State saving millions with online services, report shows

Published: Friday, Oct. 12 2012 5:25 p.m. MDT

SALT LAKE CITY — Utah saved $46 million over five years by providing services online rather than traditional “offline” methods through government offices, by telephone or through the mail, according to a University of Utah study.

Beginning with the launch of eUtah.org in 1999, the state has developed new online services to meet the demand of both residents and businesses. Today, Utah.gov offers more than 1,000 online services, including ordering birth certificates and filing income taxes.

“Utah is among the most-wired states, and our tech-savvy citizens increasingly demand state service online,” said Mark VanOrden, chief information officer and executive director of the Utah Department of Technology Services. “Registering a new business or renewing a car registration is not just easier and more convenient for our consumers, it also saves money for the state.”

The study was conducted by the university's Center for Public Policy and Administration for NIC Inc., the company that provides online services for the state. The report was designed to quantify the financial benefit of delivering services online and used cost avoidance as the measurement.

According to the report, cost avoidance is the difference between the costs of providing a service online and the costs for providing the same service through offline means.

Data were used from a number of high-demand services over a five-year period between fiscal years 2007 and 2011. The average cost per transaction for providing a service online was $13.20 lower than the offline costs, Center for Public Policy and Administration research associate Dianne Meppen said.

When multiplied by the number of online transactions for the services studied, the state saved $46 million by offering an online option for its users, Meppen added.

The state uses a “self-funded” model to provide services online, with agencies working with independent contractors that incur the direct costs for building, managing and maintaining the Utah.gov portal. While some services require modest user or transaction fees to cover expenses to operate the site, other services, such as voter registration, are offered free of charge.

The model allows the state to offer a growing number of services online without upfront investment of taxpayer dollars.

“We found that by relying on the self-funded model, the state saved an additional $15 million in costs,” said Jennifer Robinson, Center for Public Policy and Administration director.

While the state has increased its online service offering exponentially over the years, there is still room for enhancement and improvement, said Chris Neff, NIC Inc. vice president.

“Utah is committed to serving its (residents) and businesses by reducing costs and increasing efficiencies," Neff said.

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