Driving the Next Wave of IT-Enabled State Government Productivity

Companies have long used information technology (IT) to increase productivity. In the public sector, e-government initiatives are supposed to work the same way. All too often, however, governments focus on improving services, not productivity. Lawmakers and administrators tend to view IT as a cost center, not a strategic investment that can produce tangible payoffs for taxpayers and e-government users. This is partly because increasing quality and convenience for citizens is politically uncontroversial, while cutting government costs—particularly labor costs—can be. But it is time for governments, especially state governments, to fulfill the original promise of e-government to significantly improve efficiency and lower the costs of providing services. By doing so, state governments could save as much as $11 billion over the next five years.

What would it look like if states were able to fully realize their potential for IT-enabled productivity? Government programs would be leaner, employing fewer workers and using fewer materials. Government services would be fully digitized, with internal processes securely accessible by employees from anywhere and external processes easily available to all citizens and businesses. Self-service would be ubiquitous, and citizens would not waste time waiting in lines to speak to government officials to complete routine transactions. All government forms would be available online to complete and submit electronically. Government agencies would share data so that users would never be asked to submit the same information twice. Government procurement systems would be flexible, transparent, and available to all businesses. Every government service, from garbage collection to traffic management, would use analytics and the Internet of Things to optimize its operations. Rates of incorporating this technology into government services would be near 100 percent. In short, government would be a highly efficient enterprise that uses technology not only to cut its own costs, but also to boost productivity for businesses and residents.

To be sure, states have begun implementing some impressive IT programs that have led to noteworthy productivity gains, both for the agencies that implement them and the citizens and businesses that use them. The question now is whether these kinds of practices can be extended to a much larger set of government practices, programs, and strategies across all 50 states.

This report investigates how IT-enabled government can increase productivity. It first makes the case for IT-led productivity in government, reviewing the literature on IT and state and local government productivity. It then provides a wide array of examples of how state governments have been able to use IT to boost productivity. The report then discusses the barriers state governments face in using IT to raise productivity. Finally, the report offers a number of recommendations to state policymakers for optimizing productivity through IT-enabled government, including:

• Adopting statewide IT-enabled productivity strategies;
• Providing state CIOs with more decision-making authority;
• Focusing on productivity rather than IT, per se;
• Setting dates by which they will no longer accept non-digital interactions;
• Accounting for external productivity gains in IT budgeting;
• Increasing funding for IT-led productivity efforts;
• Embracing e-government public-private partnerships; and
• Fostering cooperation among states on shared IT services.

The federal government can help states improve their productivity by creating incentivizes and requirements to improve state government’s use of IT, particularly for its grant and assistance programs in such areas as education and health care. To do that:

• OMB should establish a process to harmonize federal agency grant requirements related to IT; and
• Both federal and state governments should create incentive programs for IT-led productivity.