general security and privacy of issues in terms of the
    protection of sensitive financial information

# 

# 

### Agency -- GSA

The interview was conducted by Karen Rigby and Brian Y. Lai on Oct. 24
2000. The interviewer is Judith Spencer.

### CASE ANALYZED: ACES (Access Certificates for Electronic Services)

ACES is the government\'s digital signature certificate program that
allows the public to deal with the government electronically in a secure
and protected manner. Federal agencies and entities are offering ACES
certificates to the public and business trading partners on a no-cost
basis, providing them with the capability to authenticate electronic
digital signatures. The ACES project is currently under GSA.

The idea of this project came from the SSA case three and a half years
ago. The SSA came up with an idea to put personal earnings and statement
information on line to let the public get access to that information,
trying to be more user-friendly. However, USA Today reported the story
and questioned the risk of privacy and security issues. After a
Congressional hearing, the SSA was forced to take the website down.
Since then, the government started to take interest in what PKI can do
to facilitate online communication.

To put the information online, some agencies went to the GSA for a
government-wide infrastructure solution that agency can take advantage
of. Meanwhile, half of the US households were ready to be online.

Many agencies thought of the SSA as the ideal pioneer, since they touch
people's life from birth, but SSA didn't want to take the job. Many
agencies thought that whoever goes first, would have to pay for the
infrastructure. Consequently, GSA took the lead on this initiative.

The goal of the ACES project is to entice more agencies to use PKI and
participate in online transactions. This project is supported by GSA's
FTS, who plays the government-wide role, the CIO Council and the
Government Information Service Group. GSA's Office of Government wide
Policy was also involved on the policy side of things, such as
certificate policy for access of PKI and liability issues. The
technology and website was developed by contractors.

Each agency evaluated its own needs and decided whether or not to
participate, because each agency would be obligated to pay the
transaction costs by proportion the certificate used once they signed on
to use ACES.

When choosing the industry partners, the ACES team used the following
criteria: the ability to deal with liability issues, the ability to
schedule the timetable quickly, the ability to maintain the best
transaction cost structure, and the ability to show their competency.

The expected benefit of ACES is the lower transaction costs to each
agency. Although the team didn't really evaluate and deal with the
risks, they believe some potential risks may be from governmental
bureaucratic issues, agency culture, stakeholders, or the interest
groups. Besides, not everyone is ready to be online. During the
developing process, the ACES team had negotiated with each agency to
make progress. The contactors also helped to manage the potential risky
issues like ROI estimation.

The success measures are qualitative and include: the amount of interest
in the project, the number of people and agency participants (currently
20 agencies), and the feedback from public and industry. Two years from
now, when Internet is more pervasive and all agencies are PKI compliant,
then possibly return could be a viable success measure.

# *[Lesson Learned]{.underline}:*

-   Top-down idea generation

-   High technology. ACES project if the first mover of PKI and digital
    certificate technology among government agencies.

-   Customers are well defined.

Lacks clear success measures.

**[AGENCY]{.underline}:** **U.S.** **General Services Administration**

The U.S. General Services Administration (GSA) was established in 1941
by President Herbert Hoover to consolidate efforts with regard to
handling supplies and space. Today, GSA serves individual federal
government agencies by providing workspace, products, services,
technology, and policy. GSA is essentially a central entity whose
services blanket the federal government and is one of three central
management government agencies. Within the GSA, we interviewed Deborah
Diaz regarding the First Gov system,

**[CASE ANALYZED]{.underline}: First Gov**

The First Gov system is a portal that links individuals to various
government sites and also allows searches on those sites. The portal
includes a search index, organization directory, topic category,
featured subjects, and feedback areas. First Gov was pushed by the
President's Management Council, which consists of representatives from
26 leading government agencies. Consequently, the First Gov board of
directors and development team were put together to implement the
vision.

The purpose of this system was to provide information to the average
citizen, other government agencies as well as businesses and to
aggregate information in such a way that individuals would have a single
source for government data. As has been our experience with projects
that have top management champions, initial funding and approval was not
necessarily an issue. In fact, the cost of development of the portal was
minimal due to intense interest from project contractors who waived fees
just to be a part of the project. However, a major stumbling block was
and continues to be, having updated agency web sites that this portal
could link to in the first place.

Interactions with customers were paramount to the development of First
Gov. Customer focus groups were utilized in order to gain an
understanding of the need for an online government portal. During the
early stages of the project development process, the Center for Council
in Government tendered advice on the development of the portal and focus
groups from the private sector were consulted. Additionally, the
feedback feature on the website facilitates continued interaction from
individual users in terms of what is working and what is not working.

Success for First Gov is primarily anecdotal. Time savings to customers,
including other government agencies, is an outcome of the searching
capabilities of this portal. Possible future measures of success may be:
how may people come and stay at the site, how many people return to the
site, and how many people come back to reroute to other sites. With the
enforcement of the Government Performance Results Act in 2001, success
for projects in general, may be focused on improving efficiencies and
responsiveness rather than on return alone.

In future upgrades to the system, GSA hopes to include interactive
feature to the site that allows users to complete transactions online.

## [LESSONS LEARNED]{.underline}:

-   **Idea** **Generation**: Task force idea generation origin

-   **Customer/Market Research**: Focus groups in all stages of this
    project as well as feedback areas on the website keeps this program
    focused on what works for the customer

-   **Approval Process**: based on the consensus of the President's
    Management Council

-   **Technology Development**: outside technical support to build the
    actual portal, however the ability of individual agency to provide
    updated web sites to link to affects the overall effectiveness of
    the portal.

-   **Success Measures**: mostly qualitative

-   **Risks**: not many as the portal system is based merely on
    providing aggregated access to information.

**[Agency]{.underline}: GSA**

The Electronic Asset Sales project is currently under evaluation by
Booz-Allen & Hamilton, Inc. The purpose of this project is to build an
auction website which enables the assets sales between the sellers,
government agencies, and buyer -- mainly public. The project is
outsourced by GSA, and BAH now is evaluating the effects of technology,
risks, customers and potential impact. The timeline of this project is
now undecided.

The interview was conducted by Karen Rigby and Brian Y. Lai on Nov. 14,
2000. The interviewer is Ashley Skyrme, the e-Gov consultant of
Booz-Allen & Hamilton, Inc.

## [Case Analyzed]{.underline}: Electronic Asset Sales Initiative

The idea of the electronic asset sales initiative originated from NSF's
auction website. Different agencies basically have varying outlets in
which to sell assets (real estate, financial and personal properties).
Based on NSF's online auction site, the Office of Governmentwide Policy
decided to investigate the potential of a government-wide site for
online asset sales. The goal of this inquisition was to make the case
for the development of a website that will be a government-wide portal
that provides a single source for Federal asset sales, and promotes
partnering among agencies with similar assets to implement on-line
auctioning.

Originally, the case started as public service, but when it ended up
online, agencies realized that it could be a business model from which a
revenue stream could be generated. Traditionally, each agency sells its
own assets, while this site has the value to serve the public. For this
case, there are two customer clusters: the buying public and the
agencies that have assets for sale.

Currently, the project is on the approval stage, and not yet available
and operated. The possible technology used may be the portal format, in
which users can search for the information they need either by assets or
by agencies.

As to the potential success measures, there needs to be a consensus
among participating agencies in order to come up with the criteria. It's
still too early to determine where the revenues will come from. Thus,
agencies are therefore worrying about the investing funds at this stage
of the project.

Individual agencies control their readiness to move online. Booz Allen
and Hamilton is developing the business case for the electronic asset
concept itself. The consulting firm is in the process of estimating
potential revenues, types of assets transaction, and costs...etc, but
cannot determine which agency should go online. Booz Allen and Hamilton
is now developing the eGov concept, not implementing the project. This
result of this analysis will be presented to the OMB (Office of
Management Budget). But unlike Venture Capital, OMB doesn't really fund
the ideas. They pick up the ideas just for public's support, which is
different from other business cases in the private sector. For private
sector business cases, the start-up can get initial funding support.

Some risks are visible, such as leadership, political risks and
technical incapability of each agency. This project depends on the
degree of the commitment of the project leaders from each agency. The
other risks include the possibility that this model may not bring in
revenue and benefits as well as cut the costs.

Often the best way to set an organizational-wide initiative is to find
the right division/sector or in this case, agency who can be the first
on board, and has the ability to pull everyone else in.

GSA may have a key part in the development of this business model. GSA
already has an assets auction website (GSAAuction.gov). Additionally,
the organization has a lot of assets. The only thing that GSA does not
have are financial assets. Some argue that GSA will be the single host
in the later stage, as with the First Gov portal.

**[Lesson Learned]{.underline}:**

The project is not yet implemented.

# 

### AGENCY: The Federal Supply Service

The Federal Supply Service (FSS) coordinates the procurement and
delivery of physical supplies that are needed by various agencies and
departments throughout the federal government. Information from this
section of the report was obtained through interviews with Al Iagnemmo
and Harold Roach.

The planning behind the GSA Advantage system began in 1994 when the FSS
decided to investigate the potential to expand and redesign its services
through the use of the Internet. Although this was a time when there was
still a lot of uncertainty about the future of electronic commerce, the
FSS thought it was wise at the time to begin a thorough assessment of
this new technology and the possibilities it would hold for various
agencies in the government to procure needed supplies. Over the last six
years, more and more federal agencies have become involved with GSA
Advantage and have updated their technological capabilities and
information systems in order to participate in this online procurement
system. However, not all agencies are fully able to utilize this
service; in addition, some agencies have logistical barriers to online
procurement.

With approximately \$200 billion in annual procurement expenses by
various federal agencies, there is clearly a strong need to streamline
the way that these agencies research, order and take delivery of the
products that are necessary for their operations. Before the Internet
became available for online ordering, there were a number of systems
that were in place to handle procurement, including the Federal Standard
Requisitioning and Issue Procedures System (FEDSTRIP) and Multi-Use File
For Interagency News (MUFFIN). However, these legacy systems did not
have a graphical user interface, nor were they capable of handling HTTP
and other Internet protocols. In addition to these systems, agencies
were also able to order through paper catalogs, which could not be
updated as frequently as an online system.

Although it would seem like a certainty that the FSS was justified to go
through with its plan to implement GSA Advantage, there are some risk
factors that were present and needed to be addressed thoroughly.
Specifically, there was the risk that agencies would not use the new
online system, electing instead to stick to the legacy systems. In
addition, since there was a wide range of technological proficiency
across different agencies, it is clear that some agencies may not have
the capability to integrate GSA Advantage into their current operations.
However, one of the clear benefits to the system is that it could be
implemented at a very low cost in addition to the methods of procurement
that were already available at the time. Also, since the project was
generated internally, there were fewer layers of management from which
the project would require approval; in fact, the project was given the
green light by the commissioner of the FSS, which paved the way for a
full-scale implementation of GSA Advantage. Finally, since over \$300
million worth of goods has been ordered through the system (at a cost
equal to a small fraction of this amount) it is clear that the project
has paid for itself and will continue to provide the FSS, along with the
agencies that take part in GSA Advantage, clear benefits long into the
future.

## [AGENCY]{.underline}: National Science Foundation

Description

\"By the National Science Foundation Act of 1950 the Congress
established the National Science Foundation to promote the progress of
science; to advance the national

health, prosperity, and welfare; to secure the national defense; and for
other purposes.\' The President approved the act on May 10, 1950.\"

### 

Case study -- Fastlane Project

\"The purpose of FastLane is to experiment with ways to use the World
Wide Web to facilitate business transactions and the exchange of
information between the National Science Foundation and its client
community including researchers, reviewers, research administrators, and
others doing business with NSF.\"

### 

**Idea Generation**

-   Internal

-   Feedback from customers

**Technology Development**

-   High level of technological sophistication (NSFnet)

-   Invested in internal systems; easy to do business with private
    sector

**Approval Process**

-   Viewed as an experimental agency

-   Had good support all along

-   Very well funded

**Customer/Market Research**

-   Well connected to academic institutions and other agencies
    interested in funding

-   Beta-tested system with customer base and received feedback

-   Able to receive iterative customer feedback due to open ended system
    development process

**Critical Success Factors**

The factors that needed to be in place in order for the Fastlane project
to succeed include:

-   Technologically enabled customer base

-   Involving customers directly in development process

-   Project perceived to be of great value to customer base

-   Sought customer buy-in for smaller segments of the project first,
    then gained support for more ambitious segments of project

-   Manage growth of customer support resources (grew faster than
    anticipated)

**Risk**

-   Need to anticipate customer support needs

-   Internal systems need to be integrated into front end of e-commerce
    architecture

-   Anticipate maintenance costs -- more lines of code, more maintenance

-   Don't overlook user support/training

-   IT people need to work with policy people

-   Need success metrics on front end

-   Think of interoperability

# Agency - The Social Security Administration

The Social Security Administration provides public information materials
concerning Social Security, supplemental security income programs, and
information on Medicare. Social Security is generally viewed as a
retirement program in part due to 61% of its beneficiaries receiving
retirement benefits. The remaining percentages of beneficiaries
encompass the disabled, spouses and dependents of someone who receives
Social Security, widows, widowers, and children of the deceased.
Currently 44 million Americans receive Social Security benefits.
Franklin D. Roosevelt's message to Congress on June 8, 1934 summaries
the original intent of Social Security.

\"SECURITY was attained in the earlier days through the interdependence
of members of families upon each other and of the families within a
small community upon each other. The complexities of great communities
and of organized industry make less real these simple means of security.
Therefore, we are compelled to employ the active interest of the Nation
as a whole through government in order to encourage a greater security
for each individual who composes it\.... This seeking for a greater
measure of welfare and happiness does not indicate a change in values.
It is rather a return to values lost in the course of our economic
development and expansion.\"

In government to business transactions, the major driver of idea
generation comes from legislative mandates. The legislative mandates
that have shaped idea generation within our study are listed below.

**Government Paperwork Elimination Act (GPEA)**

**December 17, 1999 White House Memorandum**

#### Federal Acquisition Reform and the Debt Collection Improvement Acts

**President's Management Council**

**National Partnership for Reinventing (NPR) Government**

Our research into best practices at the SSA for electronic commerce
project selection was taken from an interview with Tony Trenkle,
Director, Electronic Services Staff.

### 

### Case Analyzed - Overview of initiatives

The electronic commerce initiatives created by the Social Security
Administration (SSA) consist of a wide variety of issues and customers.
The SSA is faced with the daunting task of uncovering the needs and
wants of the citizens and businesses of the United States. To assist the
SSA with these tasks they have compartmentalized the needs of citizens
into three sub suites consisting of the post entitlement suite, the
retirement suite, and the disability suite. Within each suite the needs
of the citizens are researched through workload studies, customer focus
groups and usability studies.

The majority of electronic commerce projects conducted by the SSA have
been driven through legislation. The current administration at the SSA
works in a top-down approach in dictating the direction of electronic
commerce projects. The executive steering committee distributes the
goals for e-commerce projects with working level implementation teams
carrying out the initiatives. The remaining electronic commerce projects
flow from the Government Paperwork Elimination Act, the Vision for 2010
for electronic service, and the December 17, 1999 Presidential
Memorandum. These legislative mandates have lead to the creation of more
information sharing between the SSA and its constituency. Furthermore,
this has created programs that decrease transaction times and increase
efficiency for all parties involved. Some of the more widely used
initiatives include the following:

-   Ability to apply for Social Security retirement benefits online
    requests for replacement Medicare Cards

-   Up to date cost of living information

-   Programs to help citizens prepare and plan for retirement.

-   Changes to social security cards

-   Complete Benefit Information Publications

-   Requests for a Social Security Statement -- requests are mailed to
    respondents.

The request for a social security statement is very popular and this
information was once available online. Unfortunately, at the time it was
provided, security and the Internet were sensitive subjects. This
service was discontinued due to political pressures. While there were no
reported cases of privacy invasion, the Personal Earnings and Benefit
Estimate State (PEBES) was shut down. It is unfortunate that this
service had to be closed, though much can be learned from this
miscalculation. Well-intentioned and researched projects are often at
the mercy of public and political opinion, leading us to conclude that
project selection should be carefully screened as to how the political
environment may react to them. Timing can be critical when potentially
sensitive projects are undertaken. It should be noted that if PEBES was
proposed later, the backlash against it might not have materialized.
PEBES in essence became a lightening rod that people embraced during a
period of uncertainty surrounding the Internet.

The SSA is now cautious when providing possibly sensitive information
over the Internet. They now conduct risk assessments with respect to
privacy and are working on improving authentication, and Internet
security. In addition, the SSA now attempts to foresee the political
implications of its Internet projects while providing services the
public desires.

Currently the SSA has been exploring how to measure the success of their
Internet projects. They realize the need for both qualitative and
quantitative benchmarks for success. Furthermore, the SSA expressed the
understanding that the public's benchmarks for success are based on what
is expected in the private sector. The SSA is striving to match that
level of customer service and satisfaction. The public is very vocal
about its desires, and the SSA strives to provide a level of support the
public requests. In providing this level of service, the SSA on occasion
benchmarks itself with the best practices from states that have
implemented successful Internet initiatives.

# Lessons Learned:

**[AGENCY]{.underline}:** **United States Postal Service**

## 

William J Henderson, Postmaster General and CEO of the US Postal Service
said, "Only the United States Postal Service provides the American
people with a secure and efficient connection that binds our nation
together. Only the Universal Postal Service is the gateway to the
American Household."[^6] According to 1999 Statistics, the U.S. Postal
Service delivers mail to 134 million delivery addresses. The USPS is
also a large provider of business services, including business
correspondence and transactions, business advertising, expedited
delivery, publications delivery, standard package delivery, and
international mail. The U.S. Postal Service is also dedicated to
increasing it ubiquity through e-commerce. They are focused on
transferring the protection and integrity that is offered for hardcopy
mail online to serve businesses as well as the general public. We
interviewed Tom Beecher of Imagitas, a private company just outside of
Boston, MA that developed the Gov Key solution for the U.S. Postal
Service. Mr. Beecher is a General Manager at Imagitas.

### CASE ANALYZED: Gov Key

The GovKey system is a pilot program within the United States Postal
Service that facilitates the generation and use of digital certificates
(PKI). Imagitas presented the idea of developing an initiative to make
postal services more accessible to the everyday citizens. The Vice
President of e-commerce at the US Postal Service was already familiar
with Imagitas and its people and welcomed the idea of this pilot
project. In some regards, the lack of needed upfront financial
commitment on the part of the Postal Service probably also aided the
decision process. Currently, the USPS bears no financial burden in the
development of this system. The financial burden is currently absorbed
by Imagitas. The project was initiated on June of 2000, and is
relatively early in the development process. The actual pilot will be
implemented in the spring of 2001.

The GovKey initiative is in some regards similar to the ACES digital
certificate initiative within the GSA. However, GovKey also encompasses
state and local government and has differing technical infrastructure.

In general, GovKey is likely to be adopted by individuals with some
amount of technical savvy, who are able to easily adapt to doing
business online. Five to six rounds of customer focus groups were
utilized in order to better understand customers and the their need.

There are two types of constituencies that are involved in success
measurement with regard to this project: individuals and agencies, who
are counter parties for customers. With regard to customers, there is a
general need to understand their perceptions about the process and the
quality of service that they receive from GovKey. With regard to
agencies, there is a need to understand how their processes have been
enhanced, how much of a savings in terms of time the system has produced
as well as the level of quality involved in the service. Measurement
tools for customers tend to be qualitative and quantitative and those
for agencies tend to be quantitative.

The primary risk in terms of this project is the general concern about
privacy and security of sensitive information. Technology in this case
was not a risk in and of itself. Of more important is general terms, is
have enough in-house resources in order to enable walk through of legacy
systems, or facilitate the technical aspects to contractors.

There is an attempt to extend this initiative to other government
entities, such as the Social Security Administration and state of
Maryland agencies.

## 

## Lessons Learned 

-   **Idea Generation**: idea presented by an outside entity

-   **Customer/Market Research**: Customer focus groups

-   **Approval Process**: top down

-   **Technology Development**: not a significant issue in this case

-   **Success Measures**: qualitative for customers; qualitative and
    quantitative for individual agencies

**Risks**: general privacy and security concerns

# Agency - Several

# Access America for Students

### Overview

The Access America for Students (AAFS) project is for post-secondary
students including long life learners efficiently accessing government
service and information. Serving as a "yellow page", the URL of AAFS web
page, ***students.gov,*** navigates post-secondary students and its
community searching through multiple Federal agencies. This project
brings together Federal agencies including the Department of Education,
the Department of Labor, the Department of the Treasury, Internal
Revenue Service, the Social Security Administration, and so on. As well
as the providers of student financial assistance service, schools and
other members of the post-secondary education and student aid
communities in a public/private partnership are involved in this project
to improve their service to targeted students.

# Discussion

From top support, AAFS is part of the plan, ***Access America,***
entitled by the National Partnership for Reinventing (NPR) Government in
1997. The plan aimed to provide Americans with better access to Federal
services and benefits, and specifically, it called for Federal agencies
to work together to develop improvements in government services to
citizens, business, and other Federal and state government agencies.

Due to the nature of inter-agency task force and top-level support, AAFS
had critical success factors in technology development, approval and
implementation process. The inter-agency task force created to develop
ad hoc information technology, strategic plan and reported to Sally
Katzen -- Deputy Director for Management, Office of Management and
Budget, also Greg Woods, Chief Operating Officer, and Office of Student
Financial Aid Programs. Moreover, AAFS was mandated by NPRG and
attracted considerable interests from Congressional Oversight committees
both to demonstrate the high political priority. Another advantage of
the project was the readiness of users to be on line resulted from
students' computer literacy, Internet savvy and understanding of privacy
issues (i.e. comfortable with web-based transactions of sensitive
information).

## Meanwhile, the projects faced certain level of risks -- upsetting the bureaucracy, re-engineering the business process, meeting the Privacy Act Requirements, securing the on-line transaction and managing cost/benefit -- to evaluate and handle along with the development. The principle difficulty in creating the innovation system is resistance from employees, customers and stakeholders in existing organizations with the change of status quo and restructure of long-standing business. Laws also governing the access, collection, record-keeping and disclosure of any personal information, whether online or offline. AAFS needed to provide students with sensitive information (i.e. financial account balance), but at the same time it needed to ensure that these transactions were secured. The Phase I of the project involved using password-authentication, SMIME, SSL and Phase II will involve using digital security certificates & public-key encryption. Lastly, the project goal is to reduce operating costs by introducing emerging technology to benefit current service but it is unavoidable for agencies' capital investment and labor-hour consuming in developing. 

**Lessons**

**Idea Generation**

-   Top down initiation and support

### Success Measure

-   Cost and benefit analysis (focused on reduction of operating cost)

-   Qualitative measures as customer service and employee satisfaction

### Risks

-   Upsetting the bureaucracy

-   Re-engineering the business process

-   Meeting the Privacy Act Requirements

-   Securing the on-line transaction

-   Agencies' capital investment and time consuming

### Market and Customer Research

-   Advantage of students' computer literacy and Internet Savvy

### Approval Process

-   Directly report to high level of budgeting administration

-   High political priority from Congress

**Technology Development**

-   High technology sophistication

-   Multi-agency task force

# 

[^1]: <http://www.nsf.gov/home/about/>

[^2]: https://www.fastlane.nsf.gov/a0/about/whatis.htm

[^3]: http://www.ssa.gov

[^4]: Official website of the U.S. Postal Service:
    <http://new.usps.com/cgi-bin/uspsbv/scripts/content.jsp?B=null&D=23842>

[^5]: *\"Public Management,\" Vol. 76, No. 9, Sept. 94.*

[^6]: Official website of the U.S. Postal Service:
    http://new.usps.com/cgi-bin/uspsbv/scripts/content.jsp?B=null&D=23842