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city haul. Tech companies line up to get in on growing e-goverment spending february 16, 2004 In 2001, Waterford Township put off a massive project to connect more than 20 municipal buildings through a high-speed network. But the project can't be delayed anymore. Post-Sept. 11 security requirements call for the township to connect its 14 water treatment plants into a single network, said Denise Dodd, director of information systems for the township. To improve services, Waterford wants its police, fire and other municipal buildings to tap the network, too. "We need it now," Dodd said. "We need a way for staff at those remote locations to connect one way or another." Governments are spending on technology to cut costs, improve services and increase productivity and security. Nationally, state and local government spending on information technology products and services is expected to grow from $46 billion in 2004 to $64 billion in 2009, according to Reston, Va.-based research firm Input. That's a pretty big pie for tech-related firms to cut into, as long as they can overcome the slow-moving bureaucracy of government, fierce competition and decreasing hardware and software costs that have driven down prices. "E-government is just about ready for prime time," said Larry Freed, CEO of Ann Arbor-based ForeSee Results, which, among other things, tracks user satisfaction with government Web sites. "It's the one industry that's been spending a lot of money on improving their offerings during the last two years." "The market opportunities have expanded tremendously in government," said Scott Bade, vice president of Southfield-based ImageSoft Inc. About 32 percent of ImageSoft's business comes from government, up from 12 percent in 2000, he said. Recent work has included a contract from Charlevoix County to digitize its records. The company is working on similar contracts for St. Clair County, the city of Wixom and Northville Township. There's also potential in municipal Web sites. Of Michigan's 1,858 counties, townships, cities and villages, only 376 had a Web presence in late 2002, according to a May 2003 report by Cyber-state.org, a nonprofit organization that studies Michigan's information-technology interests and needs. The average growth of Michigan local governments online per year is 8 percent, which was consistent with the growth per year of Michigan citizens using the Internet, Cyber-state said. Further, those communities that already have Web sites continue to spend to make them better. Birmingham, for example, wants to offer more services like paying tickets and water bills online, said Jason Kulczycki, an employee in the city's information technology department. Responses to the request for proposals for the project were due in January. The investments pay off, too. Oakland County launched a $100 million e-government initiative in 1996. Today, the county offers 30 online services including access to delinquent tax statements, residential and commercial property profiles and even the ability to pay traffic tickets. Paying taxes online is next, said Phil Bertolini, director of information technology. Use rates are high: Oakland County Web site visitors have downloaded a monthly average of nearly 32,000 individual files in the past three months. The county estimates it saves $748,000 a year in salary, printing and postage. "End users need our technology now more than they ever did because our world has become that way; users want to click on a button and get what they need instantly," Bertolini said. "They want government to be the one to give it." That's good news for companies such as ImageSoft and Birmingham-based Municipal Web Services Inc., which has developed Web sites for the cities of Novi, Ferndale, Farmington Hills and Northville. Curt Anderson, president of Municipal Web Services, said the most opportunity is for companies that offer software products and those who offer consulting services to help government information technology departments improve existing Web sites. The opportunities aren't limited to Web sites. Waterford Township plans to network its more than 20 buildings through a wireless network, and many other communities could follow. And if the trend of online book lending continues, there are many more libraries in Michigan besides those in the Metro Net Library Consortium. But despite the opportunities, working with governments is challenging. The bureaucracy of government slowed by the need for numerous approvals can naturally make the work an arduous process, Anderson said. Further, increased competition has forced prices down for service and product vendors. When Rochester Hills issued a request for proposals to redesign its Web site, for example, more than 20 bids were received. That forced prices down. Anderson, for example, said he recently won a contract that was 20 percent lower than what he would have received for the same job three years ago. The value of the contract was $25,000, he said. Anderson said the reason is that there are many individual developers who have entered the field due to job loss. And then there's politics. Bade said there have been times when ImageSoft lost contracts for no apparent reason or reasons that he can best guess were "political." "But for every bad apple, there are half a dozen good apples," he said. |
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