Researcher says e-gov funding won't pick up until 2003

Researcher says e-gov funding won't pick up until 2003

By Dennis Blank

Special to GCN

ORLANDO, Fla.'Government agencies should expect that they must increasingly depend on external service providers to offer online services, new research concludes.

Individual agencies are transforming more traditional strategies for information technology into plans for a 'hip-hop IT shop,' said Lorrie Scardino, a research director for GartnerGroup Inc. of Stamford, Conn.

'The rapid pace of change in business models, technology and innovation makes it imperative that government IT organizations begin to operate as e-businesses themselves,' Scardino said at a recent electronic-government symposium.

She told officials from several state and federal agencies not to expect any real gains in e-government until after 2003, when GartnerGroup anticipates a dramatic rise in funding for e-government projects.

GartnerGroup's Dataquest unit has forecast that electronic-business spending in the public sector will reach $3.8 billion by 2003.

Agencies will become brokers of services rather than providers, Scardino said. Once they commit to online services, the public will expect improvement in service levels.

'The cost of changing service providers or dropping service levels will be high, particularly if one includes the political costs,' she said.

In 2001, federal, state and local governments will spend $1.4 billion on 'discrete e-government solutions,' said another GartnerGroup analyst, Rishi Sood. 'At an average growth rate of 34.5 percent, the figure will climb to $6.5 billion by 2005.'

Government-to-government spending will be one of the fastest-growing areas, amounting to more than $2.3 billion by 2005, Sood said.

'Many e-government vendors claim they will provide online functionality at no cost. However, there is no free ride,' Sood said. The leading e-gov providers are AMS Technology Group Corp. of Coral Springs, Fla., and IBM Corp., he said.

Eye on the ball

Andersen Consulting of Chicago, Deloitte Consulting of New York, Science Applications International Corp. of San Diego and Intelisys Electronic Commerce LLP of New York are making gains as external service providers, he said.

French Caldwell, a former Navy officer and now a GartnerGroup researcher, said e-gov plans that lack clear service objectives run a high risk of failure.

By 2003, an estimated 60 percent of all governments will let people carry out 'some form of electronic remote transaction, but e-government failures will overshadow the benefits,' he said. More than half of e-gov projects worldwide will fail to meet acceptable service levels, Caldwell said.

Agencies will also have to think about e-gov strategies and the electronic face they show the public. For instance, do online sites promote a government service rather than an agency name? Caldwell used Singapore's Web site by way of example. It does not list agencies but instead uses questions as service cues, such as 'Where can I find a job?'

GartnerGroup researcher Andrea DiMaio predicted that by 2005, 80 percent of all e-gov plans that are not tightly integrated with a digital society plan will have failed.

Navigating the hurdles will be tough because the blurring of jurisdictional boundaries could threaten tax collections, say, as a result of uneven tax rules, she said.

'Government agencies must prepare to compete for revenues and attract enterprises and transactions to their jurisdictions,' DiMaio said. 'The number of potential conflicts asks for the establishment of cross-jurisdictional, out-of-court settlement systems.'


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