Wooing Uncle Sam for e-gov business

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With private-sector sales slumping and public agencies mandated to ramp up Internet operations, high-tech companies see big government as very big business.

The most savvy among these marketers of e-commerce products and services have already staked their claim in the business-to-government space. They’re building Web sites, implementing e-procurement systems, tackling customer relationship management issues and much more on the federal, state and local levels.

Drivers of the b-to-g marketing boom include:

•The Government Paperwork Reduction Act, which requires that federal agencies move to electronic forms by 2003.

•The appointment of chief information officer roles at federal agencies and within state governments, which makes it easier for marketers to identify government e-commerce decision-makers.

•The out-and-out one-upmanship among agencies, creating competition within bureaucracies where few existed before.

E-commerce growth in the sector is a given. E-government, which is driven by technology purchases in portals, e-procurement, call centers, automated e-mail programs and transaction processing, is increasing 33% annually, according to Gartner Group Inc. Moreover, nearly 15% of all U.S. federal expenditures, or $602 billion in spending, will be conducted electronically by 2006, according to Forrester Research Inc.

"Governments are trying to be more businesslike in the way they run, and companies providing technologies to them are focusing on helping them get there," said Chuck Lockard, general manager of the eGov 2001 trade show, scheduled July 9-12 in Washington. With more than 12,000 attendees and 1,000 registered companies this year, eGov is expected to grow 60% in 2001, illustrating just how much momentum the b-to-g movement is gaining, he said.

Microsoft loves government?

Microsoft Corp. is perhaps the most aggressive on the government front. In late March, Microsoft Chairman Bill Gates hosted a conference of world government technology buyers, and espoused the merits of his company’s BizTalk server and other Microsoft products in enabling government transactions over the Internet.

Connie Dean, public sector industry marketing manager for Microsoft, said more than 1,000 Microsoft people are dedicated to selling to the government. Also, the company is cutting deals with key consultants, such as the April 30 agreement with municipal management consulting firm Berryman & Henigar’s, San Diego, to work together on government technology solutions designed for cities. Microsoft has made a similar deal with Accenture.

In Pennsylvania, Microsoft has deployed a Web site called PA PowerPort, which allows Pennsylvania-based businesses to establish an Internet presence. The portal, which was launched through Microsoft consulting services and architecture development, is designed in part as a sales tool for other private-sector buyers, Dean said.

IBM Corp, Armonk, N.Y., is using hosted Internet services to reach government buyers, said Todd Ramsey, IBM general manager of the global government industry.

In December, IBM teamed with the National League of Cities to provide applications for e-commerce, a move that could reach as many as 20,000 municipalities nationwide, Ramsey said. IBM also sponsors the Institute for Electronic Government, a Washington-based think tank that has greeted 20,000 government buyers in the last four years.

"[E-government] has gone from interesting conversation topic to something that is being implemented around the world," Ramsey said. "And the governments have started to spend money.’’

Meanwhile, Hewlett-Packard Co. has concentrated its government push on e-CRM, said Patrice D’Eramo, business development and marketing manager for HP Public Sector, Palo Alto, Calif. The company has launched a database—accessible worldwide by its government marketing, sales and customer services team—that identifies the buying patterns of government entities, D’Eramo said.

HP has also been borrowing from its private-sector work. From a recent, massive installation at Ford Motor Co., HP took an employee-computer purchase plan designed for auto workers and created similar computer hardware and software bundles appropriate for government employees. "We’re taking our best practices, tweaking them and making them work for government," D’Eramo said.

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