Unisys Supports Community Portal Concept Despite Risks

Unisys Corp. is resolved to stand by its community portal project launched four months ago in Pennsylvania despite a problematic business model that has failed to attract funding from its government customer.Unisys chose West Chester, Pa., and six surrounding townships last year as the first of what it hoped would be a string of portal hosting programs across the country. These would provide communities with online access to local businesses, government agencies and community organizations. But the portal, which Unisys built at no cost to the West Chester government, has yet to add the government-to-citizen services that are the staple of state and local government portals, such as tax filing or paying parking tickets and traffic fines. The company also has scaled back plans to nurture similar portals across the country. Instead, Unisys plans to establish portals only in the eastern region near where the company is based. "We have chosen consciously to stay close to the region where we started [the program] to insulate it with good management intentions during its infancy," said Mary Ann Zaborowski, vice president and general manager of Unisys' LocalLife.com eBusiness Services. LocalLife.com, launched Nov. 20, 2000, in West Chester, is the name of Unisys' community portal solution. Expressing satisfaction with the progress of the project thus far, Zaborowski said there are no plans to shut down the West Chester portal.The original plan for the community portal called for Unisys to recoup its investment via a subscriber fee similar to cable companies. That plan was scrubbed after market research showed it wouldn't work, Zaborowski said. Instead, the portal is generating revenue by charging fees for advertising and sponsorships and hosting Web sites, directory listings and electronic commerce services and transactions, said Unisys officials. The project follows an all-too-familiar pattern where the business model for this type of electronic project appears to have not created enough value to pay for itself, said Tom Davies, senior vice president at Current Analysis, Sterling, Va."As with some other e-government projects that don't create value, we've found that customers are not willing to pay enough to even cover the costs [of the launch]," he said. "I don't believe this is a key part of Unisys' state and local government future."Unisys officials, however, said the project is proceeding as planned and meeting initial expectations."We are meeting our own internal expectations and getting a lot of acceptance in the marketplace," Zaborowski said.In the months leading up to and following the launch, Unisys has focused on building brand awareness and marketing efforts, she said. "Unisys is still making changes and improvements to the portal," said Ernie McNeely, borough manager of West Chester. "There is still a lot of work to be done by everybody involved to further refine [the portal]."Unisys' short-term goals were to have the site built and launched in 2000, establish a local office to complement the portal and attract a significant amount of users in a community of less than 100,000, said Unisys officials assigned to the project. The portal already has attracted 10 percent of the community, said Steve Jarvis, director of business operations and development for Unisys' LocalLife.com. In January, Unisys signed a memorandum of understanding with the West Chester Regional Portal Corp., a nonprofit organization that was established last year to represent the community's interests. Unisys declined a request from Washington Technology for a copy of the memorandum, but it did provide an excerpt that includes the WCRPC's charter and its relationship with Unisys. According to the charter, one of the primary missions of the portal corporation is to raise funds from private, federal, state and local sources for the portal. "Pursuing grants for early-stage technology seems like a sound strategy at this stage," said Colin Hanna, chairman of Chester County Commissioners. West Chester is located in Chester County, Pa.Although the corporation hasn't gone after any grants directly related to the portal's operating costs, it did apply unsuccessfully for a state grant to wire the local school system, McNeely said. "We haven't pursued any grants yet, because we are still working on getting our house in order," he said, referring to the recent establishment of the WCRPC. If Unisys decides to terminate the project, it must give the community six months advance notice under the terms of the memorandum, said Jarvis.Unisys employees and local officials said the next stage of the portal will be devoted to delivery of electronic government services, including tax filing, payment of parking tickets and traffic fines and various types of licensing and registration. Unisys officials said they have already enhanced communications between citizens and elected officials. LocalLife.com provides citizens complete voting records and e-mail so they may correspond with their elected officials. LocalLife.com also routinely conducts surveys to gather public opinion about community issues. Unisys officials would not disclose how much they have invested in the portal. Although a government portal can be constructed for $500,000 to $2 million, a company building its first portal may have to invest upward of $15 million to $20 million, according to some industry officials. Davies said he doubted Unisys spent this much on LocalLife.com, however. "If they had invested that much, then I would have expected them to have all of their corporate marketing efforts behind promoting it. But they've been quiet about the project," he said."Building an e-government portal is a very complex proposition," said Chris Neff, director of marketing for the National Information Consortium Inc., Overland Park, Kan., a company that operates portals in 12 states. "For a company that is not experienced, the costs associated with it will be higher."For its part, Unisys expects to achieve an economy of scale when it extends its community portal solution to other municipalities, said Lucia Romano, director of marketing for Unisys' LocalLife.com. Just a few months into the project, it remains to be seen whether Unisys can generate substantial revenue from it, replicate it in other communities and deliver innovative services to the community through the portal."As a central meeting point, LocalLife.com has accumulated the necessary links and is performing its function," said Chester County's Hanna. "However, it is not yet the locus of any great breakthroughs or creative ways to deliver government services more effectively, [although] it still holds that promise."