eGov positives not sold well, Deloitte says
- By Dibya Sarkar
- Sep 29, 2003
Governments do a good job of measuring internal cost savings from information technology investments, but a poor job of conveying e-government's financial benefits to businesses and citizens, according to a new study by Deloitte Consulting.
"E-government can be a very powerful tool for economic development in terms of creating economic competitiveness by reducing compliance costs on businesses and individuals," said William Eggers, global director for Deloitte Research's public sector group. "People, for the most part, don't know that."
For example, Oregon's one-stop shop for building construction approvals, including online permitting and reporting, saves the industry 10 percent in reduced delays and permit processing costs, or $100 million annually.
On the federal level, the Small Business Administration has created a one-stop business compliance Web site to help businesses find, understand and comply with regulations, find information on legal and regulatory changes, access 20,000 links to state and local government sites and complete online transactions like registering for an Employer Identification Number.
The Deloitte report, written by Eggers and called "Citizen Advantage: Enhancing Economic Competitiveness through E-Government," estimates that the SBA site saves businesses about $526 million annually by reducing their time and expenses.
By streamlining processes and Web-enabling rules, regulations and transactions, governments can provide potential businesses and others the tools for finding, understanding and complying with regulations, Eggers said.
Governments can calculate the benefits to businesses and citizens by using the average direct costs of postage, printing, gas and travel, professional fees and personnel time for businesses, and by determining how many of those are eliminated by using e-government applications. Those expenses that are avoided — not to mention indirect costs, such as time saved in complying and company's time to market — could determine savings for businesses as a whole within a municipality, region and state, he said.
Measuring the benefit isn't difficult or costly to do, and numerous federal and state officials "love the concept," Eggers said. While cost-benefit analysis is understood and applied within the transportation and public works sectors, it's a fairly new idea within information technology. "E-government is the infrastructure of the 21st century, just the same way we calculated return on investment for water systems and bridges," he said.
The eyes of city council members, state legislators or congressional representatives might glaze over regarding internal cost benefits from an IT investment, but if they learn a certain e-government application cut compliance costs by 20 percent for businesses, then it's something they can understand and take to their constituents, Eggers said. It becomes a much more effective argument for future IT investments, he said.
However, the business community has been largely AWOL on this concept as well, Eggers said. Deloitte will talk to the U.S. Chamber of Commerce and other industry associations about it in the coming months, he said.
Savings could reach into the billions of dollars by enacting more e-government applications, and calculating those benefits for businesses and individuals, he said. "As Benjamin Franklin once said, 'Time is money,' and it's big money for some of these companies," he said.