Technology Cost Benefit Analysis
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Take actions that could improve the impact of e-government projects: Cost reduction: Leapfrogging implement the most modern and most integrative solution: skip quick-fixes (requires huge coordination efforts and leadership) Stick to the impact-maximizing actions: provide only the most required/used services, postpone other services until the market is ready (Pew survey: The rise of the e-Citizen 30 shows how most people use the internet nowadays the most requested services should be selected) Focus on services for large businesses (most have internet, and allow for scale economies) see the wide success of e-procurement projects Devise royalty-based contracts with providers of hardware and software to avoid sunk costs and project risks Extending the benefits Reach out to a larger constituency rather than choosing certain segments (e.g.. Evaluating the Project: Time frame: 3 years Assume Terminal Value of 20 of startup costs (including hardware(: 50,000 Assume discount rate: 20 Initial y1 y2 y3 Terminal value Total Cost 277 49 49 49 Benefit 0 135 135 135 50 Net benefit -277 86 86 86 50 Discount factor 1.00 1.20 1.44 1.73 2.07 Present (discounted) value -277 72 60 50 24 -72 NPV of e-tax -72 Our analysis shows that the project has a negative economic value and some of the recommendations in section 5 should be taken into account to improve the impact of the project.. Has e-government service delivery resulted in multi-department or cross-sector (state, local or federal) collaboration Has the customer s need to know organization structure disappeared Have multi-department or jurisdiction data standards been created Are shared services such as common payment process, e-mail and authentication deployed, and are multiple departments using them Is e-government marketing used on Web sites, in the press and in public places Appendix 2 Costs of building an e-commerce website INFRASTRUCTURE Costs Production Server Hardware 70,500 Web servers (5) 26,000 Application servers (2)
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