ACROSS THE DIGITAL NATION

Terrorist Attacks Punctuate Year of Change

Rishi Sood

This year has been an important crossroads for the state and local government marketplace. Red-hot economic activity and overflowing revenue coffers have receded, while electronic government initiatives, though still moving forward, now must accommodate the new priorities and direction brought about by the events of Sept. 11.

Here is a look at some of the key advances this year, as well as an outline of the major issues facing these government agencies in 2002 and beyond.

2001: A Time Capsule

With the backing of most state governors and major agency directors, e-government continued to be the most influential technology initiative within the public-sector marketplace over the past year. The progress made in providing government services to citizens, such as ServiceArizona (an online motor vehicles department) and Indiana's Ifile (Internet tax filing), has been complemented by a growing focus on electronic solutions that streamline transactions between government and businesses, employees and other government agencies.

Examples of growing solution adoption in the government-to-business space include Uniform Commercial Code filings, permits and licenses. Government-to-government and government-to-employee examples include single access and human resources, respectively.

Increasingly, e-government initiatives have become more strategic in nature, working across agency lines to provide a new method to deliver public-sector services. The focus on developing transformative e-government solutions through one-stop centers has just begun. Technology development in this area has also been driven by customer relationship management principles.

With the events of Sept. 11, a new array of technology priorities has been established. Although e-government remains a key strategic initiative, several public-sector organizations have identified security, disaster recovery and redundant systems as new initiatives.

Moreover, state and local governments have focused greater attention on public safety, justice and health in order to provide updated services for law enforcement, emergency services and disease management. Over the next two years, the increased use of mobile and wireless solutions will help drive more innovative solutions for these new business requirements.

The Road Ahead

The vast decline in economic activity is one of the most fundamental challenges facing public-sector organizations. Recently, California Gov. Gray Davis announced the state will face a $12.4 billion shortfall over the next two years. According to the National Association of State Budget Officers, about 31 states face projected budget shortfalls in fiscal 2002.

State and local governments will need to re-examine spending priorities today and establish effective guidelines for proposed reductions.

Public-sector decision-makers will focus on strategic vs. across-the-board cuts; centralization and consolidation of technology resources; buying smarter, not necessarily less; enterprise vs. stovepiped development; and redefining staff positions.

Vendors targeting public-sector organizations must be cognizant of this changing market environment. Procurement and planning issues, such as total cost of ownership, revenue generation capabilities and business case metrics, will be increasingly important to new technology implementation.

Alternative funding models, such as performance-based contracts and enterprise funds, may facilitate the approval of new technology development.

Vendors that properly address these issues will increasingly be favored by public-sector decision-makers.

Rishi Sood is a principal analyst with Gartner Dataquest in Mountain View, Calif. His e-mail address is rishi.sood@gartner.com.

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