Of fish and funding

Call it the Dead Fish Theory of government fiscal responsibility. Simply

put, government is committed to do everything in its power to secure funding

for its core services, but the core services might not be as broad as you

expect.

I concocted this theory earlier this fall when a neighbor discovered

that the stream that runs behind our townhouses had taken on a reddish hue

and an alarming number of fish had died. When my neighbor called a local

agency to report it, they tested the water and said it was probably nothing

to worry about, but they could not afford to test the fish.

This situation isn't uncommon. Government agencies, particularly at

the city and county levels, frequently find themselves cutting back their

services everywhere they can to ensure they have enough money for the absolute

essentials.

So when agency officials look to fund a significant information technology

project, they better be prepared to justify it, either to their budget office

or even to the legislature. The pressure only increases as projects get

more ambitious or overall spending increases, even in states or cities with

healthy budgets.

A legislature may not question money budgeted for upgrading an agency's

local-area network. But they will take notice when a city awards a multimillion-dollar

contract to manage its online transaction systems and services. It sounds

like a great idea, but what's the business case for such a system?

This month's cover story explains how one state, Iowa, is trying to

apply good business sense to its IT spending by evaluating each proposed

project for its potential return on investment. In short, the state attempts

to weigh a project's cost against its impact on government operations and

on the public.

The ROI initiative is not just a political exercise, Iowa officials

say, but a legitimate effort to make rational choices about which projects

to fund and which to cut. Such a businesslike approach has the potential

to save IT projects that otherwise might be cut. Consider the Dead Fish

Theory. A government faced with a tight budget inevitably must make choices

about any number of programs that have legitimate value.

Decision-makers in the executive and legislative branches often look

hard at technology budgets because they do not understand the value of those

projects. It's easy to see that staffing up the Department of Motor Vehicles

might improve service or that a new snow removal contract will allow residents

to get to work faster. But what's the value of a wide-area network linking

government buildings? What's the value of revamping a Web site?

In fact, technology can play a vital role in government operations and

services. A number of states now allow residents to renew registrations

or even drivers licenses online, which in time could dramatically reduce

the number of people standing in line. But agencies must be able to demonstrate

that value, or they run the risk that someone somewhere along the line will

decide to cut bait.