e-Texas Carole Keeton Rylander
Texas Comptroller of Public Accounts

December, 2000
The New Frontier

The Digital Frontier

The e-Texas Commission:
Our Roots Run Deep

A New Mindset:
Embracing Change

Strategies for Change:
The New Basics

Call to Action:
Texas Can Blaze the Trail

e-Texas Commission

Strategies for Change:
The New Basics

To lead the way to a digital future, Texas will have to make profound changes in the way state government looks, acts and thinks.

We have a vision of an e-Texas that:

  • Accepts and adapts to change. State government should be structured to encourage entrepreneurial behavior. Leaders have the authority and flexibility to respond to new expectations; employees are equipped with the tools to meet customers' needs; and everyone understands that managing change is a part of the mission.
  • Is oriented to citizens and businesses. Government's internal operations will be seamless and transparent, making it easy to do business with the state. Citizens receive the services they want, in the manner they choose—whether it's online, in person or over the phone.
  • Opens its doors. Technology would be used to make it easy to access government, find information and conduct transactions. Citizens no longer have to worry about which department to contact; they go through a single portal or call center that quickly gets them to the right place, whatever their need.
  • Focuses on the outcome. Government's emphasis will be on getting the service provided, not necessarily on providing the service itself. That means seeking creative ways to partner with the private sector, non-profit providers and other levels of government—and managing for results.
  • Operates as a single enterprise. State government should demonstrate "systems thinking," considering problems and solutions in many dimensions, across the entire enterprise. As a result, it is able to leverage its buying power, realize significant economies of scale, and use public resources in the best possible manner.

Citizens' wish list for online government Following our own advice—we need to start now and keep going—the e-Texas Commission decided to move forward with good ideas that emerged from the study process.

We have already started implementing "quick wins" identified by the Comptroller. "Quick wins" are those initiatives that can be put into place without legislation, both within the Comptroller's office and with other agencies. They range from large undertakings, such as filing taxes online, to small changes that add up to a different way of doing business. For example, the Comptroller has:

  • Established the Texas State Information Technology Academy, an intensive training program for talented candidates who agree to work for the state for at least two years.
  • Conducted the state's first Web-based auction, creating more competition and giving more people the opportunity to bid on unclaimed property.
  • Expanded the Comptroller's interactive Web application, WebFile, to allow more businesses to file taxes and make payments online.

These efforts show what government can do, given the right impetus and direction. Now the challenge is to extend this effort throughout state government. At the same time, we have to remember that the advent of digital government does not remove the need to provide effective services to people. Our mission remains the same, regardless of the available tools.

Recognizing this balance, the e-Texas Commission has studied two central aspects of government: what the state needs to do to fulfill its mission (such as provide for public education, promote economic development, ensure safety, and protect the environment) and how it needs to operate to improve services (such as e-procurement, online access, and creative partnerships).

What did we learn from a year of investigation, analysis, discussion and debate? Texas can be the leader of the new electronic frontier, if it makes these fundamental changes:

  1. Think about the customer first, not the agency,
  2. Be entrepreneurial,
  3. Replace bureaucracy with networks,
  4. Improve education and learning for all Texans,
  5. Transform government, not just automate it,
  6. Take action to give Texas a competitive edge, and
  7. Use technology to cut costs and increase savings.

1. Think about the customer first, not the agency

Texas state government is enormous, with approximately 250 agencies and institutions of higher education that do everything from supplying financial aid to single mothers to regulating the plumbing profession and tracking down criminals. Historically, these agencies have operated independently, even when their objectives, programs and customers overlap.

The result is a confusing maze to those inside the system, but for the state's customers—citizens, businesses, vendors, partners, other governments—it is positively bewildering. They don't care about the structure or complexities of state government. They just want to conduct their business, whether it's to find information or renew a business license.

In the past, state agencies could get by with decreeing what services would be delivered and how they would be offered. But no longer. Today's citizens expect the same service level from government they get from the private sector. They want convenience, choice, quality and personal service. And the character of the Internet will allow them to drive what government does more than ever before.

The answer is simple, at least in principle. State government must listen to what people want and offer choices that respond to their needs. As the Department of Information Resources' strategic plan envisions, "All Texans will have direct and easy access to information regarding state programs and services. They will be able to address their needs and deliver their opinions directly to elected officials and members of boards and commissions— anytime and anywhere."

Online government services, 2000-01 That means giving constituents the ability to do business with the state online—not just posting static Web pages with office hours or contact information. It means delivering services to suit citizens' convenience, not limiting them to suit the agencies' convenience. It means making government a more seamless part of people's lives—not an obstacle in their way.

Of course, making a change of this magnitude will not be easy. What we are talking about is a fundamental shift in the culture and climate of government, and while Texas is already making some important changes, much more will be required. The state must take the following steps to provide the new basics.

Enable customers to interact with government as a single entity.
Ultimately, Texas' state and local governments should collaborate to enable interested citizens to conduct all public business—from renewing driver's licenses to paying utility bills—online or through a call center.

Texas has taken the first step by creating the new "TexasOnline" portal, which makes it possible to cut across organizational boundaries and present a single face of government to customers. The portal is now available to state agencies and local governments on a voluntary basis. If the various arms of government cooperate, the portal will allow Texans to submit their information and user IDs once to access all of government.

We envision a time, not too far off, when citizens have a "My Gov" icon on their desktop and use it regularly to interact with government and obtain the information they need, whether it's public meeting announcements, starting a business or getting a child's immunizations on schedule.

Streamline government to eliminate duplication and fragmentation.
The tendency of the past has been to create new entities to address new and emerging needs, without eliminating other functions. As a result, for example, an individual seeking to open a dry cleaning shop today must contact at least five state agencies to obtain the authorizations required to do business in Texas—not to mention the three federal agencies needed to assure federal compliance.

Some reorganization will be required to make state government a "customer-facing" enterprise that mirrors citizens' interactions with it. Clearly, this will be an ongoing task for the Sunset Advisory Commission as well as other performance review efforts.

In the meantime, the state must adopt a statewide, or "enterprise" approach, for managing technology. By coordinating the establishment of IT systems that can share information, agencies will be able to eliminate duplicated effort and improve citizen services.

Make it easier to get information from government.
State government collects a huge amount of valuable information, but today most of it is difficult to access and understand. Texans should be able to get appropriate information—from how much it costs to fill a pothole to the environmental record of the new business in town—with a few clicks.

First, the state needs to share information across state agencies. The next step is to coordinate among all levels of government to make information easy to access. State government could provide a valuable service by partnering with local governments, federal agencies and related associations to create an electronic data clearinghouse—a single source for all local government data.

2. Be entrepreneurial.

Every state is taking action to position itself as the digital leader. Some are concentrating on building the infrastructure required for e-government; others are putting up front-end applications that allow users to contact government online.

We believe Texas can take the lead in creating an "entrepreneurial government." That may sound like an oxymoron today, but it is a real possibility for tomorrow if government is willing to take on the same challenges as the private sector.

Balance central oversight with agency autonomy.
One of the keys will be finding the appropriate balance between centralization and decentralization. On the one hand, digital government requires agencies to have the autonomy and flexibility to respond to customers. On the other, Texas government must operate as a single enterprise to make wise decisions, take advantage of new technologies and realize the greatest return on its investments.

We do not expect the organization and structure of government to change overnight. But the state can take an important step toward statewide, or enterprise-wide, coordination by establishing a central Program Management Office within the Department of Information Resources and giving it the authority to guide information technology decisions. Such an office would help overcome the "stovepipe mentality" of the past, where each agency operated in isolation and competed for state funds. It would also help maximize the state's resources by providing a central point for planning, setting priorities, managing projects and monitoring for quality assurance.

Offer more customer choice.
Consumers who can design their own computer from millions of configurations and have their news tailored to their interests are not likely to accept the old one-size-fits-all mentality of government. Recognizing this shift, the Texas Legislature has paved the way to offer more choice in public services, from allowing the use of vouchers for certain health services to authorizing charter schools (state-funded schools run by private charters that are not subject to many of the regulations standard public schools face).

But this orientation needs to filter through all of state government. Therefore, Texas must:

  • Provide the information citizens need to choose among options,
  • Help Texans navigate their choices with brokering services that offer shortcuts through the wide range of available choices, and
  • Expand its efforts to offer customized services.

Become the preferred provider.
Ultimately, state government must act as though it faces competition—which it very well might. We're talking about a whole new mindset, where government does everything possible to become the provider of choice, rather than seeing itself as the only game in town.

The importance of communication cannot be overestimated, as the private sector is well aware. Governments, however, are doing little to market or promote online services, a recent report by Forrester Research concluded. The report urges state governments to start marketing their services as soon as possible, to let customers know what's out there and to promote their use. One idea: begin forging deals with private sector portal sites, such as Yahoo, to drive traffic to agency Web sites.

3. Replace bureaucracy with networks.

Networking is about connecting—not just data, but people. The networked organization looks more like a web of relationships than a hierarchical pyramid; it behaves more like an organism than a machine. Technology is the thread that joins customers, suppliers, contractors, shareholders, employees and even competitors.

Range of Partnerships Networking enables organizations to focus their internal resources on what they do best and outsource peripheral services, such as fleet maintenance, data processing and payment processing. It allows them to partner with top performers to provide a higher level of quality than either could achieve alone. And it cuts costs, as the Houston Independent School System found when it opened up its food service to competition. The contract was won by a private firm that has produced nearly $8 million in savings—while serving 16,000 more meals per day.

For networked governments, technology offers the opportunity to create public-private partnerships and find new ways to achieve the ultimate goal. Over the last decade, it has become clear that such partnerships do not follow a single model, but vary widely in the level of private and public sector involvement.

Texas government can make use of all these options to serve the public good.

Focus on the mission of government.
Public resources are going to remain tight, no matter what the economic conditions. This reality is forcing the state's government, like its businesses, to take an unflinching look at internal operations; focus resources on "core" competencies (those directly related to the mission); and find other ways to provide non-core functions.

Texas is already using innovative arrangements to provide some services. For example, the TexasOnline portal is being designed, built and operated by a private firm, with the state retaining ownership of the architecture, and both partners sharing the revenues. We believe the success of such ventures will depend on the state's ability to nurture and manage networks.

Texas spends some $14 billion per year on contracted goods and services. To be a responsible steward of public funds, the state must make the transition to performance-based contracting. That will mean establishing outcome-based terms when contracting for services (in other words, holding the contractor responsible for achieving the end goal, rather than detailing the means of getting there).

Expand the "Yellow Pages Test" to explore partnership opportunities.
Competitive government has received renewed attention since Comptroller Rylander implemented the "Yellow Pages Test." The test is based on the premise that "government should do no job if there is a business in the Yellow Pages that can do that job better and at a lower cost." In fact, many ancillary services—from printing to outgoing mail—could be better served by being managed, not provided, by state government.

Before government can be opened up to competition on a large scale, however, the state must clearly identify what services are being delivered in-house, which are already being contracted out and where additional opportunities for competition exist. Texas should follow the lead of the federal government and conduct a comprehensive inventory of activities that could be performed by the public sector. As at the federal level, state agencies would compete against the private sector—on costs and quality—for the right to provide the service.

4. Improve education and learning for all Texans.

Texas is recognized as a national leader in education. According to the National Educational Goals Panel, it is one of two states that have made the most progress toward educational goals established by Congress. We can take pride in the state's achievements, including a more equitable school finance system, better teacher pay and working conditions, greater access to early education, an exemplary accountability system and more educational choices for parents and students.

But the state can't afford to rest on its laurels, because the information economy continues to raise the bar—and the stakes. Knowledge is the most valuable resource in this economy, and the lack of skilled workers is one of the greatest barriers to growth. In this arena, improving education is the most important thing we can do to assure a strong economic future and a high quality of life here.

We know that Texas' students will need different skills to compete with their peers around the world. Their success will depend on their ability to analyze information, solve problems, apply technology, communicate effectively and respond quickly to change. Yet our schools still operate in much the same way they have for generations. It is time to:

  • Equip all students with the skills and knowledge they need to thrive in the new economy,
  • Consider education in broader terms, not just K-12, but lifelong learning, and
  • Address the needs of a growing and increasingly diverse school population.

Create a seamless K-16 education system.
It's clear that there will be fewer well-paying jobs for unskilled workers, while highly educated and skilled workers will be in great demand in the new economy. And the salary gap based on educational attainment will continue to grow. Whereas 20 years ago a college graduate earned roughly 50 percent more than a high school graduate, today the difference is roughly 111 percent.

In this world, education begins before school starts—and never ends. If Texas is to realize its potential, we must strengthen this entire continuum, including:

  • Providing information on programs that effectively address the needs of students at risk of academic failure,
  • Assuring high quality in "dual credit programs" that allow exceptional high school students to take college-level courses through community colleges, and
  • Offering more options for college savings to enable even more students to afford college.

Use technology to cope with the pressure of growing school enrollment.
Technology can play an important role in increasing access to education. The Internet and distance learning reach students beyond the boundaries of public school, college or university campus, letting them take courses anytime, anywhere.

Texas has already started to exploit the potential of technology through the Virtual College of Texas, which offers online access to 39 courses from 21 community and technical colleges, as well as online courses and degree programs through public universities. But the state should take action now to become a leader in harnessing the potential of this delivery system, by creating an e-Texas University to offer online courses and programs.

The virtual university should provide every Texan with access to high-quality, college-level courses that are easily transferable to any state college or university. As a first step, the state's entire core curriculum should be available online to college students to provide more flexible course offerings.

5. Transform government, not just automate it.

All state governments have Web sites with static information, such as meeting schedules, contact names and numbers, and programs offered. The path to e-governmentThis is what the techies call "brochure-ware"—essentially printed information translated into an electronic form. Even those sites that allow interaction are often an electronic front counter masking an unchanged back office, where the real benefits can be realized.

But e-Texas can offer so much more. The new technologies enable the state to truly change the way public business is conducted—not just automate "business as usual." This is a tremendous opportunity for Texas to create a competitive advantage that attracts economic development and good, high-paying jobs. Now is the time for the state to:

Rely on technology to deliver as many services as possible.
We identified many opportunities to use technology to improve the state's services and reduce costs. Among the most significant:

  • Access to health care. Technology can be used to supplement or replace traditional health and human services, which account for an increasing portion of the state's budget. Texas should begin by using telemedicine to provide services to children with special health care needs; allowing applicants to apply for health services through the Internet or over the phone; and using automated drug dispensing systems in nursing homes.
  • Intelligent transportation systems. Texas should use new technologies to reduce traffic congestion and improve transportation. Among the innovations are advanced traveler information systems, which provide real-time traffic information to drivers; advanced management systems, which can monitor traffic flows and synchronize the operation of traffic signal systems; and automatic vehicle identification systems, which can be used to collect tolls and identify commercial carriers.
  • Environmental quality. The state can use technology to dramatically reduce compliance costs—and improve environmental quality. This includes creating incentives for regulated entities to install monitoring equipment and post real-time data.

Build creative partnerships.
In the new frontier, the boundaries of the past blur. We've seen the effect in the private sector, where strategic partnerships and alliances are created, changed and dissolved to respond to the marketplace. By adapting this model to state government, Texas can take the lead in government transformation.

Actually, the state has already started with the self-funded TexasOnline initiative. KPMG, the private sector partner, made the initial investment in hardware, software and staffing, and will share net revenues with the state. Public oversight is maintained by a state-led governing board, which sets policies, approves cost-recovery mechanisms and oversees portal operations.

Partnerships like this offer the public sector some key advantages—rapid implementation, outside funding, the skill set needed to make the technology work—and point the way to the future.

Act now and recalibrate along the way.
State government cannot meet the state's needs by sticking to the traditional deliberative, risk-averse way of doing business. There simply isn't time.

With technology moving at lightning speed, government must change the way it plans, designs and implements technology. It makes no sense to spend 18 months perfecting a request for proposals, if the technology is obsolete by the time it's issued. Instead, government needs to compress the planning cycle, use the available technologies and build flexibility into every initiative, knowing that it will change.

6. Take action to give Texas a competitive edge.

The Internet is challenging all governments to develop regulations and enforcement mechanisms that are very different from those of the past. These decisions will have a profound impact on the governed, in terms of public services, economic opportunities and standard of living.

Texas government should focus on those areas where it can be most effective and is most needed: access, infrastructure, privacy and security.

Assure digital inclusion.
Sitting in Austin, one of the nation's high-tech hubs, it's easy to forget that not all Texans have access to the Internet. But the truth is, those with lower incomes, less education and in rural locations are much less likely to be connected. And that puts them at a tremendous disadvantage.

Information technology must be accessible to everyone. But market forces alone cannot be expected to make this happen: providers are in business to make a profit, and it is simply not profitable to stretch bandwidth to areas with few users. The state must make sure there are sufficient public access points throughout the state. It's not just a moral obligation, but an economic imperative.

Build the information technology infrastructure.
The technology policies put in place today will have a major impact on Texas tomorrow. It's not just about improving government services, important as that is. It's about giving the state a competitive edge that will attract new businesses, stimulate business growth and create new job opportunities.

Leadership is critical. The state's policymakers must understand what the technology can do, where it is going and how it can help Texas. The recommended Program Management Office is a good start, but much more will be needed to make the most of the state's technology investments. The focus of the future should be on:

  • Standardization. Standards create an enterprise-wide foundation for making information technology decisions. By standardizing common business processes, the state can increase communication, reduce duplication, cut costs and take advantage of economies of scale.
  • Scalability. Scalability refers to the ability to easily expand the infrastructure, without making major changes to it. Focusing on scalability from the start will enable the state to replicate successful solutions in other agencies or upgrade at minimal cost.
  • Interoperability. Interoperability is the ability of separate applications to share information. This is a basic requirement of the new business model, allowing all parts of the enterprise to communicate with one another to better serve citizens.

Address privacy and security concerns.
The Internet allows large amounts of information to be collected, stored, compiled and distributed in ways never before possible. It's hardly surprising, then, that the public is concerned about the privacy and security of this information. In a recent survey, 65 percent of Texans said they were worried about privacy on the Internet, and more than half (52 percent) were "not at all confident" or "not very confident" in the state's ability to handle personal information.

State government needs to build trust in the security (how information is protected) and privacy (how information is used) of its systems. That will mean reviewing statutory requirements about the collection and dissemination of information—most of which were put in place before the rise of the Internet. Setting standards, which the Department of Information Resources has already done, is necessary—but not sufficient to build the public's trust. The state must also be able to back up the standards with the authority to enforce them.

7. Use technology to cut costs and increase savings.

Texas government is a huge business, with nearly a $50 billion annual budget and over 272,000 full-time equivalent state employees. Many of the challenges it faces—from managing supply chains to training employees—are the same as those of companies like IBM, Dell, Texas Instruments and American Airlines.

The Cost of Banking Transactions Private sector leaders like these are using information technology to increase speed, reduce costs, expand choices and improve customer service. The results are dramatic: for example, the banking industry has found that a transaction processed by a teller at a branch bank is more than 1,000 times the cost of processing the same transaction online.

Texas' businesses have had to make major changes to thrive—and sometimes even to survive. State government can learn from their experience, and use technology to reduce costs and produce savings.

Move purchasing and procurement online.
When it comes to cost savings, e-procurement is the "killer app." Companies such as Cisco and IBM have saved tens of millions of dollars each year by moving paper-driven purchasing systems onto the Internet. They've found that increasing the flow of information between suppliers and purchasers slashes purchasing cycles, reduces inventory, increases competition and cuts administrative costs.

The state can realize the same kinds of savings by allowing agencies to solicit, receive, evaluate and award contracts through a virtual marketplace that links suppliers and purchasers. Such a network will generate tremendous savings in the labor and handling costs of purchasing goods and services. While processing purchase orders now costs $100-$150 per transaction, with e-procurement, the cost can be expected to drop to just a few dollars.

Texas is already moving toward e-procurement with the pilot testing of the new Texas Government to Business (TxG2B) system. But achieving the full potential of these applications will require the state to transform its operations by centralizing administration, aggregating purchasing power and moving all procurement online.

Achieve cost savings from e-government.
Streamlining the purchase order process is an important first step, but Texas state government can't stop there. The experience of the private sector shows that organizations can achieve tremendous cost savings from these Internet strategies as well:

  • Managing the supply chain through the Internet reduces inventory and, therefore, production costs.
  • Introducing an online marketplace creates more competition and reduces suppliers' cost of doing business, resulting in lower costs for buyers.
  • Moving customer-care calls to self-service transactions saves up to 90 percent for each call avoided.
  • Shifting many employee communications and services online reduces the number of people needed to serve internal customers.
  • Switching from outdated technology, such as microfilm, to Internet-based technology reduces the costs of storing and retrieving huge volumes of data.

The "quick wins" initiated as a result of e-Texas demonstrate the potential. For example, the Comptroller's Fiscal Management Division cut the cost of notifying state agencies of accounting and other administrative changes by almost $95,000 a year, just by switching from paper notices to e-mail. The new approach also cut the time to get the message out from seven days to about seven seconds. In 2000, Comptroller Rylander completed the first online auction of state deposits for financial institutions that want to compete for state funds. The electronic bidding auction, called BidTX, is an innovative new process that uses the latest Internet technology to invest state funds with institutions that offer the highest interest rates to maximize earnings on state revenue. These auctions are conducted monthly.

Small changes like these quickly add up to a big difference for our future.

e-Texas is an initiative of Carole Keeton Rylander, Texas Comptroller of Public Accounts
Post Office Box 13528, Capitol Station
Austin, Texas

Privacy Policy