Challenges Galore

As a buzzword, "e-government" has been bandied about as a solution to many of government's most pressing problems. But for all of its possibilities, the use of the Internet as a path for government-to-citizen services has not been emphasized as much as one might expect by federal agencies.

"For a number of reasons, the federal government has really been focusing its time and money first on internal processes and then business-to-government connections," said Larry Bradley, federal e-business solutions manager for IBM Corp. "Now I think they're finally starting to really look at providing more [World Wide] Web-based government-to-citizen transactions."

With that opportunity finally opening up, it's not surprising that the private sector stands ready to offer help. Several dot-com companies, all specializing in facilitating direct government-to-citizen services, have arrived on the scene.

Those firms, such as Inc., GovConnect Inc., govWorks Inc., NIC Commerce and Carta Inc. have developed install-and-go software programs designed specifically for public-sector transactions. They can also lift a lot of the burden on agencies by hosting applications and providing integration and re-engineering aid.

"There are a lot of liabilities and difficulties in doing transactions over the Web, and I think there really is a lot of appeal to having a middle tier to take on that responsibility," said Rich Kellett, director of the Emerging IT Policies Division of the General Services Administration's Office of Information Technology.

During the past couple of years, the dot-coms have cut their teeth on state and local projects. For example, GovConnect (formerly known as Renaissance Government Solutions) developed solutions for 34 states that allow citizens to pay state taxes and child support and apply for unemployment benefits online. offers its state and local customers packaged solutions such as ezProperty, which allows citizens to review property records and pay property taxes online using a credit card or bank draft. It also offers ezTicket, which collects penalties for parking and speeding tickets. Link2Gov applications let citizens renew driver's licenses and tag registrations or update professional banking and real estate licenses online.

To crack the federal market, companies recently started to team up with IT firms already established in the government market., for example, recently partnered with IBM; GovWorks has an agreement with American Management Systems Inc.; and Carta Inc. is working with Microsoft Corp. The reasoning? Federal e-government applications are much more complex and require more integration and scalability than the relatively simple tag renewal and ticket payment systems used by state and local governments.

"Federal agencies oftentimes have pretty good or very good information and content presentation activities already under way online," said Kaleil Isaza Tuzman, chairman and chief executive officer of GovWorks. "Our model is to be a kind of an 'Intel inside' of electronic government, to be the application service provider on the back-end that's making the transaction more effective and buttressing the information presentation component. So really, it's less front-end Web site development and more of the engine inside that makes their existing Web site more powerful."

Indeed, the promise of more effectiveness for less money and effort is taking hold in the federal government, with several agencies exploring the option of hiring a third party to develop and host e-government applications.

The Federal Election Commission, for example, asked NIC Commerce to help it with an application that enables citizens to search for information about the source and amount of individual campaign contributions. And the Census Bureau will begin to research potential partners to help it put reams of Census 2000 data online for citizen queries and perusal.

"The truth is, we have huge requirements to get this data out to the public, and we just don't have enough time, hardware and expertise to do it," said Enrique Gomez, program manager for the Census Bureau's Data Analysis and Dissemination System. "By going to an outside source and partnering with them, we're able to deliver our data to the public in the most cost-effective way and reach more people in the same amount of time."

There are plenty of tangible benefits for federal agencies that partner with those specialized firms, not the least of which is the ability to leverage existing resources and reap enough efficiencies to make e-government financially rewarding. Agencies can redirect personnel and budgets to other important tasks. With outside help, agencies can get up and running much faster; some firms estimate that even with complex integration to back-end systems and databases, they can bring a site online in a matter of months.

Having a dedicated provider handle the technical work can provide other advantages, too. "The biggest benefit is that federal agencies get the opportunity to scale," said Christopher Baum, vice president of electronic government for Gartner Group Inc., an IT research firm. "If you've got someone who's doing the same type of service for other agencies, they can afford to build the redundant systems, they can afford to set up the secure lines, they can afford the more powerful servers. You can get four or five times the speed and power while spending a lot less money than you would trying to do it on your own."

Indeed, the pricing structure is a major benefit of using a third-party vendor because there are plenty of options. Agencies strapped for capital can spread the cost of the application development and hosting on a per-transaction basis and either absorb the cost themselves or tack on an extra fee to citizens for the convenience of an online service.

Some companies charge an initial upfront fee for development and then charge by transaction for hosting and processing the application. Carta, which has taken a stand against charging citizens, counts the transactions and charges the fees back to the government at the end of the month. And NIC Commerce actually builds portals and applications for free and then sets up a revenue-sharing agreement with their customers based on long-term transaction volumes.

Agencies also have a great deal of flexibility in choosing how much help to get from outside sources. Although many firms bill themselves as application service providers, most will perform a variety of tasks, which range from simply selling their packaged solutions to providing staff members to work onsite helping IT departments establish e-government sites or actually run the application on the government server.

Challenges Galore

But for all of the benefits to be gained by taking on an e-government partner, federal agencies are justified in their caution. Simple online citizen service forms or financial transactions can be done relatively easily. But more complex applications require significant integration with back-end systems and redesigned business processes. Before such an undertaking, agencies should prepare their infrastructures and employees. Agencies also need to contemplate the sudden increase in traffic that will flow into their networks.

"One thing that's critical is to make sure that you aren't just replacing current procedures with an electronic version of that same procedure," said Jeff Ficke, senior vice president of GovConnect. "You want to not only make the service more convenient, but you want to make it more effective as well."

As with any major IT undertaking, agencies also need to thoroughly investigate their partners and make sure that they can deliver what they promise, especially in the areas of security and privacy.

"Protecting citizen privacy is one of the federal government's biggest priorities," said Rich Phillips, director of communications for NIC Commerce. "There is an enormous difference between e-government and e-business, and that is that e-government requires a certain level of the public trust. So if they're going to partner with the private sector, agencies absolutely have to find a partner that understands that government is different and that it requires a much higher standard of privacy and control."

One way to re-assure agency heads and ensure buy-in is to initially choose a simple application that requires no complex integration and uses only publicly accessible data.

"It's important to get a quick win for the least amount of money to demonstrate the value of a packaged and hosted application," said Jeff Smith, vice president of sales and marketing for Carta. "Then once you've gotten some confidence in your partner and the process, you can build from there."

--Hayes is a freelance writer based in Stuarts Draft, Va. She can be reached at [email protected].


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