Playing with Fire

In simple terms, electronic governance is the application of information

technology to the processes of government functioning to bring about greater

efficiencies and productivity enhancements. In the US, the federal, state and

local governments are harnessing the advances in IT and the opportunities so

presented to restructure themselves and the citizen and business interfaces with

a view to providing better governance.

The idea is for governments to use IT as a tool for bringing government

services online and offering them to constituents through the Web. Routine legal

transactions such as tax filling, vehicle registration and business licensing,

can now be conveniently undertake online. This process is saving governments

substantial revenues by reducing administrative costs associated with paper

filling and staffing. At the state and local government level, many states and

provinces have also deployed online employee self service functions, using web

enabled ERP for costly activities like benefit plan enrollment, job posting and

applications and budgeting and financial management. Many departments and

ministries are also experimenting with online systems to improve efficiency.

Driving government projects



Analysts state that e-government is becoming a key driver of government

projects across the US. This sentiment is also echoed by leading global systems

integrators featured in the latest annual survey by Washington Technology, on

the 2002 Top 100 prime contracts in the US Federal IT market.

Despite a challenging economic environment in the US systems integrators

companies have claimed to have witnessed steady growth in their e-government

business. IT budget squeezes at the federal, state and local level

notwithstanding, most companies claim revenues have upped from this segment

during the 200-01 period. The growth however fell during 2001, a sign of the

fact that a slowing of the economy affected state budgets and that state

legislatures were debating where to make budget cuts because of tax revenue

shortfalls.

Role of Indian companies



What Indian companies have to realize is that implementing projects for the

government and PSUs is very different from say, addressing the corporate

marketplace. Both markets have different characteristics and different needs.

Indian companies have to work towards understanding the US Government market and

create a strategy that successfully extends their existing capabilities into the

on-line realm. Companies such as IBM have been using their e-business skill sets

to capture a larger share of the e-government market. The expertise and

experience gained while addressing commercial/ corporate customers is now begin

extended and applied in the government sector.

Analysts point to the fact that the e-government market will be dominated in

large part by traditional applications getting web enabled. A Number of US-based

Government and PSU organizations are today focusing their IT budgets on web

enabling themselves rather than beefing up their legacy mainframe or client

server based systems.

Growth across verticals



As analysts of the e-government/IT market at the US state and local

government levels conducted by Gartner Dataquest shows that the areas within

this sector that will witness significant growth are administration and finance,

human services and transportation, followed by public safety, health and

justice. The trend today is for some state and local governments to use health

and human services contracts to upgrade their infrastructures. The contracts

creates further opportunities for IT vendors, analysts point out. The Gartner

Dataquest study indicates that spending growth within agencies for IT components

is the strongest among software and external services, which are growing at

rates of 9.5% and 13.5%, respectively. Other high growth markets are internal

services and hardware.

E-governance trends in the Federal market



Industry analysts said three major trends will shape the federal

e-governance market in the year ahead. The first key trend is centered around

the issue of security. A significant opportunity exists for the Indian software

industry in this space as even large US systems integrators are looking for

partnerships with other large integrators as well as smaller software and

solutions provider’sAnother trend among vendors catering to the US Federal

market is acquisitions and mergers. These collaborations are aimed at adding

relevant skills sets to cater to the rather large and complex needs of the

Government market. The fiscal 2003 budget has allocated nearly $ 380 million for

the project. A core piece of this project is e-governance and involves on line

work. It will also entail the development of the IT and communications

infrastructure to support the initiative.

Wider playing field through partnerships



Systems integrators tapping the Government have rarely worked in isolation.

Even the largest among them have always reached out for partners on their

large-scale IT projects and readily outsourced components of their contracts.

Here, in fact lies a significant opportunity for Indian vendors. As US and other

global Government contractors seek partnerships with other integrators, the

Indian software brigade can make a collaborative pitch, based on their existing

levels of skills and services. A similar strategy could prove beneficial for

Indian IT software and services companies as well. The right partnership can

provide an Indian company with the relevant credentials needed to make an entry

into US government markets

As mentioned earlier, in the US, systems integration companies are intending

to rely on another tried and true method for obtaining new business-acquisitions

and mergers. This is a route that large Indian software companies can also

follow. In fact, leading Indian software companies have been acquiring smaller,

yet focused and niche companies in the US to gain access to the market and a

base of existing customers.

Opportunities for small players



Companies involved in e-governance projects are claiming it’s a big

revenue opportunity. Analysts also state that there is great potential for

software and services players, especially small firms. A number of SME companies

are participating actively in the e-government market and this number will rise

over the next few years. Indian SME companies within the software industry can

start out by getting involved in Web development contracts outsourced by the

larger systems integrators involved in key government projects.

Team DQ



For more information or enquiries, write to research@nasscom.org

Technologies and apps supporting Indian e-government initiatives

Portals



Portals play several critical roles for Governments, including providing a

single citizen view and access point into the wide range of Government services,

a user friendly interface that encourages citizen usage and interest in online

government services and a mechanism for integrating multiple government systems

to a web front end in a more standardized and cost effective way.

Private exchange for suppliers



Implementing technologies for suppliers allows multiple government agencies

and semi-public corporations to use a shared e-procurement systems, access a

common catalog of approved vendors and conduct basic sourcing events with

potential suppliers. This allows government agencies to lower the cost of making

purchases, improve employee compliance with purchasing policies and identify

opportunities to get more competitive prices from suppliers.

CRM



Federal agencies are using CRM to provide personalized citizen self-service,

to track interactions with citizens and ensure responsiveness, to manage citizen

contacts across multiple channels and to measure and assess citizen satisfaction

with Government services.

E-learning



So far, the United States government has always been active in the

e-learning field. The US OPM is responsible for creating a repository of

government owned courseware that would be made available to all federal, state

and local governments.