A study by Deloitte Research offers a new approach for evaluating the return on investment (ROI) of government technology investments. According to the study, public sector organizations should evaluate information technology (IT) investments not only by the cost savings they generate for government, but by the financial benefits they create for citizens and businesses. The study brings a new dimension to the valuation of IT, suggesting a direct correlation between e-government and economic competitiveness.



"E-government could potentially save individuals and businesses billions of dollars by lessening the effort it takes to obtain a building permit or register a business," said William Eggers, a Deloitte Research director and the author of the study. "Because the regulatory environment is often a critical factor in a company's decision on where to locate, e-government can therefore be a powerful tool for enhancing economic competitiveness."



Conducted by the thought leadership arm of Deloitte, the research introduces a new ROI concept that Deloitte calls "Citizen Advantage(TM)." Citing state, local and federal examples, the study examines the time and effort it takes to comply with regulatory and reporting requirements - activities often equated with red tape and extraordinary burdens to businesses and citizens trying to conduct government transactions. By Web-enabling and streamlining activities such as permitting, licensing and reporting, governments can significantly ease regulatory compliance burdens, which, in turn, helps fuel economic competitiveness.



For example, the Small Business Association's Business Compliance One Stop Web site saves US businesses about $526 million a year by helping them find, understand and comply with regulations.



Deloitte developed the Citizen Advantage methodology after recognizing that most government ROI and business case methodologies fail to measure the investment's real and quantifiable benefits to citizens and businesses. An official with the Office of Management and Budget noted that a tiny fraction of the hundreds of e-government business cases the agency reviewed this year attempted to calculate the potential benefits to businesses and citizens. The study suggests that governments need to expand the definition of information technology's ROI to include how the investment enhances value throughout the entire value chain of a government investment.



"We believe that the success of government programs should be measured by the true advantages they create for citizens, communities, and industries," said Greg Pellegrino, Deloitte Consulting's global industry leader for the public sector.



Added Pellegrino, "In the private sector, success is measured by how business creates a competitive advantage to fuel profits and increase shareholder value - but the public sector demands a more holistic view. To be successful, governments must transform themselves into streamlined, efficient organizations; but they must also deliver extraordinary advantages to the citizens and businesses they serve through new levels of efficiency, accessibility, and responsiveness."



The Deloitte study underscores the notion that "time is money," and argues that the government may need to begin addressing a growing public desire for a "time rebate" - a focus on cutting down the time it takes to comply with government regulations and complete transactions. The key is to employ technologies more widely and effectively by looking at government systems and processes from the citizen's point of view. Deloitte, in fact, has developed a Citizen Advantage Calculator that demonstrates systematic ways to measure constituent time and resource savings.



To obtain a copy of the Citizen Advantage study visit www.dc.com.read more