E-Government Costs Set to Explode

FRAMINGHAM (04/13/2000) - With tax deadline only days away, you may be wondering what the IRS is going to do with your money.

Online filing is just one of the many ways in which the government is taking advantage of the Internet and transforming itself into an e-government, and all this IT innovation is going to cost big bucks.

State, local and federal spending for e-government will explode from $1.5 billion in 2000 to more than $6.2 billion by 2005, according to Gartner Group analysts at Gartner's Spring Symposium/Itxpo 2000 conference in San Diego this week. These projected figures include the costs of hardware, software, internal labor and external service.

The e-government market comprises three segments: government-to-government, government-to-business or supplier and government-to-citizen. The first two areas will pay out $1 billion in 2000 and account for nearly 70% of e-government spending. By 2005, government-to-government and government-to-business spending will climb to $4 billion. Government-to-citizen spending will hit $455 million this year, then jump to $2.2 billion by 2005.

"E-government promises of operational costs savings, improved service delivery and positive transformations of the government workplaces are real. However, a high rate of e-government project failures in the next several years may be unavoidable," says French Caldwell, research director for Gartner. Successful initiatives require clear definition of objectives and close collaboration between government agencies and contractors. Applications that have the most potential include those of a transactional nature, such as filing your taxes online, voting electronically or applying for a permit at the state or local level.

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