Prove IT >>The Disciplines of HarvestingValue from Public SectorInformation Technology

From the Center for DigitalGovernment Signature Serieswith the support of Hyland Software, NIC, Nokia, and SAP

© 2006 e.Republic, Inc.

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Prove ITThe Disciplines of Harvesting Value from Public Sector Information Technology

“Themightydoorsofchangeswing onthetinyhingesofdiscipline.”

—KenWendle,Co-founder/PastPresident, ITServiceManagementForum(itSMF)USA

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>> Table of Contents

>> InTroDuCTIon: MeaSurIng WHaT MaTTerS 0�

>> reSeTTIng THe ProPoSITIon: goVernMenT aS a SerVICe 06

>> THe HarVeST: FInISHIng WHaT We STarTeD �8

>> THe Menu: THe Full Meal Deal anD a la CarTe CHoICeS For MoVIng ForWarD ��

>> ConCluSIon: THe ProMISe anD PerIlS aHeaD 46

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>> InTroDuCTIon

>> MeaSurIng WHaT MaTTerS

“Existingrolesforevaluatinggovernmental activitiesneedtobeupdatedtoreflectthe ongoingshifttowardadigitaleconomy.”

—JosephE.Stiglitz, NobelPrizeinEconomics,2001

“Proveit!”Thechallengehasalmostuniversalapplicability—asatauntintheschoolyard,animperativeofthescientificmethodinthelaboratoryandthestandardofevidence(beyondareasonabledoubt)inthelawcourts.

“ProveIT!”hasalsobeentheelusiveholygrailininformationtechnology (IT). Witness a body of work that includes over athousandbooksandalmostabillionWebreferencestoinformationtechnologycosts,benefits,valueandreturnoninvestment(ROI).

SearchingforInformationTechnology’sValue WebReferences Books (BySearchTerm) (Google) (amazon.com)

InformationTechnologyCost 935Million 1,491 InformationTechnologyBenefit 339Million 1,448 InformationTechnologyValue 589Million 1,389 InformationTechnologyROI 63Million 279

That the billions of words of explanation and advocacy onthesetopicshavenotresultedinamaturedisciplineofinformaticseconomics suggest that there is something missing from — oreven wrong with — the conventional approach, at least as far asgovernmentisconcerned.U.S.privatesectorinvestmentspendingonIT,afterhavingeclipsedallothertypesofspendingat50.5percentofthe2004total,continuestorise.1Whatseemstohavebeenprovenintheprivatesectorhasbeengreetedwithsuspicionanddelayinthepublicsector.Thisissoevenwhenthereisnotechnical,financial,orphilosophicaldisagreementoverwhatcanandshouldbedonetomakegovernmentworkmoreefficientlyandeffectively.Thefailuretoactinthefaceoftheobviousleadsmanytotheconclusionthatgovernment just does not work any more or cannot adapt to thedigital world fast enough to avoid being bypassed by others whocandogovernment’sworkbetterthangovernmentcan.

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Perhapsreformers,technologists,andtechnocratsplyingtheirtradeingovernmenthavealltalked“pastthesell”or,perhapstheyarespeakingthewronglanguage.Allhavebeenrelyingonwordstodotheworkofmath,which,bydefinition,isthenaturallanguageofdigitaltransformation.Andtheerrormaybeanunavoidablehazardbecause,foralltheinkspilledinthenameofprovingthevalueofinformationtechnologyovermostofthelast50years,therearestillnouniversallyacceptedmetrics forproving IT; that is,measuringthevalueofInformationandthevalueofTechnology.

Theformulaisdeceptivelysimple:

Theproblem,particularlyinthepublicsectorITcommunityistwo-fold:First,governmentdoesnotknowthenumerator(thatis,thecostoftheinvestmentinIT).FormerGov.MarkWarnerofVirginia,atechnologistbyprofession,tellsthestoryofwhenheorderedhisgovernment to tell him what the state spent on technology. Hiswillingandeagerstaffanddepartmentheadsstruggledsomuchtofind theanswer, theexercisewasacatalyst for reforminghowITwasorganizedand funded inVirginia.Orwitness the renewedeffortsofformerMichiganGov.JohnEngler,nowpresidentandCEOof the National Manufacturers Association, to make governmentmoretransparent.Frustratedbythelackofdataduringhistenureinoffice, the technology-friendlyEngler isconvinced thatmakinggovernmentspendingonITvisibleisoneofthegreatestfavorsthatcouldbedoneforelectedofficials.TheLegislature in thestateofIowawouldconcurinthatithadtoordersuchananalysisbedonebytheadministrativebranchandanoutsideconsultantbroughtintotellthestategovernmentwhatitwasspendingonIT.2

The numerator problem is compounded by the secondproblem: there is no agreement on the denominator (that is,the benefits harvested from the IT investment). The promise ofpotential benefits has been exaggerated and oversold by projectproponents. This tendency is perhaps most charitably explainedthrough an observation by Microsoft chairman, Bill Gates, whosaid, “We always overestimate the change that will occur in thenext two years and underestimate the change that will occur inthe next ten.”3 The realities of a political environment suggest amore pragmatic explanation. Elected officials want solutions tointractableproblemsthatfitwithinasingleterminofficeandthatdesirehasbeenheightenedinjurisdictionswithtermlimits.Electedofficials, together with career bureaucrats, would prefer to avoidthreatsratherthanmanagerisks—makingthemuneasywiththe

Cost(Numerator)

Benefit(Denominator)=Value

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difficultworkofmodernizinggovernmentthroughtechnologyandsubjecttostickershockwhentotalcostsaredisclosed.

Tomakemattersworse,fiscalanalystsfordepartments—oftenanxioustodefendbaselinespendingandthelegacyprogramstheymanage—wanttokeeptheexistingbudgets,processes,andstaffinplaceevenasanewsystemisbeingdeployedthatshouldrequiresubstantialbudget,process,andstaffchangeorelimination.Moreover,theydiscountorevendismissso-calledsoftdollarbenefits,includingcost avoidance, service improvements or benefits that accrue topartiesoutsideofgovernment(taxpayers,residents,businessesandcommunityorganizations).Finally,budgetwriterstoooftenclaimandcutthepromisedsavingsbeforetheinvestmentshavebeenmadetoharvestsuchsavings,orevenworse,expectthesavingsoninsuffi-cientinvestmentinthenewsystemandtheactualcostofchangingtheworkers,skillsandculturethatsupportsthelegacysystem.Allofwhichcreatesharddollardisincentivesforpublicentitiestomineoutcostsfromtheirexistingprocesses,ortoevensuggestthattheyaretryingtomineoutthosecosts.

Together,thesetwoproblemsofknowingwhatshouldgointheROI formulahave led—incorrectly—to theperceptionthatdigitaltechnologiesmustaddanadditionalandunaffordablelayerofcosttogovernmentwhilegivingshortshrifttotheexternal(ifstillearly)hopefulindicatorsthatpublicorganizationsarechangingforthebetter.

Inthepagesahead,ProveITarguesthattherealpayoffforthesepublic investments in information technology is in these invest-ments’ disruptive impacts in displacing tired, old burdensomeprocesses—notenablingincrementalimprovementstooldburden-someprocesses.4ImproveITjustdoesnotsetthebarhighenough.ProveITtakessideswiththefutureoverthepast,thecitizenoverthebureaucracy(ifforcedtochoose),withleadinginplaceratherthanbeinggoodenoughforgovernmentwork,andwithfinishingwhattheInternetstartedintransitioning—eventransforming—publicinstitutionsinorderthattheymightberesponsive,responsibleandrelevantinanewcentury.5

ProveITsetsoutthefoundationofanewdisciplinedapproachtorealizingpublicvaluethrough: •An Integrated Future:Preventingthedevelopmentof tomorrow’sstovepipesystemstodaybyeliminating bureaucraticimpedimentstodatasharingthatarebuiltinto technicalsystemsorreinforcedbyperceivedorararereal legalimpedimenttosharing. •Transparency:Creatingandoptimizingpublicvaluebyusing ITtoallowdecisionmakerstoseetheiroperations,systems andinformationacrossagencylines. •Results:Capturingthevalueof: 1.The Possible:Thenewwaysofdoingthepublic’sbusiness thatwereimpossiblebutfornetworked,digitaltechnologies.

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2.The Improvements:Thosethingsthatgovernmentwas abletodowithpeople,fundsandtimethatwouldhave otherwisebeenconsumedbyold,tiredprocessesandwork thatcannowbedonebetterbymachines. 3.The Greater Good: Efficienciesandthesavingsthatchanges createforpeopleandorganizationsoutsideofgovernment andtheeconomicmultipliereffectofreducingthefriction dragofgovernmentonourbusinessesandlives.

Andyes,ProveITusesexponentiallymorewordsthannumbersbutitisacalltoactionthatembracesbothmathandlanguageinrevisiting the proposition that has helped drive the campaign forgovernmentmodernizationformostofthelastdecade.

>> about This Paper

ProveITisthefourthinasignatureseriesofwhitepapersfromtheCenterforDigitalGovernmentonthehardbutimportantworkofgoverningthroughtechnology.Thedebutinstallment,Citizen2010,coincidedwith the2002gubernatorialelectionsandanticipatedanetworked, digital majority that have different expectations andneeds of government; expectations that require a different kindof government to respond and anticipate adequately. The Centerfollowed Citizen 2010 with Pay IT Forward, which offered a dozenfundingoptionsfordoingthepublic’sbusinesswithdigitaltechnol-ogieswhilereducingpressureonthegeneralfund.BorrowingfromanAmericanliteraryclassic,thethirdinstallmentcalledTheSawyerPrinciples, focused on new networked models of collaboration tohelpgovernmentrethinkitsapproachtothepublic’sbusinessandhowitgetsdone.

Copies of these foundational white papers and other publica-tions from the Center for Digital Government are available at http://www.centerdigitalgov.com/center/reports.php

In completing this set of four foundational white papers ondigitalgovernmentasanewplatform forgoverning,Prove IT isacallfordisciplineinmakingtherightchoicesabouttechnologyandtherightchoicesinimplementingtheminthepublicinterest.

Prove IT isultimatelynotabout the returnon investment,atleast not as ROI has been conventionally defined in the publicsector ITcommunity. It takesbothabroaderanddeeperview inthreemainparts: I. Resetting the Proposition: Government as a Service

Prove IT begins with a reminder that public service anddeliveringservicestothepublicremainlegitimateandintrin-sically valuable ends. Having (re)established the “what”thatwasthebasisoftheproposition,thissectioncontinues

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withadiscussionof“how”thoseendsareproperlyservedby a new generation of technological means, and “why”government has been unable or unwilling to pursue a fullharvestofbenefitsforitsowninternaloperationsandtothecitizensitserves.

II. The Harvest: Finishing What We StartedIftheexceptionprovestherule,thenitisusefultoexamineexceptional cases where a disciplined harvest has beenenforced.ThissectionofProveITprofilesnotableexamplesfromthestateofIndianaandcountygovernmentsinNevada(Clark)andFlorida(St.John’sandSeminole).

III. The Menu: The Full Deal Meal and A la Carte Choices for Moving Forward

ProveITculminateswithacomprehensivemenuofchoicesforbringingmoredisciplinetotheharvestofsavings,efficien-ciesandnewopportunities.Ititemizestoolsoftheharvestthatmakethenewpropositionpossibleastechnologyhascaught up with a long-standing and often-validated visionof what modern government can be. Some tasks requiredaring,mostrequireonlydoing.

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>> resetting the Proposition: government as a Service “Servicesaregovernments’primaryproduct. Thedeliveryofthoseservicesattheneeded scalerequiresIT.”

—CenterforDigitalGovernment,20036

The next five years will be more important to the effort tomodernize government than the preceding 20 years. The arrival ofthecommodityInternetwithdistributedandinteroperabledatabasesin the mid-1990s established a base for a networked world and anetworkedgovernmentasapartofthatworld.Theessentialelementsareinplacetochangethewaygovernmentworks—ifwetakethenextstepstechnologicallyandextractandusethevaluetobegainedfrom those steps. The enabling and disruptive technology that istheInternetrepresentsthesupplysideasaplatformforgoverningdifferently.Thenextstepshereatthemidpointoftheopeningdecadeofanewcenturycancreateadigitalsupplyofgovernmentservicesandmatchittothegrowingdemandforcosteffectiveservicesandresults. As technologists know, a digital supply is fast, flexible,adaptive, reconfigurable, replicableatnooronly incrementalcost,andcheaperbyexponentialfactorsthanitsanalogcounterpart.

Totaketherightsteps,wemustseetheexponentiallydifferentfutureandseeitbeforeitspeedsbyus.Wetoooftenseethefuturethroughtherearviewmirror.Weseewhathappenedwithchangesinmainframe-server-application-database-Internet cost/performanceratiosoverthelastdecadeorso,andwebaseourplansontoday’scapabilitiesandcostsandtherateofchangewehaveexperienced.We forget that the speed-price-performance-power-ubiquity-interconnectednesscurveisstillscreamingexponentiallythroughthe roof. As Ray Kurzweil argues persuasively, we have difficultythinkingexponentiallyoroutsideof thechangeparadigmsofourown experiences.7 Therefore, we plan and prepare for the pastand in government, do so slowly. Moore’s,8 Metcalf’s,9 Ellul’s,10andMurphy’s11Lawswillnotberepealedandweneedtoassumeexponential progress and its likely effects if we are to be able tocatchuptothefutureandrealizethevalueflowfromthistechnologycurveinrapidassent.

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>> Tracking the Trends

To be responsive, responsible and relevant in the decadesahead,governmentmuststopmakingtechnologychoicesthatareaimed backwards. It is incumbent on public institutions to knowandusethetoolsandtechnologiesthatarealreadyinthepipeline,and tostopbuying for thepast,and instead,catchupwith todayand anticipate the future. It is incumbent on public executivesto have sufficient curiosity to know what is already invented andwhatiseitherinproductionorawaitinganengineeringorprocessimprovement to get into cost effective production. That curiositycombined with an ever maturing tool set represents the obviousfuture. The combination of that curiosity and technologicalinnovationallowsgovernmentleadersandplannerstobeginseeingtrendsthatarelikelytocontinue,toseewhatkindofchangesthosetrendswillcause,andplanaroundthem.

At one level it seems obvious to say that those who governshouldkeepaneyeontheexponentialgrowthandthepowerofITcomponentsinchangingthenatureofgovernment.But,thenagain,themantraoftransformationwasoverusedandabusedduringthegov-dot-com era and elected officials and those who worked forthemcanbeexcusedforcastingajaundicedeyeatclaimsthatechowhatappearedtobeemptypromisesofanearliertime.

Hyperbolenotwithstanding,someofthosepromisesmayhavejustbeenearly.Still,liketheprivatesector,governmenthastobuilditsbusinessorservicedeliverymodelsasifthetoolsexistednoworarelikelytoexist.ConsidertheexampleoftheonlineentertainmentrentalcompanyNetFlix.Foramonthlyfee,customersmakealistofthemoviestheywanttoseeandNetFlixsendstitlesoffthelistthree-at-a-time,renterskeepthemforaslongastheywant,andthenmailthemback inpostage-paidpouches.Atfirstglance, itseemsthatNetFlixisintheDVDlendingbusiness.Itismorethanthat.NetFlixisbuildingahugedatabaseofcustomers forwhich thecompanyhasbecomethefirstchoiceinprovidingentertainmentproducts.ItwillbemucheasierforallconcernedwhenNetFlixisabletodeliverreal-timevideoreliablyontheInternet,apropositionthatisrapidlybecomingareality.Thatiswhatthecompanysetouttodofromthestart—anditusesDVDsandtheU.S.PostalServiceasasurrogatefor network delivery; that is, a transitionary delivery mechanism.Now the questions are how well it can make the transition andcompetewiththepure-play,Internet-onlystartups.

IfNetFlixhadfallenpreytoaproblemwithwhichthemilitaryissometimesaccused—thatis,beingperfectlypreparedtofightthelastwar—NetFlixwouldhaveopenedachainofbrickandmortarvideorentalstores.Itdidnot.Instead,thecompanybuiltitsbusinessmodelsasifthetoolsexisted,andbuiltavaluableandconvertible

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customer base in the meantime. Rather than being displaced bynetworkdeliveryasmanyofitscompetitorsare,NetFlixisbuildingvaluenowinordertobuildmorevaluelater.

The NetFlix experience helps to validate an axiom used bycomputer scientists and venture capitalists alike during the dot-comexcitements:Asthepoweroftechnologyrisesexponentially,youshouldnotbedoing thesameold thing ten times faster,youshouldbedoingsomethingdifferent.Thathasbeenatoughlessonforthepublicsectortolearn.

>> Seize the Inevitable

Governmentmodernizationhasproventobemoreevolutionarythan revolutionary but, incrementally, iteratively and inevitablytechnologyhasmadegovernmentmore logicalandlessphysical,withgreatercapacityandreachandlesscostandbureaucracy.Allofthatistakingplaceinthefaceofdramaticallyincreasedurgencycausedbyagrowingnumberofexternalfactors:

•Acyclicalrecoveryinbothrevenueandspendingamong stateandlocalgovernmentsmakingmoreprojectspossible andgivingpentupdemandanoutlet.

•The long-term U.S. fiscal crisis now described by the comptrollergeneraloftheUnitedStatesindisasterterms such as “demographic tsunami that will not recede,” “aCategory6hurricane,”andthefalloftheRomanEmpire.12

•Amaturingdigitaleconomythateverydayshowsconsumers thegulfbetweenwhatispossibleindigitalpricesandservices andwhatservicesaredeliveredbytheanaloggovernment andwhatitcosts.

•Theexponentialgrowthinthepower,speedandcapabilities ofthetechnologyitself.

•Thecontinuingimpactofthe“invention”ofthecurefor cognitivedissonancewiththeongoingmore-for-lessmismatch

betweenthepriceofgovernment,demandforgovernment services,andcostsofgovernmentservices(weallwantto eatthesuper-sizedchocolatecakewithoutexercisingor gainingweight).

•Healthcare,unemploymentinsuranceandthelooming demandsofaretirementbowwaveofbabyboomerscreate growingdemandagainstthefiniteresourcesofgovernment. Medicaidhasalreadygrowntoconsume22percentofthe statespendingbyitself13andisprojectedtoaccountformore than75percentofnewstaterevenuein10statesby2009.14

•ThegrowingdemandforqualityK-12andhighereducation andjobtrainingtorestoreAmericancompetitivenesswithout aconcomitantcommitmentofresources.

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•“Flatworld”challenges(seepage10)totheAmerican economythatundercutfiscalcapacitywhileincreasing demandforgovernmentinvestmentstoeithermeetthe challengesormitigatetheireffects.

•Theuncertaintiesandcoststhatattendtherebuildingof hurricane-damagedcommunitiesintheGulfCoaststatesand theincreasedlikelihoodofmorenaturalandman-made

disasterswithoutarainydayfundtoabsorbthem.•TheadditionalburdensofthewaronterrorandtheWar inIraq.•Anelectioncyclethatcouldputotherwisesafeincumbents inplay,makingthemevenmorefrantictodomorewiththe

sameorless.

>> a Decade of Discontent

Even before Hurricane Katrina and the public dissatisfactionwith thegovernmentresponse,2006wasshapingupasavolatilepolitical year. For example, the nonpartisan Cook Political Reportanticipatedthe2006electionoutcomeasbeinginquestioninjust50of435Housedistricts.AWallStreetJournal/NBCNewspollreleasedduringJuly2005rankstheoverallapprovalratingforCongressatapaltry28percent.Bya46percentto41percentplurality,Americanssaiditwastimetogiveanewrepresentativeachanceratherthanre-electtheirincumbentmember.LarrySabato,aUniversityofVirginiaprofessorandpoliticalanalyst,remindsus,“Thereisachancethatthedissatisfactioninthepublicwillcatchfirepolitically.”15

WhatistrueforCongressisalsotrueforstatehouses—nottomentionthe36governors’mansionstheoccupantsofwhichmustreturntothepollsin2006.

36StateswithGubernatorialElectionsin2006AlabamaAlaskaArizonaArkansasCaliforniaColoradoConnecticutFloridaGeorgia

HawaiiIdahoIllinoisIowaKansasMaineMarylandMassachusettsMichigan

MinnesotaNebraskaNevadaNewHampshireNewMexicoNewYorkOhioOklahomaOregon

PennsylvaniaRhodeIslandSouthCarolinaSouthDakotaTennesseeTexasVermontWisconsinWyoming

In thebigcontest forgovernors in36states, term limits takesevenincumbentsoutofthehuntthisyear;andmostoftheotherswillbeseekingnewmandatesafterhead-turningwinsin2002or,inthecaseofCalifornia,the2003recallelection.

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Withmore thantwo-thirdsof thecountry inplay, it isnot tooearly to think about the talking points for public sector IT in thecampaignahead.Ithasbeenalongtimesincewehaveheardlineslike the“dot-com-ingofgovernmentservices”or“everythingeby2003”instumpspeeches.Propositionshavebeenreplacedbytactics—thecurrentflavorofconsolidationcome-what-mayisdrivenbythedesiretominecostsoutofIT,ratherthanusingITtochangethecoststructureofdeliveringgovernmentservices.Itistheperfectionofmeansandtheconfusionofends.

The public sector IT community has been on message fordecadesonthepromiseofefficiency,effectiveness,costsavingsandincreasedcapacity.Thetrackrecordonthosepointsisuneven.Thebodyofworkisbook-endedbyexamplesoftransformationalsuccessanddisappointingfailures,withalargelyundistinguishedmiddle.

Governmentmodernizationisaniterativeprocessthatisreallynever done. That’s tough to reconcile with a four-year politicalcycle.Still, there isan importantandunderreported lessoninthe2002gubernatorialelection.Therewereonly12incumbentsamongthethreedozengovernorselectedthatfall.Moreover,15oftherestrepresentedachangeinpartyforthechiefexecutive’sofficeintheirrespectivestates.Inall,twodozenstatesareledbymenandwomenwhocametoofficewithnoskininthee-governmentgame.Iftherewaseveramomentthatthedigitalgovernmentexperimentcouldhavecollapsed,itwasInaugurationDay2003.

Lookaround,clickaround—50states,50officialstateportals,many of them in better shape today than they were when theirbenefactors took office. Not one portal was taken down. Whilewe were busy worrying about other things, state portals and theonline applications that stand behind them finally shook the olddescriptionas“alternativedeliverychannels”toemergeasthenewmainstreaminpublicservice.Tobeclear,insevenshortyears,states(and many localities) had established an all new, permanent andscalabledeliverychannel.Importantly,thenewgovernorsexpectednothinglessbecausethey,unliketheirpredecessors,wereabletolivedigitallybeforetheyhadtogoverndigitally.

>> Feeling Flattened

ThenitallhitawallofretrenchmentinresponsetowhatDavidOsbornecallsa“permanentbudgetcrisis.”16For itspart,muchoftheworkinpublicsectorITwasreducedtoblockingandtacklinginside government — even as these same technologies were“flattening”theworld,theanalogyfavoredbyThomasFriedmaninhismostrecentbookonglobalization,TheWorldisFlat.Friedman’scontributionisnottoprovideuniqueinsightsintohowtechnologyisremovingthebureaucraticandlogisticalfriction—orflattening—

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organizationsallovertheworld(andtheworlditselfbyhisaccount).Rather, as a consummate storyteller, Friedman has engaged auniverseofreadersthattendnottoreadwhitepapers.TheNationalGovernorsAssociationhasmade thebookrecommendedreading—MichiganGov.JenniferGranholmdoesnot leave theoffice forany of her town hall meetings across the state without her well-thumbedcopy—ashastheCouncilofStateGovernmentandotherlikeorganizations.Ultimately,thebookmattersbecausethepeopleforwhomthepublicsectorITcommunityworksarereadingit.

IntheAugust2005issueofPublicCIO,KeithComstockurgedpublicservantstoreadFriedman’s“disturbinglyaccurateassessment”because“awholelotmaydependuponit.”ComstockandotherreviewershavearguedwithFriedmanoverpropositions—theinstitutionalfailureofAmericaneducation,thelossoflargevolumesofgoodjobs,aneconomythatissupposedtobebuiltontheimaginationratherthansteelorevensand,and,ultimately,theerosionofnationalsovereignty.Still,weseetheerosionofsovereigntyasgovernmentsstruggletoregulateareaslike gambling, pornography, and banking and protect local jobs andculture.GovernmentsseesovereigntywashedawaybytheonesandzeroesoftheInternetandask:whatisgovernmenttodo?

Indeed,Friedman’sbookmaydoasmuchtoshapethepoliticalmind-setforthenextelectioncycleinthatitprovidesaframeworkforhavingimportantpublicconversations—andarguments—abouttheinterdependenciesandcontradictionsofourtime.Asthosewhohelpedunleashthetechnology-basedflatteners,itisincumbentonpublicCIOs—andnotjusttheelectedofficialsforwhomtheywork—torespondtoFriedman’srepeatedchallengeto“Figurethatout.”Itgetsharderfromhere,butitisgettinginterestingagain.

>> Pent up Demand in Search of opportunity

Itmaybecounterintuitiveatfirstglancetothinkthatthegrowthin technology spending would outstrip the increase in general

REVENUEGROWTHYearoverYearStateRevenueGrowth(Range2004-2005) 5%-24%YearoverYearStateRevenueGrowth(Average2004-2005) 11.7%AdjustedforInflationandTaxLawChanges 3.9%Source: NelsonA.RockefellerInstituteofGovernment,June2005

SPENDINGGROWTH26-YearAverage 6.2%Duringthe2001-2003PublicSectorRevenueRecession 0.6%-1.3%PostRecessionRecovery(Eachofthelast2years) 2.8%YearOverYearGrowthinStateTechnologySpend(Projected,FY2006) 4.75%Source: CenteronBudget&PolicyPriorities(2005).NASBO(2005),CenterforDigitalGovernment(2005-2006)

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governmentspending,untilyouconsiderthepentupdemandpushingagainstanewreducedbaselineandthelargertrendsinsocietylevelinvestments.ITiswherethemoneygoestosolvealotofproblemseffectivelyiftheproblemsareunderstoodandmatchedtoapropersolution.Furthermore,therearenewmandatesandoldsystems,allofwhichneedfreshinvestmentsintechnologytoaddressthecreaksandcrevassesofgoverninginanewmillennium.

Movingforward,thebaselinemaynotriseorfall,butthereareopportunitiesonbothsidesoftheline.Itmaynotbenecessarythattherealwaysbeagrowthinspending.Belowtheline,governmentmay very well seek savings by scavenging money from otherprogramsandredirectingthoseresourcessothetechnologythenreducesourbasecost.

Ata timewheneverything thatgovernmentdoes (andhow itdoesit)isunderincreasedscrutiny,atrackrecordbecomesallthemoreimportant.Andthattrackrecordismorethantheheadydaysof thedot-coms. In fact, it reachesbackahalfcentury.The trackrecordspeaksforitself,exceptthatwehavenevertakenthetimetotellthestory.Thereisatleasta50-yearhistoryofsuccessindigitalgovernment.17Thishistoryparallelsanunblinkingadvance in theexponentialgrowthof thepowerof technologyand thegrowthoftheITsector,ITuse,andITinvestmentthatwasnotaffectedbythedot-commarketbubbleburst.18

Thepublicsector ITcommunity tends toalwaysask, “what’snext?”or“what’snew?”andthosearetherightquestionsalmostallofthetime.Buttherearetimeswhenitmakessensetolookback.Theterm“e-government”hasfallenoutoffavorinsomecircles.NotethatHarvard’sJFKSchoolofGovernmenthasbeenchampioning“movingbeyonde”whileamajoranalysthouseconcludesthate-governmenthasfallenintoa“troughofdisillusionment.”

2004 20082000

$50Billionto$75Billioncut

fromStateBudgets

TheNextSavingOpportunity

TheNextSpendingOpportunity

PentupDemanddrivesgrowth

TheNewBaseline

Figure1:PentUpDemandforModernization

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Yet,digitalgovernment isnot just theWebificationofgovern-ment services or putting a pretty electronic face on bureaucraticprocesses—norisitconfinedtothewaveofexcitementthatwasthedot-comera.

Digital technologies have been doing the heaving lifting ofgovernment for decades, since hardware, software and modem-basedcommunicationwerefirstcombined toprovideaColdWardefensein1955.Themyriadautomatedeligibility,administrativeandcriminaljusticesystemsintheinterveningyearsowetheirexistencetotheneedforcapacitybecauseadministeringtheseprograms—anddistributingpublicassistance—becamemorecomplex thancouldbehandledthroughmanualormechanicalmeans.

Today’s public servants stand on the shoulders of those whohavecomebefore;wehaveinher-ited systems that are uniquelyable to process the volume andcomplexity of data necessary toconduct the public’s business;andwearechargedwith lookingaroundthenextcorner.

>> Climbing P.K.’s ladder

P.K. Agarwal, who returnedto public service in 2005 as thedirectorofCalifornia’sDepartmentofTechnologyServices,originallyrosetonationalprominenceinthemid-1990sasanearlyproponent,practitioner and prognosticatoraboutthethennascentcampaignfore-government.Duringpreviouspublicservicewith theCaliforniaFranchise Tax Board, Agarwalwas among the first to set outthe milestones on the journeytowarde-government,amodelthatdevelopedovertimeintoPITIT—Publish,Interact,Transact,IntegrateandTransform.

>> Stuck on “T”

PITIT represents the rungs on P.K.’s ladder with an implicitrecognition that the lower rungs were relatively easy to mountbuttheclimbbecamemoredifficultwitheachstepup(seeFigure2).But,governmentgotstuckhalfwayupthe ladder,somewherebetweeninteractandtransact.PuttingupaWebsiteandsending

Publish

Interact

Transact

Integrate

Transform

Governmentisstuckhere

Figure2:P.K.’sLadderorPITIT:Publish,Interact,Transact,IntegrateandTransform

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andreceivingelectroniccommunicationshasbecomeroutinestuffin government, even though there are still a surprising numberof smaller municipalities and counties without a functional andregularlymaintainedWebpage.Transactionswereslowtostartforthesamereasonsthate-commercehaddifficultybeforeclimbingtheTransactionrung—access,trust,userfees,identitymanagement,payment issues, security and acceptance. While private sectorentities now rely on e-commerce as their customer’s channel ofchoice, and these entities are climbing on to the Integration andTransformationrungs,manygovernmentshaveyettoputalltheirformsonline.Thismeansacitizenstillhastodownload,fill,andprintformsusingtheirownpaperandprinter,assumingtheycanevenfindtheminanelectronicformatinthefirstplace.Anevensmallerpercentage of government entities have all or even a substantialpartoftheirformssetupsothattheycanbefilledandfiledonlinealongwithanyrequiredpayment.Hereisthebreakdownofsamplecounty government transaction types from a national survey andtheire-formstatus:19

GovernmentTransactionType PrintandFill Submit SubmitElectronic Online Payment

Propertyassessment/Taxpayment 67% 34% —Procurementdocs 64% 21% —Voterregistrationrenewal 60% 39% —BuildingPermits 58% 14% —VitalStatistics 56% 19% 9%Parksandrecreationservices 55% 20% —Countyrecordsrequest 50% 20% —Courtservices(juryduty,courtdate) 49% 32% —Librarycardormaterialsrenewal 40% 28% n/aAnimalservices 36% 9% 4%Childsupportorchildcare 32% 9% 7%Occupationallicenserenewal 26% 6% —Utilitybills 16% 11% 11%

Figure3:E-FormStatusAmongCountyGovernments

Nearlyeverythinggovernmentdoesstartsandendswithaform,makingformsacriticaljunctionpointforthetransitionfrompapertoelectronic.Much is ridingonmaking thechange; forexample,anestimated$154issavedpertransactioncompletedthroughane-formratherthanapaperform.Simplemathsuggeststhatbillionsare being wasted or saved every year inside government on realpaperworkandsomemultipleofthosebillionswastedorsavedbythosewhomustfillouttheforms.

Therearenolongertechnologicaloruseradoptionbarrierstoelectronic government transactions. Doing transactions electroni-callyisthebiggest,mostobvious,mostlucrativeharvestleftwaitinginthefield.Sowhynotjustdoit?Let’sassume,perhapscharitably,that government leaders need a little reminder nudge that this

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remainsoneofthebigpayoffsandtogivethemabitofinformationandvisiontosaytothestaff,“Makeitso.”PerhapstheirresolvecanbestrengthenedthroughanE-FormsStarterToolKit.

So, here is the gentle nudge in the form of an E-Forms ToolKit: To find an E-Forms Business Architecture, E-Forms SolutionsArchitecture,andacompletepresentationspellingoutthisvisiongoto:http://www.centerdigitalgov.com/center/reports.php.Follow thelinktotheProveITpapertofindlinkstotheToolKitdocuments.

Hereisabreakdownofthepotentialsavings:

CostPerForm PaperForm E-Form SavingsPrinting&Storage $15 $1 $14Filling,processing&keying $145 $5 $140Costpercompletedform $160 $6 $15420

Figure4illustratestheessentialvisionofwhatneedstobedone:

Figure4:E-FormsFunctionalSummary

Figure4representsthekeystrategiesoflettingcitizensreusetheir

owndataacrossallgovernmentforms,allowingasmuchofthe“work”ofgovernmenttobedonepriortoitssubmissiontogovernment(thinkabouthowtaxpreparationsoftwareactuallyeliminatesgovernmentforms,leavingthegovernmenttojustcatchthedata).Optimization

Citizens

Businesses

CustomerAgents

ExtractData

ApplyBusiness

Rules

Validate

Sign

Submit

Route

Authenticate

FormsEnginesto:

•Submit Data

•Apply Business Rules

•Sign

•Submit

•Route

DataAnalysis,

SharingandPublicAccess

DirectDataTransfers

Datato

Agenciesto:

• Accept

• Share

• Reuse

• Query

• Manage

• Safeguard Privacy

“Count”FirstForm

“Count”FirstForm

“Count”FirstForm

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oftheremainingnecessarygovernmentformsinfrastructure,intheformofcataloguesandportals,anddatamanagementandstandardsallow data from the government forms engines and citizen andbusinessdatabasestoflowtotheagenciesthatneedit.Doneright,e-formscanhelpgovernmentclimbtheIntegrationandTransformationrungsandontoGovernmentasaService(seeFigure5).

Thekey tocontinuedmigrationor,optimally, leap frogging istodeploye-formsinamannerthatenablesotherscalledCustomerAgentstobuildtheforms’functionalityintothesoftwareandservicesthe Agents’ customers are already buying.21 Government leadersneed to facilitate the move to e-forms and direct data transfer tohappenfasterratherthanforceprivateentitiestoengageinreverseengineeringtofigureoutgovernmentrequirementsandprocesses.Figure5showsabasicblueprinttopavethewaytocompletingtheTransactionstepand themoveon to IntegrationandTransforma-tion.Moredetailedplanscanbefound intheToolKitdocumentsreferencedearlier.

SelectIndustryor

GovernmentFunction

ScopeIndustry

SegmentofGovernment

Function

IdentifyFormsandPaperworkProcesses

withinSegmentor

Function

SelectFormsand

ProcessestobeAddressed

HarmonizeandReduceDetermineCoreDataElements

andBusinessRules

HarmonizeDataElementsandBusinessRoles;Coordinate

withIndustryStandards

FinalizeandPublishXMLSchemaforDataElements,

BusinessRules,andPresentationFormats

WorkWith: •BusinessandIndustryAssociations •IndustrySolutionsVendors •Federal,State,andLocalGovernments •CustomerAgents •IndustryXMLandDataStandardsBodies

CustomerAgentsPrivateIndustrySolutions,Systems,Services,

andSoftwareModulesExtractDatafromExistingPrivateSystemsandSubmitittoGovernmentin

LieuofForms

PublishDataRoutingProcess

CreateHarmonized

Forms

AgencyProcessing,Applications,Databases,

andLegacySystems

UsingCustomerAgentsandWebServicestoEnableandEventuallyReplaceE-Forms

Figure5:Beyonde-FormstoWebServicesandCustomerAgents

Moving Out of the PIT and On to IT and to Governmentas a Service (GAAS)

PITITisanotherwayoftalkingaboutInternet-centricbusinessprocessre-engineering,atermthattoooftenleadstoaconversa-tion of means over ends. More’s the pity. The important question

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for proving IT — whether discussing PITIT, business processre-engineering, service oriented architecture (SOA), GAAS, ormakingnewinvestmentsincoreinfrastructure—istowhatends?Answeringthetowhatendsquestiongoesalongwaytowardgettinggovernmentunstuckandontowhatgovernmentcanbecome.

This question was the genesis of this white paper. The authorsobservedageneralfatigueafteranextendedperiodofblockingandtackling—oranalmostexclusivefocusontacticsandmeans—inthepublicsectorITcommunity.Therewasafirmgripon“what”and“how”in the post-recession recovery including consolidation and strategicsourcing,buttherewasageneralsilenceon“why,”nevermindagrandvisionoftransformationthatfueledtheearlyPITITefforts.

So,whyfinishwhatwestartedwithPITIT?Simplyput,reachingtheintegrationrungonP.K.’sladderisanecessaryprecursorforre-imaginingGovernmentasaServiceorGAAS22—amodelpoweredbyWebServicestechnologiesandreflectingmainstreampracticesoftheServiceEconomy.23AsillustratedinFigure6,theGovernment-as-a-Servicemodel leveragesuniquelydigitaleconomiesofscale,themultiplyingpowerofmulti-jurisdictionalandmulti-sectorcollab-oration, and the combined expertise of civil service, industry andNonGovernmentOrganizations(NGOs)—allforthepublicgood.Asenvisioned,thismodelputs“service”backintopublicservicebylettingpeopleandmachinesplaytotheirrespectivestrengths.Whilemachines and software agents process huge volumes of routinetransactionsandanalyzekilo/mega/giga/tera/peta/exa/zetta/yotta24bytesofdata,publicservantsdowhathumansarebestat:solvingproblemsandprovidingcare.Nowthereisavisiontodrawto.

Concierge LayerPersonalizedandAutomatedHuman,SoftwareandHardwareServices

PublicDevelopersDomestic,Globaland

OpenSource

WebServices

PrivateDevelopersDomestic,Globaland

OpenSource

GovernmentIntegratedintoOther

SoftwareServices

CustomerAgents

Subject Matter Expert LayerSubjectandIndustrySpecificHuman,Software,andHardwareServices

Domestic and Global Economy of Scale LayerCommon,Interchangeable,andCustomizableSoftwareandHardwareServices

PublicEntities

BothPublicOnly

For-ProfitEntities

BothPublicOnly

PrivateOnly

Non-ProfitEntitiesandAssociations

BothPublicOnly

PrivateOnly

Bit>>Niche>>Function>>Industry>>Cross-Industry>>OneStopGovernment

ObjectMarketFunctionalandSoftwareLego®Bricks

Figure6:Government-as-a-Service

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>> gaaS Defined: Fuel for Imagining the Future of government

Government is part of the Information Industry. Perhaps it isoneof itsoldestmembers. Information is thenaturalresourceonwhichgovernmentdependsandoneofitskeyoutputs.GovernmentthereforewillinevitablybeaffectedbywhathappensinInformationTechnology.ITismovingtowardanewparadigmknownvariouslyasWebServices,ServiceOrientedArchitecture,SoftwareasaService,and the Interaction Web. Added to this trend are technologicalrevolutionsingenetics,nanotechnologyandrobotics.25Thesefour“overlappingrevolutions”willsubstantiallychangethewayweliveandworkandthebusinessmodelsthatarepossibleanddominant.Government in some cases will still be a provider of services. Inmostcases,governmentwillcometobeaconsumerofinformationservicestosuchadegreethatitwillbeabletoreturnprimarilytoitsessentialfunctions:

•Listen–tothewishesandideasoftheelectorate•Deliberate–study,thinkandlistensomemore•Decide–officiatebetweencompetingvalues,parties andsourcesofinfluence•Act–toeffectuateitsdecisions•Create–content,data,analysis,rulesandlaws•Judgeoutcomes–objectively,subjectively,guidedbypublic

opinionandguidedbytheoutcomeofelections•Protect–itspeopleandtheirrights,propertyandsovereigntySuchareturntobasicsisinpartanextensionofthebusiness

modelsgovernmenthasalreadyadoptedinroadbuilding,Medicaidand power generation. (Most agencies do not create their ownelectricity). In other ways, it is profoundly different because ofwhatispossiblewhentechnologybecomesstandardized,interop-erable, ubiquitous, cheap, intelligent and reliable. The IndustrialRevolution was in large measure made real and dominant whenstandardsforalltherelevantpartswereadoptedandimplementedto the point at which they achieved critical mass. Making thingsthat worked for a broader audience became possible and thebusinessmodelsfollowedthatcapabilitywithassemblylines,massmarketing,commoditygoods,consolidation,globalization,andsoon. ITdevelopmentshaveco-enabledthese trendsandnowmoreand more critical processes and products in every industry aredependentonorarepartoftheITIndustry.

Now, IT is being standardized in its machine to machineinteractions much the way the human computer interface wasstandardized though the Web. IT standardization will causeconcomitant changes in business models in the same reflectivewaythatvariousindustriesandindustrialbusinessmodelschanged

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to reflect industrial standardization and more recently, businessmodelschangedasaresultoftheInternet.Addingtothechangewillbethatthesestandardizedsystems,modernizedprocessesandtheirattendantreformedbusinessmodelswillusethegrowingandhard-to-imaginepowerfromcomputersandintelligentsoftware.

The change is hard to imagine, but exponential growth fromcurrentlyknownandimplement-ableproductiontechniqueswillmakeasupercomputerrunatbrainspeedbyabout2020,a$1,000computerrun at brain speed 10 years later, and by midpoint in the decade a$1,000 dollar computer will run faster than all the human brains onearthcombined.26Wewillalsoseeparallelincreasesinsoftwarepowerandabilitiessothatmanymorehumanandsuperhumanprocessesbecomepossiblewithmachineintelligence.Itishardtoimaginewhatwecoulddowiththatmuchprocessorpowerandsoftwareorthatitcouldevenexist—muchharderthanitwastoimagine,whenvinylwasking,thatinafewshortyearswewouldbecarryingalifetimecollectionofmusicaroundinashirtpocket.Butimaginewemust,becausethesechangeswillcomeandtheywillchangeus.

Toexaminewhatthatchangewilllooklikeforgovernmentwilltakeabroaderanddeeperlookthancanbeaffordedhere.Thispaperstartsthediscussionandfocusesontheinevitableandverylikelychanges we will face. The paper also describes how governmentcantakeadvantageofsuchchangestoexcelatitsmission.Whenthemostrecente-governmentrevolutionbegan,therewasacadreofcommitted ITprofessionals ingovernmentandelected leaderswho just did not get it. It was not because they were not smart,committedpublicservants,itwasbecausetheyclungtowhattheyknewanddoubtedafuturethatseemedobvioustothosewhodidget it. The gulf between what we are doing now in government,including those that are doing e-government well, and what is tocomeisevengreaterthanitwasthen.

Ironically,timeandaninnatedesireforstabilityoftenhavetheeffectofturningreformersintoincumbentswhobecomewhattheyrebelledagainst.Atonepoint,theyrailedagainsttheso-calledmainframebigotswhostoodinthewayoftheInternet.Nowtheyfindthemselvesdefendingtheirsystems,theirprocessesandtheirwayofdoinggovernmentagainstanewgenerationofyoungupstartsatthedoorandtheircalltoseizetheinevitable.Theironygetspiledhighenoughtoobscurereasonwhenapersonistoldthattheydon’tgetitandtheyhelpedinventITinthefirstplace.Itmaybeabitofanepiphanytonowknowhowone’spredeces-sors felt, but rather than empathizing, this new realization should beusedtoavoidthemistakestheforbearersmade.

GAAS will mean that government, for the most part, willno longer be operating unique or separate systems to supportgovernmentoperations.Instead,manyoftheoperationalactivitiesof government service will be absorbed into software services

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thatwillbespreadacrossthethree layersdescribedbelowandaubiquitousobjectmarket.EachGAASlayercanusetheprocessesandservicesofanotherlayeranddrawfromtheobjectmarket.

The Economy of Scale LayerTheEconomyofScaleLayer(EOS)istheprimarylayerandwill

consistofprocessesandservicesusedbymostentitiesand/orpersonsorcommonlyusedbyothermachinesandsystems.Theseprocessesandserviceswillbe,asthenameimplies,largeanddominatedbyasmallnumberofutility-likeentities.Itwillbegenerallyunthinkabletotrytodowhatthislayerofservicesdoesyourself(unthinkableasinbuildingyourownnailfactorytoshingleyourroof).

Anexampleoftheeconomyofscalelayeroperatingtodaywouldincludeonlineauctions(partofageneralclassofservicesknownasreverselogistics),whichoptimizetheefficiencyofbiddingthroughlarge-scaleaggregationofbiddersandproducts.Asaresult,itwouldbeunwiseforgovernmenttodisposeofitssurplusassetsbyusingitsownsystemifitwantedtomaximizeitsreturn.ThiswouldbesoevenifagovernmentwantedtolimitbidderstosomegeographicalareabecauseanEOSLayeronlineauctioncanbecustomizedtoasubsetofusers.Moreprocessesandserviceswillbecomepartofthislayerandmoreofthemwillbecomecommontomoreentities,sectorsandpersons.Sucheconomiesofscaleareinherentinthenatureof ITconvergenceand thecharacteristicsof this layerwillmakethatpossible.Tobetterunderstandthislayer,itisinstructivetodefinethecharacteristicsoftheseprocessesandservices:

Interchangeable •Theprocessorserviceisdefinedinitsbasicfunctionality andcanbeobtainedfromanysuppliercomplyingwiththe

standardmethodsandspecifications. • Interchangeabilityflattensmonopoliesamongproviders

basedonkeydifferentiators: o Generic–whateverischeapest o BrandLoyalty–buywhatyoulikeandtrustforimage,

stability,longevity,etc. o Quality–beliefthatnotallstandardthingsaremadeequal o Relationship–buyfromwhomyoulikeandtrust o Extras–additionalfeaturesthatdonotinterfere withinterchangeability

Interoperable o Core,like,andunlikefunctionscaninteractand exchangedata,thelimitsofwhicharedefinedbythe

dataownersinpoliciesandsoftware-codedrulesnotby therigidityofsystemsilos. o Functionscanbecombinedtoperformknown,newly

invented,andadhoctasksandprocesses.

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Customizable o Functionsareabletobeeasilychangedatthediscretionof

theuserormakerwithoutaffectinginterchangeability andinteroperability.

o Customizationcanbedonebythesoftwareitselfusingan interfacethatabusinessmanagerorsubjectmatter expertwouldunderstandwithoutITtraining.

Subject Matter Expert (SME) LayerSimply put the Subject Matter Expert (SME) Layer lies in

between the one that does something for most everyone and thelayerthatdoeseverythingforyou.TheSMELayeriscomprisedofexpertpeopleandexpertsoftware,hardwareandsystemsthatareuniquetogovernmentintheirkindormethods.Thissubjectmatterexpertisecanbeverynarroworwide—fromabyteornicheononehandtocoveranentiresubject likeheathcareorcrossboundaryfunctions like benefits, case management, training, and businessintelligenceandanalysisontheother.Environmentalcompliance,public safety, justice, zoning, and Medicaid management andmyriad other governmental functions, services and processes alloccupythislayer.

In one sense, subject expertise is a prime value that thepublic sector possesses today — government is an expert on itsown programs and services. This subject matter specialty willcontinue for some time, but there is and will continue to be agrowingencroachmentasgovernmentprocessesandprivatesectorprocessesconvergeandbecomeindistinguishablefromeachother.Moreandmoreoftheseservicesbecomedistributedandmanygetpushed down to the EOS Layer. Qualifying a person for benefits—especiallyinareassuchasMedicaid,Medicare,TANFandotherhumanservicesprograms—isavitalSMEareathatisdominatedby government, but a substantial number of private vendors,providers,andNonGovernmentalOrganizations(NGO)areexpertonthisaswell.Evennowmanypartsofbenefitsqualificationandmanagementaredonebytheseoutsideexpertsandthisislikelytogrow. Moreover, where parts of these systems and processes arethe same as that which non-government entities do, those partswillbeservedbytheEOSLayer,eitherfromconsciousoutsourcingdecisionsorbydintofitbeingthecheapestandbestwaytodoit.

Concierge LayerThewordconciergewasselectedinpartbecausethewordisrarely

usedingovernmentorITcircles,butitshouldbe.Conciergealsohasaveryspecificmeaninganditconveysanexpectationthatisatypicalforgovernment.Aconciergelistenstoyourneeds,interpretshowtomeetthem,interfaceswithothersforyouanddeliversaresult.Iftheconciergeknowsyou,thenyourneedscanbeanticipatedandresults

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deliveredwithouthavingtoask.What isenvisionedhere isexactlythat: personalized and automated human, software and hardwareservices thatdelivergovernment to itscitizensandcustomersanddoso, inmostcases,withouthavingtobeasked.Wherearequestneedstobemade,itwouldbemadebyyouoryourintelligentagentintheplainlanguageofwhoyouare,whatyouaredoing,andwhatyouwantorneedandnotinthelanguageofgovernmentprogramsandrules.Thiswouldnotsoundanything likewhatgovernment istomostpeople.Italsodoesnotsoundlikethekindofgovernmentforwhichmostpeoplearewillingtopay.Thatsaid,notonlyisthiskindofgovernmentwellwithinreach,itwillbemoreexpensivetodogovernmentanyotherway.

Atfirstglance,itmayseemcounterintuitiveorevenillogicaltocontendthathightech,hightouchconciergegovernmentischeaperthan government as it operates today. Yet there is nothing cheapabouttoday’sgovernment.Alackofmoneyisnottheproblem—howitgetsspentis.Toomuchofthepublictreasuryisbeingusedtopropupold,tiredprocesses.

To be clear, the cost structure of government will change— either through blunt instruments of an ongoing tax revolt thatexpressesitselfmostforcefullythroughcitizeninitiativesto‘starvethebeast’orthroughsurgicalmeansakintoan‘extrememakeover’togivehopeandafuture.

The issues with which government must contend are two-fold: human labor costs and the misapplication of human talent.Governmenthashigh laborcost (not includingstockoptionsandexecutive pay) compared to other sectors in society includingeverythingfromthefinancialservicesindustrytoNGOsthatfightpoverty in the developing world (often as a subject matter expertpartnerswithgovernment).Failuretoadapttotechnologyandadjusttheworkcultureaccordinglyhasleftgovernmentworkersdoingfartoomanydroneandduplicatetasksthatarealreadybetterdonebymachinesofthelastdecade.

As the EOS and SME layers continue to grow and mature,distributedmachineprocessesreplacemorestandalone,people-drivenprocesses,andConciergeGovernmentbecomespossible.Itisnottoohard to believe that machines replace people and change the coststructureofanindustry:imaginetryingtogobackandrunthefinanceandinsuranceindustrywithonlytellers,fieldagents,andyellownotepads. It may be hard to believe that software services and artificialintelligence can power personal agents to do work for you, in partbecauseofpastprematuredeploymentsandhyperbole.Butbelievewemust.Artificialintelligenceisallaroundusanditsdeploymentanduseareonasteadyadoptiongrowthcurvethatwillsoonhittheexponentialgrowthphase.Wecannotdrivewithoutlookingintherearviewmirror,butwebecomelousynavigatorsanddriverswhenthatisallwedo.

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ConciergeGovernmentisemergingtodayincustomerservicessystems, 311, portals, and customer agent software and services(as discussed earlier). Building on the EOS and SME layers andusingnewpowerfulartificialintelligencetools,newkindsofmodesof service become possible that were previously too complicatedor labor intensive. Many who serve in government would like tothink thatwhat theydo isuniqueart; that is, itcanneverbedonebyothersorbymachines.Butevenwith today’s tools, Intuit,H&RBlock and others have reverse engineered one of the most arcaneandartfulareasofgovernment—thetaxcode—andturneditintoanautomatedservice.

While the totality of government programs, rules and dataneedsseemdauntinglybigandcomplex,wearenowimaginingandimplementingdeconstructionsofmuchmorecomplexsubjectareasand dynamic problems. Humanity is working on deconstructingtheuniverse,all itsparticles, thehumangenome,globalweather,tectonics,disease,theenvironment,thehumanbrainandothermindnumbinglycomplexsubjectsthatputdeconstructinggovernmentinperspective.Governmenthasalimited,reasonablysizeduniverseoflaws,rules,interactions,dataandprocessesthatcanbemasteredbymachine intelligenceandmanagedbycaringpeoplewhodealwithexceptionsasneeded.Thismakestheworkofhavingaone-stopconcierge takecareofallyour interactionswithgovernmentfeasible.Doingthisnotonlyfreespeopleandbusinessfromalotofnon-productiveandfrustratingactivity,itfreesamassiveamountofgovernmentresourcestobeputtobettergovernmentalusesorleftwiththetaxpayers.Jeffersonsaid,“Thegovernmentisbestwhichgovernsleast.”Itwillbepossibletoreformulatethataxiomtoread:“Governmentisbestwhichgovernsinvisibly.”Or,foramorecontem-porarysource:“ThelessIsay,themoremyworkgetsdone.”27

Object MarketTherealgastofueltheengineoftheGAASmodelistheobject

market — a growing collection of Lego®-like software, content andservicesthatcanbeusedandreusedinmanydisparateapplicationsandsubjectareas.Fromwidgets,todata,toapplets,andWebservices,the global virtual market of objects is growing and becoming moreusedanduseful.Theseobjectsaremadeandsoldorgivenawayunderawidevarietyofbusinessmodels(proprietaryandfor-profittoopensource) and for an equally wide variety of reasons. Making objectswas once an arcane art and sharing and reusing them was eitherimpossibleoranevenmorearcaneart.Thoselimitationsweremajorbarrierstoefficiencyandcollaboration.Whileitisprematuretodeclarethebarriergone,wespendmoretimenowdealingwiththefactthatthebarrierisnotthere,thanwedotrippingovertheremainingrubble.Forexample,nowthatWebservicesandsoftwareasaservicesuchassalesforce.comarewellestablished,wearereworkingourprocesses

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andsystemstoaccommodatethatfactanditsimplicationsratherthanwritinginterfacesormakingourownsolutions.

Another implicationof theopeningupof thismarketandtheloweringofbarrierstoentryisthatanexponentiallylargernumberofcreatorsandsellerswillcontributeto it.Notonly ismakinganobject easier today, numerous software platforms are moving tocreate interfaces that require no coding experience and that canmake software and services as an end product without humaninterventioninbetween.(Thatsoundyouhearispocketprotectorsbeingclutchedineitherhorrororderisivelaughter).Thisdemocra-tization of the object layer will happen much the same way thatdocument creation for printing or making Web sites used to bean art form that has been turned into a task most anyone with acomputer and inexpensive software can do. Consistently higherordertasksarebeingpulledintotheITprocessanddemocratizedso thatmostanyonecando itwitha little trainingandaccess tohardwareandsoftware.Software,contentproductionandservicecreation will follow a similar course because a committed groupof thecuriousand reform-minded (whomaynotevenknowwhata pocket protector is) is making it happen and it is an inherentpropertyofthetechnologyitself.Lookfortheobjectmarkettogrowandfortheroleofbrokerstogrowwithittoactasastewardoftheobjectmarketresources.

>> Snakes and ladders

The process of government modernization has a Snakes andLaddersdimensiontoit.28Forallthecaretakentodesign,buildandclimbP.K.’sladdertowardthe“100pointsquare”oftransformation,manypublicagenciesmisstepandendupslidingdownward.Thekeydifferenceisthatanelementofchanceisdecisiveintheclas-sicboardgame.Freakeventsnotwithstanding,deliberatechoicesaredecisiveinhow,andhowwell,governmentworks.Disciplineiswhatkeepsanorganizationclimbingtheladder,evenwhenstormsmaketherungsslippery,andfirmlyfootedenroutetotransforma-tionandreapingvalue.

Indeed, IT presents numerous opportunities, such as e-formsasdiscussedearlier,tomovefromrelativelyhigh-costandlow-valueactivitiestothosewithhighvalueandlowcost.WeseehowWal-MartorFederalExpressusestechnologytoaccomplishthisfeatinman-agingthesupplychainandlogistics.Suchabilitytoleapandreaphasbecomethehallmarkofsuccessfulentitiesworldwideandmarksthedifferencebetweenthewinnersandlosersinthecorporateworld.

In a world of all ladders and no snakes, or if there weregreaterdisciplineinavoidingsnakes,governmentmodernizationwouldbedonebynowandthepublicwouldleapfromoldtonew

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processesrapidlyandreapthebountiesoftheattendantefficien-cies.(SeeFigure7.)

Alas,intheworldinwhichgovernmentsactuallyoperate,thereareatleastasmanysnakesasthereareladders,andmanypublicen-titiesfinditdifficulttoremainfirmlyfootedontherungs.TheresultisdepictedinFigure8,whichisaslowandfrustratingwaytoplaythe game. Realizingsuch improvementsin thecost/valueratioin government wouldseem to be a consen-susgoalforanyunitofgovernment,but it re-mains the exception,nottherule.Infact,thenorm in governmentactually leads to theexact opposite resultwiththevaluerealizedmuchlaterthanarea-sonable effort wouldproduce and the costmuchhigherthananysensiblepersonwouldpay.Thereasonforthisisthatsnakeshavewrappedthemselvesaroundeveryrungoftheladder.Butwithfewexceptions, most of the snakes are of government’s own makingoritscollectiveimagination.AsdepictedinFigure8,government’sfootingisoftenunsurebecauseit: •Maintainstheold,mostlypaper-based,laborintensive systems,atthesametimeitspendsresourcesonthenew methodandsystem. •Eitherdelaysinvestingatallorunderfundsthenewsystem delayingthetimetosecurevaluebutactuallycostingmoreas shortcutsandcostsqueezingleadstoqualityissues. •Funds for new systems are taken from the existing budget withnoreductioninworkloadandnomethodtofinancethe transition to the new while maintaining the old and short changingboth. •Almostnoresourcesaredevotedtothetransitionfromthe oldtothenewfortrainingandre-training,re-assigning personnel,eliminatingjobs,andrestructuringworkprocesses andorganizations. • Itforcesfeesonthosewhoareactuallyusingthelower-cost methodswhileitprovidesfreeservicetothosewhousethe laborandpaperintensiveprocesses.

HighValue

LowValueHighCost LowCost

Current Process

New Process

LeapandReapRapidly

Figure7:LaddertoLeapingandReapingRapidly

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Inthisgameofsnakesandladders,thehabitsofincumbencyareoftenstrongerthanthecatalystsofchangethroughtechnology.One of the contra-dictions of our timeis that there is nocertainty of changein the timeframe inwhich it is needed,or that change willbe successful. Butchangeremainsinev-itablebecauseoftheinnate characteris-ticsof technology tochange everything ittouches. The choiceforleadersiswhetherto act as a catalyst,set a catalytic effectinmotion,orleteventstaketheircoursewithoutintervention.Ifthecreepandweepcourseischoseninsteadofacatalyticcourse,thenthevalueisnotpulledintothehereandnowforthekindofusesthatourpoliticalprocessesandmanagerscrave.Ifandwhenalongthecreepandweepcoursethevalueisharvested,thegainsareoftenabsorbedintootheractivitiesorusedinthenextfiscalcrisiswhencutsareordered—althoughit ismorelikelytohavetheeffectofincreasingorganizationcapacityandamelioratingcutsratherthatcreatingapileofmoneytoreturntothegeneralfund.Werarelyseethe fullvaluecapturedwhen it isavailableand immediatelyusedfor better purposes, even when the catalyst works. That not onlyshortchangestheperceptionoftechnology,itcheatsthepublicoutofthevalueoftheirtaxdollars.

For decades, government has had a tendency to know some-thing is going to happen, and let it happen but fail to gather thevaluefromit.Theotherproblemwithvalueishavingtheabilitytoactuallycount it.Asdiscussedearlier,governmentoftendoesnotunderstandthespecificcostsofdoinganyspecificthingnoragreeonthedesiredresults toputanumericalvalueto thevalue.Asaresult, government suffers from a chronic “the cost of everythingandthevalueofnothing”problem.

Government is most broken in its ability to know what thingscost,tojudgewhathasthegreatestpublicvalue,andtoapplysomekind of indicator of that value. Without those rungs on the ladder,thereisnoreliablewaytojudgebenefitsagainstcost—impairinganyability toextract thevalue fromthechange. It is that lastseg-ment—thefailuretoextract—thatistheslipperysnakethatjeop-

Figure8:Snakes,LaddersandCatalyticFailureinGovernment

HighValue

LowValueHighCost LowCost

Current Process

New ProcessCreepand

WeepOveraMuchLongerTime

KeeptheOldProcessButDo

Lessofit

Current Process

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ardizeseverything.Suchaharvestrequires planning differently bythinking about implementing thefutureasitbeginstounfoldratherthanwaitingforit.AnexampleofthiskindofharvestisincatalyzingGovernmentasaService,orwhatCisco’sCEOJohnChamberscallstheemerging“InteractionsWeb,”andbuildingyourenterpriseactivitiestowardthatendwiththetech-nologyoftodayandsomesoundassumptionsaboutthetechnologyoftomorrow.

While it is not yet the majority report, extracting value doeshappeninjurisdictionsthattakeadisciplinedapproachtochangingthewayitdoesthepublic’sbusiness.Weturnnowtotheirstories.

TheInteractionsWeb“TheinteractionsWebisthenextrungupfrom the familiar point-and-click Internet…anInternetthatworksonyourbehalf—findingordoingthingsinthebackground,withnointervention.”

Sources:USATODAY/CISCO/WEB2.0

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>> The Harvest: Finishing What We Started “Aslongaswekeeptendingtothesecrets ofoursauce,wewilldofine.”

—ThomasL.Friedman TheWorldisFlat,2005

“Thepioneersoftengetturnedintofertilizer, andtherestharvestoffthem. Itseemstobeharvesttime.”

—ZachNelson,CEOofNetSuite

Thesecrettoagoodharvestiswhatitalwayshasbeen—hardworkanddiscipline.Toolscanhelpbutnottotheexclusionoftheothertwo.

Amongthethousandsofexamplesofpublicentitiesdoingtherightthingstherightway,thissection,“FinishingWhatWeStarted,”profiles examples from government agencies that proved IT. ThissectiontoursanonlineapplicationforoutdoorlicensinginIndiana,looks under the covers of an ERP replacement in Clark County,Nevada,andvisitstwofinalstopsinFlorida.

>> Harvest Tour Stop �: Indiana — The great outdoors only a Click away

ThestateofIndianaissuesmorethan800,000outdoorlicensesperyear,primarilythroughretailoutlets,anactivitythatbringsin$15millioninannualrevenue.Untillate2004,theDepartmentofNaturalResources(DNR)usedapapersystemtoissuetheselicensesandcollectreceipts.

DNRstockedanddistributedpaperlicensingbooksatanannualcost of $400,000, and collected and managed paper reports andpaymentsfromhundredsofretailers.Astaffof fourwasrequiredtomanage the payments. Collections were slow and there was littleinsight into accounting errors. “In the old system, retail locationswouldsendpaperreportsandattachchecks.Whenyouhave600to700locations,that’salotofpapercomingin,”saysJohnRyan,directoroftheaccountingdivisionofDNR.“Duringthebusiesttimessuchas

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openingdayofdeerseason,retailerswouldoftenrunoutoflicenses.”Beforetheycouldreceivethelicensebooks,baitshops,sportinggoodsstoresandotherretailerswererequiredtosecurebondsatanannualcost ranging from $175 for small bait and tackle shops to severalhundredthousanddollarsforalargeretailchainstore.

In response to chronic complaints about the cumbersomeprocessandasteadydeclineinretailerswillingtoreselllicenses,DNRaskedtheIndianaLegislatureforfundstoautomateitspaper-basedsystem.Thelegislatureauthorizedthefundswithaprovision:the system had to be operational by January 2005. The agencyturnedtothestate’sWebportalteamforhelp.IndianaInteractive,asubsidiaryofNIC,managesaccessIndianathroughapublic-privatepartnership model. All operating expenses are paid through feesgeneratedbyonlinetransactions.

DNR worked with Indiana Interactive and license retailersto design and implement a solution built on the existing portalinfrastructure.Implementedinonlyeightshortmonths,theOutdoorLicensingSystemisthefirsttoserveallretailers,fromthesmallestseasonalbaitshopstothelargestchainstores,andprovidedirectsalestothepublic.Itallowsretailerstocapturecustomerinformationand process licenses instantly. The system automates the entirepaymentprocessthroughanAutomatedClearingHouse/ElectronicFundsTransfer(ACH/EFT)payment.

“Retailersneverrunoutoflicenses,andtheycanbeissuedinless than twominutes,” saysRyan.During thefirst threedaysofdeer season, more than 84,000 licenses were issued. “We’ve alsoadded about 100 new retailers in the last year, but only requireonepersontooverseethepayments”headds.Retailerswhowereinitiallyslowtosignupwitnessedthesuccessof thesystemandwere asked to join. DNR anticipates savings from the Web-basedsolutiontoexceed$3millioninthreeyears.

>> Harvest Tour Stop �: Clark County, nevada — growing Into enterprise Systems

In late 2003, Clark County, Nevada undertook one of the mostdifficultprojectsinlocalgovernment:areplacementofagingfinance,payroll/personnel and procurement systems with an integratedEnterprise Resource Planning (ERP) system. Rod Massey, ClarkCountyCIO,knewitwasunavoidableifthecountywastoserveconstit-uentsinthe21stcentury.ClarkCountyisoneofthefastestgrowingregionsintheUnitedStates,withmorethan5,000newresidentsamonth.Itsagingtechnologysystems,somemorethan15-yearsold,couldnotkeeppacewiththegrowingdemandforservices.

Masseyknewthebackofficesystemsneededtobereplacedifthecountywastoprovideelectronicservicestoconstituents.“ERP

�0 Prove IT

is the enabling foundation. If you don’t begin here, the front endmaybepretty,but it justdoesn’tpayoff,”Masseysays.However,gainingsupportforanendeavorthatwouldeventuallycostcloseto$40millionrequiredacompellingbusinesscase.

InClarkCounty,suchanendeavormeantidentifyingthecounty’score services, developing measures around those services, andidentifyingwhere theERPsystemwould improve thosemeasures.Thecountyspentoneyeardevelopingmeasuresforservicesasvariedasfinancialauditingandanimallicensing.Onekeybenefitidentifiedforthisprojectwasastandarduserinterfaceacrosscountyfunctions.Massey believes that this is one of the largest payoffs of an ERPsystem, and one that IT professionals historically fail to articulate.“Iftoolsaresimilar,thereisamuchshorterlearningcurvewhennewemployeesaretrained”Masseyexplains.“Employeescanbetrainedon all business tools one time.” Clark County agencies measuredperformance against these criteria before the implementation andwillcontinuetoreportonthemaftertheimplementation.

Nomatterwhatmeasuresofsuccessanorganizationidentifies,building and retaining support for large projects requires thisup front work. “An organization needs to be able to measureperformanceintheareasthatreallymattertoknowtheeffectofanITproject,”saysMassey.

In partnership with SAP, the first project phase completed inNovember2005.Thecountydoesnotyethavesufficientdatatofullyassesstheimpact.However,oneobvioussuccessmeasurereflectsthecounty’sdisciplinedapproach:thefirstphase,whichincludedacom-pletereplacementofthecounty’sfinancial,inventoryandpurchasingsystems,wascompletedinjust15months,ontimeandonbudget.

>> Harvest Tour Stop �: St. John’s County, Florida — Inspectors outstanding in the Field

People have been settling in St. John’s County, Florida fornearly500years.Thecountyspansmorethan600squaremilesonFlorida’sAtlanticcoastandencompassesthehistoricalcityofSt.Augustine,andmilesofbeachesandriverfrontproperty. It isalsothesecondfastestgrowingcountyinFloridaandninthinthenation.Theaccompanyingconstructionboomcreatedaheavyworkloadforthecounty’s32buildinginspectors.Withnearly900inspectionsaday, deputy building official, H.T. White, knew that simply addinginspectorswasnottheanswer.

The Building Services Division turned to wireless technologyforhelp.“Itwasamatterofsheersurvival,”saidWhite.“Wecouldn’taddenoughpeopletokeepupwiththedemand.”Thedivisionusedan automated inspection system for years, but inspectors had to

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returntotheofficeperiodicallytoenterinspectioninformationintothesystem.Thetripstookalotoftheinspectors’timeanddelayedconstructionasbuilderswaitedforinspectionresultstobeposted.

Toeliminaterepeatedtrips,St.John’sworkedwithNokiaandCelesta to implementamobilewirelesssolution.Now, inspectorsloadtheirdailyworkontoaNokia9500communicator—adevicethat lands somewhere between notebook computers and smartphones. Using the wireless device, inspectors connect to thebuildingsystem from thefieldand record inspection results.Theinformationisimmediatelyavailabletotheconstructioncompany.

Whitesaysthewirelesssystemsavesatleast24hourseachdayintraveltimealone.Equallyasimportant,thedivisionprovidesbetterservice to the contractor community. “The contractors now haveinstantstatus;theynolongerneedtowaitfortheinspectortoreturntotheofficebeforetheyknowifworkcancontinue,”Whiteexplains.

>> Harvest Tour Stop 4: Seminole County, Florida — Putting ��� Hours Back Into the Week

Located in the heart of central Florida, Seminole County is afast growing county of approximately 400,000 people with easyaccesstoOrlando.Inanefforttokeepupwiththesteadyincreaseindemandfornewservices,theSeminoleCountyBoardofCommis-sionersimplementedelectronicdocumentmanagementtechnologyin multiple departments across the county. Seminole Countyconductedacost-benefitanalysisandestimatedtheentirecomput-erizedimagingsoftwareandhardwaresystemtocostlessthan60percentofthemanualprocessforasingleyear.

ThecountyselectedHylandSoftware’sOnBasesystem.AsingleprojectmanagercoordinatedtheimplementationandencompassedagenciesincludingtheWaterandSewerdepartment,PublicWorksandtheFireDepartment.Importantpublicrecords,someold,wornpaperdocuments,werescannedandfiledinthesystem.

The electronic image repository gave employees instantaccesstothedocumentstheyneed,regardlessoflocation.Insteadof searching for paper files that could be at a different location,misfiled or on another desk, employees now simply access thecentralrepository.Priortotheelectronicdocumentsystem,countystaff spent an estimated 39 hours each day searching, retrieving,reviewing,copyingandre-filingdocuments.Atleast8hoursadaywereusedsearchingformisplaceddocuments.Inasingleweek,thecountynowsavesmorethan235hours.Thecountyalsoseesharddollarsavings inaddition to theefficienciesgained.As thesheervolume of records increased, the county had to rent or purchaseadditionalphysicalstoragespace.Thisneedforspacegoesawayastherecordsareconvertedtoelectronicformat.

�� Prove IT

>> The Menu: The Full Meal Deal and a la Carte Choices for Moving Forward “Do,ordonot.Thereisnotry.”

—Yoda29

As the Jedi Master correctly observes, discipline is a digitaldecision—yesorno,onoroff,doordonot.Thedecisiontotakeadisciplinedapproachtothestewardshipofpublicinvestmentsininformationtechnologybegsafinalquestion,how?

Thisfinalsectionaddressesthequestionofhowatastrategiclevelwitha10-pointprogram,andatatacticallevelwith17exemplarsof proven tools covering multiple roles from decision maker andinformation manager to aggregator of public sector demand andbrokerofinfrastructure,connectivityandsecurityservices.

>> Proving IT: What are We Proving and How to Prove IT

Thereare10distinctelementsofProvingIT,eachofwhichmustbepartofanintegratedprocessifthevaluesoughtistoberealized.Eachelementisdiscussedinturn.

ProveITProcess: 1. Gather 2. DetermineBenefits 3. DetermineCosts 4. Prioritize 5. Choose 6. Oversee 7. TrackValue 8. ReportValue 9. RedirectValue/Reprioritize 10. MonitorPerformance

1. Gather BuildaportfolioofITprograms,projectsandproposals thatareworthmanaging: a)Pre-procurementIdeas–forpursuingnewopportunities b)TransCapabilityRequests–forenterprise,multi-agency

orcrossjurisdictionalcollaborativeinitiatives

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c)ProjectProposals–foragency-specificbusinessneeds d)PainPoints–forfixingagingbrokenapplications orthingsthatneverworked Thefollowingfive-stepanalysisencouragesabroadviewof

subsequentinvestmentsthataddvaluetotheentireportfolio ratherthanjustsolveasingleproblem:

Step1:DefinetheProblem Step2:EvaluateExistingSystems Step3:IdentifyAlternatives Step4:ArticulateSpecific,MeasurableObjectives Step5:RuntheNumbers

2. Determine BenefitsTheportfolioprovidesacommonreferencepointforidentifyingbenefitsfrominitiatives—individuallyandtogether.Whethertaking the broad view of the entire portfolio or only a fewkey initiatives (individually or in combination), potentialinvestmentsoughttobereviewedforpotentialbenefitsagainstaclassicROIlenssuchastheaward-winningstateofIowa’sR.O.I.owa,whichoffersfivemajorcriteria:

1. Constituent Benefits:Objectivesaredirectlyintended tobenefitcitizens,businesses,othergovernment

organizations,oremployees. 2. Social Benefits (Externalities):Objectivesthatbenefit

societyasawhole. 3. Internal Financial Benefits: Objectives that positively

impactagovernment’sfinancialcondition(asmeasuredbytraditionalROIanalysis).

Upside• ReconcilingFederation&Enterprise• MassiveSavingsPossible• JobTransformationOpportunities• Synergy• EconomiesofScale• CriticalMass• TransparencyandAccountability• Performance

Source:VermontInstituteonGovernmentEffectiveness,Inc.

ProvingITintheStateofVermont—AnIndependentAnalysisITisthemostreadilyavailablesolution.“The Institute finds that a comprehensive IT reorganization is the single greatest

opportunityforstategovernmenttosavemoney,bettersupportstateemployees,transformunderlyingbusinessprocessesandservethepubliceffectively.Giventhattoday’saveragestateemployeecostsover$60,000peryearandthependingbubbleinemployeeretirements,the more employee (and outside contractor functions) that can be transitioned to atechnologysolutionortransformedfromadministration/basicprocessingtofrontline/value-addingservice functions, thebetterpositionedVermontstategovernmentwillbetomoreeffectivelyserveitscitizensandemployeessustainably.”

Downside• DispersedInfrastructure• TechnologySkillSetsUnknown• CoordinatedPlanningMostlyAbsent• LegislativeOversight• LowOverallInvestment• GrowingEmployeeCosts• WorkforceRetirementBubble

�4 Prove IT

4. Internal Non-Financial Benefits:Objectivesthatenableagovernmenttoenhanceservicedelivery.

5. Strategic Organizational Benefits:Objectivesthatenablethegovernmenttofulfillitsmissionorstrategicgoals.

For itspart, theCenter forTechnology inGovernmentat theUniversity at Albany, SUNY, recommends a simple triagemodelforcategorizing“benefitsoffeaturesandfunctionalityatmodest,moderate,andelaboratelevelsofinvestment”bykeyelementssuchas“customeraccess,responsetime,degreeofcustomization,levelofsecurity,extentofmanualdatahandlinganddegreeofintegrationwithotherprocessesorsystems.”30

The conventional ROI view remains necessary but somequestion remains as to whether it is sufficient as govern-mentconfrontsnewchallengesanddemandsforservices.

Thesocialbenefitsorexternalitiescategorybecomesmoreimpor-tant during times ofsocial upheaval ordisplacement. Takingthe social factor intoaccount, what is the“Determined CitizenValue” of a govern-ment program? Itwould include socialcredit for contrib-

uting to the general public welfare, but what about ben-efits thataccrueto—orareproducedby—smallgroupswithinsociety?Howisagovernmentsupposedtoaccountfor those gains? The question, asked here rhetorically,underscorestheunpaidbillofgovernmentinhavingneverreachedagreementon thedenominator (benefit) incalcu-lating public value. As discussed earlier, the numerator(cost)isnotwithoutchallengeseither.

3. Determine Costs

Therulesofaccountingforcostsarewellknownbutthathasnot translated into systems that track costs well, or instilldiscipline in using them. Determining costs may not berocket science but does require special attention to detail.Budget and accounting systems can be too rigid to trackprojectexpensesthat,bydefinition,arefairlyfluid.Personnelsystems do not track who spends time on what. Inventorysystemscannottypicallyshowanagencyeverythingitowns,oridentifywhatanagencyshouldknowaboutthoseassets.

ConventionalROIViewofBenefitsandCostsBenefits• Increasedrevenue• Increasedproductivity• Reducedpaper transactionsandcosts• Reducedstaff• Fewerprocessingerrors

Costs• Hardware• Software• Database• Telecommunications

equipment• Hiringandtrainingnew

andexistingemployees• Consultingfees

Source:StateofIowaR.O.I.owa/GFOA

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Often, these systems cannot isolate operational costs and,ifthecostsareunknown,theyarenotbuiltintocostprojectestimates. System rigidity is compounded by data entryproblemsthatusuallyreflecthumanfrustrationorneglect.

Thelackofscenariodatadeprivesagenciesandprojectteamstheabilitytosimulatewhathappenswhenbuilding,deployingandrunninganewsystem—byitselforinthecontextofthewiderITportfolio—ordecidingnottobuilditallandrelyonathirdparty.Speakingofexternalities,theblindsidetointernalcostsbecomefurtherexacerbatedwhenscenariosexpandtoincludecoststocitizensorsociety.

4. PrioritizeThestateofWashington’sITPortfolioManagementprogramcombinesfourkeymeasuresofseverityandfourmeasuresofprojectrisktoaidplannersinratingandrankingtheirchoices:

Taken together, the first three steps in the Prove IT processprovide a funnel for collecting streams of needs, opportuni-tiesandpotentialsolutionsintoacommonlistofactivitiesandinitiativesthatcanserveasacommondecisionpointforaction:

• Stop–Things(programs,projects,processes,activities andthelike)thatcanbediscontinued(toooftenthe thinggovernmentforgetstodo).

• Reduce–Thingstocontinuebutdolessofeach. • Maintain–Providetheresourcestokeepasis. • Redirect–Therightthing,justnottheright wayanymore. • Combine–Keepdoingthingsthataresimilar,butdo

themtogether. • Increase–It’sokay,butdomoreofit. • “Redesign”–Rethinktheprocessandthemethods andredeploy. • New–Thingsthatarebrandnew,youarenotdoing,and thatcannotcomefromanyofthethingsyouaredoing.

a) ImpactonCitizens-direct,indirect ornoneb)VisibilitytoLegislatureandExposure

ofExecutiveBranch-bybudget, missioncriticalityandtimeframec) ImpactonStateOperations-enterprise

wideoragencyspecificd)ConsequencesofDoingNothing-loss

ofpublicaccountabilityorinabilityto delivervitalservices

Severity RiskLevela) OrganizationImpact-natureand degreeofchangeb)DevelopmentEffort-investmentof cash,stafftimeandotherresourcesc) Technology-bystandardization andmaturityd)OrganizationCapability-sponsoring agency’strackrecordwithlikeprojects31

�6 Prove IT

Prioritization is importantnotonlytohowmuchgov-ernment might harvestbecause of a decision butalso in determining whatit harvests. Beyond dol-lars and cents, speedsand feeds, units of serviceand workload per revenuedollar, the more importantquestion may be: will themethod of rating, trackingand reporting changebehavior for thebetterandcause people to think andactdifferently?

5. Choose

As you choose, keep inmind the rough orders ofmagnitude of value thatcanbereturnedfromeachproject.

Asthechartillustrates,thechoosingshouldnotbetooself-servingandshouldaimfor themostbenefit to thepublic.Cutting the government cost by 15 percent would provideopportunitiesforreinvestment,substantialtaxcutsorboth.Asforhowaprojectaffectsthepublicatlargebysavingsorgivingbenefits,youmaynotbeabletoeasilyquantifyeither;

butrestassureditisabiggernumberthanwhatgovernmentcansave.ItisironicthatgovernmentcanproveanEconomicMultiplierEffect32fromitsactivitiesinpainstakingdetail,yethasdonemuchlesstodocumentorquantifygovernment’s

A BC

Assumptions

Culture

Behavior

In The Sawyer Principles, the Centerpointedtotheinterconnectionsbetweenassumptions,behaviorandculture.

Inharvestingvaluefromprioritizedinvestments,itisincumbenttoask:• Doesitchangetheassumptions?• Doesitchangethebehavior?• Doesitchangetheculture?• Forthebetter?• Doesitcausepeopletothink andactdifferentlytothebenefit ofthecitizens?

©2004CenterforDigitalGovernment

Figure9:BuildingBlocks—Assumptions,Behavior,Culture

Projectsthatonlyconsolidate,reduceorchangeITspending

ProjectsthatinvolveintelligentapplicationofITtobusinessprocessesofgovernment

ProjectsthatuseITtoautomateandstreamlinecitizen,businessandnon-governmentalorganizationinteractions,compliance,transactionsandservicedelivery

AreaAffectedByProject PotentialValueALittle(MaybeasmuchashalfofwhatyouspendonITnow)

A Lot (Up to 15% of the total spending ofgovernment)

A Lot More (A multiple of the cost of thepaperwork burden plus the cost of thefriction drag that inefficient governmentprocesseshaveontheeconomy)

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owndrageffectontheeconomyfromthebureaucraticburdenitplacesoncitizensandbusiness.Makesureyoukeepyoureyes on the biggest prizes and do not allow blocking andtackling-typeinternalITprojectstodominateITspending.

It is equally critical to chose a system that is NOT overlyburdensome, laborious, long, tedious and easily gamedso that it becomes a barrier to clear-sighted change anddecisiveactionratherthanenablingsuccess.Fromoverhead-intensive RFP processes, to paper-intensive budgetarydecision packages and burdensome business cases andfeasibilitystudies,governmentmakesitdifficulttomakeachoice. Digging out from the paper and policies, it seemsthere are four important tests that support consistentlysounddecisions:

• What projects provide the greatest good for the greatestnumber?

• Asforthosepersonsorentitiesthatyourpoliticians andsocietyvalue,whichprojectsprovidethegreatest good:

o For very important persons (kids, teachers, cops, nurses,etc.)?

o Forveryimportantbusinessesandentities? o Forveryimportantagenciesandjurisdictions? • Butfortheproject,willthebenefitoccur?(Echoingthe

Washington Portfolio’s nil consequences, there is no other way this can be accomplished unless this technology,fund,pooloractivitytakesitonanddoesit.)

• Doestheprocessleadtoresultsthataresupported andsupportable?

Making sure project teams have good key performanceindicators(KPI)isacentralthemeinITprojectmanagementliterature,asisalonglistofexamplesofprojectsthatwerehampered by poorly defined or measured project goals. Itisonekindofproblemforprojectsthatgobadbutitcanbeequallytroublingtostrongprojectsthatcomeinontime,underbudgetbutarestillperceivedasfailuresbecausethebusinessobjectiveswereneverdefinedorcommunicated,allowingthegoal posts to be moved continually. That twisted logic alsoappears towork forsomeanalysts incontrolagencieswhoknowthepriceofeverythingbutcannottrackvalue.Finally,itisequallyimportantinapoliticalenvironmenttohavetherightkindofsponsororagoodreviewinthepress.

AtrademagazinetellsthisstoryofonepublicCIO:

Bill Hill, IT director at the city of Dayton, Ohio, puts it…bluntly.“Aprojectcouldbesogoodthat itcomesin

�8 Prove IT

wellunderbudget,savesafortune,anddoeseverythingit’ssupposedtodo,butifitdoesn’thaveahigh-poweredbacker, it’s a pig.” Conversely, Hill adds that a projectcould be a complete loser, but if someone uses it toget a favorable reaction from the press or public, it’sconsideredawinner.33

6. Oversee

Leo Tolstoy observed that “all happy families are alike;eachunhappyfamilyisunhappyinitsownway.”Muchthe

samecouldbesaidofsuccessful,failed,andchallengedITprojects. Successful projects are generally characterizedby disciplined use of KPI and ROI and the elements thatcomprisethem.

According to recentdata from the StandishGroup, the percentageof successful IT proj-ects in the private sec-tor increased from 15percent a decade agoto30percenttoday.Themirrorimageofthattrendisalsotrue,withtheshareoffailedprojectsdroppingfrom30percentin1994to18percentnow.Thatsaid,therateofchallengedprojectshasremainedjustabove50percentforthelastdecade.

The Standish Group’s schedule and cost metrics are lesscheery. Time and cost overruns have been slashed in halfor better in the last decade but, even with those improve-

60%

50%

40%

30%

20%

10%

0%Successful Failed Challenged

1994

2004

Source:TheStandishGroup,2005

Figure10:ITProjectSuccessMetricsOveraDecade

1994164%180%

200484%56%

TimeOverrunsCostOverruns

ITProjectScheduleandCostMetricsOveraDecade

Source:TheStandishGroup,2005

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ments,projectsarestillcoming in,onaverage,56percentoverbudgetand84percentbehindschedule.

There is no recent comparable data for the public sector ITcommunity but it is reasonable to expect project teams ingovernmentwouldbeaslikelytoincorrectlyestimatethetimeneeded to complete a project or to be flat wrong about costestimate. In main public and private project teams, both lacktheexpertiseanddisciplinetounderstandthedegreetowhichchangecostsmoney,andthenumberofwaysitcostsmoney.Neither sector funds most projects sufficiently so they takelonger.Bothsectorsarechangeadverseindifferentwaysandendupspendingmoneytoavoidchangeortoaccommodateit.

7. Track Value

Trackingsystemuptimeisapotentiallyusefulmeasurementbut performance rates are now so high that, for the mostorganization, there are routinely a sufficient number of 9sbehind the decimal point to reliably support even missioncritical systems. Users tend to notice IT organization onlywhenthingsarenotworking.ThatiswhymostITshopskeepstats on things such as availability, because 99.99 percentuptimeperformanceprovidescontextfordefendingagainstattacksfromuserswhoseperceptionhasbeenshapedbyanisolatede-mailoutage.

The more interesting numbers to track are those thatmeasure improvements in organization performanceagainst metrics that matter to its mission. For example, areal-time dashboard integrated into supply chain systemsoffersanat-a-glanceviewofkeymetrics—frominventoriesandinventorylevelsandoutstandingorderstothesavingsrealizedthroughcontracts(comparedtomarketprices).

8. Report Value

Dashboards provide a readily available means for trackingvaluebyusingmoderntoolstoreportandextractdatathatwaspreviouslyonlyavailablewhenitwastoolatetobeusefultoassignblameorgiverewards.Inadditiontoitsroleinbusinessintelligence,thesesametechnologiescanalsohelpenforcethedisciplineofaccountabilitythroughreportcards.Thenthevalueofhavingthereportcardisthateveryonepreparestogetthegradeandthenthegradeendsupnotreallymattering.Itisthepreparationforgettingthereportcardthatendsupchangingall thebehaviorsandcausesall the learningandtheactivity.Thereportcardisanafterthought,butitiswhatdriveseverybodytoputinthework.

40 Prove IT

9. Redirect Value/ Reprioritize

Theabilitytousethedisciplinesofharvestingvaluetorepriori-tizespendingassumesthatitispossibletoreversethebudgetsystem’sperverseincentives.Thestandardbudgettreadmillpenalizesagenciesormanagersforreducingspendingmoneyoneyear,becausetheydonotget it thenext,whichmeansthey cannot spend savings because they are clawed back.Evenwithinsinglefiscalyears,thereareoftenlegalbarrierstotransferringavailablefundstoahighervaluepurpose.

Evenwithinthoseconstraints, itmaybepossibletobuildaValueBudget.34Asconceived,buildingaValueBudgetbringswithitthecompellingprospectofplanningtospendmoneyanagencyorprogramsaves—whenandifitwasactuallysaved.Under theplan, theentityactuallyappropriates thatmoneybasedonasetoftriggers.Ifarevenuetriggerisreached,thenthe savings would be earmarked for a prioritized purpose.As the coffers filled with savings or reversions, it wouldtriggersubsequentprioritizedspending.Undersuchaplan,government actually identifies those things that it valuesand creates an incentive-based system for funding themby realizing value through strategic investments, changes,improvedprocessesortechnology.

Shortofthat,agrowingnumberofstateandlocalgovernmentsaretakingapriority-orresults-basedapproachtobudgeting—focusingondeliveringtheresults thatcitizenswantatapricetheyarewillingtopay.ThisisanidealopportunityforITinvestmentstoshine,buteitherITleadersarenotsteppinguptoprovethevalueofITinchangingthewaythepublic’sbusinessgetsdone,orITspendingisburiedinanoverheadcategory. Itshouldstandoutastheonetool ingovernmentthat is uniquely able to radically change the cost structureof doing the public’s business and deliver on the prioritiesacrossthemanyfunctionalareasofgovernment.Instead,ITishidinginthedatacenterbasementoritislumpedinwithsteamtunnels,roofrepairandtheheatingbill.

The new budgeting approach also exposes the shortcom-ingsoftheconventionalapproachtodeterminingROIinthepublicsector—namely,governmenthasbeenprettybadatit.Aswithmanygovernmentefforts,thegoodintentofROIprocesses was often buried under an onerous labor-andpaper-intensiveprocessofpredictingaReturnonInvestment.WithoutadditionalresourcestodothejobrightorsecurethatdatathatprovestheROI(seeitem10laterinthissection)—asoftenasnot—ROIprocessesendedupstoppingorslowing

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projectsratherthanpropellingthegoodonesforward.Overtime, the act of demonstrating potential positive returnsbecamemoreimportantthanactualresults.Inanerawhenresultsmatter,anewmodelofROImustusemorefeasibleandeffectivewaystoprovewhichITprojectsareworthdoinganddemonstrateresultswhentheyaredone.

10. Performance Management

Thereareeightkeyquestionsformeasuringandmanagingperformance:

1.Whatareyourobjectives?

2.Whatisobservableaboutyourobjectives?

3.Howcanyouturnwhatisobservableintodata?

4.Issuchdataavailableoracquirable?

5.Whataretherelevantrelationshipsorformulas betweenthedataelements?

6.Whatistheminimumandoptimumvalueofthe metricformula?

7.Wasthevalueachieved?

8.Didtheachievementofthevalueactuallycontribute totheobjective?35

These are harder questions to answer than it may appear.Mostdepartmentheadsandmanagerscanget throughthefirstthree.Atstep4,theyrealizethatthedatatosupportwhattheyaredoingiseitherunavailable,theowner(usuallyanothergovernmententity)isunwillingtoshare,oritwillcostmoneytogather.Thentheygetstuck.Atthispoint,somewillevengobackandchangetheirstatedobjectivestosomethingtheycanaffordtomeasure.Becausegovernmentispennywiseandpoundfoolishinthisregard,performancemanagementisnotgivingusthesubstantialbenefitsthatitcouldbedelivering.Ifthisprocessisgivenproperresourcesandusedwell,itcantelluswhenwearemakingprogress,theeffectsofresourcereductions on outcomes, and when additional investmentdoesordoesnotyieldadditionalreturns.

At its core, the purpose of managing performance isdeterminingifwemadetherightdecisions, if it isgoingasexpected and why or why not, and who or what is causinganydeviations.Thisinformationisfedbackintotheprocessso better decisions can be made and the process loops onfromthereiniterativecycles.Tothatend,considerhowtouseproactive(inadvance)andreactive(afterthefirstdecisionismade)decisionmakingasfollows:

4� Prove IT

ProactiveDecisionMaking • Dothis: o Minedataandexperiencesofemployeesand

customerstodetermine: • Issues • Trends • Causes • Effects • Askthesequestions: o Whataretherelatedpiecesofthepuzzle? o Whatisthenatureoftheirrelationship? o Howdotheyfittogether? o Inshort:whatdecisiondowemakenow?

ReactiveDecisionMaking • Dothis: o Minedataandexperiencesofemployeesand customerstodetermine: • Performanceandoutcomes • Deviationsfromexpectations • Errors,complaints,failures,negligence andcrimes • Emergingissues • Askthesequestions: o Arethedecisionsbeingcarriedoutproperly? o Arethereproblemsinimplementation? o Whoorwhatismessingupthesystem? o Whatisnewandisthereareasontomakea differentdecision? o Inshort:whatwaswrongwiththedecisionsmade?36

Ifaproperperformancemanagementprogramisfollowed,itwillprovidemanyof themissingpiecesneededtoguideITinvestmentaswellassystemrequirementsandfeatures.

>> Don’t Prove IT, Just Do IT

Despitethethemeofthispaper,manyinthepublicandprivatesectorhavealreadyprovenanumberofITinitiativesoverandoveragain,soprovingit(orthem)againisjustsilly.Wherethepaybackisclearandalreadyprovenbyothers,theemphasisinplanninganddocumentingtheprojectshouldbeon:

• Determiningtheresourcesneededtodotheproject • Propersponsorshipandleadership • Clarity,alignment,andcommitmentontheobjectivesThenomineesforaJustDoIt37listareasfollows:

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Government Infrastructure, Connectivity and Integrity • PoolITFunding

o Thesurestwaytospotredundancy,standardsissues,overlap, missed opportunities for collaboration, andso on is to see all your technology spending in oneviewpresentedinthesameformat.Evenbetteristomanageandapprovethespendingofthemoneyfromthis virtual or actual fund so that sound technologydecisionsaremadeinthefirstplace.Finally,onlypayoutofthefundwhenexpensesrelatedtopreviously-approved projects are incurred. This tends to saveabout10percentperyearasitnegatesself-protectivebudget padding and prevents creative discoveryof uses for funds that are questionably or not at allrelatedtotheproject.

• Consolidation–ITOperations,Servers,E-Mail,andsoon o UnlessyouplantoleapfrogtoGAASandsavethe politicalcapitalandgoodwillyouspendingetting everyoneoneconomyofscaleplatforms,the paybackisclear. • SharedServices o Thisistheonlywaytokeeptheconsolidation/decentral-

izationpendulumfromswingingwithchangesin leadershiporserviceproblems.

• SecurityProductsandServices o Nonakedcomputingshouldbeallowedin government.Ifyoudonothaveabasicsecuritysuite,

getsomeclothesonnow. • ConvergedNetworks(includingVoIP/IPTelephony o Convergenceishere,ready,andcheaperthanany oftheoldways(andeventhephonecompanies

knowit).IPforeverythingneedsnojustification. • SoftwareProduction,SourceCodeManagement,and

ModuleReuse o ItisafoundationalcomponentofITIL,COBIT,CMM, ISO,andanyotherbestpracticeschemaandmustbe doneifyoumakeormanagesoftware.Thereuseis alsoeasierwhenproperlydocumentedandmanaged.

Government as Information Manager and Decision Maker • DataWarehouse/Mart,EnterpriseContentManagement

andXMLGateways o Ifyouhavedata,andyoudo,youhavetohaveameeting

pointtopublishitstraighttotheWebwhere appropriate,mineit,manageit,reuseit,andextract

valuefromit.Ifitisworthsavingitisworthbeing abletofinditagainwithoutthehelpofthestate

44 Prove IT

archeologist.Therearemillionsofuntappeddollars inoptimizingyourprograms,datareuse,knowledge captureandstoppingfraud,wasteandabuse—just waitingforyoutofindthem.

• BusinessIntelligence o Donotletthecorporatesoundingnamedissuadeyou.

Thisisanessentialtoolforgovernmenttogoafterthedatamentionedaboveand inperformancemanage-ment.Furthermore,ifyouaremanaginggovernment,you need to know what it is doing and you cannotknowwithoutatoollikethis.Getatoolwithacustom-izabledashboardfeatureandeveryonewillbeabletounderstandwhat isgoingonandwhat theyneedtoknowtodotheirjob.

• E-FormsandE-Signature o Everything starts and ends with a form and every

paper form processed costs $154 more than anelectronicone.Wehaveafederal,state,andcommonlawthatsaysanelectronicsignatureislegal,sowhyissomeoneinyourgovernmentstillallowedtotellyouit’snot,especiallywhenitkillsthechancetosubmittheformelectronicallyandnegatesthesavings?Yes,youcansignonline.

• IntakeManagement(ImagingandScanning) o Ifyouarenotyetbraveenoughtomakethemsubmitit

electronically,thenyoumustmakeitelectronicwhenyoureceivethepaper.Withoutthisstep,electronicworkflow,electronic case management, parallel processing andahostofotheradvantagesarenotpossible.Theresult:organizations remain stuck with sneaker nets anddocumentsthatgatherdustinsomeone’sinbox.

• RecordsManagementandComplianceStorage o It ismandatoryunder law,sowhat is theneedfora

businesscase? • CollaborativeTools

o Theprimaryroleofgovernmentistomakedecisions,yetmodern tools formakingcollaborativedecisions(such as groupsystems.com) sit on the shelf eventhough theyallowyou toget toabetterdecision ina fractionof the timewithbetterbuy in.Others likeInstant Message replace trips down the hall just toseeifsomeoneisthereandallowforbetterteamworkfor little cost. (By the way, an IM is a public recordsubjecttodisclosure,althoughyouwouldneverknowbythenatureandtoneofsomeofthetraffic.)

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• ChannelManagementandMigration o Makingpeople lineupatacounterforserviceisfar

moreexpensiveforthemandyou,sogettingthemtocheaper channels such as phone or online is, well,cheaper.

• ElectronicIntake,WorkFlow,ProcessCompletion o The insurance industry and many others wrote the

bookonwhythissavesatonandifdoubted,sendoutapaperworkflowmemoandseehowlongittakestogetbacktoyou.

• CaseManagement o Youprobablyalreadyownorhavemadeafewdozen

of these inyour jurisdictionanda fewhundredoracoupleofthousandoftheminyourstate.Whileyoumay want to consolidate them, you know you needworkerstodotheworkmoreefficiently.

• PrintManagement o Mostprinting isdoneonexpensivedesktopprinters

thatcostalittletobuyandawholelottorun.Givingworkers the tools tousemorecosteffectiveoptionswithout killing convenience are available and theprintinglooksbettertoo.

• DesktopManagement o A three-year replacement cycle, group purchasing,

andmanagedconfigurationsunquestionably reducesupportandtotalcostofownership.

IfyouhaveadditionalnomineesfortheJustDoITlist,pleaselettheauthorsknow.

46 Prove IT

>> Conclusion: The Promise and Perils ahead “Don’tgetstuckonstupid.”

—LieutenantGeneralRusselL.Honore

“Don’tletyourselfbelulledintoinaction.”

—BillGates38

Thisisnotthetimeforcomplacency,norexcuses.Governmentwillalwaysfacefiniteresourcesandinfinitedemand.Itwillremainthesubjectofintensescrutiny.Itwillberesenteduntilthemomentthatitisneeded.Itwillalwaysseemtobemovingsomuchslowerthantherateoftechnologicalchange.

Governmentmodernizationhasneverbeenaboutbeingcurrentandcoolbutbeingcompetentandcredible.Tothatend,governmentneedsarobustandnimbletechnologicalinfrastructuretoadapttothechangingneedsandexpectationsofthesocietyitserves.Itmustbeabletoprovethevalueofwhatitdoesandhowitdoesit.That’swherethedisciplinesdiscussedherecomeinasgovernmentmovesforwarditerativelyand,importantly,harvestingvalueasitgoes.

Understanding the costs of delivering services and reachingagreementonthehard-andsoft-dollarbenefitsremainstheunpaidbillofthepublicsectorITcommunity,andgovernmentingeneral.Thesedisciplinescanbe imposedfromaboveor fromwithout—but theirsustainability will require taking root as they have in Clark County,Nevada,thestateofIndiana,SeminoleandSt.John’scounties,Florida,andagrowingcriticalmassofpublicentitiesacrossthecountry.

Harvestingvalueallowsgovernmenttomeetcurrentobligationsmoreefficiently.Italsofreesupscarceresourcestofundnewpriorities;thatis,thethingsgovernmentleadersandthepubliccareabout.

Thefuturecomeswithbothupsidepotentialanddownsiderisk.AsarecentUSATodayheadlinedeclared,the“Internettoask,‘Howmay I serve you?’” — a question that goes to the heart of publicservice.

Governmentcanchooseto: • Riskirrelevancybynotdaringtoaskthatquestionof

contemporarysociety. • Keepaskingitwithaviewofprovidinganswersthrough

traditionalmeans.

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• AskandanswerthequestioninconcertwiththeInternet andthecommunitiesofvaluesuchasGovernment-as-a-

Service(GAAS)thatswarmaroundit.Consider, for example, the available capacity in the private

sectorthatcouldbebroughttobearforpublicpurposesincollabo-rationwithgovernment.Theworldrecordforcompletingafinancialtransaction is 2 nanoseconds. By way of context, the blink of aneyeis350,000nanoseconds.39Whywouldgovernmentthinkitcouldkeepupandwhywoulditwanttotry?Amoresensitivequestionmight be, could government do it by itself at all? If governmentgetstheanswerstothesequestionswrong,itisatriskofbecomingso irrelevant and so incapable of doing the obvious things thateveryoneelsecandointheblinkofaneye.Government’sepitaphcouldbecome,“Aneyeblinkedattheend”asafittingdigitalupdateofapenetratingyetsimpleobservationaboutanemperoroflegend—“‘Buthehasnothingonatall,’saidalittlechildatlast.”40

If thatchallengeisnotenough,considertheriseofanonlinecivilsocietythathasnoqualmsaboutdisplacinggovernmentinstitu-tionswithcommunity-basedsolutionsthataremoreresponsiveandrelevanttothewaypeoplelivetheirlives.

According to Jeff Jarvis, Internet content entrepreneur andassociateprofessoratCityUniversityofNewYork:“Ifthegovernmentdoesn’tdoit,maybewecan.Whatwehavetodoasapeopleisnotjustdemandbetter fromgovernmentbutdemandfromourselves.Wehavetoshowtheway.Wehavetoleadthegovernmentandnotwaittobeled.[Weneedto]bringsmartpeopletogetherandstarttoswarmaroundstandardsandefforts,andthat’swhattheInternetalsodoeswell.”41

Simplyput,ifgovernmentdoesnotbegintothinkinnewwaysaboutusingthetechnology,notonlywillitbejustimplementingthepastor just tryingtofinishlittlebitsofwhat itstarted, thepublicsectorwillbemissingallthevalueopportunitiesthatoccurasthecapacitycurveofgovernment-as-a-servicerisesstraightupfromthetopofP.K.’sladder.

48 Prove IT

>> endnotes1 http://www.csls.ca/data/ict.asp,Chart16.2 Generally,seehttp://www.iowa.gov/itd/eip/index.htmlforavarietyofreportsandfollow

upproposalsfromtheproject.Foracopyofthefinancialandconsolidationanalysis,seehttp://www.iowa.gov/itd/eip/docs/EIP_Assessment_IT_Consolidation_Impact_Study_120104.pdf.

3 Bill Gates with Nathan Myhrvold and Peter Rinearson, The Road Ahead, New York,VikingPenguin,1995.

4 SeeClaytonM.Christensen,TheInnovator’sDilemma:WhenNewTechnologiesCauseGreatFirmstoFail,Boston,HarvardBusinessSchoolPress,1997.

5 SeeAndreiCherny,TheNextDeal:TheFutureofPublicLifeintheInformationAge,NewYork,BasicBooks,2000.

6 As in the original, it bears reminding, “This is not to discount the vital role ofgovernment inmaintainingsovereigntyandcodifying, implementingandenforcinglaws,onlytosuggestthatmuchofthatactivityresultsinthedeliveryofaserviceofonetypeoranother.”SeePaulW.Taylor,PayITForward:DoingthePublic’sBusinesswithDigitalTechnologiesWhileReducingPressureontheGeneralFund,Folsom,CA,CenterforDigitalGovernment,2003.

7 RayKurzweil,TheAgeofSpiritualMachines:WhenComputersExceedHumanIntelli-gence (NewYork:PenguinBooks,1999)andTheSingularity IsNear:WhenHumansTranscendBiology,(NewYork:VikingPenguin2005).

8 Moore’sLawisnamedforGordonMoore,founderofIntel,whonotedthatthenumberoftransistorsonacomputerchipdoubledonaverageevery18monthsmakingthemexponentially more powerful at the same price point in a relatively short period oftime. Innovations have sustained his analysis and prediction and are projected tocontinuetodosoforatleastthenext20years.Kurzweilarguesthatwhenonelooksat thespeed/power/capability/costchanges incomputers, theactualdoubling timeisnow13monthsandhasbeenspeedingup.Healsoseesnoendtotheexponentialincreases.SeeTheSingularityIsNear,41-42.

9 Metcalf’s Law, postulated by Robert Metcalf, is that the value of a network is bestunderstood as the square of the number of connections on that network, not theadditivetotal.WeseethisintheInternetwhengreatvalueisrealizedbecauseofthevariouspatternsofconnectionsbetweenpeopleandmachines.Thingsthatahundredmillionpeoplecannotdo togethercanbedone throughahundredmillionsquaredconnections and corresponding relationships and interactions between them. Forexample,ahundredmillionpeoplecannotefficientlydisposeoftheirsurpluspropertytoeachother,butputthemonanetwork,andyougetE-Baywhichcan.

10 JacquesEllul,TheTechnologicalSociety,(NewYork,VintageBooks,1964),discussesthe theoryofTechnologicalDeterminismwhichholds that technology in largepartdetermineshowweliveandwork. Oftenweadopttechnologiesblindlyandinthatadoption, choose the values expressed in the way that technology functions. Theadoption of various agricultural tools and techniques changed the face of manycountries, their environment, cultures, and societies; and how their society wasorganized(foracompletetreatmentofthistopicseeJaredDiamond,Guns,Germs,and Steel, (New York, W. W. Norton & Company, 1997). The mechanization of thesetechniqueshasdepopulatedtheruralareasoftheU.S.farmbeltandleftwholetownsgaspingandgraspingforareasontobe.Weadoptglobaltransportationtechnologyand we get two World Wars and numerous other far-from-home conflicts. Did thetechnology cause the German Blitzkrieg? Many argue that is too simplistic. Butwithoutplanes,massiveships,tanks,andtrucksnowarlikethathadeverbeenfoughtandnonecouldhavebeensofought.Ellulalsopointsoutthatwerarelyifeverrefusetoadoptatechnologythatfunctionsanddeliverssomekindofvalueevenwhenwecanseeinadvancesomegreatevillurkinginitsdesign,suchasnuclearpower/weaponsandgeneticengineering.

11 Thebasicpropositionisthatwhatevercangowrong,willgowrongandsometimesitisstatedwithMacGillicuddy’sCorollary:at themost inopportunetime.Thepointhere isthatwhilethetechnologyimprovesandgetsmorepowerful,thekindsoferrorsthatcanoccurgetbetter(morecomplexandsometimeseasiertodo)andmorepowerfulintheireffectaswell.Murphy’sLawseemsespeciallypropheticwhenweseeerrorsthatcomefromsysteminterdependenciesthatarenotwellunderstoodormanaged. Seehttp://www.murphys-laws.com/,whichexhaustivelycoversthehistoryofthelawanditsmanyvariations.Forexampleandapplicablehere,itcitesvariousMurphy-liketechnologylawsincluding“Wheneverasystembecomescompletelydefined,somedamnfooldiscoverssomethingwhicheitherabolishesthesystemorexpandsitbeyondrecognition.”

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12 USAToday,November1513 GAO,200414 McKinsey&Company,200515 JoiPreciphs,“TossupsDrawFocusInMidtermElections:AHandfulofHouseRaces

in ‘06 May Hinge on Voter Dissatisfaction with Washington,” Wall Street Journal,July26,2005.

16 DavidOsborneandPeterHutchinson,ThePriceofGovernment:GettingtheResultsWeNeedinanAgeofPermanentFiscalCrisis,NewYork,BasicBooks,2004.

17 SeePaulW.Taylor,50YearsofDigitalGovernment,2005.18 Kurzweil,TheSingularityIsNear,13,97,and103.19 Extracted from the Digital Counties survey data from the Center for Digital

Government.20 CompiledfromBillGates,Business@theSpeedofThought:SucceedingintheDigital

Economy,NewYork,WarnerBusinessBooks,2000withadditionaldatafromGartnerandtheGovernmentofAustralia.

21 SeealsoTheSawyerPrinciples,Opcite.pp.17-1922 Asusedhere,GovernmentasaService isaframeworkforre-thinkingconventional

approachestoe-governmentdevelopedbyRichardJ.H.Varn.23 As is detailed in the Center’s Sawyer Principles, such models reflect a renewed

understandingofthecorecompetenciesofgovernmentandthoseoftheirpartnersandbrethren in theprivatesectorandnon-governmentalcivilsociety.Corecompetencyis the center of concentric circles that help sort the components of public servicedeliveryintothreetypesofactivities—thoseforwhichgovernmentsetsrules,thosethat government is uniquely able to provide directly and must syndicate for itself,andthose importantsupportactivitiesthatarealreadyprovidedbyotherstowhichgovernmentcansubscribeandleverage.SeePaulW.TaylorandRichardJ.H.Varn,TheSawyerPrinciples:DigitalGovernmentServiceDeliveryandtheLostArtofWhitewashingaFence,CenterforDigitalGovernment,2005.

24 Seehttp://en.wikipedia.org/wiki/Yottabytewhichexplainsthenamingofcomputerbitblocksandthemathformulasforthemincludingthedefinitionofthelargestnamedunitasfollows:Ayottabyte(derivedfromtheSIprefixyotta-)isaunitofinformationorcomputerstorageequaltooneseptillion(onelongscalequadrillion)bytesor10tothe24thpower.SeealsoYottabytesAreaLottaBytesbyStephenBeckathttp://www.whitman.edu/mathematics/number-prefixes.html.

25 Kurzweil,TheSingularityIsNear,205-298.26 Ibid,111-14227 Music by Elton John, Lyrics by Bernie Taupin, Philadelphia Freedom, released as a

singleintheUnitedKingdomin1975.28 ThegameisalsoknownasChutesandLaddersbuttheoriginalBritishnameconveys

agreaterdownsidehazardfrommakingthewrongchoices.29 Yoda, the ancient and revered Jedi Master, a fictional character created by George

LucasforStarWars.30 Sharon S. Dawes et al, Making Smart IT Choices: Understanding Value and Risk in

GovernmentITInvestments,CenterforTechnologyinGovernment,UniversityatAlbany,SUNY,SecondEdition,April2004.

31 AdaptedfromStateofWashingtonInformationServicesBoardPortfolioManagementpolicies and practices. See Washington State Information Services Board (ISB)InformationTechnologyPortfolioManagementStandards(PolicyNo:101-S1)AdoptedMay20,1999,RevisedApril2002(http://isb.wa.gov/policies/portfolio/101s.doc)

32 Multipliers are predicated upon a domino theory of economic change. Theytranslate the consequences of change in one variable upon others, taking accountof sometimes complicated and roundabout linkages. Multipliers are aptly calledestimatorsofthe‘ripple’effect.”Inmore‘technicalterms’,theyarenumericalcoeffi-cientsthatrelateachangein(acomponentofaggregate)demand(oremployment)toaconsequentchangeintotalincome(ortotalemployment).http://faculty.washington.edu/~krumme/207/inputoutput.html#multiplier.

33 DanTynan,“UsemetricstoproveyourITproject’sworth:IsyourITprojectadogoradelight?”Italldependsonhowyoumeasureit—andwho’sdoingthemeasuring,InfoWorld,November21,2005.

34 For the purposes of this white paper, value budgets reflect a model originated byRichardJ.H.Varn.

35 For the purposes of this white paper, the Eight Questions of Measurement andPerformanceManagementreflectamodeloriginatedbyRichardJ.H.Varn.

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36 For the purposes of this white paper, the Proactive and Reactive Decision MakingModelreflectamodeloriginatedbyRichardJ.H.Varn.

37 An unambiguous call to action that is also a registered trademark of the NikeCorporation.

38 BillGates,Business@theSpeedofThought:SucceedingintheDigitalEconomy,NewYork,WarnerBusinessBooks,2000.

39 FromapresentationbyDr.JeffWacker,EDSFellowandtheEDSFuturistattheStateGovernmentAffairsConference,Miami,Florida,November20,2005.

40 HansChristianAndersen,TheEmperor’sNewSuit,1837.41 Interview transcript with Jeff Jarvis, a serial Internet content entrepreneur and

executive and associate professor and director of the new media program at CityUniversityofNewYork’snewGraduateSchoolofJournalism.“NotDotGov”fromOntheMedia,NationalPublicRadio/WNYC.September9,2005.(http://www.onthemedia.org/transcripts/transcripts_090905_dotgov.html)

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>> underwritten by:

Hyland Software, established in 1991, developsOnBase, enterprise-class software that combinesintegrated document management, business pro-cess management and records management ina single application. Government agencies utilizeOnBasetostreamlineoperations,manageregulatorycompliance,reducecosts,andshareinformationandprocesses with employees, partners and constitu-ents,aswellasothergovernmentagencies.OnBasesolutionshavebeenimplementedatmorethan5,500commercial organizations, including 400+ govern-mententitiesworldwide.www.onbase.com/government

NIC is the nation’s leading provider of outsourcedeGovernment portals. We design, manage, andmarketofficialgovernmentWebsitesandeGovern-mentservicesonbehalfof18statesandhundredsoflocalgovernmentsintheUnitedStates.Oursolutionsuse technology to increase efficiency and reducecostsforgovernmentsandtheirconstituents.www.nicusa.com

Nokia’s mobile business solutions integrateindustry-leading software with purpose-built plat-forms, offering you a full set of tools to managecorporate network communication more easily,cost-effectively,andsecurely.WithahistoryinBusi-ness class devices, Security, VPN’s and Mobileapplications includingE-mail,Nokia is the trustedpartnerforbusinessandgovernment.www.nokia.com

SAPistheleadingproviderofenterprisesoftware—continuously delivering solutions that reflect thecollectiveexperienceofSAPandthousandsofgov-ernment organizations worldwide. SAP solutionsfor Public Sector are proven, stable and secure—enablinggovernmentefficiency, improvingpro-cesses,andenhancingcitizenservices.www.sap.com/publicsector

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The Signature Series

ProveIT:TheDisciplinesofHarvestingValuefromPublicSectorInformationTechnologyisthefourthwhitepaperintheSignatureSeriesfromtheCenterforDigitalGovernment,aninternationalresearchandadvisoryinstituteoninformationtechnologyingovernmentandeducation.

Contributors:

Co-authorPaulW.Taylor,Ph.D.,isthechiefstrategyofficerattheCenterforDigitalGovernment.PriortojoiningtheCenter,Dr.TaylorservedasdeputydirectoroftheWashingtonStateDepartmentofInformationServices(DIS)and thechiefofstaffof the InformationServicesBoard (ISB).Hecanbereachedatpwtaylor@erepublic.com.

Co-authorRichardJ.H.Varn,Ph.D., isaseniorfellowwiththeCenterforDigitalGovernment.Dr.VarnistheformerstateCIOofIowaandheldtheelected office of state representative for four years and served as statesenatorforeightyears.Hecanbereachedatrichardvarn@erepublic.com.

Contributor Liz Wallendorf is a senior fellow with the Center for DigitalGovernment. Wallendorf is the former policy and planning administratorfor thecityofTucson. In thiscapacity,shecreatedand ledthecity’sfirstinformation technologyprogramofficeandhelpedcreateand implementthecity’sdigitaltechnologystrategies.

Withcontributionsfrom:CathileaRobinett,ExecutiveDirector,CenterforDigitalGovernmentMaryNoel,SeniorV.P.ofResearchServices

AndassistancefromCarolMalinowski,HaleyMyers,JulieArndtandMichelleDouglas–allfromtheCenter.

Special Thanks

Thanks to Christopher Neff (NIC), Brant Kennedy (Nokia), Jason Kupcak(Hyland Software), Jerry Boerner (SAP), and the thousands of publicofficialsandemployeeswhodogreatworkandchoosetoinnovatethrougheventhetoughtimesinservicetothecitizen.

other White Papers in the Signature Series

TheSawyerPrinciples:DigitalGovernmentServiceDeliveryand theLostArtofWhitewashingaFence.Offersnetworkedmodelsofcollaborationtohelpgovern-mentrethinkitsapproachtothepublic’sbusinessandhowitgetsdone.(2005)

PayITForward:DoingthePublic’sBusinesswithDigitalTechnologiesWhileReducingPressureontheGeneralFund.OffersIT-relatedstrategiestomakebetterdecisions, increase revenues, reduceexpendituresandopendoorsfornewopportunities.(2003)

Citizen2010:LeadingforResults,GoverningThroughTechnology.Anagendaforgoverninginthe21stCentury.(2003)

© 2006 e.Republic, Inc.All rights reserved.

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