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High Payoff 

in Electronic

Government

Measuring the Return on 

E-Government

Investments

May 2003

Intergovernmental Advisory Board

Federation of Government Information Processing Councils

In cooperation with the

GSA Office of Intergovernmental Solutions

GSA Office of Citizen Services and Communications

U.S. General Services Administration

1800 F Street, NW

Washington, DC 20405

www.gsa.gov/intergov

Executive Summary ................................................................................................................1

Introduction..............................................................................................................................5

Background ........................................................................................................................5

The Challenge ..................................................................................................................5

Defining and Measuring High-Payoff E-Gov Programs ......................................................9

Financial: Reduced costs of 

Government Operations/Enhanced Revenue Collection ..................................................10

Economic Development ........................................................................................................14

Reducing Redundancy: Consolidating and Integrating Government Systems ..............16

Fostering Democratic Principles ........................................................................................21

Improved Service to Citizens and Other Constituencies..................................................25

Conclusions............................................................................................................................31

Sources and References ......................................................................................................33

Appendices

I. Payoff Categories and Benefits Offered by 75 Nominees for 2001 

and 2002 IT Recognition Awards National Association of State Chief 

Information Officers ................................................................................................37

II. Summary of E-Gov Measurement Systems ..........................................................46

III. Benefits Cited in State E-Gov Programs Nominated for NASCIO 

Digital Government Awards ....................................................................................50

IV. OMB A-11 Section 300 Scoring Criteria ................................................................58

For further information, contact Darlene Meskell at 202-501-1092 or

darlene.meskell@gsa.gov

Table of Contents

The Intergovernmental Advisory Board (IAB) undertook this study to identify prime

examples of “high-payoff” electronic government (E-Gov) programs, to share the

secrets of their successes, and to determine how they measure the results achieved

from investments made. 

Defining High-Payoff E-Gov Programs

As a new and powerful concept, E-Gov promises many benefits to its government

sponsors. It can reduce costs of government operations; open new sources of revenue;

attract businesses, tourists and new residents to the area; make it easy for citizens to

do business with the government; and reinforce the relationship between the citizen

and democratic government. As with any government program, the value of E-Gov is in

the benefits it delivers to the public and the new avenues it opens to create value. But

E-Gov can be costly, and its value to the public that supports it must be shown. 

We found E-Gov programs offer many types of benefits to a government. They can be

distilled into five categories. Any successful E-Gov program should address at least

one of these areas, but the most successful will probably deliver benefits in multiple

ways.

1. Financial: Reduced costs of government operations/enhanced revenue 

collection

2. Economic development

3. Reduced redundancy: Consolidating and integrating government systems

4. Fostering democratic principles

5. Improved service to citizens and other constituencies.

Financial: Reduced Costs of Government Operations/Enhanced Revenue

Collections. The low-hanging fruit of electronic government are the programs that

automate routine government processes and eliminate paperwork, printing and mailing

costs, check processing, document storage and retrieval, and the need for personnel to

interact with citizens in person or on the telephone. This type of savings is available to

every jurisdiction that implements an E-Gov program. E-Gov eliminates the need for

staff intervention in online programs that provide government forms, and those that

permit citizens to obtain and renew licenses and registrations, apply for government

grants and benefits, and get information over the Internet.

E-Gov programs make it easier for the public to pay permits, licenses and registration

fees, fines, and taxes owed to the government. These programs eliminate the need for

check processing, time delays in handling checks, receipts and other paperwork. Many

jurisdictions employ contractors to create and maintain the E-Gov programs used to

process these payments—some of which incur no cost to the government. The use of

these programs is increasing over time, although there are some indications that citizens will resist making payments online if the “convenience fee” assessed to pay for

online processing is more than a nominal $1 or $2.

1

Executive Summary
Economic Development. E-Gov programs designed to promote economic development are a boon to businesses, both small and large, thereby increasing their contribution to the local economy. One of the earliest and most popular types of E-Gov program reduces the amount of regulatory paperwork required for doing business in a

community by permitting online document searches and filings, tax and wage reporting, employee background checks, workers’ compensation claims, and one-stop regulatory submissions. Other E-Gov programs foster economic development by promoting

the beauty, benefits, historic and recreational attractions of the area to potential visitors, businesses and residents.

Reduced Redundancy: Consolidating and Integrating Government Systems.

E-Gov programs that integrate systems and databases and provide one-stop sources

of government information enable government to operate more responsively and more

efficiently. Governments that have already achieved the low-hanging fruit of automation recognize the payoff that will come with the next big step toward integration and

transformation of government services. National E-Gov strategies recognize the benefits of achieving economies of scale and reducing the number of duplicative systems,

stressing the benefits of implementing modular applications (“build it once, use it

often”) and a centralized infrastructure to reduce the national investment in IT. Other

benefits of consolidating and integrating E-Gov systems include the ability to provide

high quality, multi-channel, user-centric services to citizens and to ensure the security

of E-Gov systems.

Fostering Democratic Principles. The free flow of information permitted by the

Internet facilitates transparency and accountability in government. It also increases

the accessibility of government at all levels. Developing countries, especially, value EGov for making government more transparent and more democratic, and for encouraging citizen education and participation. 

Improved Service to Citizens and Other Constituencies. Service to citizens is

the primary purpose for E-Gov programs in most countries. National and state portals

make government information readily available and online services accessible.

Benefits delivered by these programs are defined in terms of convenience, time savings, quality and completeness of information. In past years, the focus on delivering

benefits to citizens in general or specific constituencies (e.g., vacation planners, students, seniors) has been so intense that costs were often not considered.

Measuring E-Gov Programs

Regardless of the type of benefits, the best way to measure the performance of E-Gov

programs is relative to the objectives of the program itself and the public agency that

sponsors it. The number of ways to measure a government program is growing daily.

One or more of these programs are used in most governments including national,

2
state, county, municipal, and tribal governments. We reviewed a wide range of

processes developed to evaluate E-Gov programs, including:

• Cost-benefit analysis, net-present-value and internal rate of return

• Return on Investment

• Customer Satisfaction

• Take-up Rates

• Benchmarking. 

As the need for performance measurement and accountability has increased, many

jurisdictions are performing more complex and multifaceted analyses to determine the

relative value of different E-Gov programs. The United States government requires the

development of convincing business cases for large E-Gov programs, and for all crosscutting E-Gov initiatives. These business cases require extensive analysis of the costs

of each alternative (including “do nothing”) for satisfying a business need weighed

against the total benefits. Costs, benefits and risks of each alternative are evaluated

in the context of the current situation. Potential funding sources, sponsors, partnerships, and synergies are considered. Market demand and promotions are also considered in developing a business case.

Many jurisdictions use Portfolio Analysis to assess the risk inherent in all of their EGov programs viewed as a whole. This kind of analysis permits the funding of a highcost program as long as other E-Gov programs that deliver high benefits relative to

their costs offset it. It is measured by quantifying the aggregate risk relative to expected returns of an entire portfolio.

Risk Management is a part of all comprehensive analyses. A risk analysis considers

the impact and probability that specific factors will impede the organization’s ability to

realize the benefits of an E-Gov program. These include the risks of cost overruns, of

technical obsolescence, or of becoming misaligned with political priorities. They also

include the risks that program managers will not leverage the technology or that the

target audience will reject a program. Risks of security and privacy violations must

also be assessed.

The Balanced Scorecard is a conceptual framework for translating an organization’s

strategic objectives into a set of performance indicators distributed among four perspectives: financial, customer, internal business processes, and learning and growth.

First proposed in a Harvard Business Review article in 1993, it has become a popular

measurement methodology in governments. A scorecard is only appropriate for organizations with a well-defined strategy with which the performance indicators can be

aligned.

These assessment methodologies have been used around the world, to a greater or

lesser extent in different jurisdictions. Many E-Gov pioneers agree with the assertion

made by Public Sector CXO magazine that “E-Government, like politics, is ‘local.’”

3
There is no uniform “cookie cutter” approach to determining the E-Gov program that

will have the highest payoff for a jurisdiction. Accordingly, there is no single measurement method that will apply as well for one government or agency as for another.

Conclusions

Any definition of “high payoff” represents value for taxpayers, through cost savings,

economic development, synergies achieved through integration of government

processes, strengthened democratic processes, and service to citizens and other constituent groups. Many tools can be used to measure the performance of these programs, with different tools for different values. In each case, the strategic decisionmaking process should determine the appropriate metrics.

In these times of tight budgets, measuring E-Gov benefits is a growing priority in governments, although the state of the art appears to be in a fairly primitive stage.

Investments in E-Government, like other government investments, traditionally have

not been driven solely, or even generally, by the prospects for financial return; rather,

these programs have been created to deliver better services to citizen/business/interest group constituencies. Each case requires a tailored measurement approach that

considers the quality, speed and comprehensiveness of services to citizens, economic

efficiencies, alignment with government’s strategic/political priorities, and the risks of

changing technologies, potential cost overruns and changing needs.

To maximize the benefits from E-Gov technology and increase the use of E-Gov programs, governments must market them broadly. Not all E-Gov programs are welcomed

enthusiastically, despite the benefits they promise to deliver, and gaining full acceptance for E-Gov will require marketing, information and education campaigns. Citizens

must be made aware that they can interact with their government online and that it is

advantageous to do so. E-Gov managers must continuously assess the citizens’ level

of acceptance through preference polling, customer satisfaction surveys and online

trend monitoring.

The important economic value of E-Gov will be the transformational value of re-engineering crosscutting government processes, and integrating IT investments into business processes. There are formidable organizational impediments to this significant

change-management objective, however, and internal factors are more important than

competition as indicators of transformational readiness. 

4
Background

Electronic government (E-Gov) is the use of technology, particularly Web-based

Internet applications, to enhance the access to and delivery of government information

and services to citizens, business partners, employees, agencies, and other entities.

E-Gov promises its government sponsors a powerful tool for improving processes and

communicating with the rest of the world. However, the real value of an E-Gov program is in the benefits it delivers to the public, and the new avenues it opens to create

value. The value of E-Gov to the public that supports it must be shown.

E-Gov projects have been seen as essential communications and operational tools for

public administration. Many were initiated without consideration of return on investment. Yet, as government expands its E-Gov programs, their sponsors are being asked

to make a strong business case, to demonstrate a return on this investment, as they

would project results from any information technology investment. Government agencies with tight budgets and an increasingly demanding clientele are reexamining their

spending priorities and inquiring whether E-Gov is delivering the payoff it has been

promising and which programs deliver the highest payoff.

The purpose of the Intergovernmental Advisory Board (IAB) is to provide advice and

guidance to The Federation of Government Information Processing Councils on

emerging IT intergovernmental issues and challenges they present. In early 2002, the

IAB recognized a need to evaluate and differentiate among E-Gov programs in terms

of the outcomes they deliver. Our objective was to identify the qualities that make an

E-Gov program exceptionally valuable to the government that commissions it, and how

the sponsoring governments measure the “payoff” delivered. Little definitive work

has been done in this area, although many jurisdictions, with some urgency, are seeking information about the best practices in measuring high-payoff in E-Gov. 

Measuring the benefits being achieved by individual E-Gov investments is a growing

priority in governments. We examined measurement methodologies in place and in

process. We reviewed E-Gov programs at the Federal, state and local levels and in

other countries, seeking appropriate case studies to illustrate the qualities of a highpayoff program. We found that the state of the art appears to be in a fairly primitive

stage. This report describes our findings.

The Challenge

The first challenge in determining which programs are delivering the highest payoff is

defining terms: What form should the payoff in E-Government take? How does one

evaluate “payoff” in this sector of society whose mission extends well beyond the bottom-line profit and loss indicators of a commercial enterprise? Unlike commercial

enterprises, government is responsible to its constituents to perform a number of

5

Introduction
other functions, many of which, by definition, are to provide services that are not commercially viable. These are not easily measurable; defining payoff in these areas

requires addressing the purpose of government and the priorities of its leaders. 

The term “high payoff” evokes images of windfall gains resulting from modest investments. Given limited resources to invest, and the prospect of adding to those

resources through high returns on investment, it makes sense to invest in the projects

that offer the highest payoff. 

Since many governments are using financial measures to evaluate performance, it

would seem to be a relatively straightforward task to identify and rank-order those

projects that generate benefits greater than their costs. This is especially the case in

the United States, where increasing importance is placed on achieving quantitative

results, but the trend is spreading to Europe. A report for the E-Government workgroup

of the European Union found the U.S. government to be the frontrunner in measuring

economic return. Furthermore, the report found signs that “an explicit focus on value

to investors as the key criteria is also spreading to governments in Europe... unconditional support for E-Government is being replaced by a growing demand for projects to

create value and deliver Return on Investment.”

(http://www.e.gov.dk/sitemod/upload/Root/English/Value_Creation_in_eGovernment_

projects.pdf)

Even in the United States, however, the value of E-Gov programs is increasingly seen

as multi-faceted. In a poll of government leaders responsible for delivering programs

or program mission support, Public Sector CXO Magazine found that organization leaders view E-Gov primarily as a way to improve services to citizens, through enhancements in mission completion and improved customer satisfaction. Only one-fifth of

these CXOs considered cost-efficiency to be the most important return on investment.

(The magazine’s audience includes 14,000 Chief Executive Officers, Chief Information

Officers, Chief Financial Officers and other “chief officers” and their deputies who

work for Federal, state and local governments.) 

(http://cxoadvisory.com.futuresite.register.com/_wsn/page16.html)

We found “payoff” defined in many non-financial ways. Public service functions can

have immense value in terms of delivering services to citizens, law enforcement, public

safety and health. That value may or may not be reflected in financial results. The

types and quality of E-Gov infrastructure can have a major impact on a local economy

and the businesses that drive it. The use of E-Gov programs to consolidate the backroom processes that support service delivery yields significant results in both efficiency and effectiveness over the long-term. It also brings about fundamental realignment

of government organizations and redefines “business as usual.” The use of E-Gov can

be an important tool of democratic governance, facilitating the transparent, two-way,

open communication that makes government-of-the-people possible.

6
Governments have viewed their E-Gov programs as a public service, or a utility, providing value to citizens and establishing a presence for the city, state or country in the

worldwide Internet. The international leaders, Canada, Singapore and Australia in particular, are recreating their government service programs around a Web-enabled

framework that focuses on customer-service goals and systems integration. E-Gov

programs of U.S. jurisdictions at all levels are also predominantly customer-oriented,

but not centrally coordinated as in some other countries. 

The preponderance of recent studies, articles and publications addressing the valuation of E-Gov programs suggests that government executives and legislators want to

see more accountability from their investments in E-Gov, in order to demonstrate that

taxpayer dollars are being well-spent. Program managers are expected to justify their

E-Gov expenditures with sound business cases that address the performance expectations of each individual E-Gov project and how they help achieve the goals of the program offices that implement them. 

These calls for measuring E-Gov performance reflect recent findings of inadequate

justification for E-Gov expenditures that illustrate the critical need for controlling government spending on E-Gov and other information technology (IT) investments. 

• The US Office of Management and Budget (OMB), designated 771 of 1,400 IT

projects budgeted for FY 2004 as “at-risk,” for not demonstrating sufficient

potential for success or adequate IT security. “At risk” projects will be unable

to proceed unless their sponsors can present a credible business case.

(http://www.cdt.org/egov/handbook)

• The Performance Institute, in its October 2002 report Creating a PerformanceBased Electronic Government, summarized its survey of 3,500 Federal IT personnel, finding: “Of the $48 billion spent on information technology in FY 2002, this

survey indicates that most of those expenditures were not justified by missionaligned performance measures. This practice represents a “high risk” business

practice that could result in failed IT projects and losses to the taxpayer.”

(www.performanceweb.org/research/egovernment.htm)

• In Sweden, economist Richard Murray has produced manuals for government

agencies to use in performing cost-benefit analyses and regularly studies the

economics of government operations. He reported similar findings in an email

in October 2002: “I asked about forty agencies in central government to give me

cost-benefit calculations, accounts or assessments of any kind to help me judge

the profitability of IT investments. I got no complete calculation and mostly

assertions that these investments are or will be very profitable.” 

• The Texas State Auditor’s Office found IT management to be a major risk area

for the state. The report found that 48 large projects had delivery delays averag7
ing 14 months and total cost overruns of more than $352 million. In addition, 46

of 63 systems assessed were found to be vulnerable to disruptions, data tampering, fraud and inappropriate disclosure. Only 27% had adequate system protection. (www.dir.state.tx.us/TIC/dir_info/dirpubs.htm)

The Texas auditors’ findings are particularly notable when compared to the results of a

2000 Brown University study, Assessing E-Government: The Internet, Democracy, and

Service Delivery by State and Federal Governments, which found that Texas ranked highest of all states in terms of the quality of citizen access to information and services.

(www.brown.edu/Departments/Taubman_Center/polreports/egovtreport00.html)

These findings suggest there is a significant performance gap in E-Government.

Public investments in IT, including E-Government, are failing to deliver commensurate

payoff. Not only are they disconnected from the mission-critical programs they promise to improve; these systems, across the board, are failing to achieve their own operational goals. Governments at all levels are reconsidering their E-Gov strategies and

seeking ways to reduce the costs while increasing the effectiveness of this fundamental arm of the public infrastructure.

This report examines five ways in which governments gain high payoff from their EGov programs, and the methods they use to determine whether they are achieving the

results they want. 

8
As a new and powerful concept, E-Gov promises many benefits. It can reduce costs of

government operations; open new sources of revenue; attract businesses, tourists and

new residents to an area; make it easy for citizens to do business with the government;

and reinforce the relationship between the citizen and democratic government. As

with any government program, the real value of E-Gov is in the benefits it delivers to

the public and the new avenues it opens to create value. But it can be costly, and the

value of E-Gov to the public that supports it must be shown. 

We undertook this report to find and describe E-Gov programs that clearly deliver high

payoff to the governments that fund them. It was not an easy task, not because there

are no E-Gov programs in place that generate significant cost savings, but because

there are many ways to describe the benefits of E-Gov programs, each of which is valuable. We distilled these into five categories:

1. Financial: reduced costs of government operations/enhanced 

revenue collection

2. Economic development

3. Reduced redundancy: consolidating and integrating government systems

4. Fostering democratic principles

5. Improved service to citizens and other constituencies.

Any E-Gov program will address at least one of these categories. The most successful

will provide benefits in multiple areas. The nature of the benefits determines which

metrics are in alignment with the performance objectives of the program itself and

those of the public agency that sponsors it. 

Most jurisdictions—national, state, local and tribal—use a combination of metrics,

including financial measures, customer-satisfaction, and risk assessment. Investment

decisions may be based largely on political or legislative priorities, or these priorities

may be assigned weights and considered along with other factors. Increasingly, jurisdictions at all levels are using a mix of measurement methods that evaluate missionrelated indicators as well as cost-savings. 

Single-factor measurements are rarely definitive. Most jurisdictions recognize that, in

E-Gov decision-making, it can be as self-defeating to fund only those E-Gov projects

that show financial savings, regardless of the service they provide, as to fund only

those projects that promote citizen participation, regardless of their cost.

We reviewed a number of metrics used to evaluate E-Gov programs, including:

• Financial measures, such as return-on-investment, cost-benefit analysis, 

including net-present-value and internal-rate-of-return

• Indicators of public approval and acceptance, such as customer satisfaction

measures and E-Gov take-up, or adoption, rates

• Benchmarking 

• Balanced scorecard measures

• Business cases

• Portfolio analysis and risk management.

9

Defining and Measuring High-Payoff E-Gov Programs
These measures range from the very precise measurement of cash flows to the comprehensive view of all the possible factors that might have an impact on the success of

a government’s E-Gov portfolio. While the process of taking measurements may not

itself define what is high-payoff in E-Gov programs, government planners who use

multi-factor analysis can build a comprehensive case for using E-Gov to achieve their

program objectives. 

This report contains a discussion of highly regarded E-Gov programs in each of these

five categories. Case studies and relevant reports are cited and examples provided of

methods used to measure the effectiveness of these programs. More information

about the programs cited can be found at the links provided in the text.

1. Financial: Reduced Costs of Government 

Operations/Enhanced Revenue Collection

Many governments, particularly in the United States, define “payoff” in economic

terms—e.g., revenue collected or costs reduced or avoided. They evaluate their programs in terms of the economic return on investment. States, with severely limited

budgets, are the most tightly constrained. Many E-Gov managers are under pressure

to assess the value of their programs and their return on investment. Some perform

traditional cost/benefit analyses, and many employ elaborate formulas and ranking

systems to evaluate the effectiveness of their E-Gov programs. Some are still setting

up data collection systems that would enable them to perform these analyses. 

a. Reduced Costs of Government Operations

The process improvements and streamlining achieved by E-Gov can provide significant

savings or cost avoidance. By eliminating paperwork processing, jurisdictions acrossthe-board are reducing staffing requirements, paperwork, printing and mailing costs,

cycle time, check processing, document storage, telephone calls and visits to field

offices—efficiencies that can translate directly into overhead cost savings. These are

the low-hanging fruit of electronic government, and they are becoming as commonplace as voicemail. 

E-Gov programs that offer these kinds of cost reductions include many of those nominated for the National Association of State Chief Information Officers’ (NASCIO)

Recognition Awards for Outstanding Achievement in the Field of Information

Technology (www.nascio.org/awards/2002awards/ and

www.nascio.org/awards/2001awards/). For example:

• MyFlorida.com search engine reduces the number of calls to the state’s call

center for a savings of $1.5 million a year.

• The Massachusetts Educator Licensure and Recruitment Initiative streamlined

the state licensing process to save $1.6 million a year.

10
• The Idaho Paperless Online Personnel/Payroll System saves $430,000 a year

through a 20% reduction in personnel, and saves another $75,000 a year in costs

of printing pay stubs.

• The $7.3 million overhead cost savings and up to $4 million in forms processing

savings, combined, are just a small percentage of the $120 million annual savings the Ohio Bureau of Workers’ Compensation achieved by automating its

workers’ compensation claims process.

• The Wisconsin Workers’ Compensation Insurers’ Web Reports system achieves

an estimated $1.5 million by eliminating a half million pieces of paper each

year—100,000 forms and 300,000 state mailings—as well as 20,000 annual hours

of staff time.

Some of the most effective E-Gov programs are those that enable government procurement activities online. They are complex systems that facilitate government purchasing and eliminate the costs of purchase orders, reduce the need for printed catalogs

and reduce calls to customer service representatives. Some examples are:

• The State of California’s award-winning CAL-Buy Online Procurement System,

for instance, projects $9.7 million a year in cost savings, or $37 per purchase

order. CAL-Buy won the NASCIO Recognition Award for Digital Government in

2001. (www.nascio.org/awards/2001awards/digital_gov.cfm)

• The eMaryland Marketplace has eliminated $100 in costs per purchase order. 

• The prime example of an online acquisition program is the Federal government’s

GSA Advantage!TM, which offers 2.4 million products and services to Federal

buyers over the Web, eliminating the cost of thousands of purchase orders every

year. (www.gsaadvantage.gov). The success of GSA Advantage! enabled the

GSA Federal Supply Service to close six of its eight distribution centers and

forward supply points in 2001.

• Italy’s Consip e-procurement project delivers to the Italian Government an

annual average saving of 30% on the price of goods and services purchased

through the site. Savings of 20% on administrative costs were estimated to

total 1,500 billion lire (about $700 million) for 2001. (www.consip.it)

E-Gov also offers operational, and, ultimately, economic benefits more indirectly by

improving the processes of government. These include benefits from maintaining

accurate data (without re-keying or checking for errors) and savings on cash-management costs by reducing the cycle time of check processing and time-to-market for service improvements. Other sources of savings include those used by the North Carolina

Security Portal, which saved $2.2 million by avoiding 550 computer incidents costing an

estimated $4,000 apiece, and by the State of Kansas, which saves nearly $9 million a

year in unemployment compensation it doesn’t have to pay to people who find a job

quickly through online listings. (www.nascio.org/awards/2002awards)

States use E-Gov programs for issuing and renewing licenses and registrations, in

particular, hunting, fishing and boat licenses, professional licenses (e.g. for nurses,

CPAs, educators, engineers, land surveyors, barbers and audiologists), business

11
licenses and motor vehicle/motor carrier credentials. They find administrative cost

savings in offering online licenses and permits for a wide variety of activities, such as

cross-country skiing in Minnesota, viewing wildlife in Alaska, and moving native plants

in Arizona. States that implemented E-Gov programs for grants management streamlined their processes, eliminated paperwork, reduced application processing time and

saw their staff costs reduced by as much as 35%. (See Appendix I)

b. Enhanced Revenue Collection

We found several E-Gov systems in place that either bring in revenue to their sponsors, through convenience fees that cover the costs of conducting transactions online,

cash management savings derived from prompt payment of fines, fees and taxes, vendor fees that pay for the cost of online government procurement programs, such as

those in Virginia and North Carolina.

Of particular interest are E-Gov programs that are developed, managed and maintained by vendors, who recover their costs by assessing fees for the services they provide. Some of these programs deliver significant cost savings to governments.

Kansas has created a public/private network, the Information Network of Kansas

(INK), which operates the self-funded Consolidated IT Management Model and manages 215,000 pages for the state. The network builds service applications and web

sites for state agencies and associations at no cost to the agencies. The state portal

encompasses all state agencies, regents and many association web sites and services.

More than 90% are free to users; the other 10% collect small transaction fees and the

$75 up-front fees and $60 annual subscription fees for access to the Kansas

Administration Regulations and other documents provided by INK. The INK model

costs the state nothing. Nine years after its creation, Ink’s revenues total more than

$7 million a year. Of that, 80%, or $5.6 million, is returned to state agencies.

(http://www.accesskansas.org) 

ServiceArizona, which was developed, hosted and maintained by IBM, allows citizens

to register their vehicles, at no cost to the state. IBM recovers its costs by charging a

fee for each registration. Since processing an online request costs about $4 less than

a counter transaction, the state also saves more than a million dollars a year, with over

15% of renewals being processed by ServiceArizona (www.servicearizona.com).

However, there are some indications that the demand for online government is very

price sensitive and that use of online transaction processing systems goes down if a

“convenience fee” of more than $1 or $2 is charged for conducting the transaction over

the Internet.

The U.K. Private Funding Initiative (PFI) places the burden of challenging inefficiency

in E-Gov programs on private sector investors in public/private E-Gov partnerships

that use private investment to fund public projects. Between 1997 and 2002, $28 billion

was made available through PFI in the U.K. PFI promoters cite advantages in allowing

12
the private sector to assume the financial risk for public projects: it requires the government only pay for the achievement of specific outcomes, forces the costing of risk,

and leaves it to the private partner to challenge and correct inefficiencies in building or

maintaining the programs. While this process was used primarily to finance large construction projects, with only a 25% total success rate, successful IT PFI projects

include the Ministry of Defence’s voice and data network across the U.K.

Some jurisdictions have explored the possibilities of funding E-Gov programs by selling government data for commercial use, although there is significant opposition to the

practice. Recognizing these objections, ServiceArizona runs a disclaimer saying it

does not collect or share data on Web site users.

Measuring cost-saving E-Gov projects. E-Gov projects that promise operational

efficiencies are perhaps the most straightforward prospects for measuring “payoff.”

Economic measures range from simple cost-benefit analysis to more complex returnon-investment systems. Here are some examples.

Cost-benefit analysis. If the costs and benefits are clearly identifiable, this is a

simple way to measure the economic benefits of a program. For example, the

District of Columbia determined that its Business Resource Center saves District

taxpayers $1.8 million a year, net of operating costs, by eliminating some customer

service positions. The Center cost $1 million to design and build. The cost-benefit

ratio is $1million/$1.8 million = .56. Ratios less than 1 indicate a positive return,

and should be funded. 

Some of the benefits of proposed E-Gov programs are difficult to substantiate; and

cost estimates are not always reliable. These analyses are generally prepared by

the sponsor of a proposed E-Gov program without an independent review, and can

often lead to inaccurate conclusions. Jurisdictions such as the State of Iowa

require independent third-party reviews of proposals for IT investments above a

certain cost level.

Return on Investment (ROI). Many states calculate return on investment to

measure economic, as well as intangible benefits. Some of these are universally

difficult to measure—an individual’s productivity, for instance, or the impact of

training programs. Others, such as the value provided to citizen constituencies,

are inherent to the government process itself. The State of Iowa’s highly regarded

Return on Investment program, is the most robust ROI measurement system used

by the states. It was recognized by NASCIO as the best state IT management

initiative in 2002.

(https://www.nascio.org/awards/2002awards/state_management.cfm)

The Iowa ROI program is a process that has been incorporated into the State’s

overall IT management program. All IT programs costing $100,000 or more must be

reviewed by the State’s Information Technology Council, which assigns values to

13
different features of each system under consideration and determines which

programs should be funded each year. The system attempts to balance the outputrelated attributes of the project with other important drivers, such as legislative

mandates. (See Appendix II.) This complex return-on-investment program must be

rigorously enforced, and as such, requires continuous management attention. The

numerous analyses required also may require more resources to perform than are

available during a period of tight budgets.

Return-on-investment calculations are required for all proposed IT project plans in

Kansas. The ROI metrics are custom tailored for each project. ROI is filed with the

Kansas Information Technology Office as part of a cost benefit statement, to

demonstrate benefits realized during, and one year after, project completion. In its

first year, the Kansas Consolidated Management Model delivered a 13.7% return on

investment for 23 major projects worth $75 million. 

Other tools used for measuring Return on Investment are Net Present Value (NPV)

and Internal Rate of Return (IRR) measures. See Appendix II for descriptions. 

2. Economic Development

Economic development programs traditionally have focused on attracting businesses

that would build large plants and bring jobs to the community, perhaps in exchange for

tax breaks. This is not the focus of economic development on the Web. Instead, the

emphasis is twofold: on helping small businesses—the fastest growing economic sector worldwide, and a favorite constituency for state E-Gov programs—and on promoting the geographic area to attract tourists and residents. 

Complying with laws and regulations cost small firms nearly half a trillion dollars in

2000, or $7,000 per employee in firms with fewer than 20 employees, according to the

U.S. Small Business Administration. Small businesses struggle to comply with regulations that govern fundamental activities as paying taxes, hiring and managing

employees and obtaining the necessary licenses and permits. 

One of the 24 U.S. Federal E-Gov initiatives, Business Compliance One-stop, which

uses www.businesslaw.gov as its platform, helps businesses by creating a one-stop

where they can easily access information about laws and regulations and learn how to

comply. The site initially will focus on four legal and regulatory areas (environment,

workplace health and safety, employment, and taxes). By providing quick access to

information about laws and regulations, compliance assistance tools, and the ability to

perform online transactions, Business Compliance One-Stop will offer improved customer service to the business community. Estimates indicate that businesses will save

at least $275 million annually by searching for information in an organized, user-friendly manner in one portal. (http://www.whitehouse.gov/omb/egov/gtob/compliance.htm)

14
Many of the most successful state E-Gov programs also target small businesses with

programs that save money by permitting online document searches and filings, tax and

wage reporting, employee background checks, renewal of professional fees and licenses, and by reducing time, transactions and office visits. Some of these applications

also save money for the sponsoring jurisdictions, as well as for local businesses.

Making information and services (e.g., reservations, permits, scheduling) available

online helps bring tourists and businesses and their spending money into a region.

Every state and national government has a home page; many local governments do as

well. Most governments have established a central portal that consolidates their Web

presence and provides access to their programs and information. Portals are excellent

promotional tools. They can present the city, county, state or country in a very attractive light for outsiders, and make it easy for tourists, visitors and residents to make

plans and reservations in the area. Portals can make basic citizen services and business transactions available at a click, so a citizen can check the school lunch menus,

register his boat, pay a traffic fine, and apply for unemployment insurance, all online.

Portals can be very helpful to citizens and businesses, but they also can save a lot of

taxpayer money. Mass.gov, the State of Massachusetts portal, for example, is expected

to return $250 million over five years on an investment of $180 million.

(www.nascio.org/awards/2001awards/digital_gov.cfm) 

Singapore. As with traditional economic development programs, the government

bears the initial costs for the benefit of business. For example, the Singapore government uses E-Gov as a testbed to allow the commercial sector to develop products and

experience, such as the “radio frequency I.D.” (RFID), which helps increase productivity in many functions. The RFID uses a tag composed of a memory chip and a copper

antenna that stores a unique identifier and a small amount of programmable information without battery power and transmits information to a handheld reader when

scanned. The process is used in Singapore to automate the entire book loan and

return process for better library management and for more efficient ATM maintenance.

The country uses this kind of investments in IT to grow industry, and makes its “information banks” available to benefit industry. 

Finland. Finland launched a “portal for companies” in Spring 2002. A joint effort of

seven agencies working in the field of business development, it offers information on

venture capital, research and development, exports and regulations. (http://www.icait.org/conf36/docs/Finland.pdf) 

Measuring the payoff from economic development E-Gov programs. While EGov programs designed to foster economic development may deliver direct financial

returns to the government sponsors, the direct results are generally more beneficial to

industry. The Texas System for Electronic Rate and Form-Filing, for instance, offers the

insurance industry up to $12 million a year in process savings. The Colorado Secretary

of State Business Center offers businesses annual savings totaling $2 million, about 6

times the savings projected for the government. (www.nascio.org/awards)

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This is illustrated by the results of a nationwide E-Government Benefits Study conducted by the Australian National Office for the Information Economy in 2001-2002. The

study measured the benefits-to-cost ratio for 24 government online programs that

together represented an investment of approximately $109 million. The overall benefits-to-cost ratio of 92% reflected a negative return on investment. However, of the

three types of programs reviewed, only the programs directed to business pulled down

the results. They scored a 54% benefits-to-cost ratio compared to 121% for citizen

online programs and 128% for internally focused government online programs.

(http://www.noie.gov.au/publications/NOIE/egovt_benefits/Egov_benefits.pdf)

Like the other crosscutting Federal E-Gov initiatives, Business Compliance One-stop

has specific performance targets to meet, and is required to report progress regularly

to OMB. The purpose of the Business Compliance project is to reduce the burden on

businesses by making it easy to find, understand and comply with relevant laws and

regulations at all levels of government. (http://businesslaw.gov/index.cfm) Its metrics

include the following:

• Time savings for business compliance and filing

• Regulatory agency savings through transition to compliance from enforcement

through automated processes

• Number of days reduced for issuing permits and licenses

• Cycle time to issue permits and licenses

• Number of visitors/page views

• Reduction in redundant IT investments.

3. Reduced Redundancy: Consolidating and Integrating Government Systems 

The national governments with the most advanced E-Gov programs are turning their

attention to the need to integrate E-Gov programs across agencies at all levels of government. High up-front costs may make integrating programs appear uneconomical,

and organizational barriers to change present a daunting challenge. 

E-Gov programs that integrate systems and databases and provide one-stop sources

of government information enable government to operate more responsively and more

efficiently. Governments that already have achieved the low hanging fruit of automation recognize the payoff that will come with the next big step toward integration and

transformation of government services. 

National E-Gov strategies recognize the benefits of achieving economies of scale and

reducing the number of duplicative systems, stressing the benefits of implementing

modular applications (“build it once, use it often”) and a centralized infrastructure to

reduce the national investment in IT. Other benefits of consolidating and integrating

E-Gov systems include the ability to provide high quality, multi-channel, user-centric

services to citizens and to ensure the security of E-Gov systems.

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Governments are looking to integrate horizontally, i.e., consolidating IT infrastructure

to link similar systems across agencies; vertically, i.e., consolidating within a line of

business at different levels of government; and consolidating around customers. The

objective is to make government more efficient and more effective. Opportunities

abound for consolidating like programs, eliminating redundant systems and replacing

multiple licensing agreements with enterprise software licenses. 

Finland. Finland’s Ministry of Finance has launched a project in which 48 agencies

work together on E-Gov service strategies. This approach has been successful in the

field of information security, and other efforts are underway for joint projects to handle

paperless accounting. (http://www.infosoc.fi/PublicServices.pdf) 

Finland’s consolidation efforts are also being extended to the local level. They provide

a public-tenders database that targets Calls for Tender below a threshold level, particularly in the municipal sector. Finland’s government-owned public procurement company, Hansel, also operates a complete system for electronic tendering and procurement that was rated the most advanced in Europe by the European Union Commission.

(http://www.posti.fi/english/uutiset/31-12-102-14-01-35.html)

United States. The major finding of the U.S. E-Government Task Force in 2001 was

significant overlap and redundancy in the Executive Branch, with multiple agencies

performing each of approximately 35 major functions of government. The Task Force’s

E-Government Strategy calls for simplifying government by leveraging technology to

create new and more effective ways of achieving government’s objectives. Integration

of processes, particularly cross-agency and across governments, enables the simplification of government processes and achievement of significant benefits over the longterm. (http://www.whitehouse.gov/omb/inforeg/egovstrategy.pdf) 

A year and a half later, OMB is investing a significant effort to develop a comprehensive Federal Enterprise Architecture and find opportunities to achieve synergy through

consolidation. (http://feapmo.gov/) Directed centrally by OMB, this effort is being

replicated by Federal agencies, as well as some states and municipalities. The formulation or implementation of an agency architecture was named as the primary challenge of Federal Chief Information Officers in 2002 in a survey conducted for the

Washington-based Association for Federal Information Resources Management

(AFFIRM). By contrast, the category, “Using IT to Improve Service to

Customers/Stakeholders/Citizens,” the number-one challenge in 2001, dropped to 9th

place in the 2002 survey. (http://www.affirm.org)

United Kingdom. In its UK Online Annual Report 2002, the British Government commits to “a radical reform of public services,” citing E-Government as “a powerful catalyst to bringing about this transformation.” The keystone of this transformation will be

the installation of a common infrastructure across Government. (www.eenvoy.gov.uk/oee/oee.nsf/sections/reports-annrep-2002-pdf/$file/annualreport02.pdf)

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The U.K. is building a central infrastructure designed to host multiple Government Web

sites, known as Delivering on the Promise (DotP). With the Government Gateway, it

will lead the way in delivering a central common infrastructure, bringing economies of

scale benefits to Government departments through a modular ‘build-once, use-many’

architecture. The U.K. expects to realize benefits from this program as it achieves a

critical mass, by leveraging opportunities for content syndication and cross-site content

sharing making the service available to local authorities and agencies.

Measuring the payoff from reducing redundancy.The payoff from consolidating

and integrating systems is in implementing an enterprise (or whole-of-government)

approach to E-Government. Benefits come from eliminating unnecessary backroom

systems, creating an enterprise-wide infrastructure, re-engineering business

processes to achieve synergies and order-of-magnitude improvements, and from

providing simplified and unified access for users. While the benefits accrue over the

long-term, the costs, which tend to be up-front, can be high. These include the costs of

developing and implementing enterprise architecture, acquiring new systems to

replace redundant systems, and redesigning business processes, as well as the

significant costs of retraining personnel to work with redesigned processes.

Return on Investment. Because of the broad impact of these multi-agency

programs, a measurable return on investment should be expected over time.

Consolidation across organizational lines requires extensive change management

efforts and long-term investments. Breaking down silos can require sustained

effort over time, and the dedication of considerable political capital. And, since

economic savings come some time after implementation and E-Gov programs

require up-front investment, there is often no funding to initiate these programs. 

The State of Iowa realized savings of $2.4 million in 2001 and $1.06 million in 2002

as the result of combining similar or duplicative systems that were revealed by the

required Return on Investment analysis.

(https://www.nascio.org/awards/2002awards/state_management.cfm)

The Washington State Combined Application Program (WASHCAP), an awardwinning Federal demonstration project, brought together the Social Security

Administration, the U.S. Department of Agriculture’s food stamps program, and

the Washington State Department of Health and Social Services to consolidate

benefits programs that serve needy citizens in the state. By automating the

process and centralizing caseload maintenance in WASHCAP, the program

simplified the process for benefits recipients and dramatic savings for taxpayers.

Annual savings in administrative and outreach costs amount to approximately

$6.37 million per year. This represents a total return of $31.5 million, over the span

of the five-year demonstration project, on a $400,000 investment.

(https://www.nascio.org/awards/2002awards/dg_g_to_g.cfm)

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Virginia’s state government spent $10 million to develop a base mapping program,

a single consistent spatial data infrastructure for Virginia based on high-resolution

digital orthophotography for the State’s entire land base. The program can

significantly reduce the overall cost of producing a digital base map for Virginia’s

counties and communities by providing statewide coverage at half the cost that

counties and cities pay to produce the products individually. The potential Return

on Investment is over $10 million. But it will not be realized unless the 100+ cities

and counties participate in the program and, as a result, reduce their own costs.

(www.nascio.org/scoring/viles/2002Virginia5.doc)

Citizen/Customer Satisfaction. Building on the understanding it has developed

over years of experience with E-Gov programs, the Government of Canada has

adopted a broad service vision that focuses on client-centric service delivery. This

vision requires a number of government wide strategies to ensure responsive, costeffective, accessible, trusted and secure service delivery, and demands a much

higher degree of coordination and integration across government. The government

is committed to changing the governance structure of its Government Online and

Service Improvement initiatives to achieve this vision. Accordingly, it has

developed a performance measurement framework that encompasses three main

outcomes—citizen/client-centered government; better more responsive service

and capacity for online delivery. Specific indicators have been developed for these

measures and work is underway to develop performance measures for them. These

indicators are as follows: (http://www.iccs-isac.org/eng/cmt-about.htm) 

Business Cases. Comprehensive business cases encourage E-Gov program

directors to consider and plan for all the ways the program will achieve its desired

outcomes. Projects in different stages will require different levels of maturity, but

the basic elements of a business case should be incorporated in project planning.

These elements include cost, schedule, and customer analysis, plan performance

metrics, project management and analysis of risk and alternatives. Customers and

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Citizen/client centered government

• Convenience

• Accessibility

• Credibility

• Critical mass of services

• Take-up

• Service transformation

• Citizen/client satisfaction

• Security

• Privacy

• Efficiency

• Innovation

Better, more responsive service

Capacity for online delivery
other stakeholders should independently validate assumptions used in the

analysis. It is essential that the business case go beyond simply project-oriented

financial justification. The business case must address broader issues, e.g.,

political, legislative, value to external and internal audiences, and enterprise-wide

impact, like some of the States’ return-on-investment tools. 

The U.S. Office of Management and Budget is seeking an order of magnitude

improvement in government performance by closing performance gaps and

leveraging e-business techniques. In its budget process, OMB requires agencies

and crosscutting E-Gov projects to use business cases to assure that IT

investments generate increased efficiency, effectiveness and maximized service.

(http://www.whitehouse.gov/omb/circulars/a11/2002/part7.pdf) Several key criteria

are applied to determine the viability of a business case:

• Linkage to the agency mission, strategic goals and program performance

Support of the President’s Management Agenda by incorporating multiple

agencies or governments, by using e-business techniques, and by aligning

with the Federal Enterprise Architecture and the other E-Gov initiatives.

• Mitigation of risk to the Federal government

• Compliance with IT security requirements.

OMB scores business cases with a 1-to-5 rating in 10 categories. The strongest

documented business cases score between 41 and 50 points overall. Business

cases scoring between 31 and 40 points still need strengthening. Those that score

30 points or below require much more work. The criteria and scoring are shown in

Appendix IV. 

OMB requires agencies to map their major IT investments to the Federal

Enterprise Architecture’s Business Reference Model. Functions that are

performed by multiple agencies are now clearly delineated and the opportunities

for cross-agency collaboration to improve performance are readily apparent.

(www.feapmo.gov) 

Balanced Scorecard. The Balanced Scorecard set of performance indicators

was originally developed to measure private industry non-financial performance. It

has often been modified for use in government agencies by accounting for mission

and mandate requirements that are essential to public sector entities. Balanced

Scorecard measures are distributed among four perspectives: financial, customer,

internal business processes, and learning and growth. Some indicators are

maintained to measure an organization’s progress toward achieving its vision;

other indicators are maintained to measure the long-term drivers of success.

Through the balanced scorecard, an organization monitors both its current

performance (finance, customer satisfaction, and business process results) and its

efforts to improve processes, motivate and educate employees, and enhance

information systems—its ability to learn and improve.

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Risk Assessment. Risk associated with an E-Gov investment may impact

performance, impede implementation or drive up costs. Risk that is not identified

cannot be mitigated and can cause a project to fail. The more thought is given upfront to mitigating the risks of a project, the more likely it is to succeed. Risk

assessments are used increasingly as part of the business cases made to support

E-Gov investment proposals. OMB requires agencies to demonstrate an

acquisition strategy that uses a strong risk mitigation plan to limit the risk to the

government. Formal risk assessments are a major feature in the IT business case

process developed for the U.S. Postal Service and for the value measuring model

developed for the U.S. Social Security Administration and the U.S. General

Services Administration. The USPS model quantifies four categories of risk:

business risk, technology risk, schedule risk, and financial risk. The SSA/GSA

Value Measuring Model considers risk as one of three categories for analysis,

along with cost and a category that represents five “value” determinants. In New

Zealand, risk-based funding rules for complex projects have been developed.

Using quantitative risk analysis, each risk is assessed along with its impact and

probability. Thus, the fiscal impact of a project’s risks can be made explicit to

decision-makers.

4. Fostering Democratic Principles 

The Internet offers many opportunities for citizens to interact directly with their governments on civic issues, opportunities that may significantly change the functioning

of democracy. It exemplifies many of the qualities that underlie a democratic society,

such as the free flow of information, interactive communication and feedback, community development and transparency. For E-Gov programs that provide these qualities,

the high-payoff may come in the quality of civic decision-making that results from

increased participation by citizens.

E-democracy involves not only strengthening existing democracy but also developing new forms of democracy. We are witnessing the advent not only of a new

society and a new economy but also of a new democracy. We must realize that

our old values and standards can be preserved only if our democracy is sufficiently

flexible to adapt to the changes taking place around us.

– Dr. Pauline Poland

Advisor, The Netherlands Ministry of the Interior and Kingdom Relations

February 8, 2002

Some countries are actively reaching out to citizens to encourage the broadest participation in the democratic process. The Netherlands, in particular, has undertaken many

experiments with public consultation and service delivery in recent years. The Ministry

of the Interior and Kingdom Relations, has published a Handbook for Electronic

Consultation of Citizens, provides substantial financial incentives for government bodies to post information encouraging the involvement of citizens in the democratic

21
process, and links to all political Web sites through the government portal. In 2001, the

handbook was revised to outline various technical instruments that can be used to

consult citizens on the web, with the aim of lowering the threshold for citizen-involvement as much as possible.

In developing countries, in particular, transparency is the characteristic most valued in

E-Gov programs. E-Gov promotes transparency in government operations by making

information freely available, making transactions highly visible online and deterring

corruption. Over 58% of the participants from 35 countries who were surveyed at the

2002 State Department E-Gov Conference identified “transparency and democracy” as

the goal of primary importance for E-Gov programs in their countries, over “supporting

local industry,” “social and human capital development,” “foreign direct investment”

and “export promotion.”

(http://www.mcconnellinternational.com/ereadiness/The_Global_EGovernment_Outlook.pdf) 

E-Mexico was launched to bridge the digital divide by fostering the creation of a

national technology infrastructure and transitioning Mexican society into the information age through programs for E-Government, e-health, e-education and e-economy. 

It is an initiative of the President’s Office for Innovation in Government, whose objectives are to produce a world-class federal government around six major objectives:

• Culture of quality in public service

• Savings and cost reduction

• Deregulation and administrative simplification

• Use of information and communication technologies

• Cultural change and professional development of public service

• Transparency and fighting corruption.

Transparency is central to the Mexican president’s agenda. It is at the heart of the government’s E-Gov outreach program, which is attempting to bring entire communities

online—both geographic communities and communities of interest through a network

of Internet community centers and electronic forums with dozens of topics and thousands of participants. The primary goal of the system’s developers is to expand the

reach of the E-Government program by encouraging citizens to participate through

local programs, through communities of interest, or through individual Internet use.

(http://www.ica-it.org/conf36/docs/Mexico.pdf)

The Bhoomi project in Karnataka State in India is exemplary in the way it delivered for

its citizens by making government more transparent. Bhoomi is a computerized

system of land records that replaced an exploitative manual system. About 6.7 million

farmers in Karnataka State own 20 million land holdings. The documents recording

these land holdings are required for land transactions, for obtaining loans and for other

concessions. Under the manual system, these records were maintained by village

accountants, without public scrutiny but with many reported instances of records

22
manipulation, bribery, and harassment. With all records now maintained in the public

domain, farmers have ready access to the documents they need and information in the

public record. They can access these records easily through a network of kiosks

installed in 177 locations, where queues are routinely seen. Despite some concern

about higher fees to use the kiosks—15 rupees vs. 2 rupees for the manual system—

some 330,000 people have paid the fee.

(http://www1.worldbank.org/publicsector/egov/bhoomi_cs.htm)

Voting Online. Although the use of online voting in Brazil’s landmark presidential

2002 presidential election was watched with interest around the world, there is considerable resistance to voting over the Internet. A 1999 IBM survey of elected officials in

14 European countries found that 74.2% believe information technology can enhance

democracy, but only 50.4% supported the introduction of online voting alongside traditional methods. In the United States, a large majority (63%) of the American public

opposes the idea of allowing people to vote online for federal offices such as the presidency or Congress, according to a February 2002 report of the Council for Excellence in

Government. Not only did 51% strongly oppose online voting, but support for it

dropped from 38% to 33% during the previous year.

(http://www.excelgov.org/displayContent.asp?Keyword=ppp022602)

The implicit promise that online voting will increase the percentage of citizens who

exercise their franchise ensures that jurisdictions will continue to experiment with this

process. The U.S. Defense Department, which administers the Federal Voting

Assistance Program for American citizens in the military or overseas, piloted an

Internet-based absentee voting project in the November 2000 general election. This

was the first time binding votes were cast over the Internet for Federal, state and local

offices, including President and members of Congress. The States of South Carolina,

Florida, Texas, and Utah and counties within those states also participated. The study

concluded that further development is needed before Internet voting can be provided

effectively, reliably and securely on a large scale. The integrity of the online electoral

process has not yet been established and the potential for election fraud when using

the Internet is still a major concern. (http://www.calvoter.org/votingtech/VOIReport7-

9.pdf)

The first binding U.S. public-sector election online was the 2000 Democratic Party primary in Arizona. Al Gore beat Bill Bradley 4-to-1 in this primary, in which twice as

many voters participated as in previous primaries. The system encountered some

technical problems, such as overloaded telephone lines, and older browsers that

crashed, but the major obstacle to online voting—in the short term—may be lawsuits

challenging online voting for unfairly favoring the class of voters that has easy access

to the Internet. (http://usinfo.state.gov/topical/rights/democracy/inetvot110701.pdf) 

E-Rulemaking, one of the U.S. Federal E-Gov initiatives, is a one-stop Federal regulatory clearinghouse that makes it easy for citizens to participate in Federal rulemaking

and the democratic process by improving access to, and quality of, the rulemaking

23
process. When citizens submit comments on regulations, Federal agencies must take

their views into account and justify their regulatory actions. Descriptions and the full

text of every proposed and final Federal regulation currently open for comment can be

read online on www.regulations.gov, and readers may submit comments to the Federal

agencies responsible for the rulemaking action. Launched in January 2003, this initiative already has taken major steps:

• All agency regulatory docket sites are linked to FirstGov.gov

• A “Clinger-Cohen” letter was issued by OMB to consolidate redundant and

siloed Web sites

• Planning has begun to consolidate existing agency e-docket systems at the

Department of Transportation, the Food and Drug Administration, and the

Department of Labor with the Environmental Protection Agency’s system.

• Business process reengineering of the rulemaking process has been initiated.

The quality of government service delivery can and should contribute to strengthen

democratic citizenship and the bonds of trust between citizens and their democratic

governments. 

Measuring E-democracy programs. Most typical E-Gov metrics are not applicable

to this high-payoff category. E-Gov programs designed to meet civic objectives are

generally cost centers. Rather than reducing the costs of government, these programs

represent a commitment to provide good government without the expectation of a

return on investment. Over the long run, the returns may be high in terms of the civic

and economic health of a community, but the immediate financial impact is likely to be

costly.

Governments around the world are actively promoting citizen feedback online in order

to strengthen democracy and development, according to a report by the Government

Online International Network. (http://governments-online.org/documents/e-consultation.pdf) However, few countries have developed programs to measure e-consultation

projects. Those that have, have done so mainly on a pilot basis. 

During the Organisation for Economic Co-operation and Development (OECD) meetings on “e-consultation” or democratic processes online, participants discussed a

framework for information, consultation and public participation in policy-making, and

criteria for evaluating (1) the impact of government efforts to inform, consult and

engage citizens in policy-making; and (2) the process used.

(http://www.olis.oecd.org/olis/2002doc.nsf/43bb6130e5e86e5fc12569fa005d004c/10fb657f4

4a588d4c1256bec004df3a6/$FILE/JT00130234.PDF)

For example, the effectiveness of on-line voter registration could be indicated by the

percentage of eligible voters registered; the effectiveness of online voting by an

increase in the percentage of voters. 

24
5. Improved Service to Citizens and Other Constituencies 

The primary goal of E-Gov programs at all levels and in all countries is to make it easy

for citizens to obtain service and information and to interact with the government. This

is the first stated goal in the U.S. E-Government Strategy and it reflects a national perception. Two thirds (68%) of Americans polled by the Council for Excellence in

Government in a 2000 survey said it should be a priority for government to invest tax

dollars in making more information and services available over the Internet. The

return on those investments will increase as citizens find they can obtain the government information and services they need online.

....for the public services, the real opportunity is to use information technology to

help create fundamental improvement in the efficiency, convenience and quality of

our services. That is why we aim to have all government services on-line by 2005,

building on best practices... But we recognise that British businesses and citizens

are not yet using government services online in the numbers that match the best

in the world. So our new strategy will focus on driving up access in key categories in the NHS, education, transport, benefits, tax and criminal justice. It will

include, for example, services to enable drivers to conduct all their dealings with

Governments online including tax discs, vehicle registration and driving licence

applications. 

– U.K. Prime Minister Tony Blair in his keynote speech to e-Summit

November 19, 2002 

(http://www.number10.gov.uk/output/Page1734.asp) 

The results of a University of Texas study suggest another reason governments would

find it useful to increase citizen use of E-Government programs: funding. The CostBenefit Study of Online Services in January 2003 revealed that 55% of the Texans surveyed believe E-Gov should be considered a “value-added service whose costs should

be shouldered by its users” and that using tax dollars to support E-Gov was unacceptable. Sponsors of E-Gov programs must be vigilant to ensure that they are “delighting” the public with the convenience and ease-of-use of online government, or they run

the risk of losing their funding. (www.dir.state.tx.us/TIC/dir_info/dirpubs.htm) 

Use of E-Gov is slowly increasing. In 2002, the average use of government online services had increased by 4% to 30%, according to a Government Online survey of 28,000

people in 31 countries. The survey showed that 42% of the population had personally

used the Internet in the previous month. The use of E-Gov ranged from 3% in Hungary

to 57% in Sweden. Major gains since 2001 were in Australia (up 15% to 46%), Turkey

(up 10% to 13%), and the United States (up 9% to 43%). Only Japan showed a drop in

E-Gov usage, from 17% to 13%; Internet use in Japan dropped overall.

(www.tnsofres.com/gostudy2002)

The survey reported that 2002 take-up rates, i.e., the percentage of Internet users that

use E-Gov, ranged from 16% in Hungary to 82% in the Faroe Islands. The high-percent25
age users included Norway and Denmark (81%), Finland (78%), Estonia (77%),

Australia (73%), Canada (70%), France and Hong Kong (69%) and Singapore (68%).

The United States take-up rate was 62%. The U.K. was near the low at 30%. 

Australia. The National Office for the Information Economy, reports that there is

ongoing demand for E-Gov services and users believe significant benefits are available. 

The survey, taken in 2001-2002 found the take-up of E-Gov services among businesses

ranged from 54% for small businesses (fewer than 4 employees) to 86% for businesses

with more than 100 employees. (http://www.noie.gov.au/publications/NOIE/egovt_benefits/Egov_benefits.pdf)

Canada. Sixty four percent of all Internet users visited Government of Canada Web

sites, up from 52% in 2001. Although only 22% report the Internet/e-mail as their main

method of contact with governments, 40% expect it to be their primary communication

channel in two years and 48% expect it to be so in 5 years.

United States. Internet usage in the United States is estimated at 71% by the

University of California at Los Angeles (UCLA); 63% of the population used the

Internet in the previous month, Taylor Nelson Sofres reported. More than a third of

these U.S. Internet users visited a federal government Web site in February 2003,

according to Nielsen//NetRatings. Traffic to those sites increased 26% from December

2002 to February 2003. The Treasury Department experienced the largest growth during

this period: 147%; traffic to NASA sites grew 124%; the Education and State

Departments also grew by 90% or more. (Nielsen//NetRatings, 3/17/03,

http://www.nielsen-netratings.com/news.jsp) 

United Kingdom. The U.K., which is in the process of spending £6 billion on IT

improvements, is focusing on improvements to its very low take-up rates—only 13% of

the population (30 of Internet users) used government online programs last year,

despite the fact that close to 75% of all government services were available online. To

boost usage, the U.K. has undertaken a multifaceted approach to making computers

easy to use by the entire population. Some of the initiatives outlined by Prime Minister

Blair in his address to the November 2002 e-Summit include:

• Putting all government services online by 2005, following a strategy that will

focus on driving up access in key categories in health, education, transport,

benefits, tax and criminal justice.

• Encouraging competition in the broadband market to keep the price of broadband low and falling.

• Providing funding to deliver broadband connections to every primary and secondary school in the country by 2006.

• Investing more than £1 billion in broadband connectivity for public services,

including criminal justice, hospitals and doctors’ offices.

• Providing incentives for businesses and individuals to invest in information and

26
communications technology, to build skills at every level and for businesses to

increase their proportion of R&D spending.

• Ensuring access to the Internet for everyone who wants it by 2005,starting with

the establishment of 6,000 online centers throughout the country to provide a

crucial entry point for those unable to afford PCs and connections.

• Gaining trust in the way data will be used, ensuring that systems are secure, 

and addressing ways public services can authenticate each other and their 

customers.

Canada. The success of Canada’s E-Government program can be measured by its

designation, for two years in a row, as the leader among 23 nations for online service

delivery. The Accenture report E-Government leadership—Realizing the Vision, April

2002, found that “Canada has achieved its leadership position largely due to its focus

on the citizen in its E-Government programs.” (www.accenture.com)

Canada’s Government-on-Line initiative has resulted in higher levels of satisfaction

and “surprisingly resilient positive perceptions of government service.“ The public’s

overall rating of the quality of the service or information they receive from their federal

government has risen steadily every year from 59% saying ‘good’ in 1999 to 67% in 2002.

One valuable benefit of the improvements in E-Gov services offered to Canadians is

the finding that 67% of Internet users surveyed said they would be comfortable submitting their personal information over the Internet to the government. 

Michelle d’Auray, CIO for the Government of Canada, has an even more ambitious

vision for E-Gov—and for government itself:

Technology is driving us to rethink how we are organized in government to serve

individuals and business, in Canada and abroad, and how we can be more effective

and innovative in achieving the public interest faster and more efficiently. The big

payoff will come when we’ve moved from “E-Government” to create a de facto

“my government” for every citizen and business. This means looking beyond service, so that Canadians can participate more actively and systematically in the

development of policies that affect their daily lives and the future of the country. 

Australia. Ann Steward, of the Australian National Office for the Information

Economy (NOIE), views E-Gov’s most important benefit as “enabling government to

transform itself through technology into a citizen-centric, high quality integrated services delivery agent.” NOIE surveyed citizens and businesses in 2001/2002 and found

that 86% of E-Gov users felt the overall benefit of E-Gov was either significant or moderate. However, only 45% were able to quantify actual cost savings associated with

interacting online compared to traditional channels; only a third of those estimated

savings of more than $25 per interaction.

27
The NOIE survey found that interacting with government online offered some to significant improvements in the following areas:

• Ease of finding information (80%)

• Service quality (75%)

• Ability to make decisions (75%)

• Access to public records (68%).

Over 80% of businesses and nearly 90% of government employees saw either some or

significant improvements in the quality of their decision-making.

(http://www.noie.gov.au/publications/NOIE/egovt_benefits/Egov_benefits.pdf)

The most successful E-Gov programs are tailored to the citizens they serve, particularly E-Gov programs managed by the more “hands-on” providers of services in State

and local governments. “Cookie-cutter” approaches are not useful.

The biggest benefit E-Government offers government is a way to tailor their service delivery mechanism to meet the needs of their customers. E-Government

makes it possible to deliver transactions and information through multiple channels, i.e. Web Sites/Portals, Interactive Voice Response, Kiosks, PDA’s, and text

messaging, when and where it is convenient for the customer. 

– David Molchany, Chief Information Officer, Fairfax County, VA.

Measuring improved service to citizens. Most of the E-Gov programs we

reviewed—on the state, federal and international levels—are primarily directed at providing better service to various constituencies, such as taxpayers, small businesses,

lobbyists, nurses, hunters, job-seekers, or insurance claims filers. It is easy to see

their effectiveness, in terms of improving transactions between citizens and government. It is often more difficult to measure their value in terms of a return on investment. 

Some jurisdictions assess the value of their customer service E-Gov efforts with

numerical scores to quantify how much they help achieve the organization’s objectives. Others attempt to quantify the savings to individuals, in terms of waiting time, or

travel expenses. Recognizing that the function of electronic government is to serve

citizens better, however, many programs find E-Gov programs strengthen their own

effectiveness by offering citizens another—usually better—channel for interacting

with their government. These programs are low-risk, since they only augment, and do

not replace, the existing systems that permit a citizen to get the same service by mail

or in person. 

There are many ways to measure the effectiveness of the service provided to constituent groups by E-Gov programs. According to the Performance Institute, many

Federal agencies use accessibility metrics to measure improved program performance.

These include measuring customer satisfaction, the percent of audience reached,

28
response time, reduced constituent cost, returning users, and service availability. 

The first two of these measures are widely considered effective measures of the effectiveness of E-Gov programs.

Customer satisfaction surveys. Customer satisfaction measures are becoming

more common and more standardized. In the United States, the American

Customer Satisfaction Index (ACSI), a private application developed in

partnership with the University of Michigan School of Business and the American

Society for Quality, tracks annual trends in customer satisfaction with Federal

government agencies. The quantitative ACSI survey instrument, which is available

for use in Federal agencies through a U.S. Treasury franchise, is regularly employed

to measure customer satisfaction with government services. In its 2002 survey, for

the first time, the ACSI survey covered several government Web sites, whose

average score (73.5) is higher than the overall ACSI score for private industry

(73.1), news and information sites (73) and government offline (70.2). 

Canada has developed a Common Measurement Tool (CMT) for use in measuring

client satisfaction. The CMT provides public organizations with a set of standard

questions and standard measurement scales for use in surveying their clients. It is

a comprehensive collection of potential survey questions that an organization may

select from, to custom design a client satisfaction survey that meets their

information requirements. The use of standard questions allows the organization to

benchmark progress over time and, since questions are standard, organizations

can compare results with other organizations within the same business line. 

To ensure this ability to benchmark performance, several core questions are

required for inclusion in all surveys. Designed to provide client feedback to any

public organization and ensure that all aspects of client service are considered, the

CMT is conceived around five key elements: client expectations, perceptions of the

service experience, satisfaction levels, levels of importance, and priorities for

service improvements. (www.iccs-isac.org/eng/cmt-about.htm)

Benchmarking. The U.K. expanded its exercise benchmarking the G7 countries

(US, U.K., France, Germany, Italy, Japan, and Canada), Sweden and Australia, to

measure key E-Government indicators within its benchmarking framework. The

benchmarking report, issued at the e-Summit in November 2002, places the U.K.

ahead of the other European countries and Japan, and in second place overall

behind the United States. The report highlighted areas in which the U.K. can learn

from other countries—Canada’s online services and Sweden’s expansion of PC

use, among others. (http://www.e-envoy.gov.uk/oee/oee.nsf/sections/esummitbenchmarking/$file/indexpage.htm)

Improving Take-up Rates. There is no “payoff” from an E-Gov program that is

not used and there is no guarantee that “if you build it, they will come.” The

effectiveness of an E-Gov program is in direct proportion to the audience it

29
reaches, and the savings it provides. State and local officials have found that EGov programs must be tailored to provide what their communities need, using the

methods they prefer. 

One way to increase the effectiveness of E-Gov is to increase its use by the

intended audience. By monitoring usage and repeatedly polling citizens and other

stakeholders, program managers can learn what steps to take to improve service

delivery and outreach to citizens and so increase usage.

A recently published State of Texas Cost-Benefit Study of Online Services found

that 11 applications and services offered by TexasOnline could save personnel

costs of between $35,207 and $1.9 million if they achieved 30% take up. These

prospective savings would rise proportionately—to as much as $6.3 million—as the

take-up rate neared 100%. 

The United States government recognizes the need to market its online programs

and is planning a major marketing campaign to promote FirstGov.gov, the national

Web portal, and to inform citizens what is available online from the government.

The U.S. General Services Administration’s Office of Citizen Services and

Communications will launch this campaign in the summer of 2003. The immediate

goal is to help FirstGov.gov become a “household name” by raising awareness of

the national E-Gov resources among all market segments, and encouraging

citizens to routinely use this single gateway to get information from all levels of

government quickly, easily and conveniently. (www.firstgov.gov)

“After all, the potential of E-Governance is actualized only when it has reached to

each and every individual and community in its specific conditions and in a manner

that is sustainable,” an E-Gov official from India commented during the State

Department’s E-Gov Conference in November 2002. (http://www.

mcconnellinternational.com/ereadiness/The_Global_E-Government_Outlook.pdf)

30
Any definition of “high payoff” represents value for taxpayers, through cost savings,

economic development, synergies achieved through integration of government

processes, strengthened democratic processes, and service to citizens and other constituent groups. Many tools can be used to measure the performance of these programs, with different tools for different values. In each case, the strategic decisionmaking process should determine the appropriate measurement.

Each case requires a tailored measurement approach that considers the quality, speed

and comprehensiveness of services to citizens, economic efficiencies, alignment with

government’s strategic/political priorities, and the risks of changing technologies,

potential cost overruns and changing needs.

To maximize the benefits from E-Gov technology and increase the use of E-Gov programs, governments must market them broadly. Not all E-Gov programs are welcomed

enthusiastically, despite the benefits they promise to deliver, and gaining full acceptance for E-Gov will require marketing, information and education campaigns. Citizens

must be made aware that they can interact with their government online and that it is

advantageous to do so. E-Gov managers must continuously assess the citizens’ level

of acceptance through preference polling, customer satisfaction surveys and online

trend monitoring.

The important economic value of E-Gov will be the transformational value of re-engineering crosscutting government processes, and integrating IT investments into business processes. There are formidable organizational impediments to this significant

change-management objective, however. In the United States, the Office of

Management and Budget has taken on the challenge of transforming government

through E-Gov. As stated in the U.S. E-Government Strategy, February 27, 2002 

(www.whitehouse.gov/omb/inforeg/egovstrategy.pdf): 

...[T]he pay-off will not result from automating current processes, but rather

through the transformation of how the government interacts with its citizens and

customers. Only through changing how we do business internally—that is,

streamlining work processes to take advantage of modern IT systems—will citizens experience the transformation envisioned.

31

Conclusions
32
We reviewed national E-Gov programs around the world and reports from two major

international E-Gov conferences, the 36th Conference of the International Council for

Information Technology in Government Administration (ICA) 

(http://www.ica-it.org/conf36) in October 2002, and the U.S. State Department’s

Conference on E-Government Implementation in November 2002, and reviewed materials from the United Kingdom’s e-Summit in the same month. We sought out awardwinning E-Gov programs in all jurisdictions. We interviewed IT officials and reviewed

E-Gov strategy papers issued by the U.S. and other national governments.

We reviewed a number of studies issued on performance measurement in government.

We examined several measurement systems created to calculate return on investment

in E-Gov programs, at the national, Federal and State levels. We compared and categorized best-in-class State E-Gov programs that were nominated by their States for IT

Recognition Awards submitted to NASCIO in 2001 and 2002. 

Following is a list of the documents referenced in this report.

Accenture, eGovernment Leadership – Realizing the Vision, 2002 (www.accenture.com)

Accenture Government Practice, Three Radical Changes Promise Practical Impact

(http://www.accenture.com/xd/xd.asp?it=enweb&xd=industries\government\gove_wave

s.xml#summary)

Accenture, Value Creation in eGovernment projects - An exploratory analysis conducted

for the Danish presidency of the eGovernment workgroup of the Directors General, 2002,

(http://www.e.gov.dk/sitemod/upload/Root/English/Value_Creation_in_eGovernment_p

rojects.pdf) 

Anexys, LLC, Indiana University-Bloomington Institute for Development Studies and

META Group, Inc., The Anexys Primer on Measuring ROI in E-Government, 2001.

Assirati, Bob, Executive Director – IT Directorate, UK Office of Government

Commerce, PFI – The Cost of Risk, The Price of Success, presentation, October 22, 2002

Association for Federal Information Resources Management, The Federal Chief

Information Officer/Seventh Annual Top Ten Challenges Survey, December 2002

(http://www.affirm.org)

Australian National Office for the Information Economy, E-Government Benefits

Study/Measuring the demand for, and the benefits of, E-Government, Preliminary findings, 11/11/02 (http://www.noie.gov.au/publications/NOIE/egovt_benefits/Egov_benefits.pdf)

Australian National Office for the Information Economy, Better Services, Better

Government, November 2002 (http://www.noie.gov.au/publications/NOIE/better_services-better_gov/Better_Services-Better_Gov.pdf)

33

Sources and References
Blair, Tony, Prime Minister, UK, Keynote speech to e-Summit, November 19, 2002

(http://www.number10.gov.uk/output/Page1734.asp)

Booz Allen Hamilton, International e-Economy Benchmarking/The World’s Most

Effective Policies for the e-Economy, November 19, 2002 (http://www.eenvoy.gov.uk/oee/oee.nsf/sections/esummit-benchmarking/$file/indexpage.htm)

Caldow, Janet, IBM Institute for Electronic Government, The Quest for Electronic

Government/ A Defining Vision, July 1999 (www.ieg.ibm.com/thought_leadership/egovvision.pdf)

Canadian Institute for Citizen-Centred Service, Benchmarking (www.iccsisac.org/eng/bench-ben.htm)

Canadian Institute for Citizen-Centred Service, Common Measurements Tool

(www.iccs-isac.org/eng/cmt-about.htm)

CAPAM International Awards Programme 2001-2002, India submission,

(http://www.capam.comnet.mt/Docs/IIA2002/submissions/2%20SILVER%20BHOOMI%20Land%20registry%20India.pdf)

Center for Democracy & Technology and InfoDev, The E-Government Handbook for

Developing Countries, November 2002 (http//www.cdt.org/egov/handbook/). 

Judy, Debbie, U.S. Postal Service, Building IT Business Cases and Portfolio Investment

Analysis, presentation September 18, 2002

Department of Defense Washington Headquarters Services Federal Voting Assistance

Program, Voting Over the Internet/Pilot Project Assessment Report, June 2001

(http://www.calvoter.org/votingtech/VOIReport7-9.pdf)

Economist Magazine, Survey: Government and the Internet, January 22, 2003

(www.economist.com/displayStory.cfm?Story_id=80746)

Finnish Information Society Advisory Board, Services in the New Millennium/

Programme of Action to Support Online Government, 31 December 2001

(http://www.infosoc.fi/PublicServices.pdf)

ICA Member Country Reports, ICA 36th Conference, Singapore, October 2002

(http://www.ica-it.org/conf36/index.html)

Malatest & Associates Ltd., for the Public Sector Service Delivery Council and the

Institute of Public Administration of Canada, Clients Speak, A Report on SingleWindow Government Services in Canada, 2002 (www.ipaciapc.ca)

34
McConnell International, The Global E-Government Outlook, 2002

(http://www.mcconnellinternational.com/ereadiness/The_Global_EGovernment_Outlook.pdf)

Miller, Jason, Government Computer News, “OMB to Agencies: Justify that IT

Spending,” 2/10/03 (http://www.gcn.com/22_3/news/21095-1.html)

National Association of State Chief Information Officers (NASCIO), Creating CitizenCentric Digital Government/A Guide for the States v. 2001

(https://www.nascio.org/hotIssues/dg/introduction.cfm).

National Association of State Chief Information Officers (NASCIO), Resource

Funding Pools/An Innovative Way of Funding Digital Government/Issue Brief, October 25,

2002 

Organization for Economic Co-operation and Development, OECD E-Government

Project, Key Issues and Findings, October 2, 2002

Organization for Economic Co-operation and Development, Summary Record of the 1st

Session of the PUMA Expert Group on Government Relations with Citizens and Civil

Society, February 8, 2002,

(http://www.olis.oecd.org/olis/2002doc.nsf/43bb6130e5e86e5fc12569fa005d004c/a4da88b3

7fe7cc68c1256b5a00380229/$FILE/JT00120520.PDF)

Organization for Economic Co-operation and Development, Summary Record of the 2nd

Session of the PUMA Expert Group on Government Relations with Citizens and Civil

Society, August 7, 2002

(http://www.olis.oecd.org/olis/2002doc.nsf/43bb6130e5e86e5fc12569fa005d004c/10fb657f4

4a588d4c1256bec004df3a6/$FILE/JT00130234.PDF)

Poland, Pauline, Government Online International Network, Online Consultation In

GOL-IN Countries - Initiatives to foster e-democracy, (http://governmentsonline.org/documents/e-consultation.pdf)

Public Sector CXO Magazine, Insights on transformation for government chief officers

(http://cxoadvisory.com.futuresite.register.com/_wsn/page16.html)

Taylor Nelson Sofres, Government Online Study 2002 (www.tnsofres.com/gostudy2002)

TexasOnline Authority, Department of Information Resources, Cost-Benefit Study of

Online Services, January 2003. (www.dir.state.tx.us/TIC/dir_info/dirpubs.htm)

The Performance Institute, Creating a Performance-Based Electronic Government,

October 30, 2002 (www.performanceweb.org/research/egovernment.htm)

35
The World Bank Group, “BHOOMI” Online Delivery of Land Records in Karnataka, India

(www1.worldbank.org/publicsector/egov/bhoomi_cs.htm)

U.S. General Accounting Office, Electronic Government/Success of the Office of

Management and Budget’s 25 Initiatives Depends on Effective Management and

Oversight, March 13, 2003 (www.gao.gov)

U.S. Office of Management and Budget, E-Gov Strategy/Simplified Delivery of Services

to Citizens, February 27, 2002

(http://www.whitehouse.gov/omb/inforeg/egovstrategy.pdf)

U.S. Office of Management and Budget, National Strategy for Transforming to an

Electronic Government, February 8, 2002 (http://www.whitehouse.gov/omb/egov/) 

U.S. Social Security Administration, U.S. General Services Administration, Booz

Allen Hamilton and Harvard University, The Value Measuring Methodology, August

2002. 

(http://www.cio.gov/index.cfm?function=documents§ion=capital%20planning)

UK National Audit Office, Government on the Web II, Report by the Comptroller and

Auditor General, April 25, 2002 (http://www.nao.gov.uk/publications/nao_reports/01-

02/0102764.pdf)

UK Online/Annual Report 2002 (www.e-envoy.gov.uk/oee/oee.nsf/sections/reportsannrep-2002-pdf/$file/annualreport02.pdf)

”Working Smarter Takes Work,” Optimize Magazine, January 2003, Issue 15, (www.optimizemag.com/issue/015/gap.htm,)

West, Darrell, Brown University, Assessing E-Government/The Internet, Democracy and

Service Delivery by State and Federal Governments, September 2000,

(www.brown.edu/Departments/Taubman_Center/polreports/egovtreport00.html)

36
Payoff Categories and Benefits Offered by

75 Nominees for 2001 and 2002 IT Recognition Awards

National Association of State Chief Information Officers

A. Summary of 22 NASCIO 2001 Recognition Award Nominees

2001 Project 5 Payoff Categories Benefits

California Financial: Cost savings - Efficiency in purchasing

CAL-Buy Online or cash input - Easier for vendors to do 

Procurement System Constituent Services: business with State

Delivery of services and info - Ultimately $9.7 million annual 

to the users process savings @$37 per 

Reduced Redundancy: purchase order.

Eliminating and integrating 

redundant systems

Connecticut Ethics Constituent Services: - FOIA requests dropped

Commission Online Delivery of services and info from 500 to 50/mo.

Reporting System to the users - $10,000 savings in printing, etc., 

costs in 2000

- Reduced staff-time, paperwork

(cost $200,000)

Idaho Official Web Site Constituent Services: - 3 million hits to home page

accessidaho.org Delivery of services and info - Increased ability to transact 

to the users e- business

Reduced Redundancy: Eliminating - future savings of many

and integrating redundant systems thousands of dollars

(cost to state = 0)

Illinois E-Filing Financial: Cost savings or cash input - $149,500 first year savings

Constituent Services: Delivery of - better customer service

services and info to the users - more efficient operations

Reduced Redundancy: Eliminating - more resources left over to

and integrating redundant systems promote voluntary compliance

(cost = $34,000)

accessIndiana Financial: Cost savings or cash input -$3 million/year in development, 

– Next Generation Portal Constituent Services: Delivery of support, maintenance and mar

services and info to the users keting saved based on publicReduced Redundancy: Eliminating private partnership

and integrating systems redundant - fewer telephone inquiries

systems - better accuracy 

State of Iowa Resource Constituent Services: Delivery of - Consolidates info systems and 

Network – Community services and info to the users alleviates overhead costs

Resource Directory Reduced Redundancy: Eliminating 

and integrating redundant systems

Kansas State Board of Constituent Services: Delivery of - reduced phone calls by +90% in

Nursing Online License services and info to the users 5 years

Renewal - streamlined processes

-self funding with user fees

37

Appendix I
Maine Rapid Renewal Constituent Services: Delivery - time savings

Service of services and info to the users - improved customer service

Reduced Redundancy: Eliminating - transaction fees for private 

and integrating redundant partner

eMaryland Marketplace Financial: Cost savings or - Reduces the cost of purchase 

cash input orders by $100.

Constituent Services: Delivery of - Reduces “maverick” buying 

services and info to the users - Increases state purchasing 

power

Massachusetts Enterprise Financial: Cost savings or Improved:

Portal – Mass.gov cash input - convenience

Constituent Services: Delivery of - customer service

services and info to the users - efficiency

- productivity

$250 million total estimate

(cost $180 m over 5 years)

Missouri iGrants: Financial: Cost savings or Not seen as a revenue generator

Internet Grant cash input - improves productivity

Management Application Constituent Services: Delivery of - improves availability of service

services and info to the users - allows reallocation of resources 

Reduced Redundancy: Eliminating to other projects

and integrating redundant systems

Nevada On Line Corporate Constituent Services: Delivery of - 10-15% increase in corporate

Name Reservation services and info to the users filings with increased fees of

Economic Development: $57,000 in year 1.

Encouraging growth in regional (cost = $500)

economic activity - improved accuracy, turnaround 

time and better info.

- attracts business to the state/

New Jersey Portal: Constituent Services: Delivery of - 2.7 million hits per day

Virtual Gateway to services and info to the users - bring seamless E-Government

Government Services Reduced Redundancy: Eliminating services to NJ citizens

and integrating redundant systems - reusable “build it once” 

components such as PKI, 

e-payment, shopping cart

New York State Constituent Services: Delivery of - Government services are

Government Without services and info to the users easier and more convenient

Walls Initiative Reduced Redundancy: Eliminating to access

and integrating redundant systems - eliminating duplication will

save state money

- almost 600 transactions

and services available online

North Carolina’s Portal: Constituent Services: Delivery of - self-funded e-procurement

NC@YourService services and info to the users model

Economic Development: Encouraging 

growth in regional economic activity

Reduced Redundancy: Eliminating 

and integrating redundant systems

Ohio Dolphin Project Financial: Cost savings or - $122 million annual savings

cash input from process improvements

Workers comp Constituent Services: Delivery of and claims cost reductions

services and info to the users (cost = $15 million)

38
Pennsylvania PA Financial: Cost savings or - “friction-free government”

Open for Business cash input - eliminate redundant systems

Constituent Services: Delivery of through de-fragmenting

services and info to the users

Economic Development: Encouraging 

growth in regional econ activity

Reduced Redundancy: Eliminating 

and integrating redundant systems

Texas System Financial: Cost savings or - Costs to states have been “all 

for Electronic Rate and cash input but eliminated”

Form-Filing (SERFF) Constituent Services: Delivery of - Industry benefits

services and info to the users $150k to $12 m per year for

SERFF filings

Virginia eVA Financial: Cost savings or - Funded through a self-financing

cash input model 

Constituent Services: Delivery of $1 billion annual business

services and info to the users volume

(start-up cost = $300k)

Transact Washington Financial: Cost savings or - Long-term savings from

cash input consolidated infrastructure and

Constituent Services: Delivery of eliminating duplication

services and info to the users - Reduced operating costs from

Reduced Redundancy: Eliminating more efficient processes

and integrating redundant systems - convenience for businesses 

and citizens

West Virginia Financial: Cost savings or - reduced staff by 2.5 positions

Service at the cash input - $4,000 savings

Speed of Technology Constituent Services: Delivery of - shared infrastructure

services and info to the users

Wisconsin.Gov Constituent Services: Delivery of - more convenient ways to access

services and info to the users state and local government 

services

39
B. Review of 53 NASCIO 2002 Recognition Award Nominees

2002 Project 5 Payoff Categories Benefits

Colorado Constituent Services: Delivery of - Reduced mailing costs

Integrated Criminal Justice services and info to the public - Improved accuracy of info

Information System Reduced Redundancy: Eliminating - Improved timeliness

and integrating redundant systems - Reduced data entry redundancy

- Reduced paper processing and 

interagency contacts

MyFlorida.com Financial: Cost savings or $2.2 million a year:

cash input - Improved access to online

Constituent Services: Delivery of services reduces operating

services and info to the public cost $700,000 a year

Reduced Redundancy: Eliminating - Improved search engine reduces

and integrating redundant systems call center calls by 1%, for 

$1.5 million savings

Idaho Attorney Constituent Services: Delivery of - Saves printing/ mailing costs

General’s No-Call List services and info to the public of $thousands

Website and Purchase and - initial $420k receipts covers

Registration Applications $180k costs plus 2 years’ 

expenses 

Indiana Department Financial: Cost savings or - $51,000 a year and increasing 

of Revenue I-File cash input annually

Constituent Services: Delivery of 

services and info to the public

Kansas Job Link Financial: Cost savings or - Individuals using job function 

cash input need .75 weeks’ less of

Constituent Services: Delivery of unemployment benefits,

services and info to the public which saves $9 million per year

- Time required to process a claim

reduced 76%

Kentucky IVR Constituent Services: Delivery of - $48,000 per year over 5 years

Deer Harvest Program services and info to the public - Savings of 119 days for

data collection

Massachusetts Financial: Cost savings or - Streamlined licensing

Educator Licensure and cash input cuts 6 months off process

Recruitment Initiative Constituent Services: Delivery of - cuts $1.6 million annual costs

services and info to the public - adds $2.5 million licensing 

WINNER revenue (cost: $2.6 million)

Missouri Internet Financial: Cost savings or - potential savings of 

On-line Claims cash input $61,250 per year

Filing System Constituent Services: Delivery of - redirected 6600 staff hours

services and info to the public toward customer service

Montana Constituent Services: Delivery of - Crime victims’ peace of mind

Criminal Offenders services and info to the public - $54,550 maintenance paid

Network – Online by other state agencies

Services

40
Nevada Employment Constituent Services: Delivery of - System availability 24/7 

Insurance Internet services and info to the public - Data Integrity

Claim System - System Security

New York City Constituent Services: Delivery of Improved sanitation in city 

Restaurant Inspection, services and info to the public restaurants due to availability of 

Recording and information about health code

Reporting System violations

North Carolina’s Portal to Constituent Services: Delivery of The portal improved process for 

Automated Unemployment services and info to the public filing unemployment claims

Insurance Services online and to pay weekly claims

by direct deposit. 

Ohio Department of Financial: Cost savings or Automating fishing/hunting 

Natural Resources cash input licenses supports marketing

Constituent Services: Delivery of program to attract/retain loyal 

services and info to the public customers; $500k in 

(incremental?) licensing revenue

Pennsylvania Constituent Services: Delivery of Empowers people by sending

Department of services and info to the public them customized notifications 

Environmental Protection’s Fostering Democracy: Nurturing of environmental permitting

eNOTICE Service civic practices that support actions so that they can

democratic ideals comment on pending actions.

Costs = $20,000. 

Rhode Island Financial: Cost savings or - $40k ($0 cost)

Online Boat Registration cash input - Less State employee time

Renewal Service Constituent Services: Delivery of needed for data entry,

services and info to the public answering calls, processing

checks, marketing.

South Dakota Financial: Cost savings or - Savings in staff time, postage,

Service Direct cash input storage, check processing.

(Forms Portal) Constituent Services: Delivery of - Customer convenience of

services and info to the public online forms and

pre-populated forms.

Texas State of Texas Constituent Services: Delivery of Saves time and trouble in 

Assistance and Referral services and info to the public predetermining whether 

System individuals are eligible for 

government benefits

Utah Community Constituent Services: Delivery of - Up to date information available

Services Directory services and info to the public to citizens

- Information consolidated and 

easy to access

- Database can be leveraged by 

other state agencies

Virginia VEC Financial: Cost savings or - $6.5 million savings for 

Claim for Benefits cash input claimants in saved travel and 

Constituent Services: Delivery of time;

services and info to the public - $821,786 operational savings

(cost = $250,000)

41
Florida Juvenile Financial: Cost savings or - Eliminates the cost of

Information cash input connecting 443 police 

Justice System Reduced Redundancy: Eliminating departments and sheriffs’ 

and integrating redundant systems offices of $2.1 million/year.

(cost of coding =$211,200) 

Idaho Financial: Cost savings or - $430,000 annual savings in 

Paperless Online cash input personnel

Personnel/Payroll - 20% reduction in personnel

System - $75,000 annual savings

in printing pay stubs

(cost = $1.65 million)

Illinois Wireless Constituent Services: Delivery of - Enhancement of interagency 

Information Network services and info to the public communication

(I-WIN/ALERTS) Reduced Redundancy: Eliminating 

and integrating redundant systems

Indiana State Constituent Services: Delivery of - 35% reduction in personnel

Student Assistance services and info to the public costs in the Grants Division

Commission Suite of - $390,000 received in sale

Services to another state

Missouri E-Grants Constituent Services: Delivery of - 86% reduction in application 

services and info to the public processing time using 35% less

Reduced Redundancy: Eliminating staff

and integrating redundant systems - 360% increase in technical 

support to school districts

(cost = $2.5 m)

Nevada Multi-County Reduced Redundancy: Eliminating - seamless info and services at 

Integrated Justice and integrating redundant systems all levels of government

Information System - reduced paper flow

- reduced errors

New Jersey Reduced Redundancy: Eliminating - reduced backup of State 

Pre-Inmate and integrating redundant systems inmates in county jails which

Management System costs up to $4.7 m. 

- streamlined processes and 

reduced redundancies

New Mexico Constituent Services: Delivery of - Savings from revised

Web-based Instructional services and info to the public processes $236,440/year

Materials System Reduced Redundancy: Eliminating (costs $167,551)

and integrating redundant systems

North Carolina Financial: Cost savings or Savings from avoiding 550

Security Portal cash input computer incidents @ $4k =

Constituent Services: Delivery of $2.2 million 

services and info to the public (cost = $160k)

Pennsylvania Constituent Services: Delivery of - reduced costs

Justice Network services and info to the public - reduced delays

Reduced Redundancy: Eliminating - public safety

and integrating redundant systems - easy to replicate in other states 

and federal agencies

(cost = $18 million)

42
Texas ARP/ATP Constituent Services: Delivery of $21,338 per grant net savings

Online System services and info to the public (includes cost savings at 

colleges)

Virginia Base Mapping Reduced Redundancy: Eliminating $10 million avoided costs for 

Program and integrating redundant systems counties and cities if paid for 

individually

Washington State Constituent Services: Delivery of Total net savings, including

Combined Application services and info to the public outreach and admin = $6.37 m

Program Reduced Redundancy: Eliminating per year (cost = $400k)

and integrating redundant systems

WINNER

West Virginia Reduced Redundancy: Eliminating - data accuracy

Data Integration for and integrating redundant systems - personnel time savings

Effective Reporting 

and Efficient Fiscal 

Management

Colorado Financial: Cost savings Annual savings:

Secretary of State or cash input - $2 million ($169.5/ month) for

Business Center Constituent Services: Delivery of businesses on UCC filings

services and info to the public and documents

- $372,000 State savings on

UCC filings, certificates

($31k/month)

District of Columbia Financial: Cost savings or $1.8 million a year savings from

Business Resource cash input reduced customer service 

Center Constituent Services: Delivery of positions. (cost- $1 million)

services and info to the public

WINNER

Florida Business and Constituent Services: Delivery of - annual admin cost savings of

Professional Regulation services and info to the public $40,000 per FTE from customer

Single Licensing Project Reduced Redundancy: Eliminating contact center consolidation;

and integrating redundant systems reduced data entry; and other 

personal services

Idaho Constituent Services: Delivery of - $7,000 per year

Small Business Solutions services and info to the public - fosters 15-30 new businesses

Reduced Redundancy: Eliminating - adds 15-90 jobs

and integrating redundant systems (cost = $120k)

Illinois E-Batch Constituent Services: Delivery of - reduced paperwork backlog

License Renewal services and info to the public - user-friendly and timely

Reduced Redundancy: Eliminating services to professionals

and integrating redundant systems (cost = $12,500)

Indiana Uniform Constituent Services: Delivery of - time savings with 24/7 access

Commercial Code services and info to the public - $30,000 salary unnecessary

Services: Filings and - accuracy

Searches

43
Iowa Single Constituent Services: Delivery of Total -$264k/year:

Contact Repository services and info to the public - savings to employers doing

background checks @$100 =

$132,000/year

- savings to state government =

$132,000/year

(cost = $277,000)

Kansas Online UCC Constituent Services: Delivery of Savings for Sec of State Office 

Filing System services and info to the public @$.71 per filing = $710,000/year

Reduced Redundancy: Eliminating Other benefits are in time saved,

and integrating redundant systems convenience, reduced payment 

processing and greater accuracy.

Kentucky Financial: Cost savings or - timely and cost-efficient info

The Extranet: cash input updates for travelers to 

Business Friendly Economic Development: Kentucky

Control Encouraging growth in regional - $4.9 million/year state tax

economic activity revenue from website visitors

(cost = $138,333/year)

Massachusetts Financial: Cost savings - reduces costs of mailing and

Webfile for Employers or cash input forms printing, data entry and

Constituent Services: Delivery of data processing

services and info to the public - reduces reporting burden

on employers

Montana Business Financial: Cost savings or Public/private alliance that

Entity Search – Online cash input developed and maintained

Service Constituent Services: Delivery of program saved taxpayers $60k

services and info to the public in 3 months.

Nebraska’s UIConnect Financial: Cost savings or $424,164 in Yr 1:

cash input - $361,624 for employers in tax

Constituent Services: Delivery of calculation, report preparation,

services and info to the public bookkeeper time 

- $62,540 for government in data 

entry, wage reporting, payment 

processing

North Carolina Financial: Cost savings or By allowing online renewals,

International cash input registrations and fee payments,

Registration Plan Constituent Services: Delivery of offers savings in:

services and info to the public - agency time

- admin burden

- motor carrier operating time 

and costs

Ohio Business Gateway Financial: Cost savings or Reduction of:

cash input - time, data redundancy, errors

Constituent Services: Delivery of in complying with tax laws

services and info to the public - data entry

- paperwork

Pennsylvania Constituent Services: Delivery of - Reduced lag time in business

Open for Business services and info to the public registrations

Interactive Registration - Average $500 professional

Portal services charge per business

- Available for use by other states

44
Texas Electronic Financial: Cost savings or - Savings of $300,000 a year

Reporting System for cash input - Reduction of FTEs from 27-20

Reporting and Payment Constituent Services: Delivery of - Mail processing, data entry,

of Oil and Gas Royalties services and info to the public error correction, time and 

rework reduced by >70%.

Utah Impound Financial: Cost savings or Reduced cost of:

Vehicle System cash input - data entry staff

Constituent Services: Delivery of - decertifying tow companies

services and info to the public - locating vehicles

Citizens get real-time info on 

their vehicles

Virginia WebCat: Financial: Cost savings or - Service 24/7

A Virginia DMV Extranet cash input - Transactions at half the cost of 

Application for Constituent Services: Delivery of manual

Motor Carriers services and info to the public - reduced paperwork and 

in-person visits

- reduced time requirements

Washington Online Financial: Cost savings or Annual savings:

Uniform Commercial Code cash input - $323k salaries

Filings and Searches Constituent Services: Delivery of - $154k data processing

services and info to the public - $36k microfilm processing

(cost=$1.05m)

Wisconsin Worker’s Financial: Cost savings or Annual cost savings of $1.5

Compensation Insurers’ cash input million @ $10 for each piece of

Internet Reporting Constituent Services: Delivery of paper saved by all parties

System services and info to the public (costs = $275k startup + $25k/yr)

45
Summary of E-Gov Measurement Systems

1. The Anexys Primer on Measuring ROI in E-Government, by Anexys LLC, 

Indiana University School of Public and Environmental Affairs, and 

META-Group (August 2001)

• Early adopters of new valuation methods will test models that move beyond the

traditional ROI measurements. By 2004-2005, such efforts will drive widespread

adoption of comprehensive valuation models in large jurisdictions. 

• In today’s legislative climate, it’s likely that government agencies will be

increasingly required to conduct ongoing ROI studies. Agencies that fail to

measure ROI of E-Government initiatives may face difficulties in receiving both

initial and ongoing funding.

• ROI Valuation is critical to E-Government success because the cost of failure is

too high, because E-Government initiatives:

•• come with substantial expense

•• can have very long durations

•• are infrequent occurrences

•• and have limited irreversibility.

• While most E-Government initiatives are established to reflect the policy direction of the agency, such as citizen convenience, economic development, tourism

or creation of an educated work force, the most common themes are:

•• Increasing the competitive advantage of the agency over other agencies

within the same jurisdiction

•• Creating greater citizen satisfaction

•• Economic development or reduction of transaction costs by providing 

online services.

• Carol Kelly of META-Group suggests jurisdictions should: 

•• Determine components based on public policy makers’ articulated agenda,

e.g., decentralization, flexibility and personalization

•• Develop explicit analysis criteria for each scorecard component (balanced

scorecard method)

•• Determine measurement points for data collection

•• Map known existing relations/approval processes

•• Develop methods to quantify intangible benefits

•• Ensure that overall valuation model measures stated policy requirements

• Anexys suggests four possible valuation methods:

1. Net present Value to measure dollar return on projects

2. Benefit Cost Analysis to calculate project costs relative to benefits 

(tangible and intangible) affecting diverse groups.

3. Cost Effectiveness Analysis to quantify tangible and intangible benefits for

specific, standardized populations.

4. Portfolio Analysis to quantify aggregate risk relative to expect6ed returns of

an entire portfolio of initiatives.

46

Appendix II
ROI Valuation Methodologies for E-Government

FromThe Anexys Primer on Measuring ROI in E-Government, 2001

By Anexys, LLC Indiana University-Bloomington

Institute for Development Studies META Group, Inc.

Method Net Present Benefit Cost Cost Effectiveness Portfolio 

Value Analysis Analysis Analysis

What it does Measures dollar Calculates project Quantifies tangible Quantifies aggregate

return on projects costs relative to and intangible risk relative to expected 

benefits (tangible and benefits for specific returns of an entire

intangible) affecting standardized portfolio of initiatives.

diverse groups populations

Formula Present Value of Net Total Benefit/Net Total Cost/Total- Return of 

Net Cash Flow – Total Cost Output Investment/Risk

Net Investment of Investment

When to use When cash flows When cash flows When cash flows When valuating an

are private and are social and are private and agency’s total risk.

benefits tangible benefits are both benefits are both Cash flows can be

tangible and tangible and social or private and 

intangible intangible benefits can be tangible 

or intangible but must 

be consistent across 

the portfolio.

Basic For independent If ratio is >1, there If ratio is >1, there If ratio is >1, it means 

decision rule projects with NPV is a positive ROI is a positive ROI there is more return

greater than $0, and the project and the project relative to risk and

the project should should be accepted. should be accepted. the portfolio is within

be accepted If ratio is <1, there If ratio is <1, there tolerable risk levels.

is a negative return. is a negative return. If the ratio is <1, it 

means risk is higher 

relative to return and 

the portfolio exceeds 

tolerable risk.

Advantages Straightforward Flexible. Allows Useful at analyzing Good for risk-adverse 

additional intangible incremental benefits, decision-makers who

benefits to be in terms of achieving may not want to attempt

included. specific goals, in multiple high-stakes,

relation to marginal high-risk projects

costs. simultaneously.

Disadvantages Limited to Can be expensive, Technique not directly Complex, but could

internal capital time-consuming. related to the outcome; possibly be the most

investments. Challenging to agree measurement is accurate in terms of

Does not allow on values of limited to the strategic management.

for intangible intangible costs. cost-effectiveness,

benefits. not outcomes.

47
2. Creating a Performance-Based Electronic Government, a report issued 

October 30, 2002, by The Performance Institute, et al.

Key themes:

1. The administration and OMB are to be commended for their strong leadership

of E-Gov initiatives, though some improvements are needed.

2. Federal agencies generally fail to use mission-aligned IT performance measures to justify, manage and evaluate the success of E-Government.

3. Agencies need to become more creative and willing to “blow up” old program

structures with technology.

4. Non-governmental intermediaries are providing greater opportunities to borrow

rather than build an E-Government solutions

5. E-Government is increasingly focusing on the citizen again, but not all EGovernment initiatives are “citizen-centered.”

6. CIOs are assuming an appropriate role of “enabler” of agency business

processes and are more integrated with the rest of the agency’s leadership.

7. More program managers are playing leadership roles in E-Government, but

more needs to be done to engage all program managers in E-Government leadership roles.

8. Excellent cross-agency coordination is seen in the priority E-Government initiatives, but stove-piped systems and processes remain an obstacle to an integrated E-Government.

9. The federal enterprise architecture is recognized as the necessary, scaffolding

for all agency E-Gov initiatives.

10. Establishing clear priorities is paying off in generating attention to and sufficient funding for key E-Gov initiatives.

3. Technology in Government: Riding the Waves of Change, Accenture 

Institute for Strategic Change, 2002

Accenture interviewed 70 political leaders and top government executives from a

range of government agencies in 10 countries. 

Public officials interviewed agreed on five broad areas that are priorities for improvement in government:

1. Differentiate services to create more constituent-centric government

2. Share assets and solutions across organizations and levels of government

3. Establish new funding mechanisms and incentives to achieve cross-departmental goals

4. Improve services by taking a consolidated view of constituents’ information

5. Foster prosperity by developing a robust national technology infrastructure.

48
Public officials’ efforts to date in these five areas have begun to pay off in improved

management practices and greater efficiency. But they have not gone far enough.

Accenture foresees 3 dramatic changes enabled by emerging technology waves that

democratic governments should pursue now:

1. Establishing dynamic connections...between governments and their constituents to enable intelligent interactions....The primary characteristics

include a single, integrated face for government interactions; a practical set of

channel choices, two-way flows of meaningful information, convenient services

that are embedded in everyday activities; and an agile network of intermediaries for service delivery.

2. Embracing policy speed to market, or radically accelerating the processes of

policy formulation and implementation in order to improve outcomes.

3. Engaging constituents as integral stakeholders in the everyday activities of

government. Using new processes and powerful tools, citizens and businesses

will leave behind the traditional arms length relationship with governments to

embark on a closer collaboration....And constituents will take responsibility for

paying for the services and resources they use. 

4. Value Measuring Methodology: Capturing, Measuring and Evaluating the 

Value of IT Investments, U.S. Social Security Administration/U.S. General 

Services Administration

VMM is a toolkit for capturing, measuring and evaluating the value of E-Government IT

investments. It provides the structure, tools and techniques for a comprehensive

analysis and comparison of value (benefits), cost and risk. Outcomes include:

• Measures that are used to define success, identify and analyze alternatives,

address values, and support desired outcomes.

• Documentation that provides an audit trail of decision-making and assumptions regarding priorities, value, risk and cost.

• Comparison of alternatives and relationships between value and investment

cost.

• Analysis that must be summarized in the preparation of budget justification

documents such as OMB Exhibit 300.

VMM provides a foundation for decision-making and management of an initiative. 

The methodology has the approval of the CIO Council Best Practices Committee.

49
Benefits Cited in

State E-Gov Programs Nominated for NASCIO Digital Government Awards

Workers Compensation

State Workers’ Benefits

Compensation Project

Ohio Bureau of The Dolphin Project Over $120 million annual savings

Workers’ Compensation (www.ohiobwc.com) provides to BWC on a $15 million

(BWC) a window into the state’s workers’ investment.

compensation system through Short-term returns to BWC:

24/7 account access and - Early intervention reduces time

electronic request and receipt to report a claim from 25 to 7

of services. days; lowers claims costs 

by $113.4 million a year

- Demographic information 

updates shift costs to 

customers of $500,000 a year

- Processing electronic forms vs. 

paper saves $800,000 to $4 

million a year

- Overhead cost reductions 

associated with public data 

record requests and status 

inquiries total $7.3 million 

a year.

In addition, shorter medical bill 

payment cycle benefits providers.

Wisconsin Worker’s The Insurers’ Pending Reports $1.5 million estimated annual 

Compensation Insurers’ System is a claims management savings to State, industry and 

Web Reports tool for insurers and claims workers from eliminating 500,000

administrators to get real-time pieces of paper, vs. $275,000

access to the status of workers start-up and $25,000 annual

compensation claims. operating costs. 

Eliminates:

- almost 100,000 forms each year

- 250,000-300,000 State mailings 

a year

- 20,000 annual hours of staff time

for private insurance claims 

adjusters and State staff.

50

Appendix III
Unemployment Compensation

State Unemployment Benefits

Insurance Project

Kansas Job Link The Tax, Appeals and Benefits - Processing time for 

Self-Service (TABS) System unemployment claims dropped

was initiated by the Kansas 76% from 47 minutes per claim

Department of Human Resources to 11 minutes per claim.

to improve, reengineer, redesign - By integrating the 

and restructure the entire unemployment claims and job 

unemployment insurance search applications in a single

infrastructure. It allows unemployed Web application, the system

workers the ability to file helps claimants become

Unemployment insurance claims employed sooner than they

and link directly to job opportunities would have. Therefore, they

at www.kansasjoblink.com receive, on average,

several days less in

unemployment benefits. This 

saves the State trust fund 

nearly $9 million a year.

Missouri Department The Missouri On-line Internet - Saves over $28,000 in toll-free

of Labor and Claims Filing System developed telephone costs

Industrial Relations by the Office of Information - Reduces staff hours by 6,600

Systems and Employment Security, - Available 24/7, not just during

permits automated unemployment business hours

claims processing and links to the - Allows claimants to file

State’s on-line employment search in privacy.

engine.

Nevada Department of The Unemployment Insurance The State’s return on investment

Employment, Training Internet Claims System is linked to is defined as ”the seamless

and Rehabilitation the State’s job search functions. delivery of services at the

It was built on a fast-track basis government level around the

when it became clear that the number needs of the citizen. As the

of unemployment claims would usage of the site increases,

exceed capacity to handle them. therefore, increased service is 

provided to the citizen.”

51
North Carolina The North Carolina Portal to Savings of $1.8 million a year on

Employment Security Automated Unemployment the investment of $480,000 in

Commission Insurance Services delivers federal grant funds. This 

workforce services to North includes:

Carolina’s workers through real - Close to an estimated $950,000

time, Internet-based unemployment a year in unneeded staff 

insurance benefit claims and time to answer calls and

access to the State’s job listings. process claims, based on: 

- $71,200/month for in-person help

- $8,300/month for phone 

assistance.

- Direct deposit of unemployment 

checks saves over $850,000 a 

year on checks, envelopes and 

postage.

“As current programs are 

improved and new ones are 

added, ESC expects more and 

more return on its investment, 

both in the financial sense and in 

its emotional investment to fulfill 

its mission statement by 

providing the best customer

service possible...”

Virginia Employment The Virginia Employment VEC estimates the Claim for

Commission (VEC) Commission Claim for Benefits Benefits system will save $7.27

system was developed to reduce million over its 3 year lifetime,

traffic by initial claimants into vs. a $250,000 investment from

VEC’s local field offices and a U.S. Labor Department grant:

eliminate keying of unemployment - $6.45 million in travel hours

insurance information by VEC in driving time for claimants

personnel. who filed online rather than

appearing in person at a field 

office.

- $822,000 in operational time 

savings for field office 

personnel who won’t have to 

process claims filed in person.

52
Government-to-Business Programs

State Business Project Benefits

Connecticut Ethics Commission Online - FOIA requests dropped by 90%

Reporting System to 50/month

- savings in printing costs

- reduced staff time and 

paperwork

District of Columbia Business Resource Center - $1.8 million a year from 

eliminating customer service 

jobs

Illinois e-Filing e-Filing - $149,500 year 1 savings

- better customer service

- more efficient operations

Massachusetts Webfile for Employers - reduces mailing, printing and 

data entry costs

- reduces reporting burden on 

employers

Nebraska UIConnect UIConnect Savings in year one

- $361,624 for employers in tax 

calculation, report preparation, 

bookkeeper time

- $62,540 for the government in 

data entry, wage reporting, 

payment processing

Ohio Business Gateway Business Gateway Reduced time, data redundancy, 

errors, data entry, paperwork

Texas System for System for Electronic Rate Savings of $300,000 a year

Electronic Rate and and Form Filing - reduction of 7 FTE

Form Filing (SERFF) - reduced mail processing, data

entry, error correction, time and 

rework by 70%

53
Online Acquisition Systems

State Online Acquisition System Benefits

California CAL-Buy Online Process savings of $37 per 

purchase order. Ultimately $9.7 

million annual process savings.

Maryland EMaryland Marketplace Savings of $100 per purchase 

order.

- Reduces “maverick” buying

- Increases state purchasing 

power

New Mexico Web-based Instructional Savings from revised processes 

Materials System $236,440/year. (Costs $167,551)

North Carolina NorthCarolina@YourService Self-funding

Virginia EVA Start up costs of $300,000 plus 

time of 10 managers and 4 staff.

Self-financing system: AMS 

doesn’t get paid until system is 

used.

54
Online Licensing

State Online Licensing Benefits

Florida Business and Professional Annual administrative cost

Regulation Single Licensing Project savings of $40,000 per FTE; for 

savings of 9 FTE, $360,000 annual 

savings.

Illinois E-Batch License Renewal Reduced paperwork backlog

User-friendly and timely services

Kansas State Board of Nursing Online Reduced phone calls by >90%

License Renewal

Maine Rapid Renewal Service Time savings for citizens and 

state employees

Massachusetts Educator Licensure and Eliminates:

Recruitment Initiative - 6 months processing time

- $1.6 million annual costs

- Increases licensing revenue by 

$2.5 million.

(Cost = $2.6 million)

North Carolina International Registration Plan Savings in:

- agency time

- administrative burden

- motor carrier operating 

time/costs

Rhode Island Online Boat Registration - $40,000 (cf. no cost)

Renewal Service - Reduces employee time for data 

entry, answering calls, 

processing checks, marketing

Virginia WebCat: A Virginia DMV Extranet - Transactions at ? cost of manual

Application for Motor Carriers reduced paperwork and inperson visits

- reduced time requirements

55
Law Enforcement Information Systems

State Law Enforcement Project Benefits

Colorado Integrated Criminal Justice - Reduced mailing costs, paper 

Information System processing and interagency 

contacts

- Improved accuracy of info

- Improved timeliness

Florida Juvenile Justice Information - Eliminates the $2.1 million 

annual cost of connecting 443 

police and sheriff’s offices and 

$211,000 cost of coding

Illinois Wireless Information Network - Enhancement of interagency 

(I-WIN/ALERTS) communication

Montana Criminal Offenders - Crime victims’ peace of mind

Network—Online Services - $55,000 maintenance paid by

other agencies

Nevada Multi-county Integrated Justice - Seamless information and

Information System services at all levels of 

government

- Reduced paper flow

- Fewer errors

New Jersey Pre-Inmate Management System - Reduced backup of State 

inmates in county jails which 

costs up to $4.7 million

- Streamlined processes and 

reduced redundancies

Pennsylvania Justice Network - Reduced costs

- Reduced delays

- Public safety

- Easy to replicate

Total cost $18 million.

56
Grants Management Programs

State Grants Management Benefits

Program

Indiana State Student Assistance - Reduced staff costs by 35%

Commission - Sold backend system to another 

state for $390,000

- Streamlined processes

- Improved communications

Missouri eGrants - Reduced application processing 

time by 86%

- Reduced staff by 35%

- Eliminated 17 forms

- Consolidated Federal grant 

programs

Missouri iGrants: Internet Grant - Reduced staff required for grant

Management Application processing by 31

- Improves service availability

from 18.5% of resources 

to 44.4%

- Shortened elapsed days for 

application from 65 days to 

5 days

Texas ARP/ATP Online System - Increased grant proposals 

processed from 2,900 to 9,000

with no extra staff.

- Eliminated 6 temporary staff

- Saved $21,338 per grant cycle

West Virginia Service at the Speed of Technology - Reduced staff needed to 

disburse funds by 1.5 FTE 

and 1 contractor

- Saved $40,000

57
OMB A-11 Section 300 Scoring Criteria

Note: OMB has renamed its required “Exhibit 300” as “Capital Asset Plan and Business Case.”

300.10 How will OMB evaluate the business cases in the exhibits 300?

All business cases are scored against a core set of criteria and the results are provided to the agency via the budget pass-back process. While one size scoring does not fit

all categories, this scoring is meant to ensure that agency planning and management

of assets is consistent with OMB policy and guidance. For projects other than IT, the

IT specific categories are awarded full points as they are not applicable. The scoring of

a business case is two-fold. The business case is scored based upon the criteria listed

below and then a programmatic review is done for the project. A business case may

be the strongest possible based upon the criteria listed here and if the program is

deemed ineffective and changes are being made, then there is no need for the investment represented by the business case scoring. Business case scoring is as follows:

Business Case (BC) (composite of all categories) 

Total Score for Business Case 

Projects scoring 5 and meeting program requirements are automatically recommended

for funding. Projects scoring a 4 and meeting program requirements, and meeting most

of the business case requirements are recommended for funding and the agency is

instructed to continue improvements in the areas identified as needing work. Projects

scoring 3 or below have the opportunity to improve to a 4 or degrade to a 2 rather easily. Projects scoring a 2 or below are not recommended for funding.

Score: Category/Total Definition

5 41-50 Strong documented business case 

(including all sections as appropriate).

4 31-40 Very few weak points within the BC but still needs strengthening. 

3 21-30 Much work remains to solidify and quantify BC. BC has the

opportunity to either improve or degrade very quickly. 

2 11-20 Significant gaps in the required categories of the BC.

1 1-10 Inadequate in every category of the required BC.

Supports the President’s Management Agenda Items (AI) (Multiple Sections)

5 This is a collaborative project that includes multiple agencies, state, local, or

tribal governments, uses e-business technologies and the project is governed

by citizen needs. Project also supports the Federal Business Architecture published by OMB. If project is a steady state project, then an E-Gov strategy

review is underway and includes all of the necessary elements. If appropriate,

this project is fully aligned with one or more of the President’s E-Gov initiatives. 

58

Appendix IV
4 This is a collaborative project that includes multiple agencies, state, local, or

tribal governments, uses e-business technologies though work remains to solidify these relationships. Project also supports the Federal Business Architecture published by OMB though work remains to solidify the linkage. If project is

a steady state project, then an E-Gov strategy review is underway but needs

work in order to strengthen the analysis. If appropriate, project supports one or

more of the President’s E-Gov initiatives but is not yet fully aligned. 

3 This is not a collaborative project though it could be and much work remains to

strengthen the ties to the President’s Management Agenda. If a steady state

project and no E-Gov strategy is evident, this project will have a difficult time

securing continued or new funding from OMB. If appropriate, this project supports one or more of the President’s E-Gov initiatives but alignment is not

demonstrated. 

2 This is not a collaborative project and it is difficult to ascertain support for the

AI. If steady state project, no E-Gov strategy was performed or is planned. 

1 There does not seem to be any link to the AI and no E-Gov strategy. 

Acquisition Strategy (AS) (Part I, Section I.G)

5 Strong Acquisition Strategy that mitigates risk to the Federal Government,

accommodates Section 508 as needed, and contracts and statements of work

(SOWs) are performance based. Implementation of the Acquisition Strategy is

clearly defined. 

4 Contracts and SOWs are performance based with very few weak points that

agency is strengthening and implementation of the AS is clearly defined.

3 Much work remains to solidify and quantify the AS.

2 Some parts of the AS are present but no clear implementation strategy.

1 There is no evidence of an AS.

Program Management (PM) (Part I, Sections I.D and I.H)

5 Program is very strong and has resources in place to manage it.

4 Program has some weak points in the area of PM and agency is working to

strengthen PM.

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3 Much work remains in order for PM to manage the risks for this project.

2 There is some understanding of PM for this project but it is very rudimentary.

1 There is no evidence of PM. 

Enterprise Architecture (EA) (Part II, Section II.A) for IT Only. 

5 This project is included in the Agency EA and CPIC process. BC demonstrates

business, data, and application, and technology layers of the EA in relationship

to this project. 

4 This project is included in the Agency EA and CPIC process. BC demonstrates

weaknesses in the business, data, application, and technology layers of the EA

in relationship to this project.

3 This project is not included in the Agency EA and CPIC process. BC demonstrates a lack of understanding on the layers of the EA (business, data, application, and technology). 

2 While the agency has an EA Framework, it is not implemented in the agency and

does not include this project. 

1 There is no evidence of a comprehensive EA in the agency. 

Alternatives Analysis (AA) (Part I, Section I.E)

5 AA includes three viable alternatives, alternatives were compared consistently,

and alternative chosen provides benefits and reasons.

4 AA includes three viable alternatives, however work needs to continue in terms

of the alternative chosen and the accompanying analysis.

3 AA includes fewer than three alternatives and overall analysis needs strengthening.

2 AA includes weak AA information overall, significant weaknesses exist.

1 There is no evidence that an AA was performed. 

Risk Management (RM) (Part I, Section I.F)

5 Risk Assessment was performed for all mandatory elements and risk is managed throughout the project.

60
4 Risk assessment addresses some of the Risk, but not all that should be

addressed for this project.

3 Risk Management is very weak and does not seem to address or manage most

of the risk associated with the project.

2 Risk Assessment was performed at the outset of the project but does not seem

to be part of the program management.

1 There is no evidence of a Risk Assessment Plan or Strategy.

Performance Goals (PG) (Part I, Section I.C)

5 Performance Goals are provided for the agency, are linked to the annual performance plan, the project discusses the agency mission and strategic goals,

and performance measures are provided. 

4 Performance Goals are provided for the agency, are linked to the annual performance plan, the project discusses the agency mission and strategic goals,

and performance measures are provided yet work remains to strengthen the PG. 

3 Performance Goals exist but linkage to the agency mission and strategic goals

is weak. 

2 Performance Goals are in their initial stages and are not appropriate for the type

of project. Much work remains to strengthen the PG. 

1 There is no evidence of PG for this project.

Security and Privacy (SE) (Part II, Section II.B)

5 Security and privacy issues for the project and all questions are answered,

detail is provided about the individual project throughout the life-cycle to

include budgeting for SE.

4 Security and privacy information for the project is provided but there are weaknesses in the information that need to be corrected.

3 Security and privacy information for the project is provided but fails to answer

the minimum requirements. 

2 Security and privacy information points to an overall Agency Security Process

with little to detail at this project level.

1 There is no security or privacy information provided for the project.

61
Performance Based Management System (PB) (Part I, Section I.H)

5 Agency will use, or uses an Earned Value Management System (EVMS) that

meets ANSI/EIA Standard 748 and project is earning the value as planned for

costs, schedule, and performance goals. 

4 Agency uses the required EVMS, is within the variance levels for two of the

three criteria, and needs work on the third issue.

3 Agency uses required EVMS but the process within the agency is very new and

not fully implemented or there are weaknesses for this individual project’s

EVMS information.

2 Agency seems to re-baseline rather than report variances.

1 There is no evidence of PB. 

Life-Cycle Costs Formulation (LC) (Multiple Sections)

5 Life-cycle costs seems to reflect formulation that includes all of the required

resources and is risk adjusted to accommodate items addressed in the RM. It

appears that the project is planned well enough to come in on budget.

4 Life-cycle costs seem to reflect formulation of some of the resources and some

of the issues as included in the risk adjustment strategy but work remains in

order to ensure that LC costs are accurately portrayed. 

3 Life-cycle costs seem to reflect formulation of the resources but are not risk

adjusted based upon the risk management plan. 

2 Life-cycle costs seem to include some of the resource criteria and are not risk

adjusted.

1 Life-cycle costs do not seem to reflect a planned formulation process.

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63

Scoring Element Score

Business Case (BC) Total

Supports the President’s Management Agenda Items (IA)

Acquisition Strategy (AS)

Program Management (PM)

Enterprise Architecture (EA)

Alternatives Analysis (AA)

Risk Management (RM)

Performance Goals (PG)

Security (SE)

Performance Based Management System (PB)

Life Cycle Costs Formulation (LC)

TOTAL SCORE