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E-Government – a strategic perspective
– The approach of Roland Berger Strategy Consultants–
European Technology Forum
Strasbourg, April 24, 2001
E-Government – a strategic perspective | April 24, 2001
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This document was created for the exclusive use of our clients. It is not complete unless supported by the underlying detailed analyses and oral presentation. It must not be passed on to third parties except with the explicit prior consent of Roland Berger & Partner GmbH International Management Consultants.
Content Page
A. Initial situation – e-government is a means, a part and an objective of administrative reform
3
B. Need for action – the fields of action result from the gap between vision and reality of e-government
9
C. Options for action – fields of action are prioritized in the e-strategy by the criteria of potential for realization and strategic relevance
19
D. Roland Berger and e-government-projects – our strategic consulting approach encloses the key elements for the realization of e-government
23
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A. Initial situation – e-government is a means, a part and an objective of administrative reform
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E-government supports all the important objectives of administrative reform – so it can be a means, a part and an objective of modernization
The most important objectives ofadministrative modernization1) Possible support by e-government
Source: Bertelsmann-Foundation, Roland Berger
1) Poll of the Bertelsmann-Foundation involving 164 mayors in cities with morethan 50.000 inhabitants, Aug./Oct. 2000. Objectives rated as "very important"
Higher satisfaction of citizens
60
61
67
69
73
Better service for companies
Improvement of attractiveness for
companies
Higher effectiveness of administration
Higher economic efficiency of
administration 100%
Easier processing of contacts with the administration
Promotion of economic development online, faster permits, marketplaces for SMEs
Higher attractiveness through better service
Easier processes through electronic support
Cost savings, e.g. through e-procurement
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E-government is the electronic execution of administrative processes – between administration and the public as well as within the administration
Citizens
Companies
Other administrations
Supporting technologies
Internal communication of politics and administration
g2c, c2g1)
g2b, b2g2)
g2g3)
Public Administration
Strategic partners(hard- and software-firms, banks, local enterprises, … )
Processes and workflows supported by intranet
1) Government to Citizen: e.g. information, citizen services on-line, elections2) Government to Business: e.g. promotion of economic development and permits on-line, procurement3) Government to Government: e.g. joint processing of permits
Front-Office Back-Office
Source: Roland Berger
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The continuing pressure of social and internal factors strengthens the need for a further administrative modernization
International pressure by competition
• Various innovative approaches towards e-government in other countries
• Customer, i.e. enterprise orientation and rapid permit processing are important factors for attractiveness of a country in the global competition for investors
New models of administration
• International approach of "New Public Management"
• German administrative reform in the nineties under the concept of the "Neue Steuerungsmodell"
Expectations of the citizens
• Experience of the rapidity of the internet
• Expectation of fast, cheap and efficient action by the state and the administration
• Expectation of being treated as a client instead of a solicitor
Technological change
• Growing connectivity of economy and private persons forces administration to catch up
• Digitalization of information and communication eases the coordination tasks of the administration
Source: Roland Berger; PriceWaterhouseCoopers and WIBERA, "Die Zukunft heißt E-Government"
Strong pressure for change from many sides
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High growth rate of internet usage creates new expectations towards public administration
Source: PWC, "e-Government. Eine Modeerscheinung oder "digitale" Revolution und Zukunft der Städte?", EITO (European Information Technology Observatory), Roland Berger
Growth of number of internet users in Germany1)
Wider distribution of new customer expectations
"What would you like to do from your home via the internet?"(% of persons asked)2)
5,78,0
10,9
13,6
16,1
18,7
21,2
23,7
0
5
10
15
20
25
1997 1998 200420032002200120001999
ConservativeEstimate
Mio.
• "24/7/365“ – rapidity and availability around the clock expected
• Higher convenience – realization from private home hoped for
• Individualized treatment desired
Contact public authorities
22
24
27
40
43
44
50
Transfer money
Order tickets
Book journeys
Buy books
Order from mail order houses
Order food
1) Estimate: EITO 2000 2) PWC-Poll 2000
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In Germany the most important field for the application of e-government will be the municipal level, as administrations of all levels agree
Levels of administration with the strongest change by e-government
Source: KPMG, "Verwaltung der Zukunft – Status quo undPerspektiven für e-Government 2000", Roland Berger
100%
64
9
27
4
20
76
8
92
Municipalities
Länder
Federal government
MunicipalitiesLänderFederal government
Appreciation of
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B. Need for action – the fields of action result from the gap between vision and reality of e-government
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• 24/7/265 – Citizen services available on-line around the clock
• Information, communication and interaction
• General availability, e.g. by kiosk system
The ultimate vision of e-government is the virtual town hall – the modernization of all fields of administration by the new techniques and media
• Promotion of economic developmentand permit processing on-line
• E-procurement
• Electronic communication with other administrations
• Administration guide / "phone book"
• Joint processing, e.g. of permits or reforms
• Connected IT-landscape without interfaces
• Electronic internal communication of administration
• Electronic internal exchange of documents
• Appropriate partners for operation, financing, hard- and software, content, etc.
• e-processes – complete electronic workflow and document management, supporting the citizen services
Source: Roland Berger
• Assured financing
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This way, the vision embraces much more than the offering of citizen services on-line – the ideal is a parallel internal modernization of the administration
Source: Roland Berger
Not only build the internet offer upon the existing processes ... … but reform the internal processes as well!
Partial modernization Overall modernization
• Only limited cost savings• No improvement of internal efficiency• Partial understanding of e-government• Possibilities of new techniques are not fully used
• Complete realization of savings potential• More efficient processing• Global understanding of e-government in the frame of
administrative modernization• New techniques and media are used in all spheres of the
administration, front and back office
• Offer of citizen services on-line• Internal processing in the old form – numerous media
breaks1)
• No redesign of internal processes
• Offer of citizen services on-line• Internal processing in seamless electronic workflow –
avoidance of media breaks• Check and optimization of processes
e-Government – partial or overall modernization of the administration
1) A classic example: the citizen's e-mail is printed and put into the circulation file
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If internal modernization takes place, e-government is a means to lower costs – despite the initial investments
Principle
1) To be reduced by choice of appropriate partners for financing - see pages on financing2) E.g. no more typing of paper forms into a computer program. Example: German electronic tax declaration3) Examples: Munich and Muenster – see pages on document management4) Example: Police of Baden-Wuerttemberg – see pages on e-procurement
Drivers of costs1) Drivers for savings
• Development of e-strategy• Development of applications• Investments in necessary hardware• Training of employees• Public relations
• Cheaper electronic processing, e.g. by– avoidance of media breaks2)
– avoidance of sorting- and filing-time3)
– automatized processing, e.g. of orders4)
• Growth of these effects by further distribution of internet usage and acceptance of the new services by the citizens
• Cost of investments for additional service decreases through effects of scale and through learning effects
Savings
Costs
Time
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Vision is confronted by reality – e-government in the front-office has only been realised to a small degree in Germany
Information• Guide through administration• Information on industrial areas• Information on economic qualities of site• Local enterprises
Communication• Between citizens and administrative departments
via e-mail• Between various citizens
Interaction• Download of forms• Filling and sending of forms on-line• Digital signature and payment• Digital invitation to tender and decision
Participation• Elections on-line
Number of services
offered
High
LowlMany FewCities which
offer the service
InteractionCommu-nication
Information
Partici-pation
Degrees of realization Degree of realization
Source: Roland Berger
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Though there are numerous examples for e-government in Germany, in most cases only isolated services are realised electronically
E-signature– Bremen, Nürnberg,
Esslingen, (Chip card)
– Memmelsdorf (digital encryption)
E-forms– County Neumarkt (order of trash cans)– Karlsruhe (various forms)– Other cities and counties
E–payments– Bremen
E-town-marketing– Mannheim as best practice– In principle in all bigger
townsE-PPP
– Berlin: financing of berlin.de by private partners
Internal e-communication– Stuttgart (CUPARLA)– Administration networks
(North-Rhine Westphalia, Bavaria)
E-procurement– Cities of the Erftkreis county– Baden-Wuerttemberg state police
E-processes– Town hall Cologne:
IT-supported workflows
E-public – citizen network
"publikom" in Münster E-document management– München (car registry)– Münster (passport registry)
E-Government
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A number of factors prevent the further expansion of e-government
Source: Roland Berger; PriceWaterhouseCoopers and WIBERA, "Die Zukunft heißt E-Government"
Political factors
• Sometimes problematic interaction between politics and administration
Cultural factors
• Lack of service orientation
• Lack of a culture of motivation and innovation
Social factors
• Danger of the "digital divide"
Legal factors
• Prohibition of auctions in calls to tender
• Requirement of handwritten signature for many processes
Technical factors• Insufficient IT-
equipment of town administrations
• Data safety must be secured
• Digital signature requires chip card and reading devices
Financial factors• High initial
investments
• German muni-cipalities name lack of financial freedom as main obstacle to e-government
Lack of strategy• 88% of German cities do not
have an e-strategy
• Cities do not know the expectations of their citizens regarding the cities' web site
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Some impediments can be overcome by partnerships – appropriate partners useful for the conception, financing and implementation of e-government
Partner
Other cities or counties(horizontalpartnership)
Producers of soft- and hardware
Partners for financing
Content partners for commercial portals
Universities
• Producer takes over development costs and receives future • selling rights
Functions of partnership
• Joint development of concept and IT
• Lower development costs
• Wider reach of joint internet presence
• Joint development of pilot applications
• The public partner saves the development costs
• Private partner finances internet presence, in exchange he receives the right of commercial use of the site
• Integration of all kinds of content by different partners: hotels, real estate market, events, sports, news, ...
• Joint development of new products
• Integration of scientists in decision making in order to gain additional know-how
Examples
• RegioInfo (Baden-Wuerttemberg)
• baynet.de (Bavaria)• RegIS online (Lower Saxony)
• Stuttgart (Berkom)
• Mannheim (SAP)
• Berlin (berlin.de new media GmbH)
• Berlin
• Stuttgart
• Mannheim
Source: Roland Berger
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Partnerships can contribute to the financing of e-government in a number of ways
Case-by-case payment
• A private partner develops an application for the on-line transaction of citizen services
• The public partner pays a fixed fee for each transaction made via the application
• Lower transaction costs compared to traditional transaction makes for a savings effect1)
Joint development of applications
• Joint development of software• Public partner serves as a test user for piloting• The private partner pays the costs of development and
receives the rights of future selling of the application
Life events-related advertising
• Integration of private partners into the needs listed under each "life event"
• Examples: for the life event "registration": links to a bank, to utility firms etc.; for the life event "marriage" links to shopping malls etc.
Site operation by private company
• Private partner takes over the costs and the operation of the site, in exchange he receives the name rights and the right of commercial usage
• Public partner cares for the "official" content on administration etc.
Source: Roland Berger, McKinsey Quarterly
Financing models for e-Government
1) E.g. in Hong Kong: 0,80 instead of 1,90$ average transaction costs
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Further possibilities for financing arise from the adaptation of the functioning of private internet portals
Source: Roland Berger
The internet presence of a city should not be understood as a static offer of information ...
... but as a portal, which offers an entry to all kind of information on the town...
... and so allows a commercial use of the site
Theatre
Shops
Hotels
Administration
News
sel-ling
User
Vendor
Portal
Ads
seeksserviceor product
brings user
€ €Sport
€
informa-tion/na-vigation
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C. Options for action – fields of action are prioritized in the e-strategy according to criteria of potential for realization and strategic relevance
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The broad scope of the subject makes it impossible to realize e-government simultaneously everywhere – it is a essential to have an e-strategy
Definition of an e-strategy
• Concentration on the fields with the highest strategic potential
• Start at the interfaces of fields
– High effectiveness– Strong chance for
integration
• Making up of a global strategy and vision – but implementation of this vision in small easy-to-realize steps
• Concrete, small e-realization projects instead of long and fruitless e-discussions
Cross sectionfields
Impossibility of simultaneous development in all fields
Isolated fields
Citizen services
Enterprise services (Promotion of econo- mic development, marketplaces, etc.)
E-procurement
Internal workflow and document management
Internal communication
Processes IT Partnering Financing
Source: Roland Berger
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The fields of action are prioritized by the criteria of potential for realization and strategic relevance
Evaluation of each application and step-by-step implementation
Step 1 Step 2 Step 3
Potential of realization
Big
Small
High LowStrategic relevance
Source: Roland Berger
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The weighting of the criteria determines the final evaluation of both dimensions
Strategic relevanceQuality of service Image
effectEfficiency Subjective
urgencyImprovement of
connectivityUse of media
25% 25% 25% 5% 10% 10%X X X X X X
+ + + +
=
+
=
+
Potential for realization
Ec. effectiveness25%X
Technical aspects
15%X+
Organiz. aspects15%X
Legal possibility
15%X
+
Step 3Step 2Step 1
Pol. acceptance30%X
+
Source: Roland Berger
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D. Roland Berger and e-government-projects – our strategic consulting approach encloses the key elements for the realization of e-government
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The strategic approach of Roland Berger helps municipalities overcome the typical hurdles of e-Government
Support by strategic and holistic consulting approach of Roland Berger
• Knows and respects the complex realities of public administration
• Cooperation of Roland Berger with IT-partners guarantees competence in the sphere of politics and administration as well as in technical questions; a mere IT-consultant is not enough in order to overcome the hurdles
e-governmenttoday
Vision ofe-government
tomorrow
Financial hurdlesTechnical hurdles
Legal hurdlesCultural hurdles
Political hurdles
Source: Roland Berger
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Roland Berger's contribution to project success resides in our combination of administrative and e-experience
Contribution of Roland Berger
Experience in public administration
• Competence Center Public Services – numerous projects in all spheres of the public sector
• Knowledge of the public administration
• Experience of projects and implementation of modernization and reforms in public administration
• Knowledge of political and administrative proceedings and frameworks
e-experience
• Over 100 realised e-projects in private economy
• Broad coverage of all fields – from processes, organization and technique to marketing, portals and marketplaces
• Knowledge of proceedings used in the private economy
Source: Roland Berger
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The consulting approach of Roland Berger contains all the key elements of a successful implementation of e-government
Source: Roland Berger
Parallel measures• Integration of all relevant players from politics and administration• Choice of appropriate partners
IT-audit• Analysis of IT-strategy
• Analysis of IT-processes, infrastructure and applications
• Analysis of options for action• Prioritization according to
specific client needs• Recommendation of individual
approach
e-government-strategy• Analysis of actual
processes regarding the proposed strategy• Definition of target processes
• Definition of necessary IT and comparison with results of IT-audit
Redesign of processes• Choice of pilot field and pilot
application
Piloting and implementation
• Evaluation and communication of results
• Implementation
1 3 4
2
5
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The Roland Berger strategy audit identifies strategic potentials for e-government and elaborates individual approaches
Source: Roland Berger
Process Aims
• Classification of tasks of the institution analyzed in the scheme of isolated and cross section fields
• Definition of appropriate project approach, which promises highest degree of optimization
• Analysis of single fields following economic and political criteria
– Discussion of options
– Evaluation and prioritization of options
• Evaluation of strategic position compared to other administrations/political institutions
• Evaluation of tasks and performance of the institution– Internal view– External view
• Identification of future challenges
• Identification of strategic strengths and weaknesses and oh biggest levers for e-government
Strategy audit
Recommendationof individualapproach for e-government
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The existing IT is checked for its e-government aptness in four different fields
Structure of IT-audit
IT-strategy• Definition of tasks
• Vision
• Self-understanding
• Standards
IT-processes• Operation• User training / support• Software development• Procurement• Project management
Applications• Fulfillment of tasks
Infrastructure
• Hardware
• Capacity for integration• Network
• Future appropriateness• Internet connection
Fit for e-Government?
• Satisfaction of users
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The profound and complex process of change can be managed successfully with a step-by-step acceleration
All processes and offices
Only pilot processes
Integrated processesand office
Piloting Transfer to similar offices
Global roll-out
Communicationof pilot results
Preparation of all employees for the new structures
(training/ workshops)
Gradualimplementation of
e-government
Scheme
