Saving Money through E-Government - FEDERAL SECTOR REPORT

FEDERAL SECTOR REPORT February 2005 IN THIS ISSUE Finding Cost Savings through e-Government Consulting Services Home Page (c) 2004 by the P2C2 Group, Inc. SAVING MONEY THROUGH E-GOVERNMENT We need to look beyond federal information technology when searching for cost savings and Return on Investment (ROI). Many of the savings are driven by the broad e-Government agenda, and you may find most of the dollars saved are outside of the IT organization. The greatest potential for ROI will often be derived from business process simplification, agency-level reorganization, consolidation of back-office functions, and customer self-service. Unfortunately, many of the Exhibit 300 business cases for IT budget justifications consider only a very narrow range of alternatives. For example, the alternatives identified may be limited to software alternatives (such as Oracle versus SQL Server), technology architectures, or IT acquisition alternatives such as inhouse versus outsourcing. The problem with using a narrow range of alternatives is that your Cost Benefits Analysis may fail to demonstrate an adequate ROI, because most savings and benefits of e-Gov accrue outside the IT budget. Further, the cost of continuing legacy IT systems is often less than the budget outlay for replacing them. What's more, simply selecting one technology alternative over another (wireless telecommunications versus satellite) is somewhat bogus for an Alternatives Analysis--like saying you'll save money buying a Chevy Suburban rather than a Hummer … without justifying why you need to budget for either. e-Gov is a way of doing business that has the potential for reinventing the entire government organization--improving customer service, streamlining business processes, and reducing organizational complexity. A simple but efficient example is the move by state governments to put many Motor Vehicle Administration functions online, where automation enables government to reduce the cost of field offices and personnel. The truth is that the federal government will need to spend MORE on IT to achieve e-Gov, but the justification for the investments must be based on inventing a more streamlined approach to government programs and agency performance objectives. For example, many regionalized functions need to be consolidated into a single "back office," located in a low-cost community (same as corporations do). Many centralized functions can be consolidated and automated. You have undoubtedly noticed that customer service in the business world has become highly automated, with the unspoken agenda of enabling most customers to get information, get services, and get solutions without incurring additional business costs for labor. The same approach can be applied to many government services, and the cost savings are potentially dramatic. Following are just a few thought-starters for identifying where to find the ROI to justify investments in e-Gov: Business Architecture Consolidation of organizational structure Simplification and automation of business processes Conversion to customer self-service approaches that do not require direct government personnel costs Consolidation of internal IT organizations within the agency Outsourcing non-core business functions to other government agencies or the private sector Elimination of unnecessary business functions *Information Architecture* Elimination of duplicative or overlapping data systems Use of enterprise-wide directory services Partnerships with other agencies having similar needs Outsourcing data acquisition or maintenance Technology Architecture Improving the cost efficiency of the EA Technology Architecture Use of Presidential government-wide solutions Consolidation of systems within the agency Consolidation of maintenance of similar application systems Infrastructure Simplifying, consolidating, and unifying the management of infrastructure In addition to outside the box thinking, there are also actions that IT executives can take to improve the IT cost performance of agencies, and examples include: Establishing an agency Project Management Office to improve the overall efficiency and performance of IT investments Making full use of earned value (EVMS) for cost and schedule performance. The above ideas for finding ROI may sound like a tall order. However, with the mandate for tightened agency budgets, IT executives in the government may find that this is an opportune time to work with line managers in redefining how agencies are structured and operate. e-Gov can be part of the solution.	VISIT OUR WEBSITE
CONSULTING SERVICES We have the experience, know-how, and commitment to help you develop smart solutions. Please contact us for more information. e-Gov IT Capital Investments Budget Justification Acquisition Plans and Proposals Performance Evaluation Business Architecture
HOME PAGE I get excited when I talk to federal and contractor personnel who are working hard to make e-Government a reality. Yet I wish there was a better way in the federal sector to identify, validate and apply innovation and best practices. Many agencies and contractors have people who are making exciting contributions, but these advances are often hidden within organizations and difficult to locate. There currently is no easy way to "Google" a comprehensive catalog of best practices … and promising practices. It's even more challenging to validate that the results are real, and not just wishful thinking. In addition, there is no consistent structure for information and case studies about innovation and good practices, and comparisons between alternative practices are often difficult. My own suspicion is that the federal government could save a billion dollars a year on IT simply by making it easy for the federal sector to find, compare and implement the most appropriate best practices.	Winter finally arrived in Washington, DC, but my son wasn't satisfied: He flew to Connecticut to step into a knee-high New England blizzard. The photo is courtesy of CNN archives.
Best wishes, Jim Kendrick Enterprise Management Consultant P2C2 Group, Inc. 4101 Denfeld Avenue Kensington, MD 20895 kendrick@p2c2group.com 301-942-7985 NEWSLETTER ARCHIVE

The P2C2 Group, Inc.
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Point of Contact: Jim Kendrick, President
e-mail: kendrick@p2c2group.com
phone: 301-942-7985