Information technology has been a key driver of productivity growth in the private sector, as evidenced by the fact that companies that have invested the most in computers, software, and communications grew their employees’ output per hour three times faster than other companies. Unfortunately, it appears that most state governments, including California, lag behind and are more like those companies that have invested less in IT.
In part due to budget constraints, state governments tend to invest less than what is optimal to drive productivity. This is a significant missed opportunity. For example, if California made a stronger commitment to exploit the productivity-enhancing power of IT in government operations, it could achieve approximately $1.3 billion in savings over the next five years.
It is time for California to set its expectations for e-government higher.
To be sure, California has made some noteworthy investments that boost productivity, such as when the state incorporated IT into its prison system. Correction officials used to maintain inmates’ health information and other records in paper files. In some cases, these files were quite large, which forced the state to pay for storage and shipping whenever an inmate transferred from one prison to another. With more than 137,000 inmates in the state’s care and thousands of transfers a year, this system was complicated and costly. But by digitizing these files so officials all over the state can access them with the right credentials, the state saved more than $1.5 million annually on storage and shipping. In addition, the state eliminated unnecessary staff tasks and reduced errors associated with the old paper system—a clear example of successfully boosting internal productivity.
All too often, though, state governments focus their IT investments on improving services, rather than increasing productivity. For example, California’s Department of Technology’s Information Technology Strategic Plan for 2015 lists six goals, such as driving more responsive, accessible, and mobile government and securing information. However, using IT to drive productivity is not one of the goals. In fact, there is virtually no mention of productivity in the strategy, and the few places where cost cutting is mentioned refer to cutting IT costs rather than how to invest in IT to cut government costs overall.
But California is not unique. Few states if any have made IT-led government productivity a strategic goal. Indeed, productivity has almost been a taboo subject for state chief information officers in part because boosting productivity usually involves reducing headcount. CIOs are often unwilling to openly advocate for using technology to replace government workers for fear that it will generate opposition from workers and their unions to the detriment of the entire e-government enterprise. But this is no longer tenable, given the scale of the potential savings and the budget needs of states. As such, California should not shy away from using IT to reduce the government workforce, as long as they go hand-in-hand with high-quality service for citizens and good value for taxpayers.
Moreover, California should focus not just on boosting its own productivity, but also that of California’s businesses and residents. Even if an e-government application might not improve state productivity, it may cut costs for users. California agencies need to factor in these efficiency benefits for businesses and individuals when making decision about IT investments.
It is time for California to set its expectations for e-government higher. The state should fully digitize its services so that state employees can access internal services from anywhere and citizens and businesses can access all public services online. California should make state programs leaner, employing only the number of workers necessary to complete a task without sacrificing quality. State agencies should put every government form online and share data with each other so e-government users are not asked to submit the same information twice. And every government service, from garbage collection to traffic management, should use data analytics to optimize its operations.
This is not a question of being for or against smaller government. California legislators can use savings from IT investments to cut taxes or expand services, depending on their values and goals. But the state’s foremost priority for e-government should be to cut costs by increasing productivity. This strategy will not only provide Californians with better and more convenient public services, but also free up needed resources in a time of budget constraints.
Ed’s Note: Robert D. Atkinson is president of the Information Technology and Innovation Foundation, a think tank focusing on the intersection of technological innovation and public policy.