The projected benefits for the proposed E-Government programs are significant -- $250 million from inception to year five. This amount does not include the social benefits, savings for the public, or benefits from current E-Government initiatives.
This new benefit does not come without an up-front investment. It is important to fully understand the benefits of E-Government, both for these selected programs and for the E-Government program as a whole. The broader E-Government program includes these investments as well as the existing on-line capabilities offered at the Massachusetts web site and other existing technology projects. The programs receiving current bond funding are referred to as the "flanking programs," and are addressed later in this document.
This section of the report does not provided detailed cost and benefit cases for each funded program - that is provided in Section Five. Rather, this section provides the context for understanding the estimated benefits. In this section, we answer the following questions:
- Who benefits from E-Government and what are the kinds of benefits that can be achieved?
- What are the financial benefits of the selected E-Government programs?
- What will affect the ability of the Commonwealth to meet his expected level of benefits?
- How were benefit cases developed?
2.1 Who benefits from E-Government and what are the kinds of benefits that can be achieved?
E-Government can provide better service to citizens and businesses at less cost to the Commonwealth, and can make the Commonwealth a more attractive place to live and do business. To the extent that E-Government makes it easier for citizens to conduct their affairs with government and to simply retrieve important information they need, E-Government can both increase efficiency and increase the stature and relevance of the State government in the eyes of the citizens and businesses. Beneficiaries of E-Government include citizens, businesses and the Commonwealth government. Each is addressed in turn below.
Key benefits of E-Government for citizens include convenience, improved quality of customer service, and access to more, higher quality information.
- Convenience -- E-Government brings public services to citizens on their schedule and their venue.
- Citizens gain access to government services in their homes and offices, without having to work within the confines of limited office hours in sometimes distant locations. Wage earners do not have to forego a half a day's pay to visit a government office, nor do people in the western part of the state or the Cape have to spend six hours driving to Boston and back to accomplish their business. For example, the proposed SPORT online recreational permits allow users to spend more time "casting a line than waiting in one."
- Improved Customer Service - E-Government allows the Commonwealth to redeploy resources from back-end processing to the front line of customer service.
- Enabling electronic self-service for routine citizen interactions allows government to focus more attention on the aspects of customer service that are most challenging. For example, reducing effort on routine simple tasks allows more time for complicated tasks such as explaining complex regulations, providing interpretation for limited English proficiency citizens, or providing specialized assistance to disabled or otherwise challenged citizens.
The Department of Revenue provides a good example of how this has been done in the past. In the early 1990s, the Department of Revenue was required to reduce headcount while still maintaining a high quality of customer service. DOR embraced the electronic filing of taxes, aggressively promoting this new application. As a result personal income tax returns filed electronically almost quadrupled in five years, rising from 222,000 in 1995 to a hefty 817,000 in 2000. By the year 2000, 26% of all returns were filed electronically, allowing significant redeployment of personnel who had been processing paper returns.
Another example, the "MassCARES" suite of applications automates the routine tasks of a caseworker and enables citizen self-service for informational requests. This allows caseworkers to spend more time doing what makes the most difference - interacting with and helping their consumers.
- Increased access to information - E-Government improves the accessibility of government information to citizens allowing it become an important resource in the making the decisions that affect daily life.
- Government collects vital and important information, but attaining access to it is often inconvenient and time consuming. As an example, government maintains records on the status of professionals and has their history of rulings against them in arbitration or courts of law. The Business License Look-Up will allow citizens on-line access to check this information on any licensed professional in the Commonwealth. This vital information becomes readily accessible, and its very accessibility can provide a powerful incentive to professionals to monitor the quality of their own service. Government becomes a welcome source of unbiased information - a boon to citizens who are bombarded with marketing messages of greater and lesser veracity.
Key benefits of E-Government for businesses include lower cost of doing business and increased access to information.
- Lower cost of doing business - E-Government lowers the cost to a business of conducting all of its interaction with government.
- Electronic transactions save time compared to conducting business in person. There is no driving to a government office, no waiting in line. And if a transaction is not completed right away, the return trip can be made with a mouse click rather than a drive to the office. As more businesses conduct their business with government online, their transaction costs will be lowered. The cost to a business for any interaction decreases as more technology and fewer staff resources are needed.
- Improved access to information - E-Government provides a greater amount of information to businesses and provides it in a more organized and accessible manner.
- A key driver of business success is the ability to plan for the future. Planning is driven by data and predictions about the future. The government collects a great deal of data on economic, demographic and other trends. Making this data more accessible to businesses may increase their chances of prosperity.
In addition, E-Government can help businesses navigate through the sometimes daunting maze of government regulations, by providing an intuitively organized site rich with useful applications. The proposed electronic filings of applications for environmental permits provide an example. Businesses often do not know how, when and for which permits they must apply. As a result, non-compliance with environmental regulations can run as high as 70%- a staggering figure  most likely the product of confusion about requirements rather than willful disregard for the law. An easy to find link to an electronic form for environmental permits would make the process significantly less confusing, help boost compliance, and help better identify businesses refusing to observe the law by stripping away the excuse of ignorance or an overly bureaucratic application process.
Key benefits of E-Government for the Commonwealth are the increased efficiency of operations and the growth in public esteem for government.
- Increased efficiency - E-Government can help the Commonwealth become more productive by allowing each employee to focus on mission critical activities and allowing routine inquiries to be handled electronically.
- On-line transactions decrease the need for paper processing by enabling citizen self-service and by automating routine or clerical tasks. This increases the ability of the Commonwealth to either manage the growth of its workforce or redirect new growth to mission-critical or customer-facing areas rather than back-end data processing.
- Increased esteem - E-Government can improve the image of Commonwealth government in the eyes of citizens and businesses.
- As it becomes easier to do business with government and get information from it, citizen perceptions of the responsiveness and relevance of government will improve. The Registry of Motor Vehicles provides an excellent example of this potential. A separate Accenture study found the RMV's web site to be the most transaction-rich motor vehicle website in the country. The Registry aggressively promotes its site and has implemented a series of non-Internet customer initiatives, such as improved call centers, which has allowed them to transfer people from the back offices to front counters. The reward is an improved perception of the Registry. On January 14 th, 2001 Bruce Mohl of the Boston Globe wrote:
"One of my pet peeves, customer service at the Registry of Motor Vehicles is finally getting some attention…. Average wait times have dropped from little over an hour to 30 minutes for the most common transactions. Customer survey cards indicate satisfaction is up sharply……Web site activity is soaring. Transactions hit a peak of 43,000 in the month of October, more than occurred in each of the three previous years. The Registry's operating budget is up about $7 million over last year, but an agency that brought $935 million in state coffers last year, the money is paying big dividends in customer satisfaction."
The new website is one of several reforms implemented to improve customer service. The Registry has moved to meet customers in all channels - in person, on the phone, and on the web, and has improved service in all areas, creating a virtuous cycle. People using the website do not have to visit a local office or can be better informed and equipped when they do. Overall traffic at the counter drops, and what traffic does remain is handled more efficiently.
2.2 What are the financial benefits of the selected E-Government programs?
Taken together, the total estimated benefit of the new E-Government programs is $250 million. These benefits begin small, but grow larger over time, leveling off at a steady state in years four and five, as can be seen by the graph below. Benefits increase over time as program implementations complete.
Each of the proposed programs contributes independently to the total. The range of benefit provided by each is significant. Total program benefit levels range from $800,000 to $66 million. Benefits net of investment and ongoing operating costs range from -$3.8 million to $18.3 million, as shown by the graphic below.
While not every program provides positive return on its own, taken together, the programs constitute a program of E-Government that provides significant value, both financially and in other ways, such as improved customer service or other public benefit. For example, the Municipal eFile program brings in no additional revenue to the Commonwealth but significantly reduces the paperwork burden on cities and towns by allowing them to submit required filings on-line.
There is a more extensive discussion of the financial calculations of the entire set of programs in Section Five, and each of the individual write-ups for each program provides considerable financial detail.
2.3 What will affect the ability of the Commonwealth to meet this expected level of benefits?
The extent to which the Commonwealth meets or exceeds the expected level of benefit will be determined by the following issues.
- Ability to meet planned interdependencies - The programs must be implemented properly and on schedule, as several depend on one another. The ePayment shared service is needed for several applications that will receive payments over the web. Delay in the implementation of the ePayment capability will make it impossible to fully implement these programs. The benefits associated with the programs would then be delayed as well.
- Integration to existing systems - For many applications, E-Government can generate noteworthy savings, but only when the application is fully implemented and integrated into the relevant agency "legacy systems."
- User uptake - The customers need to use those services. This simple principle drives much of thought behind the portal design and the choice of eApplications to populate the portal. The portal design must be easy to understand and navigate, and the portal must be designed around customer needs. This "intentions-based" design will increase usage, as will marketing, outreach and change management efforts.
- Ability to invest in "whole of government" efficiency gains - Massachusetts stands to recognize substantial benefits in efficiency gains by combining functions (into "virtual agencies") across organizational borders.
2.4 How were benefit cases developed?
Benefit cases were developed collaboratively by members of the project team and the program experts from the agencies and departments. Benefits are estimated only for the programs proposed for new funding, rather than for all of the many programs that relate to E-Government. In each case, the process was iterative, with ongoing discussion that eventually arrived at consensus around the best current estimate of costs and benefits of each program. Note that benefit estimates address only revenue and avoided costs that accrue directly to the Commonwealth and exclude non-financial benefits, as well as financial benefits accruing to other parties.
Generally speaking, benefits were classified either as new revenue sources or avoided costs and efficiency gains. Sample types of new revenues projected include:
- Fees paid by businesses for value-added services such as those offered by OSD through Comm-PASS or the RMV for licensee lookup
- Additional revenue due to "convenience purchases" of Commonwealth government services, for example the bundling of fishing and camping permits together, or higher levels of interest in criminal records requests due to the increased ease of access.
- Additional revenue collected in eChild Support Enforcement by using more convenient payment methods such as credit cards
Avoided costs fell into a number of categories. Selected examples include:
- Administrative, photocopying and mailing costs for documents available online instead of by mail out or for documents sent out correctly the first time due to improved data capture online
- Managed growth of government staffing, for cases in which efficiencies or productivity gains result in a net lower required growth of personnel force strength.
- Avoided fees and expenses related to the rework needed to correct errors or the temporary labor required to meet seasonal peaks in workload. Online transactions can absorb much of the stress during high workload seasons, for example at the beginning of the hunting or fishing season, when permit applications peak, online service delivery can absorb a significant amount of the excess workload.
- Direct cost savings such as could be achieved by lower prices offered to Commonwealth agencies based on increased volume of purchasing through Comm-PASS.
- Leveraging technology across many areas to avoid the high cost of maintaining multiple redundant and independently hosted E-Government solutions.
In summary, the benefit cases represent our combined best estimates of the financial impact of implementing the selected programs.
2.5 Concluding thoughts on the Benefits of E-Government
Accenture believes that the value, both financial and otherwise, of an eCommerce initiative increases as an organization moves up along what we call the "e-Commerce continuum" as seen below.
The benefits of E-Government compound as governments move up this continuum. It certainly helps to have information published on the web, but it is far better to be able to provide personalized information through interaction. Even more value accrues when citizens actually complete business transactions on-line, such as reregistering their vehicle (requiring interactions with RMV as well as transaction, paying the fee). The agency receives the benefit when those inputs from the web go directly into the legacy systems - when the web is integrated into the IT systems and business processes - so no state employee has to put that information into the system again, with all the possibilities for mistakes that comes with that process. The web can transform the citizen into a "deputized state employee" for the ten minutes of his own transaction. And the citizen is willing to loan his labor to the Commonwealth for a few minutes, because he is able to complete his business with the Commonwealth on his schedule and in his own home or in the office.
 According to an Environmental Results Program (ERP) study conducted in 1997 covering 2,000 (of 16,000 total) businesses.