a methodology framework for calculating the cost of e-government services ted conference on...

A Methodology Framework for A Methodology Framework for Calculating the Cost of Calculating the Cost of

e-Government Servicese-Government Services

TED Conference on e-Government“Electronic democracy: The challenge

ahead”March 4, 2005

Bozen-Bolzano, Italy

Elias A. HadziliasElias A. Hadzilias

IÉSEG School of Management - Université Catholique IÉSEG School of Management - Université Catholique

de Lillede Lille

3 rue de la Digue, 59800 Lille, FRANCE3 rue de la Digue, 59800 Lille, FRANCE

[email protected]@ieseg.fr

® Elias A. Hadzilias 2005 2

Presentation outline

Introduction

Theoretical background IDEF ABC

Case study Taxisnet

Conclusions

Further research


The context of e-Government

Source: http://europa.eu.int/information_society/activities/egovernment_research/focus/index_en.htm


The main issues

Durable and popular public management reform

The added value of Information Technology (IT)

Civic participation in the public sphere

The idolise approach [1]

[1] Heeks, R., Davies, A.: Different approaches to information reform. In Heeks, R. (ed.): Reinventing Government in the Information Age: IT Enabled Public Sector Reform, Routledge, London (1999) 22-48


Motivation of the study

eGovernment is the use of information and communication technologies in public administrations - combined with organisational change and new skills - to improve public services and democratic processes and to strengthen support to public policies.

eGovernment is a way for public administrations to become: more open and transparent and to reinforce

democratic participation more service-oriented, providing personalised and

inclusive services to each citizen productive, delivering maximum value for taxpayers'

money

Source: http://europa.eu.int/information_society/soccul/egov/index_en.htm


Objectives

Provide an integrated methodology for the cost calculation of e-Government services combining IDEF and ABC methods

Address workflow issues when tax legislation is altered

Establish a reference level for defining performance indicators

Visualise the business processes supporting the e-Government landscape

Enable what-if scenario analysis


The IDEF Method

Modelling of decisions, actions, and activities of an organisation or system

Field proven function method for analysing and communicating the functional perspective of a system

As a communication tool, IDEF enhances domain expert involvement and consensus decision-making through simplified graphical devices.

As an analysis tool, IDEF assists the modeller in identifying the functions performed and what is needed to perform them.


Graphical representation

Inputs

Mechanisms

Outputs

Controls

ACTIVITY

4

3

2

1

3

3

2

1

2

1

A0

A4

A42

A-0

A4

A42

A00


Activity-Based Costing (ABC)

Resources

Products / Services

Traditional Cost Accounting

Resources

Products / ServicesCustomers

Activity-BasedCosting

Business ProcessesActivities


TRADITIONAL ACCOUNTING ACTIVITY BASED COSTING

Activity

Overhead Direct Labour

Direct Material

COSTCOSTActivity

Overhead Direct Labour

Direct Material

COSTCOST

A less conceptual view of ABC

ABC jargon:• Cost drivers• Activity centers• Cost pools


ADMINISTRATION

DEPARTMENTS

PROCESS 1

Why ABC…

PROCESS 2


One year ago…

Business ecosystem, digital economy, etc.


The case study: TAXISnet

TAXation Information System, named after the Greek word for order (TAXISnet after 6 years)

Initiated and managed by the Greek Ministry of Finance

Strategic IT investment with an overall budget of approximately € 90 M

Cost analysis report of submitting and processing income statements E1/E1A (General Secretariat for Information Systems)

Intermediation of tax agencies for numerous tax refund cases (lawyers, doctors, engineers, etc) after a circular that was published from the Ministry of Finance


The TAXISnet portalhttps://www.taxisnet.gr/web/default.html


The workflow until 2003

Submit E1/E1A tax statement

Secureconnection

TAX PAYER INTERNET MINISTRY OF

FINANCE


…but things changed!


Secureconnection


Secureconnection

Circular 1028034/771/A 0012/31.03.04(Greek Ministry of Finance)

TAX AGENCY

Submit paper documents


Weaknesses of the TAXISnet cost analysis report Does not address the gap in

the e-Government services with the intermediation of tax agencies

Assumptions are based on a traditional accounting approach


The proposed framework:IDEF and ABC

Cost objectsCost objects

Cost driver analysis


Performance measuremen

t


t

Cost assignment view

Pro

cess

vie

w

ResourcesResources

ActivitiesActivities


Cost assignment view

e-Government

services

Resources

Pro

cess

vie

w


(Why work is done)

Activities(Work

performed)


t(How well work is done)

Resource drivers

Activity drivers

Calculating the cost of e-Government services


Α1ActivityAnalysis

Interviews

Α2Cost

Collection

Α3Cost

Allocation

Organisationalprocedures

Data

Project Team

Employees

AccumulatedCosts Α4

Output Measure Definition

Cost per activity

Project Team

Employees

Project Team

IDEF Activity model

Α5Activity and Cost

Analysis

Organisational Culture

PIs

Cost per activity

Project Team

Central Administration

Cost per activityand Cost Object

The integrated methodology

Documentation

Project Team

Project Team


TAXISnet today…

less service-oriented, not providing personalised and inclusive services to the citizens

less productive, not delivering maximum value for taxpayers' money

“… if the amount of tax refund exceeds € 1500 […] then there will be a delay due to necessary administrative procedures and the final decision will be made afterwards”.

Source: Guidelines for declaring the 2004 income (http://www.gsis.gr)


Calculating the cost of change

Α1

Α2

Α3

Α4

4

3

2

1

3

3

2

1

2

1

A0

A4

A42

A-0

A4

A42

A00

Anew

+ CostAnew

or- CostAnew


Conclusions

Proposed methodology proves to be more suitable for the cost calculation of e-Government services than traditional accounting

The established IDEF model is able to address workflow issues when tax legislation is altered

Performance indicators allow for continuous e-Government services improvement

The IDEF/ABC enterprise models enable the transparent view of business processes supporting the e-Government landscape

Enable what-if scenario analysis


Further research

Determine the requirements of an information system, which will be dedicated to support the process mapping of the e-Government services with the IDEFØ tool and the cost allocation using the ABC approach

Reconsider and redesign the Weberian bureaucratic model of the Greek administration to address the e-Governance organisation

Compare the e-Government efforts in the taxing domain with other EU member-states (benchmarking and best practices)


Questions

a methodology framework for calculating the cost of e-government services ted conference on...

Documents