Who's Afraid of Productivity?
FREEMAN, JAMES
Who's Afraid of Productivity? Government bureaucrats, that's who. BY JAMES FREEMAN HOW MUCH MONEY could government save taxpayers by using the latest technology? Some public officials don't want...
...In recent years, as Washington has spent more and more on information technology, the cost of government has continued to grow...
...of the latest report was delayed because of complaints from government officials...
...According to Barg, public servants have seen studies showing phenomenal savings when commercial banks move from paper to electronic transactions...
...But he adds, "They're concerned about expectations...
...Some public officials don't want you to know the answer...
...The PC was a death warrant for corporate middle managers in the 1980s, contributing to well-publicized layoffs but turbo-charging American competitiveness...
...That's more than the annual revenues of Intel, the world's largest computer chip maker...
...The team that issues the papers, the Harvard Policy Group on Network-Enabled Services and Government, includes representatives of numerous federal departments and 17 state governments...
...And there's no denying the power of information technology to reduce transaction costs...
...Janet caldow directs IBM's Institute for Electronic Government in Washington, D.C., which helps educate public-sector managers about new technology...
...The Department of Education moved financial aid applications online and cut the processing cost for one form from $2.55 to 90 cents...
...According to Caldow, the release James Freeman is a writer in Washington, D.C...
...Further, the report makes clear that many agencies are botching their investments in information technology, with projects that "come in late and over budget and have often failed altogether...
...Fair enough...
...The institute sponsors a series of reports at Harvard's Kennedy School of Government on the wise use of computers...
...One exception has been California Republican Steve Horn, who plans more hearings this year in his House Government Reform subcommittee on efficiency...
...Why hasn't government gotten cheaper...
...No bureaucrat, of course, wants to let appropriators know that his agency could make do with a smaller budget...
...Where's the return...
...Jeremy Sharrard covers the e-government market for Forrester Research, a leading forecaster for the tech industry...
...As a result, according to Sharrard, government managers aren't bothering to keep track of their e-savings: "They're just not measuring" Congress has largely played along, making process improvements, not cost reductions, the aim of investments in technology...
...History suggests that any "tech dividend" will be "reinvested" in bureaucratic missions and staff...
...To take the bank example, a 1999 Gartner Group study found that a transaction handled by a bank teller costs more than a dollar, but the same transaction conducted over the Internet costs less than 5 cents...
...And there are already success stories in various pockets of the government...
...In every other industry, computers have allowed people to do more while spending less...
...Last year, according to the Council for Excellence in Government, which counts former presidents Bush, Ford, and Carter as honorary co-chairmen, Washington spent $40 billion on information technology...
...As the experts explain, you have to wait several years to see the benefits of investment in technology...
...Where's the return on this investment...
...So where's our tech dividend...
...I haven't heard that on or off the record," says Sharrard, adding, "They understand the implications of that idea...
...Strangely, though, few people in government are asking how the new tools can cut costs...
...The lead researcher, Scot Barg, says that he didn't hear from any unhappy public officials while drafting the report...
...If any organization should see huge savings from digital technology, it's the government...
...According to the report, "it has recently become clear that the most significant challenges are related to interpersonal and organizational politics...
...The state of Arizona hired IBM to move its vehicle registration process onto the Internet and cut costs by more than 70 percent...
...Fed chairman Alan Greenspan has noted the dramatic jump in worker productivity in the late 1990s and cited digital technology as the cause...
...You risk marginalizing yourself," says Sharrard...
...Congress should track it, and grab it, and return it to the original investors before a self-interested bureaucracy swallows it up...
...The report, now available on Harvard's website, highlights "best-practices" to make government agencies more efficient—with the implication that those agencies not following best practices are wasting your money...
...Federal Computer Week, a trade publication, reports that some agencies have saved up to 20 percent on procurement by conducting online reverse auctions, where companies bid to provide products or services...
...The potential is enormous—so whether the savings are returned to taxpayers or remain in agency budgets is a multi-billion-dollar question...
...This isn't a message that politicians like to send to taxpayers...
...There's every reason to believe that, for an operation as immense as the federal government, the tech dividend will be enormous...
...So go back to 1994, when according to the General Accounting Office the federal government spent $23.5 billion on information technology—more than the 1994 revenues of Intel, Microsoft, and Cisco combined...
...These officials are afraid their agencies might be expected to deliver similar results...
...If you do e-government too well, you may reduce your budget and lose your prestigious position...
...When he attends conferences and panels on the uses of the Internet, the potential for cheaper government through technology is not a topic for discussion among government employees...
...A vast amount of what government does is collect and distribute information and mon-ey—exactly what computers and digital networks do cheaply and efficiently...
...It's called "e-government...
...When computer network projects fail, the culprit is generally not the technology but the bureaucrats...
...The potential for cheaper government through technology is not a topic for discussion among government employees...
...Computers, then, could make government more efficient, but government employees won't let them...
...And the news gets more depressing...
...Horn says he'll look at specific practices that could save money...
...A study funded by PricewaterhouseCoopers estimates that our various levels of government could save more than $50 billion per year just by using online procurement and doing the job half as well as private companies...
Vol. 6 • April 2001 • No. 28
