The e-business leader

When we think of leading-edge IT organizations, we generally don't think of the government. Federal, state, and local governments have historically been laggards when it comes to IT, and they have viewed their IT investments as a way to make their operations more efficient, although not necessarily less bureaucratic.

But things are changing in the government when it comes to IT, and the government is beginning to look like a leader when it comes to e-business. It also may be one of the few sweet spots in an otherwise sour economy.

Several factors are driving the transformation of government IT. As are private entities, governments are facing enormous pressure to exploit the Internet to improve customer service and cut administrative overhead. Requesting Social Security forms online or renewing your driver's license from the state Department of Motor Vehicles are just two examples of ways in which governments are trying harder to deliver services via the Web. In many cases, these service-based initiatives are mandated by legislators, and the IT arms of these agencies have to move fast to meet their obligations. To do so, they are becoming significant consumers of IT.

In Gartner Inc.'s annual IT budget survey this year, we found that the average organization spends about 5.5 percent of revenue on IT, but governments spend 9 percent of their overall operating budget on IT. On top of that, governments are forecasting more aggressive IT spending growth for 2002 than are most industries.

In addition to their aggressive plans, governments may prove to be more resilient than the private sector in this faltering economy. They are not immune to the economic downturn, of course, because less consumer spending means less tax revenue and therefore less money for government. But, if you've worked in government, you know that there are ways to get emergency funding that do not exist in the private sector. And because governments are reeling from the recent terrorist attacks, many are focused on shoring up their disaster recovery plans. As obvious and visible targets, governments do not have the luxury of putting off business continuance improvements. Besides, the dramatic losses and much-deserved admiration for the police and fire departments in New York have brought a heightened awareness of the value of these agencies.

I have had enough exposure to government IT to know that the public sector also has some real challenges when it comes to IT, particularly related to its work force. A large segment of government's IT work force is nearing retirement, and they have not been successful at bringing new talent into the fold.

Still, governments have a rare opportunity in the coming year -- to leapfrog private industry in its investment in e-business. For vendors, this presents an opportunity. For those working in the private sector, it may mean a career move that involves lower pay but highly rewarding and challenging work.

Barb Gomolski is a research director at Gartner, a research firm in Stamford, Conn. Send her e-mail at

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