Indianapolis, NIC harness marketing power
- By William Welsh
- Jul 17, 2003
Key to e-government success is selling online services to constituents
"In general, we've found that businesses are more than willing to pay an extra dollar or two to have the convenience of doing something quickly and easily online rather than driving to a building and stand in line." ? Laura Lindenbusch, director of CivicNet for NIC Inc.
Indianapolis Chief Information Officer Mike Hineline doesn't hesitate to acknowledge the shortcomings of local government when it comes to delivering electronic services to citizens and businesses.
"We don't understand the term marketing," Hineline said.
So when city officials several years ago decided to build a suite of Web services that included online building permits, police and criminal court records requests, traffic and parking ticket payment and property record inquiries, they tasked the contractor with drumming up the business.
"When you have a service like this, you really need to be out there and finding new people to use it," Hineline said.
Indianapolis and Marion County, Ind., officials selected CivicNet Inc. for the work partly because of its marketing prowess, he said. The company, which last year received a three-year, multimillion-dollar extension, offers 27 services to city and county residents, said Laura Lindenbusch, CivicNet's director.
CivicNet "presents these services to them and shows them how they can save them money," Hineline said.
CivicNet is a subsidiary of NIC Inc. of Overland Park, Kan. Another NIC subsidiary, AccessIndiana, runs the state portal. The two operations are located together in the state capital.
CivicNet's self-funded portal was built at no cost to the city and offers services for businesses and citizens in the greater Indianapolis metropolitan area. More than 2,000 metropolitan area businesses subscribe to the site, Lindenbusch said.
The online services that generate the most revenue for both the city and NIC are the building and construction permits. The sale of these permits accounted for about $700,000 of the more than $1 million generated for the city and county during 2002, Hineline said. Permits generated more than $1 million for NIC, Lindenbusch said.
NIC charges a $3 convenience fee for six individual permits and a $10 fee for a master construction permit, she said. The adoption rate, or the number of people who purchase the permits online versus by fax or in person, is more than 70 percent for the master permits and more than 50 percent for the plumbing and right-of-way permits.
Finding a transaction or model capable of funding the project was a major challenge, Lindenbusch said. State government portals, which can tap larger revenue bases, are easier to fund than local government portals, she said.
NIC ultimately settled on permit sales as the transaction that would generate the most revenue. At that point, the company was able to deploy the six individual permit applications in one year, Lindenbusch said.
The company has great incentive to roll out the applications quickly -- it doesn't make any money until businesses begin using the service.
NIC's success with projects such as CivicNet can be attributed to the company's large state and local client base and its repeatable templates for government portal applications, said Amy Santenello, senior research analyst with the market research firm Meta Group Inc., Stamford, Conn.
"They can quickly provide digital functionality," he said. "In addition, they bring a set governance model to the table."
To ensure the portal's success, NIC carefully prepared to market the services, Lindenbusch said.
"In most cases, before we write one word of code, we work with the agency to find out who the customers are and what the potential benefits are" to the customers, she said. NIC also spoke with prospective users to find out how much value they placed on the convenience of being able to do a transaction online.
"In general, we've found that businesses are more than willing to pay an extra dollar or two to have the convenience of doing something quickly and easily online rather than driving to a building and stand in line," she said.
Payment for permits and other transactions is either by credit card or monthly subscription. In the past, the Indianapolis Division of Compliance, which approves the permits, had trouble collecting delinquent accounts, city and company officials said. But this is no longer a problem because NIC handles all collections associated with the transactions.
"If they don't pay, we still pay the city," Lindenbusch said. "As the private contractor, we have taken on that risk, and [the city] likes that a lot."
The online transaction process makes it faster and easier to obtain permits online. For example, the database retains certain information about customers and subscribers so they don't have to enter basic information, such as a business address, every time they apply for a permit, Lindenbusch said.
Builders that use CivicNet can now receive their permits in several hours rather than several days, Lindenbusch said. The municipal staff receives less counter traffic, which gives them more time for permit applicants that require extra service, she said.
Roger Stephens, director of government affairs for the Builders Association of Greater Indianapolis, applauded the city's effort to bring permits online, but said that some members of the association are not purchasing permits this way because they prefer to continue to use firms whose primary business is to obtain permits for them.
Currently, the larger builders, those that apply for more than 1,000 permits per year, are obtaining most of their permits online.
However, the smaller builders, which purchase fewer than 50 permits a year, are still doing the bulk of their business by fax or in person, he said. He said about 20 percent of the membership is doing 80 percent of the online business.
In a time when some state and local governments are cutting services, NIC's self-funded approach continues to have widespread appeal.
"They do the development on their own nickel," Hineline said. "It's what people want." *
Staff Writer William Welsh can be reached at firstname.lastname@example.org.
William Welsh is a freelance writer covering IT and defense technology.