The joint solution calls on local governments to standardize online administrative services to enable them to jointly outsource the writing and management of software for their online systems to private sector companies. The outsourcing approach offers a number of benefits for local governments.
The financial benefit could be considerable. If 10 local governments were to use an identical e-government system, the cost would be about 60 percent of the combined cost of installing separate client servers in each municipality, according to a Public Management Ministry estimate. Outsourcing would make e-government viable for small local governments that could not otherwise afford it.
Second, turning to IT-savvy private companies can help solve the lack of engineers in local governments. Furthermore, outsourcing will free municipal officials from full-time physical involvement in e-government operations, allowing them to concentrate on their primary role of planning and enhancing e-government services.
Third, the utilization of private-sector expertise will help buoy local economies by creating jobs at Internet data centers and other firms. In a report to the government's Economic and Fiscal Advisory Council last year, Public Management Minister Toranosuke Katayama estimated that such outsourcing schemes would create 110,000 new jobs directly and an additional 600,000 jobs indirectly.
Nonetheless, we should not be too optimistic. There are a number of problems that must be addressed. Among them are legal and regulatory barriers. Currently, local government ordinances or related regulations for the protection of personal information strictly limit the online connection of the information system to outside parties, including the use of the Internet.
Under ordinances of some local governments, such connection is prohibited. This is because when local governments established such ordinances, they did not assume that they would make the information system accessible through Internet data centers in the private sector. In order to use private-sector IT companies, legal and regulatory restrictions need to be altered.
Another problem for municipalities is the shortage of officials capable of supervising e-government projects. Even in the case of a joint-outsourcing approach, each local government will be ultimately responsible for managing and supervising such projects.
However, there are not sufficient municipal officials capable of managing large-scale outsourcing projects. Solutions to the scarcity of IT specialists within municipal government could include in-house training plans to foster IT-savvy officials and even the commissioning of outside experts.
The third issue involves standardization of local governments' services and enhancement of efficiency.
If municipalities choose to customize e-government services in accordance with existing work procedures while relying on common outsourcing projects, they will end up with inflated costs. In other words, to attain the cost-cutting goal, local governments need to not only unify relevant regulations and standardize work processes, but also implement business-process reengineering plans.
Also essential for the successful launching of joint-outsourcing projects is the establishment of security infrastructures and risk-communication systems. There is concern over new security issues, such as the possible leakage of personal data through subcontractors.
To address such issues, there must be certain technological collateral to ensure the protection of such data.
At the same time, contracts with outsourcing contractors would need to thoroughly clarify conditions of the handling of personal data.
Local governments need to strictly supervise the projects, as well as establishing a policy on data protection and creating a system to guarantee proper enforcement of such a policy. It is also worth considering the introduction of outside auditing.
Meanwhile, the lack of risk communication--a system in which relevant organizations and people including municipalities and residents share information in an emergency--is the cause of public concern, as seen in the issue of the Basic Residential Registers Network System.
Local governments need to win the understanding of residents about the need for joint-outsourcing projects by disclosing all manner of information about possible risks concerning the outsourcing scheme.
Finally, contracts between local governments and contractors must be reworded to offer greater clarity and accountability. To date, such contracts have mainly covered procurements of materials and equipment and construction works--without any mention of the purchase of services.
As a result, in the case of procuring IT services, there were gaps between services that local governments expected to receive and the actual services that private-sector companies provided. To solve the disparity, local governments and contractors need to have contracts clarifying the scope of responsibilities in details, including service level agreements.
This form of agreement is a contract that objectively quantifies the quality of services, establishes a level of service to be maintained, and guarantees that contractors will continue to provide the level of service stipulated in the contract.
The level of service should be clarified with quantitative benchmarks and should be constantly measured and maintained. One such benchmark may require the service provider to keep the operation rate at 99 percent.
If the supplier fails to deliver the required level of service, such penalties as a reduction in fee payments and other penalties could be imposed. If a contractor fails to adhere to the level of service stated in the contract, nullification of the contract could be considered.
It is vitally important for local governments to solve each of these issues, increase the efficiency of the administrative services through joint-outsourcing approaches and, by so doing, create a framework and an environment that enables them to concentrate on their core function--the provision of administrative services.
Hasegawa is a consultant at the Public Sector Management Consulting Department of Nomura Research Institute Ltd.
Quelle: The Daily Yomiuri
