1. eGovernment’s New Imperatives Governor Jim Geringer May 29, 2002

2. This Presentation is about… Tight Budgets Big expectations State $ have decreased But Fed $ in high cost areas have increased Don’t forget local government Resource problems that may be only allocation problems

3. eGov: Who really “gets it?” Have we properly defined Digital Gov? Centered mostly on transactions eGov increases productivity, but does it affect service results? Value added services Performance based budgeting Enterprise approach Functional integration Investment model

4. Bringing it on home The New Economy is about productivity and innovation eGov must do likewise to meet citizens expectations about access and quality

5. Great Expectations States and locals are in difficult financial straits Reduced revenues Medicaid costs up 14% this year, 9% next; employee health insurance is up another 30% Increases expected by P-16 Education Public assistance costs could increase with reduced employment Big buildup in Homeland Security

6. Fiscal Outlook for the States Fiscal 2002 enacted budgets were reduced in thirty-nine states by approximately $15 billion— 20 states more than in FY2001

7. -$15B -$6.2B

8. Federal Increases in Education Reading First$ 1.0B Teacher Quality$ 9.0B Accountability$ 0.4B IDEA$ 1.3B Title 1$ 1.8B TOTAL$14.5B Source: www.whitehouse.gov, www.nochildleftbehind.govwww.whitehouse.govwww.nochildleftbehind.gov

9. BioTerrorism $4.3B in Budget Request Much of the focus of the BioTerrorism grants is on building capacity through Public Health, hospitals, labs, surveillance Medicaid and other health services are enhanced as a result

10. Homeland Security $10.6B in FY02, $18.2B in FY03 Some of the Possibles that states might consider to leverage other program benefits –SmartCards: Benefits transfer to clients –Public Safety Networks: First responders, lower costs to local governments –Integrated data bases –Security against cyber terrorism helps all security –GIS (more than maps – Interrelationships)

11. Education Homeland Security Medicaid Increased federal dollars allocated for each of the above exceed the $15B reduction incurred by the states in 2002 More Obligations, Less Money? or is it an allocation problem?

12. What happens to IT Budgets? 50 States, 3200 counties, 19,000 municipalities Could IT be a ready target for % reduction? Is IT integral or an add-on? How do you calculate IT costs? Benefit?

13. Challenge of Change How well informed are government executives on IT issues? CIO’s CEO’s Agency Directors Executive Oversight and Budget Personnel Legislative Bodies 050 100 86% 45% 36% 28% 7% Source: JFK School of Government, Harvard University

14. How Does Digital Government or eGov Mature? Web presence –Passive displays, agency specific Interactive web –Hot links, still mostly gov by agency Transactions on the Web –Highly interactive, prompts, function portals Imbedded technology and Interactive Web –Enterprise interactivity –Service enhancement –Data driven results focused; not just process –Economic and business partnerships

15. Much of Government is Transaction Centered Price of Government Service Transactions Legal & Regulatory Information Seeking & Gathering Inventory Payments Logistics & Procurement Benefits and grants

16. Cost of Teller Transaction $1.50 $0.30 $0.01 1985 (Bank) 1995 (ATM) 2000 (Internet)

17. Length of Time to Execute a Long-Term Gas Contract 9 months 2 weeks < 1 second 2-3 years 1981198919972000

18. eGovernment: Business Transactions Business and tax Forms on line –Downloadable, mail in –Web interactive, real time Electronic Payment –License, permit, registration, taxes, utilities –EFT or credit card Records storage and retrieval Source: Digital States 2001 Progress and Freedom Foundation

19. Social Services Transactions Benefit application forms on-line, preferable web-interactive Client history and contact available through email or web Job Search and application Smart cards for benefit distribution and client history Child support payment and enforcement Source: Digital States 2001

20. Public Safety Transactions Law Enforcement and Corrections Digital wireless statewide network –Interoperable communications Data entry and retrieval –Traffic queries, reports –Crime investigations Tele- –Health –Depositions Source: Digital States 2001

21. Judicial Transactions Integrated data systems with law enforcement, social services Court decisions on line Source: Digital States 2001

22. Legislative and Elections Bill Status, text, amendments, history Election –Requirements –Returns Contacts Source: Digital States 2001

23. Technology Enables Productivity Barter Economy Creation of Money Industrialization, Transportation & Communication Internet & InfoTech 1300’s 1800’s 2000’s Specialization & Firms Integrated, Hierarchical Firm “Virtually Integrated” Firm Or Government Interaction Costs Time

24. Transactions can be reduced or eliminated – that saves $ but Have you added value to the service or only saved $? 24/7 has shifted the responsibility for transactions from government to the client or customer. Value through convenience

25. What Value does your agency add? Value time divided by elapsed time Value time is the amount of productive work time Elapsed time is from the time work starts until the time it’s finished Ideal ratio of VT/ET = 1 In a typical organization, value added is less than five percent Source: (Dr. Michael Hammer to NGA Aug 2001)

26. Reallocating Resources The solution lies in eliminating non-value added work, which only adds costs, errors, delays, and inflexibility. Current employees can be moved to higher skill and value areas Processes can be redesigned or eliminated Embedded Technology is the enabler, data is essential

27. A Technology Solution must deliver value or benefit Technology by itself does NOT deliver benefit Technology enables process transformation which may deliver benefit at lower cost or better quality

28. Understanding IT is as hard as Understanding Performance 26 states resorted to across-the-board cuts to balance their current year budgets Only 10 states chose to make program changes Why aren’t performance budgeting and enterprise management used more effectively? Standard Budget: Resources needed to –Perform the same workor –Deliver the same services

29. Managing for Results Fifteen years later Performance Based Budgeting was widely popular, then pushed into the background when state revenues were flush Agencies now are being asked to justify increases or even to take less money Agencies often don’t know a program’s full cost, how to integrate annual performance plans with budget justifications or even how to measure or evaluate performance

30. Enterprise approach to managing state government Data-driven evaluation of results is essential to performance evaluation but impossible without technology H ow should states apply technology to collect data – real-time and over time ? We are overwhelmed with data. What we need is data that can enable or inform decisions, especially in budgets How will you justify substantial increases without measurement of results?

31. Local Government to Feds, States: No More Mandates Tell us what you want to achieve, not how to do it Give us flexibility, we’ll give you accountability Who sets performance criteria?

32. Mayors, governors, CIO’s, legislators, agency folk all have to understand the value of shared responsibility and functional management Functional areas don’t follow agency boundaries Enterprise management is essential Continuous improvement is a necessity Frequent “reinventing of government” is a sign of poor strategic thinking and a route to mediocrity Dr. Michael Porter, Harvard Business Review

33. Technology is the easy part You have to change an entire culture

34. Who Moved My Cheese? Change Happens –They keep moving my cheese Anticipate Change –Get ready for the cheese to move Monitor Change –Smell the cheese often so you’ll know if it’s getting old Spencer Johnson, M.D.

35. “The best way to predict the future is to create it.” -- Peter Drucker