October 19, 2012 By Sarah Rich
Government agencies and online service providers tout the many benefits of switching offline government services to a Web-based approach, but often don't quantify the actual savings. This is not the case in Utah, where a new study shows just how much was saved by switching to online services.
In a new study, Smarter eGovernment: The Economics of Online Services in Utah, sponsored by NIC, the Center for Public Policy and Administration at the University of Utah surveyed and analyzed state agency services provided through Utah.gov. The results showed that since online services became available for the state in 1999, Utah has since deployed more than 1,000 online services.
For a portion of the state’s services, cost savings were realized when the services were moved offline to online, and quantifications of the savings that were measured reflected results from a five-year period from 2007 to 2011.
For nine of the state’s services, the cost per transaction decreased from an average of nearly $17 when they were provided offline to an average of about $4 after those same services were made available online, creating an average savings of $13 per transaction. For those nine Web services alone, the state realized a cost savings of $46 million over the duration of five years.
To see how the nine Web services were selected, click here.
“The ability to quantify what our success has been and what the impact has been on the state as a whole from online services, that’s something that we’ve never been able to do before for one reason or another,” said Rich Olsen, general manager of Utah Interactive. “The information just hasn’t been readily available or people haven’t been willing to talk too much about that side of things.”
To quantify the cost savings the nine Utah state agency services realized, the Center for Public Policy and Administration at the University of Utah obtained a list of the 25 highest-volume state agency services. Twenty-four of the 25 Web services on the list that were obtained are managed by Utah Interactive, a subsidiary of NIC.
From there, the policy center conducted analysis by gathering information from each of the agencies that provide the high-volume services. Dianne Meppen, a researcher with the University of Utah, said the agencies were asked questions such as, “How much did your agency pay to develop or create your online service?” and “What’s the annual charge from the service provider?”
However, not every state agency could deliver comprehensive data on every Web service it provides, Meppen said, which is why only nine Web services were represented in the $46 million savings statistic.
Only Web services that had the most comprehensive data were factored into the final results, she said.
Meppen said there were multiple reasons why not all data was comprehensive. For example, an agency hadn’t kept track of information regarding costs for Web services and what those costs were before the services went online.
“This was not a government mandate of any sort to do this study,” Meppen said. “We were asking them to invest some time to do this.”
Model for Other States?
Whether or not state agencies have already conducted similar studies to Utah’s is unclear, though the study could be applied to any state, according to Sara Watts, director of marketing for Utah Interactive.
“They could do the study and replicate the study,” Watts said. “But I think it’s easy enough for them to say, ‘The same cost savings that you see in Utah is going to be typical in every state.’”
On the whole, Utah was in a good position to take part in the study, Meppen said, because she considers Utah to be a “tech-savvy” state.
How the Nine Web Services Were Chosen:
According to the study, the 25 highest-volume Web services were selected for analysis. Since the Department of Workforce Services manages the other services, the department declined from participation in the study.
Of the 24 services evaluated, state agencies were able to submit some data for 19 Web services.
Of the 19 services, agencies had enough data to provide cost-savings metrics for nine of them.
The data on these nine applications represent approximately 14 percent of total state portal transactions.
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