Donna Klein is an accountant at J. Cleo Thompson & James Cleo Thompson Jr., a small Texas oil and gas producer with 20 full-time employees. As part of her job, she has the unenviable task of filling out all the government paperwork that allows the firm to conduct business without running afoul of the law. To do her job well, Klein has learned something she was never taught in accounting class: the art of navigating government red tape. Each month she completes 11 different forms for four separate state agencies -- and that doesn't include the federal paperwork. "I spend about one week each month just doing government paperwork and reporting," she said.

One report is for the West Texas Operations of the University of Texas (UT) System's University Lands Accounting Office. The reports are required of all oil companies that operate oil and gas leases on Permanent University Fund lands in West Texas. Under the old paper-based system, Klein spent three workdays each month filing reports and amendments to the University Lands office. Not anymore.

Thanks to two new Web-enabled systems -- the Electronic Reporting System (ERS) and Electronic Customer Accounts Receivable (e-CARE) -- companies can submit reports and payments online. Klein now spends only four hours per month completing the reports. This translates to only 48 hours each year, compared to 288 hours before -- one-sixth the time. This saves J. Cleo Thompson about $12,000 per year -- a significant sum for the small company.

The online system has also given Klein peace of mind. "I can anticipate the next report and go on vacation without having to worry about missing a payment," she said.

The UT's cost savings from Web-enablement amounts to just over $300,000 per year. While the University Lands office hasn't officially calculated industry savings, an informal calculation clearly shows they dwarf UT's savings. Extrapolating the $12,000 in savings realized by J. Cleo Thompson to the other 225 oil and gas companies that now file electronically yields $2.7 million. The actual savings is likely to be much higher, because many companies have more leases than J. Cleo Thompson and therefore would have to devote more effort to government paperwork.

The UT Lands Office story illustrates two important points. First, the cost benefits to citizens and businesses from e-government will often be greater than the benefits to government itself. And second, government rarely even tries to quantify such benefits.


Measuring Constituent Value
In the 1990s -- when government budgets were flush with cash and e-government was in its formative years -- CIOs typically weren't required to make the business case for IT in a rigorous, meticulous way. Policy-makers launched e-government programs because they knew viscerally that providing around-the-clock service to citizens was the right thing to do.

Those days are long over.

With governments at all levels struggling with huge budget deficits, robust business cases have become de rigueur for all new IT outlays. While a few efforts have yielded impressive results -- Iowa's ROI methodology, for example -- most government ROI and business case methodologies suffer from at least one major flaw: a failure to measure real and quantifiable benefits to citizens and businesses from e-government investments. According to an Office of Management and Budget official, for example, only a tiny fraction of the hundreds of e-government business cases the agency reviewed this year even attempted to calculate the potential benefits to businesses and citizens.

This represents a significant hole in the business case analysis because information technology's ROI can't just be measured by direct return -- by doing things more efficiently for its own sake, or even to generate cost efficiencies. Both should play a central role in calculating the ROI, but neither is sufficient because government competes not for its own benefit, but for the benefit of stakeholders with