By Mary Velan
Gov1
A recent study outlines the many ways states can increase productivity and generate significant savings by harnessing information technology. Through a combination of state and federal policy initiatives, as well as better optimization of IT-enabled productivity in government, states could capture $11 billion in savings for governments, businesses and citizens while also enjoying the financial and efficiency benefits the technology provides.
The Study
The Information Technology and Innovation Foundation recently released a new analysis of why and how states utilize information technology to support productivity, and discovered ample opportunity for growth and savings. The report found if state governments made IT-enabled productivity a top priority, the cost of providing public services could drop by $11 billion nationwide over the next five years. Furthermore, using IT to boost productivity would also make services easier to use for citizens and businesses, which will cut their costs as well. The report broke down the potential savings state-by-state which ranged from $38 million in South Dakota to $1.3 billion in California.
Potential State Government Savings Over Five Years from IT-based Productivity Gains
| State | Cost Savings | State | Cost Savings | |
| Alabama | $147,535,000 | Montana | $65,026,000 | |
| Alaska | $117,795,000 | Nebraska | $50,565,000 | |
| Arizona | $177,587,000 | Nevada | $96,363,000 | |
| Arkansas | $138,575,000 | New Hampshire | $48,095,000 | |
| California | $1,329,017,000 | New Jersey | $584,172,000 | |
| Colorado | $173,855,000 | New Mexico | $84,877,000 | |
| Connecticut | $248,085,000 | New York | $788,930,000 | |
| Delaware | $88,054,000 | North Carolina | $277,964,000 | |
| Florida | $472,227,000 | North Dakota | $41,487,000 | |
| Georgia | $255,054,000 | Ohio | $281,014,000 | |
| Hawaii | $101,440,000 | Oklahoma | $159,409,000 | |
| Idaho | $64,266,000 | Oregon | $215,632,000 | |
| Illinois | $425,422,000 | Pennsylvania | $391,857,000 | |
| Indiana | $137,917,000 | Rhode Island | $76,433,000 | |
| Iowa | $131,590,000 | South Carolina | $145,934,000 | |
| Kansas | $78,512,000 | South Dakota | $38,380,000 | |
| Kentucky | $169,836,000 | Tennessee | $194,756,000 | |
| Louisiana | $148,571,000 | Texas | $662,504,000 | |
| Maine | $59,373,000 | Utah | $113,596,000 | |
| Maryland | $303,210,000 | Vermont | $48,186,000 | |
| Massachusetts | $403,463,000 | Virginia | $216,765,000 | |
| Michigan | $286,751,000 | Washington | $343,881,000 | |
| Minnesota | $215,050,000 | West Virginia | $88,294,000 | |
| Mississippi | $93,646,000 | Wisconsin | $168,174,000 | |
| Missouri | $183,381,000 | Wyoming | $41,345,000 | |
| Total | $11,173,850,000 |
(Source: Information Technology and Innovation Foundation, “Driving the Next Wave of IT-Enabled State Government Productivity,” October 2015)
“In the same way that technology has driven productivity growth in the private sector, there is a great opportunity for savings by state governments,” said Dr. Robert D. Atkinson, founder and president of ITIF and a co-author of the report. “But to achieve this promise of e-government, leaders will need to clearly articulate the goal of replacing labor with technology. They will need to take on entrenched political opposition and overcome an array of administrative challenges, including an unwillingness to increase IT investments that would generate significant returns.”
The report also showcases examples and best practices of programs states have used to cut labor and material costs while driving government efficiency and value for citizens. These best practices were placed into three main categories:
- Replacing routine government employee tasks with self-service tools on the Internet, mobile devices, and kiosks. Examples include self-service sign up for Medicaid in Ohio, a kiosk program in Georgia for driver’s licenses, a telehealth program for inmates in California, and innovative online services in Montana and Illinois.
- Automating routine government employee tasks such as manual entry of paper forms with online applications and smart, connected devices. Examples include using a mobile app for road inspections in Pennsylvania and automating the procurement process in Virginia.
- Optimizing agency operations with data and analytics. Examples include using sensors to improve traffic management in Oregon and weather response in Utah, saving taxpayer money and increasing public safety.
In California, for example, the report cites the state’s inmate telehealth program as an example of using IT to boost government productivity and create savings. With prisons spread out in rural areas all over a large state, providing health care to inmates can be a costly challenge. In 2009, the California Correctional Health Care Services aggressively expanded its telehealth program to connect inmates in rural prisons with specialty care providers. This program resulted in a 21 percent increase in the number of inmate medical appointments in its first year. Not only did this program enhance public safety—since many inmates no longer need to be transported off prison grounds for health care—but it also reduced material costs related to security, fuel, and vehicle maintenance.
Despite the report’s authors finding examples of IT-enabled productivity across the country, the findings indicate no state has made IT-led productivity a top priority, and therefore has not fully realized the potential savings. The authors recommend each state undergo a series of reforms to create a more efficient government driven by results. The reforms include:
- Giving state chief information officers more decision-making authority
- Embracing public-private partnerships
- Incentivizing IT-enabled productivity
“Imagine a leaner state government that needs fewer workers and materials to get the same or better results,” said Atkinson. “By fully integrating technology into agency operations, governments can cut the time citizens waste standing in line or filling out forms, reduce the burden on taxpayers, and make everyday services more efficient and effective. This not only cuts costs, but also makes everyone more productive—which is essential for state economic growth.”
Read the report here.