'E-Government' Spending To Soar Through 2005

WASHINGTON (04/24/2000) - With the year 2000 problem behind them, federal and state CIOs are rushing to catch up with the private sector in offering online services.

Analysts expect spending on government-related Internet ventures - and public information technology projects generally - to soar in the years ahead.

Stamford, Connecticut-based Gartner Group Inc. says spending on government Internet activities will increase from $1.5 billion this year to $6.2 billion by 2005.

This task, however, is filled with obstacles. Many public-sector e-commerce efforts have been disjointed. For instance, the federal government has more than 20,000 Web sites that use different formats and standards and have no single portal to tie them together.

The federal government "is still kind of operating in its feudal stovepipe mode," said Alan Balutis, deputy CIO at the U.S. Department of Commerce.

Federal agencies are developing an online portal that may be ready by year's end. But providing online services goes beyond that - it also means integrating back-end and online systems as well as dealing with complex privacy issues.

There are, however, financial incentives for solving these problems.

"Ninety percent of our [customer] interactions are face-to-face, time-consuming and very costly," said Doug Robinson, an IT official at the Kentucky governor's office.

At two conferences last week, the FOSE trade show and McLean, Virginia-based Federal Source Inc.'s State of the States conference, government CIOs said public agencies can save money, improve customer service and streamline operations by offering online services. Arizona, for instance, drastically cut motor vehicle department waiting-line times by moving some services such as registration renewals online.

Quality Counts

Public officials say users expect the same kinds of around-the-clock services and personalized experience they get from visiting private-sector business sites.

This push to online government is also making public officials more "brand-conscious" as a way of building customer relationships. "Branding is critical to state government," said Robinson, whose state advertises its online services as KyDirect. "We want [customers] to feel comfortable."

George Molaski, CIO at the U.S. Department of Transportation, said the government can do more to brand the services used by private third parties. For instance, some travel Web sites are using U.S. Federal Aviation Administration radar data to show plane locations, but users may not know that. "We're not communicating back to the citizen that this is in fact a product of your tax dollars," he said.

CIOs also say users need to feel they can trust the government to protect information.

Allisoun Moore, CIO for the state of Maryland, which plans to offer 80% of its state services online by 2004, said she believes a "natural trust" will build up with users overtime. "We all used to wonder whether our credit-card numbers would be misused when we made an electronic purchase," she said.

But Otto Doll, South Dakota's CIO, said the public is increasingly worried about how individual information is being aggregated and who is getting access to that information. State officials "are getting hammered more and more relative to these questions," he said.

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