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Understanding Costs and Benefits
Identifying Government Costs
The first step towards financing an e-Government project is to develop a budget that fully and accurately reflects the costs involved. The costs to governments of launching successful e-Government projects can be sizeable, and many are not directly related to technologies. Major cost categories include:
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The first step towards financing an e-Government project is to develop a budget that fully and accurately reflects the costs involved. The costs to governments of launching successful e-Government projects can be sizeable, and many are not directly related to technologies. Major cost categories include:
- IT Software and Hardware - e-Government portals and applications can be expensive, especially if customized software design is packaged with a range of consulting services. These costs can quickly increase if complex systems, such as content management (CMS), database or document management (DMS), knowledge management (KM) or customer relationship management (CRM), are added to support user-facing applications.
- Planning – Given the complexity of IT technologies and public administration, planning an effective e-government project can require commitments from a variety of teams at all levels of government. Costs associated with planning include time spent by various internal planning teams defining operational and technical requirements and developing tenders for design and implementation services. Additional expense may be associated with internal and consultant evaluations of existing internal processes and IT systems and other vendor support for the planning process. Planning costs may also include the development of interoperability frameworks and suitable security and privacy guidelines.
- Process reform – Effective implementation of e-Government often requires the simplification of regulatory requirements, streamlining of processes, and cross-agency integration. Costs will vary greatly depending on the complexity of processes involved and the number of agencies that must work together, but can be substantial. Implementing an e-Government solution may bring additional inefficiencies into the open, which must then be addressed, adding to the overall costs of the project.
- Interoperability - Interoperability costs include the cost of developing and implementing meta-data tags and directories for locating services and information across agencies and developing and managing intra-government processes for reviewing the interoperability of proposed systems. There are also additional costs associated with making local governments interoperable with central or federal governments. Regional entities face additional costs of addressing interoperability among national governments. See Norbert Benamou, “Bringing e-Government Interoperability to Local Governments in Europe”.
- Usability -- Users may decline to use portals and applications if navigation is difficult, there is insufficient or out-dated information, or online transactional processes are lengthy and complex. Meeting user needs may require ongoing usability assessments, followed by redevelopment and investment in new technologies.
- ICT Infrastructure -- Existing infrastructure often does not support delivery of services to rural and underserved populations, so e-Government initiatives must often include an infrastructure development component. There are a variety of approaches to expanding basic access, and costs depend on a range of factors, including the extent to which telecommunications and Internet service markets have been liberalized.
- Privacy and Security -- Lack of trust is a barrier to the use of e-Government in developing as well as developed countries. Building the public’s trust in e-Government requires investment in security and privacy.
- On-going maintenance and management -- Additional costs are associated with ongoing management, maintenance, personnel costs, training of government workers, and, if needed, the training of users.
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