Gartner Sees 'E-Government' Explosion

SAN DIEGO (04/12/2000) - The federal government is transforming itself into an online player and will quadruple its Web-related investments over the next five years to become an "e-government," according to analysts at Gartner Group Inc.

Gartner forecasts that federal, state and local governments will more than quadruple their spending on information technology products and related services over the next five years, to about $6.2 billion by 2005. Gartner analysts offered their analysis yesterday at the Stamford, Conn.-based research and advisory firm's Spring Symposium/ITxpo 2000 here.

"E-government promises of operational cost savings, improved service delivery and positive transformations of the government workplaces are real," said French Caldwell, research director at Gartner.

Gartner breaks the e-government market into three categories: government-to-government purchases, government-to-supplier and government-to-business transactions, and government-to-citizen transactions.

The first two segments are projected to account for nearly 70 percent of total e-government spending - or about $1 billion - this year and will grow to $4 billion by 2005, Gartner predicted. Meanwhile, Gartner said the government-to-citizen sector will generate $455 million in business this year, growing to $2.2 billion in 2005.

Gartner analysts cited online voting and tax payments as two prime areas where government can use the Web effectively. Caldwell said 60 percent to 70 percent of developed countries are allowing taxpayers to make some form of payment online. He added that the Internal Revenue Service is seeing increased taxpayer satisfaction with its online filing program.

Gartner pointed to last month's Democratic presidential primary in Arizona as an example of the potential for online voting (see story). Christopher Baum, a research director at Gartner, said that nearly half of the estimated 87,000 votes cast in Arizona were done online - 36,000 of them before the day of the primary. And the results from the votes cast online were available just 14 minutes after the polls closed.

But Caldwell cautioned that the government's transition to the Web may cause a high rate of "unavoidable" project failures. In particular, he cited a "very serious" problem among various government agencies to recruit and retain IT personnel. He pointed to a lack of Web-based skills among government IT professionals, along with a relative unease among public-sector technologists to work in what he described as "hierarchical environments." However, Caldwell says, governments can confront the skills issue by having Web contractors help develop the talents of their full-time IT professionals. "You need to make it part of the contract," he said.

But a potential drawback to that approach, Caldwell added, is that an employee could take those skills and wind up leaving for a job with the contractor. "The threat is always there," he said.

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