e-Government_172151-07092007_ita

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Document prepared byThe Cluster Competitiveness Group

forTurin Euro-Latin American Forum

for the promotion of know ledge-basedregional development

Review of thee-Governmentsolution evolution

Title

2007 The Cluster Competitiveness Group, S.A. and Associazione Columbus Torino. All Rights Reserved

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Index

1. Introduction ........................................................................... 3

2. The drivers of the demand and the governments challenges4

General Objectives of the eGovernment Projects........................ 4

Understanding the demands of the public sector ........................... 6

Current IT projects and initiatives... ............................................... 7

Core technologies in the public sector........................................... 9

3. Key regions and evolution of the sales.............................. 12

Global Ranking ........................................................................... 12

The Unites States ....................................................................... 16

Europe........................................................................................ 17

4. Examples of products on the market and strategy followed

by the main actors ....................................................................... 21

Examples of Consulting Firms..................................................... 22

Examples of IT Services Firms.................................................... 22

Examples of Software vendors.................................................... 23

5. Future developments .......................................................... 24

6. Bibliography ........................................................................ 25


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1. Introduction

Many government organizations are restructuring their delivery ofservices to more closely align to the needs of constituents ratherthan internal business processes. eGovernment is a critical compo-nent to this constituent-centric view of government as these strate-gies allow constituents to exert more control over how and when theyreceive services. More than simply deploying web-based solutions,eGovernment strategies aim to digitize interactions between govern-ments and citizens, businesses and other government organizationsin order to provide more timely, personalized and comprehensiveconstituent service. Although state, provincial, regional and local

agencies have the same broad goals for their eGovernment strate-gies constituent satisfaction, internal efficiency and operationalequity specific objectives vary across levels of government as dothe functions and services agencies target with eGovernment.

Improving constituent satisfaction is a top goal for state, provincial,regional and local eGovernment strategies. In todays increasinglymobile society, governments must consistently offer the highest qual-ity services in order to retain residents, attract business developmentand secure grant funding.

This report analyzes the market for the deployment of IT solutions inthe public sector across the US and key markets in EMEA. It focuseson the factors that are influencing market conditions, such as gov-ernment initiatives and the competitive landscape. In this document,we will detail the demand drivers of this growing market as well asthe range of solutions implemented, then we will look at the behav-iour of the leading markets (the US and EMEA) and consider a few ofthe leading companies in the sector.

This document should serve as the basis for a discussion betweenregions of their relative positions as both users and hosting solutionproviders in the marketplace.


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2. Demand drivers and a challenges togovernments

General Objectives of the eGovernment Projects

Agencies across levels and geographies are slow to realize the fullbenefits of eGovernment, and most agencies have not moved pastthe static phase of the eGovernment evolution. The development ofeGovernment strategies as part of broader constituent-centric plansrepresents an evolutionary process as governments move to deliverservices via online, rather than off-line, channels. Typically, agencies

begin this transformation by publishing static information to govern-ment websites. Agencies that successfully advance through theeGovernment evolution deploy solutions that enable constituents totruly transact, meaning making payment and participate in govern-ment online with electronic voting.

First Step: Static Pages

While e-enabled participation represents a deep implementation ofeGovernment strategies, most eGovernment deployments do not

realize the full benefits offered by online interactions. Although a ma- jority of agencies are using at least one eGovernment solution, mostorganizations merely enable a static, one-way exchange of informa-tion between constituents and government.

Second Step: Transactional web site

However, innovative agencies at all levels have developed strategiesthat include transactional and participatory eGovernment. For exam-ple, more than half of the local governments that have deployed aneGovernment solution allow constituents to make payments online.Because many fee-based government services such as applyingfor construction permits or requesting public records are often dis-tributed by local authorities, the share of governments that have en-abled constituents to make online payments is larger at the locallevel than at the regional or state and provincial level. In fact, nearlyone-fifth of the local governments using eGovernment claim thatmaking payments online is the function constituents use most often,compared to 8% of regional governments and 5% of state and pro-vincial governments according to a survey performed by BusinessInsight to 151 US and European agencies.


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Figure 1. Publishing static information is the most commonly used eGovernmentfunction (Source: Business Insight)

Third Step: E-enabled participation

The e-enabled participation phase of the eGovernment evolutionrepresents the deepest implementation of eGovernment strategies.However, a very small share of authorities has reached this stage.Because services that allow constituents to participate in the govern-ing process tend to be politically sensitive and require an exchangeof personal information, services such as voting and civil service ex-ams are the least common targets for eGovernment strategiesacross levels of government. For example, only one in seven agen-cies would consider enabling constituents to vote online. Constitu-ents fears about network security and data vulnerability will likelyinhibit agencies progress towards eGovernment-enabled participa-tion in the short term.

The survey performed by Business Insight also helps to elucidate themotivation of the agency implementing an eGovernment project. Ac-cording to the results of this study (see figure 2), improving constitu-ent satisfaction is the most common goal for agencies at all levels.Because unsatisfied citizens can easily relocate and deprive a gov-ernment of tax revenue, agencies recognize the imperative to pro-vide quality constituent services. Improving constituent satisfaction isalso key to attracting economic investment as the ease of transactingwith government is often a determining factor when corporations es-tablish factories, call centers or other operation hubs.


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Figure 2. Constituent satisfaction tops agencies' goals for eGovernment(Source: Business Insight)

Understanding the demands of the public sector

A number of opportunities exist for IT vendors in the public sector.Governments at all levels are facing pressure to slash expendituresin order to reduce taxes, while at the same time optimizing access toinformation and caller care. This phenomenon is not restricted to anyone country or region in the developed world. It pervades all levels ofthe public sector, from national governments to local administrativecouncils.

For example, the public sector has become increasingly open toCRM solutions over the past decade, in an effort to communicatepolicies, information and ideas more effectively to citizens. In recentyears, voice applications have been used in a number of jurisdic-tions, and are likely to continue a pace of steady penetration as gov-ernment officials seek to straddle the delicate balance of cost-effectiveness and transparency.

Another driver behind the use of IT in government, particularly in theUS, has been pressure to improve the professionalism with whichgovernment agencies are managed. The argument runs that just asbusinesses are accountable to their customers and shareholders,


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government should also be responsive to its citizens. Therefore,every dollar spent should be allocated, tracked and managed effi-ciently.

Beyond the need for modernized government and for closer integra-tion between citizens and governments, there are legislative driversin the EU as well. For example, the EU set up targets under theeEurope 2002 program, then again in 2005 and now eEurope 2010.eEurope 2010 is an ambitious plan to raise all member states to thesame level. Some countries, such as Norway, spend more than dou-ble the EU average amount per capita on government IT. Others,such as the Mediterranean countries, invest approximately 50% lessthan the EU average. Member states are encouraged to developeGovernment by interlinking public administration with broadbandnetworks, deploying multi-platform interactive services, taking advan-tage of eBusiness for public procurement and fostering transnationalinteroperability.

Current IT projects and initiatives

There are multiple IT projects currently underway in the US andEMEA aimed at offering eGovernment services and improving the

way in which government relates to citizens. Figure 3 highlightssome of the IT projects taking place in the public sector across theUS and EMEA.

Department Country IT partner Project Aim

Home Office UK PA ConsultingGroup

Implement the national IDscheme

NS&I UK Siemens BusinessSvcs

Extension to contract managingback-office

Home Office UK Atos Origin Build and manage INDinfrastructure

Oregon US Accenture Consolidate networks and datacenters

Oklahoma US ACS Public safety system for police,


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City fire & courts

CorpusChristi

US NorthrupGrumman

Automated meter readingsystem for utilities

Indianapolis US NorthrupGrumman

Manage & support county's ITinfrastructure

Dept ofAgric.

US SI International Web-based livestock trackingsystem

Treasury US AT&T Build IP VPN

NHS US Microsoft Supply desktop operatingsystem and software

Newham UK Hewlett Packard(HP)

Deliver Windows-based ITinfrastructure

MoD UK EDS Consolidate IT systems of Army,RAF & Navy

Figure 3. IT deals in the public sector in the US and EMEA (Source: BusinessInsight)

However, IT vendors should bear in mind that deals in the public sec-

tor are not always easy to close and often result in very public fail-ures. Witness the collapse in negotiations between a consortium ledby CSC and the German Ministry of Defense for a planned $7.3 bn ITand communications outsourcing contract. CSC started the biddingprocess for the contract in 2000; the costs of competing for and ne-gotiating the deal were a huge drain on the company's resources forfour years. The main sticking point was additional IT infrastructurecosts, which were reported by the German edition of the FinancialTimes to be worth 500m ($608m). The breakdown in negotiationshas led to increasing caution among vendors towards taking on long-

term mega-deals.

The recent financial problems suffered by EDS, in part triggered byan inability to generate a profit from its landmark contract with the USNavy and Marines Corp, have highlighted the fact that developmentcosts and operating risks of managing major deals may often out-weigh profits. There are also the public criticisms to bear, as EDSfound when it came under fire for problems with IT implementationsin the UK at the Child Support Agency, Department for Work andPensions and the Inland Revenue. The latter 3bn contract saw EDS


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being replaced by Capgemini after delays occurred in paying new taxcredits in 2003.

Core technologies in the public sector

eEurope 2010 also provides an indication of the areas in which ITvendors will be able to exploit opportunities. Due to the complexity ofthe administrative apparatus, consultancy services will be importantin helping draw up IT strategies. Solutions will have to be custom-ised, as packaged ones are unlikely to conform to government re-quirements. However, a central IT strategy across the main lines ofactivity would be preferable on the state level in order to increase

transparency and ease of use.

Most governments have yet to fully integrate back-office and middle-and front-office systems. Platforms need to be open in order to in-sure maximum flexibility and scalability, as the system needs to beable to handle an increasing amount of users.

Figure 4. Core tehcnologies and channels in local government (Source:Business Insight)

Going online - this is the first, rudimentary phase of eGov-ernment, allowing one-way electronic information dissemina-


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tion from government to the public. It starts with the digitiza-tion of central registers and the launch of an electronic front-end solution. By the end of the first phase, some transactionsmay be enabled on government websites;

Transactional functionality - this is about the exchange of in-formation and the introduction of interactivity to governmentwebsites, with added functionality such as personalization andCRM software. This phase sees a more advanced security in-frastructure being established, such as PKI, to complementthe transactional solution. With increased interaction, theneed for further systems integration becomes acute and front-and back-office processes are integrated at this point;

Channel integration - the third phase emphasizes the har-monization of electronic services over all available channels.At this point, the linking of all channels to the same back-office infrastructure becomes a top priority. In the US, despitean overall slowdown in ERP spending in the private sector,spending on ERP in the public sector - particularly at the fed-eral government level - has been growing at a higher ratethan federal IT spending overall.

Managing content - the endgame of eGovernment. As bothprocess and content management become more pressing is-sues, it will be necessary outsource various parts of the IT in-frastructure to complement in-house skill sets with dedicatedexternal ones. Internal or external content management willbe needed when government portals, co-coordinating datafrom several government agencies, come alive.

Lastly, an additional driver of growth in demand is the developmentof the telecom infrastructure. High income countries, which already

have extensive communication infrastructure in place, have found iteasier to take advantage of the new technologies. On the other hand,countries where telecommunications reforms, including privatizationof the telecommunication industry, are still in their infancy remain farbehind, as illustrated on the following figure:


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Figure 5. Interlinkages between Telecomunications and Egovernment (UnitedNations global E-government Readiness Report 2004)


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In terms of relative performance some regions did better than others.Again, North America and Europe were leaders in all four indices.

Figure 7. Regional E-government Readiness, (United Nations global E-government Readiness Report 2004)

Most countries of South and Central America made steady progressin 2004 and either maintained their relative positions in the globalrankings or improved them. Compared to the rest of the world, coun-tries such as Chile, Mexico, Peru and Argentina had the same rela-tive world ranking in 2004 as in 2003. Others, such as Venezuela,Colombia, Honduras, Uruguay and Brazil improved. Suriname joinedthe list of countries offering e-government services.


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Figure 8. South America E-government Readiness, (United Nations global E-government Readiness Report 2004)

Chiles e-government services has a simple and effectiveapproach

Simplicity summarizes Chiles approach to e-governmenthttp://www.gobiernodechile.cl . The country homepageprovides citizens with direct access to a variety of onlineservices and information, including a National Online Em-ployment Database ( http://www.infoempleo.cl/ ) and an In-teractive Consumer Affairs Center(http://www.gobiernodechile.cl/consumidor/index_orien_c

onsumidor.asp ).In addition to direct links to these services, Chiles home-page provides user-friendly information on the Presidentsdaily agenda, one-click access to current legislation andimportant documents, easy access to regional govern-ments and national ministry sites, and the list of servicesgoes on and on. While many country websites providethis information, Chile has tailored the national homepage


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so that all online services and critical information are citi-zen friendly and one click away.

The following figure presents the 38 countries that offer transaction-nal features in descending order by the number of online transac-tions available on the national and the six ministry sites.

Figure 9. Countries offering online transactions, (United Nations global E-government Readiness Report 2004)

The United States, the United Kingdom, the Republic of Korea andSingapore offered several transactions online including payment fortaxes, violations/penalties, postal services on both their national andministry sites.


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The Unites StatesThe United States is the world leader in egovernment initiative. TheUnited States national portal FirstGov http://www.firstgov.gov attractsaround 6 million visitors a month. It is the nations Gateway to morethan 180 million web pages from federal and state governments, theDistrict of Columbia, and US territories. The United Sates level ofadvancement provides a stark contrast with the rest of the world.The US alone accounts for 29 percent of the global Internet accessuniverse, far exceeding the whole of Europe at 23 percent, Asia Pa-cific at 13 percent, and Latin America at two percent.

In its approach to e-government, the US have heavily relied on inte-grated portals. Several specialized portals, which collect and con-solidate information in one place online one-stop-shops increasethe convenience of finding topic-specific information for citizens whileresulting in operational efficiencies for government agencies. Fur-thermore, recognizing the importance of involving the citizenry earlyon in its knowledge society initiatives, the government of UnitedStates strongly emphasises on consultation and informed decision-making. Its approach to e-information, e-services and e-consultationcan be dubbed a best practice case.

In terms of technology investments, US state and local governmentshave the following priorities for the next 12 months, which will ac-count for an average of 30% of IT budgets. These are:

Cyber-security - the opportunities for security are growing at8.1%;

disaster recovery and business continuity;

ERP - the opportunities for ERP systems (human capitalmanagement and financial systems) are growing at 7.3%;

CRM - the opportunities for CRM are growing at 10.3%;

and collaboration tools.

In urban areas, wireless communic ations are a priority. More cities -such as Cleveland and Atlanta - are announcing plans to deploycitywide wireless networks. Other growth areas include CRM, espe-


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cially in case management for health and social welfare agencies;and tax and revenue, where systems are being deployed to track andcollect upon complex streams of state and local revenue.

Figure 10. Total US state & local eGovernment spending by level ofgovernment, 2006-2011 (Source: Business Insight)

US state and local governments will experience solid growth ineGovernment investment as agencies use web-based technologiesto improve constituent services, increase internal efficiency and en-hance equity in constituent interactions.

Europe

Europe is the second region in the world after the United-States, ac-cording to the UN ranking. Within Europe, Denmark and the UnitedKingdom take the lead, as illustrated below:


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Figure 11. European egovernment readiness ranking, (United Nations global E-government Readiness Report 2004)

With funding through the e-Europe Action plan, several Eastern Eu-ropean countries are in the process of fortifying their e-services andexpecting to leapfrog to e-health, e-learning, e-government applica-tions, networking, and other web services. For example, health ser-vices such as prescriptions, medical websites and records are in theprocess of being linked throughout the region. The program is al-ready at work in Poland, Hungary and the Czech Republic.


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local government institutions, in time the French and German mar-kets have the potential to catch up with the UK.


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4. Examples of products on the marketand strategy followed by the main ac-tors

The lucrative opportunities presented by the public sector, which areincreasingly global in nature, have not escaped vendors attention.Vendors such as IBM have already begun efforts to expand theirpublic sector ties in countries such as Brazil, while Linux distributorRed Hat is establishing a presence in China to promote its opensource software.

Other vendors are developing innovative ways to gain a foothold inthe public sector vertical in countries where they already have apresence. Witness Novell's efforts to target the UK public sector lastyear, which saw the systems management company offering freesoftware licenses for the latest version of its Netware operating sys-tem to encourage government bodies to opt for its Linux and networksoftware. A month later in the US, Novell became the latest partici-pant in the GSA's SmartBUY program and the first open source soft-ware supplier to participate in SmartBUY.

The type of actors of the private sectors that are involved in suchproject are illustrated in the diagram below.

Lead systems integrator orsubcontractor

Governments

Regions,States,

Landers,Councinl,

Cities, etc.

EngineeringServices-Jacobs-Mitre

-

Consulting Firms-Accenture,- Booz Allen-CapGemini

-

IT services firms-EDS-IBM

-Unisys-

Communicationsproviders-Lucent-AT&T-Sprint

-

Products andniche exspertise

SW Vendors-SAP

-Oracle- Microsoft

-

HW Vendors-Dell

-Nortel-Cisco

-

Niche Providers-Voice recognition

system,-

Figure 13. Vendor and Partnership ecosystem


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Examples of Consulting Firms

Accenture

Accenture is perhaps the fastest rising star among consulting firms inthe federal government market. The company's most recent win, forthe Department of Homeland Security's $10bn US-VISIT (U.S. Visitorand Immigrant Status Indicator Technology) program, puts Accentureamong the forerunners for future projects of this scale and promi-nence. The thrill of winning, however, was somewhat overshadowedby the attempt by Congress to block the deal from Accenture be-cause its parent company is based in Bermuda. Although this failed,one part of the initial amendment could affect future homeland secu-rity contracts.

However, year-to-year revenue growth for Accenture is strong and italso has been actively developing solutions and partnerships for thegovernment through its other operating groups. For example, Accen-ture's Communications and High Tech operating group has partneredwith AT&T to develop a managed messaging solution.

BearingPoint

Much of BearingPoint's work in the federal government is in ERP. In

June, BearingPoint won an interoperability analysis contract, worth$13.4m, from the Naval Air Systems Command. It also has a $229mBPA for the Electronically Managing Enterprise Resources for Gov-ernment Effectiveness program. In addition, BearingPoint and Micro-soft have signed a multi-year agreement to develop repeatable en-terprise IT solutions for government.

Examples of IT Services Firms

IBM

IBM has made inroads into the federal government market via pri-marily two fronts: through its business consulting arm, IBM BusinessConsulting Services, a result of its acquisition of PwC Consulting,and its middleware offerings.

Earlier this year, the Department of Defense selected IBM BusinessConsulting Services to manage and support the development of itspolicy on the use of Radio Frequency Identification Device (RFID)tags among defense suppliers. Meanwhile, as part of a broader


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launch of several industry-specific middleware offerings, IBM re-leased five middleware offerings specifically for government agen-cies in the first quarter of 2004.

HP

HP continues to push into the federal government market via both itsproduct and IT services offerings. On the latter front, HP recentlysigned a $784m contract (the VistA Maintenance and Expertise Cen-ter contract) with the Department of Veterans Affairs to provide engi-neering support services and maintenance on all hardware and soft-ware used by the VA's VistA health information systems.

Examples of Software vendors

SAP

In May, SAP strengthened its offering into the defense and securitymarket by launching its SAP for Defense and Security solution set,which targets defense forces, border patrols and emergency re-sponders. This provides integrated logistics and resource manage-ment, force planning, tactical logistics, personnel and organizationmanagement, material management and infrastructure management.

Siebel Systems

In a selection that suggests Siebel may place more emphasis on tar-geting defence customers with its solutions, Lockheed Martin se-lected Siebel's Service and Analytics modules for the F-35 JointStrike Fighter Program, on which Lockheed Martin is the lead sys-tems integrator. Solutions targeting defence personnel and logisticsmanagement were among those launched by Siebel last March aspart of its public sector solutions launch.


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5. Future developments

Although governments seem committed to making the transi-tion to eGovernment, they lack concise strategies to achieveproposed targets.

The main challenge for governments is to solve issues ofhorizontal fragmentation and vertical regionalization when im-plementing eGovernment.

Governments are under constant pressure to reduce expendi-tures. One interesting response to cost pressures by govern-ments around the world has been the shift in favour of imple-menting open source software.

Due to the complexity of the administrative apparatus, consul-tancy services will be important in helping draw up IT strate-gies.

For most governments, significant work remains on the inte-gration of back-office with middle- and front-office systems.

IP telephony vendors are gaining considerable traction giventhe efficiencies that their solutions can generate through costreductions, unified multimedia and new applications.

The public sector is viewed as one of the most aggressivevertical markets for voice solution adoption over the comingfive years.

In the US, compliance with FISMA has been one of the key

drivers behind IT security spending among federal agencies.


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6. Bibliography

http://inderscience.metapress.com/media/1eplvprhtmg387tkuw1h/contributions/r/q/8/u/rq8u6kvb9jcgjl51.pdf

http://en.wikipedia.org/wiki/E-Government

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/EXTEGOVERNMENT/0,,menuPK:702592~pagePK:149018~piPK:149093~theSitePK:702586,00.html

http://ec.europa.eu/information_society/eeurope/i2010/index_en.htm

http://unpan1.un.org/intradoc/groups/public/documents/un/unpan019207.pdf

http://www.internetworldstats.com/stats.htm

Examples of some best practice approaches in the world for govern-ment website according to the UN:

USA http://www.recalls.govUSA http://www.fedforms.govUSA http://www.govbenefits.govUSA http://studentaid.ed.govUSA http://www.usajobs.opm.govUSA http://www.egov.govCanada http://www.strategis.ic.gc.caCanada http://www.jobbank.gc.caRepublic http://www.g2b.go.kr/ Singapore http://www.ecitizen.gov.sgSingapore http://www.feedback.gov.sg

Chile http://www.gobiernodechile.clChile http://www.gobiernodechile.cl/defensa_ciBrazil http://www.e.gov.brIsrael http://www.ecom.gov.ilAustralia http://www.education.gov.au/ Australia http://www.workplace.gov.au New Zealand http://www.govt.nzNew Zealand http://www.tki.org.nzMauritius http://labour.gov.mu/ Botswana http://www.iec.gov.bw

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