1. S o lu t i o n S f o r S tat e a n d lo c a l G ov e r n m e n t i n t h e i n f o r m at i o n aG e GOVERNMENT TECHNOLOGYA publication of e.RepublicV o l u m e1 8 I s s u e 8 w w w. g o V t e c h . n e t A U G U S T 2 0 0 5Its no secret that the Internet forced society to change as thegeneral public discovered the new electronic mediums many conveniences.Businesses scrambled to whip up Web sites to meet the sudden demand,and those sites evolved rapidly from simplistic to sophisticated, able tohandle a variety of transactions directly with consumers or through thirdparties such as PayPal.Public-sector leaders also recognized the benefits of various Web-based transactions with the range of constituents that different agenciesserve. Government Web sites popped up on the Internet soon after thepublics fascination with all things online proved permanent. S h a n e P e t e r S o n | a S S o c i at e e d i t o rThe problem is that once an agency went beyond a simpleSouth Carolina, like other states, sought the best product at the online brochure, nobody had a clear idea of how to proceed.best value, said Ruth Kirkland, director of strategic communica- Surprise, surprise the biggest unknown was devising a way to tions for the Division of the State CIO. pay for electronic government. Cost and funding was a critical component, Kirkland said. Governments had three choices: build and manage their ownAlso, managing the project from beginning to end, all the way to Web sites; pay somebody else significant money to build andmaking the citizen aware of what services are available. manage them; or sign a self-funding contract, which unlike the Doing all this at no cost to the state played a big part in NICs first two options, doesnt cost the government a dime. eventual success in winning the bid, Kirkland continued, as did The self-funding model clearly holds a certain attraction. Who the companys familiarity with operating self-funding portals for doesnt like something for nothing? A significant number of states various states. have deployed portals that pay for themselves through convenienceAs part of the contract, the states existing portal will get a fees for certain e-government transactions, known as self-fundingmakeover, slated to include customization and personalization portals. features, and more than 30 existing e-government services with There are strings attached to the approach, its just that theyre online payment functionality will be moved to NICs payment attached to somebody else. Still, the self-funding model seems toengine. make sense with todays ultra-tight government budgets, and sup- Our current portal is somewhat dated, said Barbara Teusink, porters argue they made more progress on e-government than South Carolinas deputy CIO. Weve had a difficult time finding they would have otherwise because they adopted a self-fundingadequate time and resources to keep it as current and fresh as we approach.would like internally, so were looking to NIC to give it a freshface, bring in updated information and give it a little more current South Carolina Wades Inperspective. In April, South Carolina signed with Kansas-based e-govern-The portals current design is vintage 2000, Kirkland added, ment provider NIC to build and manage the states e-government and the state would like the portal to reflect advances in Internet- portal, making the state the 17th to contract with the company.related technologies. Though the state is happy to turn over the The state went to bid November 2003 and chose NIC from portal maintenance to somebody else, doing so doesnt completely among 11 competitors, including BearingPoint, IBM and Official absolve state officials of duty. Payments Corp. State officials said the first new service launched The biggest headache is working with all the agencies to find this summer, and NIC representatives worked with state agenciesout what their needs are, what services they have that we need to and the E-Government Oversight Committee to identify and pri-make available to the citizens, how were going to get those ser- oritize new applications.vices online and going through all the technical gyrations to make

2. them available, Kirkland said. Then, once its there, letting citizens the end of this year for completing the transition to the new portal know its there and how to use it. From that aspect, it relieves a environment. big headache for us. Obviously it creates a minor headache in that Teusink said reactions to the new portal include excitement, we have to manage NIC to make sure theyre doing what theyrecautious optimism and unenthusiastic. supposed to be doing. There are a few agencies out there that are somewhat reluctant In some ways, South Carolinas experience mirrors that ofto consider becoming involved, she explained. But I think the Texas. design and model behind what were trying to do will win them In 1999, the Texas Legislature approved a pilot for creating anover. eGovernment Framework an infrastructure for state agencies Still, Kirkland and Teusink expressed surprise at the amount of and local governments to provide online services to citizens and what they called pent-up demand for Web applications in certain businesses. The Legislature also stipulated that there would be no agencies. state funding for it, and no requirement for state agencies or local The small- to medium-size agencies that have these needs but governments to develop applications to use on the framework. have not had the funds to even consider such offerings are excited Texas eventually awarded a contract to BearingPoint, which about the possibilities, Kirkland said. The lists are growing. built the infrastructure behind TexasOnline the super-portal Officials believed that interest was out there, but the magnitude that would serve as Texas e-government face.The portals business is nearly overwhelming, Teusink said. model relies heavily on self-funding TexasOnline servicesWe knew there was going to be demand, she said. We just generate revenue through user, subscription and hosting fees.didnt expect such volume right off the bat. The company receives a convenience fee for each transaction, and a 15-citizen governing board, established by the Legislature,Long Time Online determines services provided and establishes associated fees.Utahs self-funding portal has been live since May 1999, said AlSherwood, the states deputy CIO, adding that Utah is happy with Up to Speedthe use of the portal services by both businesses and the public.South Carolinas portal platform was slated to go online June 1,The self-funded model, by the way, has been very successful Teusink said, followed by conversion of legacy Web applications to in Utah, Sherwood said. I cant imagine being this far along in the new platform.The next steps are the portals new look and feel,e-government without it. We were so pleased with the results and adding more applications, she said. South Carolina is targetingover the first four years that we simultaneously executed tworenewals at the same time.The self-funding part of the portal is the fee charged to cer-tain users for access to premium services. Most consumer services, Sampling of Statessuch as registering a pet or checking availability of vanity licenseplates, are accessible for free, but businesses often pay convenience Online Servicesfees for corporate services on the portal.Still, a self-funding portal creates kinks that need working out, Digitally Certified Records in Indiana Sherwood said. In December 2003, nIc and the Indiana Bureau of motorThe complaint about self-funding portals is that convenience Vehicles simplified the process of certifying driver records tofees will drive adoption down because people wont pay the fee be admitted in county court proceedings. Indiana becameto do something they can do for free at a physical office. the first state to allow government records to be digitallyIf youre talking about motor vehicle registration renewal, signed, legally certified and delivered electronically by usingwhy should somebody that goes online pay extra? And some- electronic Postmark technology. now available in all 92body who walks into an office gets a better deal? Sherwood Indiana counties, the service has reduced turnaround for said. Thats essentially the question we had to address here. Even record requests from up to six weeks to a matter of sec- though we needed this model to work in Utah, philosophically onds.we knew that if agencies cant drive toward 35 percent adoption,their internal efficiencies arent going to be that great because Alabamas Point-of-Sale Outdoor Licenses theyre going to have to manage multiple channels. last summer, nIc worked with the Alabama Department of The state wanted a funding mechanism for its portal but had to conservation & natural Resources and wal-mart to build balance that against the reality that a convenience fee would drive an online hunting and fishing license service. the solutionconsumers to physical offices instead of using the portal. resides on a licensing agents existing computer and auto- Sherwood said Utah passed legislation in 2003 to let state agen- mates the licensing process. more than 140,000 licensescies modify the fees they collected for services so those fees would were purchased at wal-mart stores during the first hunting cover the cost of providing that service. season, which dramatically reduced bookkeeping demands We opened it up so the portal provider could still charge a for licensing agents. the agency estimates it will savefee, but it wouldnt be charged directly to just the people using the $200,000 annually from the service.Internet service, he said. There was a registration service, and itwas charged to everybody. You paid the same thing at the door asyou did on the Internet.August 2005 3. Early PlayersGovWorks(acquired in 2001 by govONE Solutions)govONE Solutions(now part of First Data Government Solutions)GovConnect(acquired by govONE Solutions in 2002)EzGov(acquired by ChoicePoint in 2005)NICSDR Technologies Inc.(acquired by NIC in 2000)SAICBecause of the legislative change, Utah gradually eliminated To some extent, it changes the rules of the game. convenience fees for most online citizen services, Sherwood said,Bringing existing, separate contracts and the outsourcing rela- though the motor vehicle registration renewal service does includetionships created by smaller agencies into the newly created central a small convenience fee built into the overall renewal fee. IT shop creates an unknown, Sherwood said, and its not certainCorporate customers, however, pay convenience fees on many whether the results will be more outsourcing, less outsourcing or business-oriented services. In part, Sherwood said, businesses dontcloser coordination of outsourcing. mind the fees because the application software on the portal isIt will be an interesting area to keep an eye on, he said. There designed to work seamlessly with corporate IT systems.will be some have-not agencies that will now have internal resourcesThey dont have a problem paying the convenience feethey havent had in the past.There will be some options where, in the because they save money, he said. People dont typically gripepast, there havent really been options. Things are going to change, about those fees.The bulk of the fee area in the self-support model and it may be that some of that work will be done internally because comes from those business services.the capability is there to do it internally.Changing StructureChange of Heart? Utah is moving to a centralized IT environment, a move that will Massachusetts put together its Mass.gov portal in late 2001 and complicate the states self-funding portal contract, Sherwood said. early 2002 with an official launch in May 2002. The state con- One aspect of NICs relationship with the state is that, despitetracted with a vendor to build and implement the portal, said Susan the current decentralized IT environment, the portal gives theParker, director of Mass.gov, though the states IT staff developed CIO an arena to develop enterprise applications, he said. Onall portal content. the flip side, NIC can market directly to agencies for work on State officials considered the self-funding model for por- agency-specific applications since NIC signed a statewide tals, Parker said, but Massachusetts opted not to pursue such an contract, smaller agencies dont have to go through the procure-approach. ment process to use NIC. When we developed the portal and our e-gov strategy back That doesnt mean an agency has to use NIC, he said. It also in 2000 and 2001, the self-funding model was relatively new and doesnt mean an agency doesnt have a right to do an RFP if theyunproven, she recalled. There were states doing it, but we didnt wanted to see what the state of the market is at any particular time. necessarily know how sustainable it was. There was also a percep- Theyve got an option to do that.tion that there would be a heavy reliance on charging fees to That flexibility to use the contract for either enterprise or citizens. agency-specific purposes might be constricted by the emergence I think that perception may have been slightly off, because now of a central IT shop, which was created by HB 109. The bill its clear that NIC is relying more on things like fees for motor passed the Utah Legislature in early May, and consolidates IT vehicle records that citizens never or rarely end up paying, she services and governance in the executive branch of state govern-explained.Those fees are charged to insurance companies or other ment into one department. Utah will now have a consolidated large entities that collect and sell that data. IT department reporting to the CIO.The transition, which began Whats catching officials eyes now is self-funded application after the bills passage, is scheduled for a 16-month period. development, and Massachusetts would like to explore opportu- Small agencies without IT resources have used that contract tonities in that vein, Parker said, because even though Mass.gov is work with NIC on Web applications, Sherwood explained.successful and has built up a community of users, IT staff struggles The question then becomes, If everybody is one operation or with how long it takes to develop applications. organization, then whos going to do the work? he continued. We think the self-funding model could help us jump-start Are you going to do it internally? Are you going to outsourcesome application development, she said. Were not philosophi- part of it? How are you going to coordinate that so its efficient? cally or morally opposed to the whole model, but a decision was w w w. g o v t e c h . n e t 4. local Governments Self-Funded PortalsDes moines, IowaIndianapolis/marion county, Ind.Iowa state county treasurers Associationhouston, texasDallas, texas made a few years ago not to pursue the portal that way.ernment, she continued, applications that require a higher level of Massachusetts has hit the point where the applications to handlecollaboration. the obvious and easy transactions online have been written. The As with any state, Massachusetts is certainly not averse to having remaining work is in developing difficult applications that handlesomebody else do that work, she said, and the self-funding model transactions that cross lines between agencies and branches of gov- is clearly attractive. Q Elizabeth ProudfitDirector of Business Development 703-288-0980eproudfit@nicusa.comPosted from the August 2005 issue of Government Technology Copyright 2005 Government Technology magazine www.govtech.net#1-11654924 Managed by Reprint Management Services, 717.399.1900. To request a quote online, visit www.reprintbuyer.com.