The Government Transformation

Network-based applications and information systems are enhancing communications and collaboration and providing new levels of productivity and operational efficiency within and across functions such as human resources, logistics and transportation. During the next 10 years, Internet Protocol telephony and video-on-demand figure to develop into primary methods of communications among agencies adopting cost-efficient, interoperable, self-defending networks.

Government transformation is not simply a matter of agencies' implementing the industry's latest-and-greatest technology innovations, however. In addition to deploying strategic optical platforms, Voice over IP solutions, security devices and other tools, government agencies are also re-engineering business processes to enhance productivity and efficiency.

Government agencies are seeking something beyond just leading-edge technologies, says Jim White, president of Computing Systems at Northrop Grumman Information Technology. They are on the lookout for trusted advisors, capable of evaluating their network environments in the context of their missions, and making sound recommendations as to how to reshape business processes to maximize existing and new IT investments.

In fact, there is compelling evidence from the private sector that the order in which new technology implementation and alteration of business processes are undertaken is critical. Cisco Systems in 2003 studied 300 diverse organizations across a variety of industries. The Cisco study showed that network-enabled applications, when coupled with appropriate changes in business processes, spurred productivity by an impressive fivefold.

Deploying the network-enabled applications first, however, sometimes drove increases in costs of up to 9 percent; modifying business processes and then implementing the new applications actually reduced costs by up to 30 percent. The key lesson to be heeded by agencies with government transformation accelerating: Throwing money at leading-edge equipment and software without first defining the necessary, associated changes in business processes cannot only fail to create the productivity enhancements they seek but also significantly boost costs.

Resellers serving the government marketplace, meanwhile, are taking stock of the emerging government transformation opportunity. Input, a government IT market-research firm, forecasts federal-government spending on IT outsourcing to swell to $15 billion in fiscal 2007, up from $6.6 billion in fiscal 2002, an annual growth rate of 18 percent.

It's clear that agencies are buying into the notion that government transformation is poised to yield the degree of productivity gains the Internet has produced in business and to foster a citizen-centric, networked business model that enables them to better serve their constituencies and meet their missions. It is equally clear that the old rap on government as a technology follower no longer applies. Agencies are pioneering in adoption of IT innovations that figure to help drive the general economy. The Department of Defense is a prime example of this.

The resellers that cash in on the opportunity to rally around the opportunities arising from the emergence of government transformation will be those that augment their technology solutions with value-added advisory services. Such services will enable government agencies to make the most of their investments.

Scott Spehar ([email protected]) is federal area vice president of Cisco Systems.