For most companies, expanding a traditional sales campaign over the World Wide Web usually promises increased profits after the start-up costs are covered.
But for government agencies, making a business case for using the Web often involves tallying intangible benefits, such as reaching a larger audience for agency information or easing citizen woes in dealing with government bureaucracy.
Most agencies are on the brink of offering advanced e-government applications, such as online forms and online transactions. Those are normally the types of Web services that enable agencies to project a hefty cost savings by eliminating paper and streamlining business processes.
However, despite the push for accountability in government performance and spending, most agencies don't have a formal model or framework for calculating the return on investment from their Web site development and maintenance outlays. Instead, they must do what they can to identify and measure the benefits that result from their Web site investments.
Sharon Dawes, director of the Center for Technology in Government, said she does not know of a federal agency performing a traditional cost/benefit analysis of its Web site. In part, that's because federal agencies have not charged the public for information except for fees related to printing costs, such as obtaining documents under the Freedom of Information Act (FOIA).
What's more, offering information-rich Web sites is becoming a required cost of doing business for federal agencies. "The benefits are real, but they are intangible," Dawes said. "Making information freely available to the public is the mission of federal agencies. It's a more effective, more publicly accessible way to carry out a part of the mission that's always been important."
For many agencies, those intangible benefits are being added to savings in printing costs to produce a general cost/benefit analysis. For example, the U.S. Department of Agriculture's communications department says it is saving $500,000 per year in mailing and personnel costs by posting its news releases online. "Almost all of the Web sites were put up before there was a consideration of how much it costs or how much it saves," said Vic Powell, USDA's Webmaster (www.usda.gov).
Powell pointed to the public benefit of providing instantaneous access to documents compared to the lengthy waits associated with snail mail as one of the justifications for Web site investments. Still, he asked, "How do you put a cost on something like that?"
FAA's Web Investment
The U.S. Federal Aviation Administration also has launched a Web site whose benefit is hard to measure: easing the passenger angst and inconvenience produced by flight delays. The FAA's site provides delay information for about 40 of the nation's busiest airports. The FAA made the site public in April; before then, only airlines were privy to this information, which is owned solely by the FAA's Air Traffic Control System Command Center.
"That's our ace in the hole," said Tim Grovac, manager of systems requirements for the center. "The FAA command center is the only source [of airport delay information]. This is more of a public relations site. With the public, it is more of a defensive posture in that we're sharing the same information with the public that we share with the airlines. It's a tough one to justify, cost-wise."
The site (www.fly.faa.gov) has received positive feedback: FAA Webmasters receive about 30 e-mail messages a day from users. Spurred in part by customer requests, the FAA's command center will soon allow users to be alerted via pager or cellular phone when there are delays at a specified airport. Officials also plan to begin offering delay information about more airports this fall, bringing the total number of airports represented on the site to 100.
Space Agency Returns
NASA has completely eliminated printing and mailing costs for news releases and press kits by producing electronic versions via the space agency's home page (www.nasa.gov). While the agency's annual $210,000 investment in the Web site is not a strict cost/benefit trade-off from axing costs of producing hard copies, the Web enables the agency to open its doors to the public by providing news releases to anyone with Internet access.
In addition, the home page offers specialized features such as live chats with astronauts and scientists. The offerings are geared toward making "people feel like they're participating in space programs, as opposed to [being] spectators," while showcasing how the agency has invested taxpayer money, said Brian Dunbar, NASA's Internet services manager.
While NASA's home page offers users a peek inside space flight, a new NASA portal may soon lead to more joint funding and other kinds of collaboration with industry on NASA technology projects. The technology portal, launched by NASA's Langley Research Center in April, provides a visible marketing tool to advertise the agency's research and development projects to industry users, who might be interested in commercial applications.
Before launching the portal, officials depended on printed documents, word of mouth and technology fairs to draw the public into their work. Every year they printed 4,000 copies of the agency's plan for technology projects and mailed them out. That cost between $30,000 and $40,000 per year for printing costs alone, according to Don Avery, manager for support in NASA's Office of the Chief Technologist.
"That's a year's salary for a Web developer," he said. "If you do that every year, you could be paying for a programmer to do Web development. There are more than 4,000 companies in this country that could potentially benefit from the technology we're working on."
While the agency distributed 4,000 printed brochures a year, the Web site has received up to 5,000 hits a day and is averaging 200,000 per month. The portal requires one full-time programmer, a third of another employee's time for content updating and minimal time from several civil servants for additional work.
The U.S. Department of Health and Human Service's Healthfinder portal (www.healthfinder.gov), which provides health information to consumers, also has allowed HHS to extend its reach with marginal costs. Before launching the site, HHS was able to disseminate information to about 100,000 people per year ? 3,500 a month via a consumer telephone hotline and 12,000 each quarter via printed materials. Healthfinder now averages 500,000 hits per month, said Mary Jo Deering, director of health communication and telehealth in HHS' Office of Disease Prevention and Health Promotion.
The site has increased its audience to 6 million people per year while increasing expenditures less than 50 percent, Deering said. Because the number of Internet users is growing faster than the cost of technology, the business case will only improve in the future, she added.
Although some additional work -- such as information gathering and processing, and translating data into a form that is easy for the public to understand -- is required to maintain Healthfinder, much of the work would have been done anyway for content to be distributed in hard-copy form or prepared as resources to aid hotline callers, Deering said.
Also, because the office's hotline calls have been cut almost in half to about 2,000 per month, officials have been able to reduce the staff time spent answering calls as users increasingly migrate to the Web.
Weighing Customer Satisfaction
The U.S. General Services Administration's Federal Consumer Information Center does not have a formal process for evaluating the costs and benefits of its online offerings, but recent high-volume requests for a package of documents highlighted the advantages of posting information on the Web.
Earlier this year, Teresa Nasif, director of the FCIC, wrote a letter to a syndicated newspaper advice columnist mentioning a package of documents women might want to obtain as a resource. Officials were deluged with requests for a printed version of the package. After they had distributed 1 million printed packages, with requests still coming in, they directed requesters to the service's Web site (www.pueblo.gsa.gov). Before moving its vast document library to the Web, the agency would have had to mail apology letters denying those requests, Nasif said.
The FCIC, which maintains 500 documents in its online library, does all of its Web design and maintenance in-house with three full-time employees. While information technology costs make up $100,000 of the agency's $3.4 million budget, the computer-related expenses have been relatively stable -- increasing only at the rate of inflation -- since fiscal 1997, when officials asked for an additional $200,000 for IT staff salaries. "The real costs for us have been the infrastructure charges," Nasif said. "We have to pay 'x' number of dollars for our server and the support that we need."
No Fixed Model
The U.S. Small Business Administration (www.sba.gov) also does not have a fixed model to weigh the costs of its Web development against projected benefits, but the agency relies heavily on traffic volume and feedback from users and its 70 district offices to hone content to customer needs. SBA officials organize focus groups and rely on an eight-person answer desk that tackles 500 e-mail messages a month for additional insight into the information needs of their customers.
"In some ways, it's based on information that we've gathered about our users," said Lawrence Barrett, SBA's chief information officer. "A lot of the decisions are made in the program offices. They're the ones who know what their clients want. We closely monitor for activity. If there's not a lot of activity, then we pull them off. You don't know what amount of use you're going to attract.
It's only after we put it out there and get hard statistics that we know how popular it is."
Many agencies lack a formal methodology for making the business case for Web sites because such measurements are complicated by multiple factors needed to analyze a site's effectiveness, said Ari Schwartz, policy analyst with the Center for Democracy and Technology.
Agencies have made launching a Web site a higher priority than measuring its value, he said. Still, the very act of publishing an agency's information on a Web site can yield some unintended benefits. For example, if all documents were available on the Web, "they would know where everything was and there wouldn't be this month of searching" to meet a FOIA request, he said.
But despite the absence of tangible benefits to produce a traditional cost/benefit analysis, many agencies point to compelling evidence that their Web sites provide real benefits. The U.S. Securities and Exchange Commission's EDGAR site (www.sec.gov/edgarhp.htm), for example, not only enables potential investors to research the financial viability -- or even the existence -- of companies, it now allows citizens to file complaints online, said Susan Wyderko, director of SEC's Office of Investor Education and Assistance.
This enables the agency -- once it has investigated and confirmed a report of fraud from a user -- to instantaneously post warnings for investors. Recently, a user reported an investment scheme targeting elderly investors, Wyderko said.
Less than one day after the complaint was confirmed, a warning was posted on the Web site. Two weeks later, the printed version of the warning was in the works but not yet available to the public.
"If we can get to people before they hand their money over to the con man, then we have a much better chance of preventing fraud," she said. "Fraud is only fraud as long as the investing public doesn't know about it. I'm not sure that there is a way to quantify why an educated investor is our best defense against fraud, but it's true. You can't measure the dollars that don't get lost through fraud."
A closer look at costs
Building an effective Web site might cost more than you think:
A critical part of creating an effective Web site is understanding who the target audience is and what they want. Because the Web involves new rules for communicating with the public, obtaining this knowledge usually involves extra costs for research and analysis. But the information is crucial.
"'One size fits all' is not applicable for the content of many public information educational efforts," said Mary Jo Deering, director of health communication and telehealth in the Department of Health and Human Services' Office of Disease Prevention and Health Promotion. "Agencies might have seemingly similar content or missions, but if they have dramatically different audiences, the cost/benefit analysis may be different."
Or it might cost less than you think:
Special projects -- at extra cost -- to convert an agency's information to a Web-ready format are not always necessary. Many agencies convert content to a Web format by piggybacking the task on other document preparation projects such as those for producing paper reports or developing resources to support call centers.
Placing government information and services on the Web produces enormous benefits for the public and government, although not all of them show up on budgets or operations reports. Here are some of the benefits agencies have seen:
* Quicker public access to information. Information on an agency Web site is available to the public instantly, but paper-based information delivered by regular mail could take days or weeks to get into the public's hands.
* Public access to more information. The Federal Aviation Administration, for example, is using a Web site to provide the public with airport delay information that was once only available to airlines.
* The ability to reach more people with government information. The Department of Health and Human Services has increased the number of people receiving its health-related materials from 100,000 to 6 million annually by using the Internet, at a cost of only 50 percent more than what it spent on printed materials and telephone hotlines.
* Improved government responsiveness. The U.S. Securities and Exchange Commission created an online complaint system that enables it to receive and investigate investor complaints faster, helping the agency warn the public about fraud more quickly.