Academic journal article The McKinsey Quarterly

Putting Citizens On-Line, Not in Line

Academic journal article The McKinsey Quarterly

Putting Citizens On-Line, Not in Line

Article excerpt

Electronic government can provide faster, more convenient, and more accurate services that will improve the lives of the people.

Although governments hardly stand at the forefront of Internet innovation, their use of the Net to deliver services has experienced something like a quiet explosion over the past five years. During that time, more than 500 electronic-government initiatives have been launched around the world--up from 3 in 1996. [1] In many cases, the early results have been very promising. A few years ago, for example, obtaining an import or export license in Singapore required applicants to fill out 21 different forms and then wait 15 to 20 days for 23 government agencies to process the request. But since the government launched TradeNet, applicants have had to submit only one on-line form, and they receive a license as soon as 15 seconds later.

To gain a better understanding of e-government's potential, we examined major initiatives around the world and undertook a significant amount of research. We found that the real value of e-government derives less from simply placing public services on-line than from the ability to force an agency to rethink, reorganize, and streamline their delivery before doing so, much as the redesign of core processes in the 1980s transformed many businesses. And it isn't just the Internet-savvy industrialized nations that can benefit; e-government programs can introduce world-class technology players to developing economies.

Better, cheaper government

When citizens and businesses get on-line instead of waiting in line, they can obtain faster, more convenient access to government services, and with fewer errors. Singapore's eCitizen portal, for example, allows people to access all government services from a single World Wide Web site. Moving? Just type in your address once, and it is automatically sent to all government agencies, such as the post office and the police department. Starting a small business? With just a few clicks, you can apply to Singapore's Ministry of Law for a patent and to the country's Trade Development Board for an import license, and you can post job vacancies with the Ministry of Manpower. While Singapore is perhaps furthest ahead in the e-government game, the United Kingdom, the US state of Washington, and many other places are close behind.

Our experience suggests that just 15 percent of e-government's benefits stem from technology solutions; the rest come from streamlining the delivery of services. The two together can produce dramatic cost savings per transaction. In Arizona, processing a vehicle registration renewal on-line costs the state only $1.60, while the cost is $6.60 for customers who renew in person. [2] And the Web site hasn't cost taxpayers anything: it was created and is maintained by IBM, which receives 2 percent of the fee for each on-line renewal. These fees now save the state's Motor Vehicle Division nearly $2 million a year, and the amount could easily double or triple as more people choose to renew their licenses on the Web. [3] The US Internal Revenue Service can process an electronic tax return for just 40 cents, while a paper return costs the IRS $1.60. On average, 40 percent of the expenditures of state governments in the United States pay for the delivery of services, so the potential savings are enormous. [4]

The savings come mostly from using a rule-based decision engine to issue permits or to perform other tasks automatically, provided the user meets specific requirements. Singapore's TradeNet, for example, can issue no less than 95 percent of its import-export licenses automatically, allowing the government to reduce the size of its workforce or to enhance service by redirecting employees to more valuable activities. Additional cost savings come from capturing information more accurately. Electronic filing with the IRS, for instance, eliminates the need to scan handwritten tax forms, thus reducing the incidence of data errors and audits. …

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