EYE ON THE STATES

Selling E-Gov Is the Next New Thing

Thomas Davies

One of the greatest surprises in the state and local market since the first of the year is how few companies ? even the traditional market leaders ? have the capabilities needed to sell electronic government.

In many cases, this dearth of skills is holding back market growth. Future winners in the e-gov market need to master the unique competencies that are key to selling e-gov.

The first step is to recognize just how much work lies ahead. Many companies are working under the incorrect assumption that selling e-gov is just like selling technology. Nothing could be further from reality.

The differences are confounding even those companies that have a proven track record of successful selling to state and local governments. Quite simply, the usual selling practices will not produce the results companies have grown to count on. And slower-than-expected revenue growth will become the norm if the situation continues.

One reason many information technology companies are having such a difficult time selling e-gov is that their best-selling practices often don't work when applied to e-gov. Companies confuse selling a new way of doing business, which e-gov represents, with selling new technology.

Consequently, e-gov is catching companies unprepared to make the necessary adjustments in how, and to whom, they sell.

The comfort zone for most technology companies is typically at the mid- to upper-management level of state government. This level traditionally has been responsible for initiating IT projects. Elected officials ? to the degree that they have been an important part of the sales process ? have been courted primarily to gain support for tech projects whose genesis came from much further down the chain of command.

E-gov reverses this situation. Elected officials are becoming the dominant force behind e-gov spending. While e-gov clearly incorporates the latest advances in technology, especially Internet and communications technologies, it uniquely represents profound change in the role, mission and vision of government.

Responsibility for the vision of government rests at the highest levels of the states. It is the governor that is responsible for formulating and communicating a vision for the state.

Not too surprisingly, then, governors have jumped into the e-gov drivers seat. Most e-gov projects have been top-down initiatives: Rather than allowing themselves to be relegated to simply reviewing and approving projects, these governors are becoming the champions of e-gov in their states. They have taken the lead and served as the visionary behind the e-gov initiative.

Governors' growing influence is most apparent in the many enterprise portal initiatives that have been launched in the states. With the exception of occasional statewide outsourcing initiatives, it is extremely rare for the top executives to be driving technology-related spending. Those who have been at the forefront of working with the governors on their e-gov initiatives are finding these chief executives to be much different buyers than CIOs and career senior managers.

It's not simply because the governors command greater prestige, resources and authority, but also that they are willing to take often significant risks to achieve their goals. Governors see e-gov as a transformation of the way government does business, not simply as a new wave of technology.

Governors realize that their visions cannot, and will not, be achieved without incurring risk. And they understand that one key to e-gov, like other fundamental transformations and reforms of state government that have preceded it, is the willingness to accept the risks because the opportunities are so great.

Just as the governors have reversed course from their traditional hands-off role when it comes to IT, so must companies rethink their approach to selling e-gov.

Rather than avoiding projects that have significant business risks, companies need to become smarter at identifying and managing risks. Instead of staying within a comfort zone of selling to CIOs and senior-level managers, companies need to reach into the highest levels of state government.

Finally, rather than competing based on their technology, they need to compete based on their ability to contribute to the formation and attainment of the chief executive officer's vision.

E-gov represents a fundamental, and perhaps irreversible, turning point in the way technology initiatives are launched and sold in state and local government. Very few companies today are ready to execute an e-gov selling strategy. Companies that are slow to adapt their selling practices run the risk of being passed by.

Thomas Davies is senior vice president at Current Analysis in Sterling, Va. His e-mail address is tdavies@
currentanalysis.com.

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