E-Government – a strategic perspective | April 24, 2001

1. E-Government – a strategic perspective– The approach of Roland Berger Strategy Consultants–European Technology ForumStrasbourg, April 24, 2001 E-Government – a strategic perspective | April 24, 2001 HAM-0280-97000-01-01.ppt

2. Content Page • A. Initial situation – e-government is a means, a part and an objective of administrative reform 3 • B. Need for action – the fields of action result from the gap between vision and reality of e-government 9 • C. Options for action – fields of action are prioritized in the e-strategy by the criteria of potential for realization and strategic relevance 19 • D. Roland Berger and e-government-projects – our strategic consulting approach encloses the key elements for the realization of e-government 23 This document was created for the exclusive use of our clients. It is not complete unless supported by the underlying detailed analyses and oral presentation. It must not be passed on to third parties except with the explicit prior consent of Roland Berger & Partner GmbH International Management Consultants. HAM-0280-97000-01-01.ppt

3. A. Initial situation – e-government is a means, a part and an objective of administrative reform HAM-0280-97000-01-01.ppt

4. E-government supports all the important objectives of administrative reform – so it can be a means, a part and an objective of modernization The most important objectives of administrative modernization1) Possible support by e-government • Higher satisfaction • of citizens • Easier processing of contacts with the administration • Better service for companies • Promotion of economic development online, faster permits, marketplaces for SMEs • Improvement of attractiveness for companies • Higher attractiveness through better service • Higher effectiveness of administration • Easier processes through electronic support • Higher economic efficiency of administration • Cost savings, e.g. through e-procurement • 100% 1) Poll of the Bertelsmann-Foundation involving 164 mayors in cities with more than 50.000 inhabitants, Aug./Oct. 2000. Objectives rated as "very important" Source: Bertelsmann-Foundation, Roland Berger HAM-0280-97000-01-01.ppt

5. Citizens • Processes and workflows supported by intranet • Companies • Supporting technologies E-government is the electronic execution of administrative processes – between administration and the public as well as within the administration Front-Office Back-Office • Public Administration • Internal communication of politics and administration • g2c, c2g1) • g2b, b2g2) • g2g3) • Other administrations • Strategic partners • (hard- and software-firms, banks, local enterprises, … ) 1) Government to Citizen: e.g. information, citizen services on-line, elections 2) Government to Business: e.g. promotion of economic development and permits on-line, procurement 3) Government to Government: e.g. joint processing of permits Source: Roland Berger HAM-0280-97000-01-01.ppt

6. International pressure by competition • New models of administration • Various innovative approaches towards e-government in other countries • Customer, i.e. enterprise orientation and rapid permit processing are important factors for attractiveness of a country in the global competition for investors • International approach of "New Public Management" • German administrative reform in the nineties under the concept of the "Neue Steuerungsmodell" • Expectations of the citizens • Technological change • Experience of the rapidity of the internet • Expectation of fast, cheap and efficient action by the state and the administration • Expectation of being treated as a client instead of a solicitor • Growing connectivity of economy and private persons forces administration to catch up • Digitalization of information and communication eases the coordination tasks of the administration The continuing pressure of social and internal factors strengthens the need for a further administrative modernization Strong pressure for change from many sides Source: Roland Berger; PriceWaterhouseCoopers and WIBERA, "Die Zukunft heißt E-Government" HAM-0280-97000-01-01.ppt

7. Backup High growth rate of internet usage creates new expectations towards public administration • "What would you like to do from your home via the internet?" • (% of persons asked)2) • Growth of number of internet users in Germany1) • Wider distribution of new customer expectations • Contact public authorities • Mio. • "24/7/365“ – rapidity and availability around the clock expected • Higher convenience – realization from private home hoped for • Individualized treatment desired • Transfer money • Order tickets • Book journeys Conservative Estimate • Buy books • Order from mail • order houses • 1997 • 1998 • 1999 • 2000 • 2001 • 2002 • 2003 • 2004 • Order • food 1) Estimate: EITO 2000 2) PWC-Poll 2000 Source: PWC, "e-Government. Eine Modeerscheinung oder "digitale" Revolution und Zukunft der Städte?", EITO (European Information Technology Observatory), Roland Berger HAM-0280-97000-01-01.ppt

8. In Germany the most important field for the application of e-government will be the municipal level, as administrations of all levels agree Levels of administration with the strongest change by e-government • 100% • Municipalities • Länder • 64 • 76 • 92 • Federal government • 9 • 20 • 27 • 8 • 4 • Appreciation of • Federal government • Länder • Municipalities Source: KPMG, "Verwaltung der Zukunft – Status quo und Perspektiven für e-Government 2000", Roland Berger HAM-0280-97000-01-01.ppt

9. B. Need for action – the fields of action result from the gap between vision and reality of e-government HAM-0280-97000-01-01.ppt

10. The ultimate vision of e-government is the virtual town hall – the modernization of all fields of administration by the new techniques and media • 24/7/265 – Citizen services available on-line around the clock • Information, communication and interaction • General availability, e.g. by kiosk system • Electronic internal communication of administration • Electronic internal exchange of documents • Promotion of economic developmentand permit processing on-line • E-procurement • e-processes – complete electronic workflow and document management, supporting the citizen services • Appropriate partners for operation, financing, hard- and software, content, etc. • Connected IT-landscape without interfaces • Electronic communication with other administrations • Administration guide / "phone book" • Joint processing, e.g. of permits or reforms • Assured financing Source: Roland Berger HAM-0280-97000-01-01.ppt

11. This way, the vision embraces much more than the offering of citizen services on-line – the ideal is a parallel internal modernization of the administration e-Government – partial or overall modernization of the administration Not only build the internet offer upon the existing processes ... … but reform the internal processes as well! Partial modernization Overall modernization • Offer of citizen services on-line • Internal processing in the old form – numerous media breaks1) • No redesign of internal processes • Offer of citizen services on-line • Internal processing in seamless electronic workflow – avoidance of media breaks • Check and optimization of processes • Only limited cost savings • No improvement of internal efficiency • Partial understanding of e-government • Possibilities of new techniques are not fully used • Complete realization of savings potential • More efficient processing • Global understanding of e-government in the frame of administrative modernization • New techniques and media are used in all spheres of the administration, front and back office 1) A classic example: the citizen's e-mail is printed and put into the circulation file Source: Roland Berger HAM-0280-97000-01-01.ppt

12. Drivers of costs1) Drivers for savings • Development of e-strategy • Development of applications • Investments in necessary hardware • Training of employees • Public relations • Cheaper electronic processing, e.g. by • avoidance of media breaks2) • avoidance of sorting- and filing-time3) • automatized processing, e.g. of orders4) • Growth of these effects by further distribution of internet usage and acceptance of the new services by the citizens • Cost of investments for additional service decreases through effects of scale and through learning effects If internal modernization takes place, e-government is a means to lower costs – despite the initial investments Principle Savings Time Costs 1) To be reduced by choice of appropriate partners for financing - see pages on financing 2) E.g. no more typing of paper forms into a computer program. Example: German electronic tax declaration 3) Examples: Munich and Muenster – see pages on document management 4) Example: Police of Baden-Wuerttemberg – see pages on e-procurement HAM-0280-97000-01-01.ppt

13. Vision is confronted by reality – e-government in the front-office has only been realised to a small degree in Germany Degree of realization Degrees of realization • Information • Guide through administration • Information on industrial areas • Information on economic qualities of site • Local enterprises • High Information • Communication • Between citizens and administrative departments via e-mail • Between various citizens • Number of services offered • Interaction • Download of forms • Filling and sending of forms on-line • Digital signature and payment • Digital invitation to tender and decision Commu-nication Interaction • Partici- • pation • Participation • Elections on-line • Lowl • Cities which • offer the service • Many • Few Source: Roland Berger HAM-0280-97000-01-01.ppt

14. Backup Though there are numerous examples for e-government in Germany, in most cases only isolated services are realised electronically • E-public • citizen network "publikom" in Münster • E-document management • E-forms • München (car registry) • County Neumarkt (order of trash cans) • Münster (passport registry) • Karlsruhe (various forms) • Other cities and counties • E-processes • Town hall Cologne: IT-supported workflows • E-signature • Bremen, Nürnberg, Esslingen, (Chip card) • E-procurement • E-Government • Memmelsdorf (digital encryption) • Cities of the Erftkreis county • Baden-Wuerttemberg state police • E–payments • Bremen • Internal e-communication • E-town-marketing • Stuttgart (CUPARLA) • Administration networks(North-Rhine Westphalia, Bavaria) • Mannheim as best practice • In principle in all bigger towns • E-PPP • Berlin: financing of berlin.de by private partners HAM-0280-97000-01-01.ppt

15. A number of factors prevent the further expansion of e-government • Lack of strategy • 88% of German cities do not have an e-strategy • Cities do not know the expectations of their citizens regarding the cities' web site • Financial factors • High initial investments • German muni-cipalities name lack of financial freedom as main obstacle to e-government • Technical factors • Insufficient IT-equipment of town administrations • Data safety must be secured • Digital signature requires chip card and reading devices • Legal factors • Prohibition of auctions in calls to tender • Requirement of handwritten signature for many processes • Social factors • Danger of the "digital divide" • Cultural factors • Lack of service orientation • Lack of a culture of motivation and innovation • Political factors • Sometimes problematic interaction between politics and administration Source: Roland Berger; PriceWaterhouseCoopers and WIBERA, "Die Zukunft heißt E-Government" HAM-0280-97000-01-01.ppt

16. Some impediments can be overcome by partnerships – appropriate partners useful for the conception, financing and implementation of e-government • Partner • Functions of partnership • Examples • Other cities or • counties • (horizontalpartnership) • Joint development of concept and IT • RegioInfo (Baden-Wuerttemberg) • Lower development costs • baynet.de (Bavaria) • Wider reach of joint internet presence • RegIS online (Lower Saxony) • Producers of soft- • and hardware • Joint development of pilot applications • Stuttgart (Berkom) • Producer takes over development costs and receives future • selling rights • Mannheim (SAP) • The public partner saves the development costs • Partners for financing • Private partner finances internet presence, in exchange he receives the right of commercial use of the site • Berlin (berlin.de new media GmbH) • Content partners for • commercial portals • Integration of all kinds of content by different partners: hotels, real estate market, events, sports, news, ... • Berlin • Universities • Joint development of new products • Stuttgart • Integration of scientists in decision making in order to gain additional know-how • Mannheim Source: Roland Berger HAM-0280-97000-01-01.ppt

17. Partnerships can contribute to the financing of e-government in a number of ways Financing models for e-Government • Case-by-case payment • Joint development of applications • A private partner develops an application for the on-line transaction of citizen services • The public partner pays a fixed fee for each transaction made via the application • Lower transaction costs compared to traditional transaction makes for a savings effect1) • Joint development of software • Public partner serves as a test user for piloting • The private partner pays the costs of development and receives the rights of future selling of the application • Life events-related advertising • Site operation by private company • Integration of private partners into the needs listed under each "life event" • Examples: for the life event "registration": links to a bank, to utility firms etc.; for the life event "marriage" links to shopping malls etc. • Private partner takes over the costs and the operation of the site, in exchange he receives the name rights and the right of commercial usage • Public partner cares for the "official" content on administration etc. 1) E.g. in Hong Kong: 0,80 instead of 1,90$ average transaction costs Source: Roland Berger, McKinsey Quarterly HAM-0280-97000-01-01.ppt

18. Further possibilities for financing arise from the adaptation of the functioning of private internet portals The internet presence of a city should not be understood as a static offer of information ... ... but as a portal, which offers an entry to all kind of information on the town... ... and so allows a commercial use of the site User • Shops • seeks • service • or • product • informa- • tion/na- • vigation • Theatre • Hotels • Administration • sel- • ling • € Portal • News • brings • user • Sport • € • € Ads Vendor Source: Roland Berger HAM-0280-97000-01-01.ppt

19. C. Options for action – fields of action are prioritized in the e-strategy according to criteria of potential for realization and strategic relevance HAM-0280-97000-01-01.ppt

20. The broad scope of the subject makes it impossible to realize e-government simultaneously everywhere – it is a essential to have an e-strategy • Impossibility of simultaneous development in all fields • Definition of an e-strategy Cross section fields • Concentration on the fields with the highest strategic potential Processes IT Partnering Financing Isolated fields Citizen services • Start at the interfaces of fields Enterprise services (Promotion of econo- mic development, marketplaces, etc.) • High effectiveness • Strong chance for integration E-procurement • Making up of a global strategy and vision – but implementation of this vision in small easy-to-realize steps Internal workflow and document management • Concrete, small e-realization projects instead of long and fruitless e-discussions Internal communication Source: Roland Berger HAM-0280-97000-01-01.ppt

21. Step 3 • Step 2 • Step 1 The fields of action are prioritized by the criteria of potential for realization and strategic relevance Evaluation of each application and step-by-step implementation • Big • Potential of realization • Small • Strategic relevance • High • Low Source: Roland Berger HAM-0280-97000-01-01.ppt

22. Step 3 • Step 2 • Step 1 The weighting of the criteria determines the final evaluation of both dimensions • Potential for realization = • Pol. acceptance X • 30% + • Ec. effectiveness X • 25% + • Technical aspects X • 15% + • Organiz. aspects X • 15% + • Legal possibility X • 15% = • Strategic relevance • Quality of service • Image • effect • Efficiency • Improvement of connectivity • Use of • media • Subjective • urgency + + + + + X X X X X X • 25% • 25% • 25% • 5% • 10% • 10% Source: Roland Berger HAM-0280-97000-01-01.ppt

23. D. Roland Berger and e-government-projects – our strategic consulting approach encloses the key elements for the realization of e-government HAM-0280-97000-01-01.ppt

24. Technical hurdles Political hurdles Legal hurdles Financial hurdles Cultural hurdles The strategic approach of Roland Berger helps municipalities overcome the typical hurdles of e-Government Vision of e-government tomorrow e-government today • Support by strategic and holistic consulting approach of Roland Berger • Knows and respects the complex realities of public administration • Cooperation of Roland Berger with IT-partners guarantees competence in the sphere of politics and administration as well as in technical questions; a mere IT-consultant is not enough in order to overcome the hurdles Source: Roland Berger HAM-0280-97000-01-01.ppt

25. Roland Berger's contribution to project success resides in our combination of administrative and e-experience Contribution of Roland Berger • e-experience • Experience in public administration • Competence Center Public Services – numerous projects in all spheres of the public sector • Knowledge of the public administration • Experience of projects and implementation of modernization and reforms in public administration • Knowledge of political and administrative proceedings and frameworks • Over 100 realised e-projects in private economy • Broad coverage of all fields – from processes, organization and technique to marketing, portals and marketplaces • Knowledge of proceedings used in the private economy Source: Roland Berger HAM-0280-97000-01-01.ppt

26. 1 3 4 • e-government-strategy • Redesign of processes • Piloting and implementation • Analysis of options for action • Analysis of actual processes regarding the proposed strategy • Choice of pilot field and pilot application • Prioritization according to specific client needs • Evaluation and communication of results • Definition of target processes • Recommendation of individualapproach • Definition of necessary IT and comparison with results of IT-audit • Implementation 2 • IT-audit • Analysis of IT-strategy • Analysis of IT-processes, infrastructure and applications 5 • Parallel measures • Integration of all relevant players from politics and administration • Choice of appropriate partners The consulting approach of Roland Berger contains all the key elements of a successful implementation of e-government Source: Roland Berger HAM-0280-97000-01-01.ppt

27. Backup The Roland Berger strategy audit identifies strategic potentials for e-government and elaborates individual approaches 1 Strategy audit Process Aims • Classification of tasks of the institution analyzed in the scheme of isolated and cross section fields • Evaluation of strategic position compared to other administrations/political institutions • Analysis of single fields following economic and political criteria • Evaluation of tasks and performance of the institution Recommendation of individual approach for e-government • Internal view • Discussion of options • External view • Identification of future challenges • Evaluation and prioritization of options • Identification of strategic strengths and weaknesses and oh biggest levers for e-government • Definition of appropriate project approach, which promises highest degree of optimization Source: Roland Berger HAM-0280-97000-01-01.ppt

28. Backup The existing IT is checked for its e-government aptness in four different fields 2 Structure of IT-audit • IT-strategy • IT-processes • Operation • Definition of tasks • User training / support • Vision • Software development • Self-understanding • Procurement • Standards • Project management • Fit for e-Government? • Applications • Infrastructure • Fulfillment of tasks • Hardware • Satisfaction of users • Network • Capacity for integration • Internet connection • Future appropriateness HAM-0280-97000-01-01.ppt

29. The profound and complex process of change can be managed successfully with a step-by-step acceleration Scheme All processes and offices Gradual implementation of e-government Integrated processesand office Preparation of all employees for the new structures (training/ workshops) Communicationof pilot results Only pilot processes Piloting Transfer to similar offices Global roll-out HAM-0280-97000-01-01.ppt