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Securing budget for govt IT projects

I just had another fruitful trip to Taiwan last week. The hectic one week schedule was packed with 20 odd meetings (three of which were with ministers), a press conference (which we hosted jointly with Ministry of Finance and Taipei City Government) and not to forget FutureGov Forum Taiwan, which attracted CIOs from every key ministry and local government unit despite the ongoing budget season (where projects are scrutinised in terms of legislature).

Talking about budget season, the one thing I keep hearing from colleagues in Taiwan is that budgets are so hard to secure. “Getting minister’s approval is hard enough,” says a ministerial IT director. “And we also need to defend our budget before legislators, who have no idea what we are doing”.

It is true that, comparatively, Taiwan’s investment in government IT is lower than that of other sophisticated economies in the region. However, it does not mean that the government is short of money. For some of the IT leaders, budget has never been a problem.

Pan Chengwu, Director General, Information Management Centre, Directorate-General of Budgeting, Accounting and Statistics (DGBAS), surprised (and possibly agitated) the audience at FutureGov Forum when he said “Money is always there, but you need to find the right way to get it”.

He is obviously at a privileged position, as DGBAS in a way acts as the country’s Controller’s office. However, that is not the reason why he seems to be able to get budget for projects he is driving.

“You need to know your superior better, even have dinner with him frequently, and try to understand what his needs are and his concerns are,” he says. “Then you can better deliver your proposal.” One of Pan’s many responsibilities is to review IT project proposals from different ministries and departments. “Making a good proposal is easier said than done,” he says. “I have seen so many proposals from our few government IT directors which, to be honest, will not interest the decision makers at all.”

“So many of our colleagues are so pressed with their agenda and every time they meet the minister, they ask for money,” Pan adds. “What is the result of that? The minister will shy away from you.” Pan also explains that showing some tangible results, however small they are, gives Ministers and legislators a better idea of how things will look like once developed.

One of Pan’s successes was the comprehensive Chinese National Standard Code, which included more than 100,000 Chinese characters. He started small, ran a pilot in 1999 with cost of only NTD100,000 and created a simple database, which helped him secure the next investment of NTD500,000, then NTD4 million… To date, almost NTD200 million have been invested in the system.

The database has been widely applied in education, household registration, land registration, justice and many other areas, such that it has become very difficult to calculate the value it has created. “But there is a consensus that the value is huge,” says Pan.

Chen Shou-Chiang, Director of Information Management Office, Directorate General of Highways, plans to consolidate all vehicle data and driver data onto the cloud. He budgeted NTD2 billion for the project, and found a way to convince the Minister and legislators that such investment is necessary.

“If you tell people that the system is efficient or green, few are able to internalise the message,” Su explains. “But if you do the calculation and tell them that how many hours of productivity this will save taxpayers, and how much can these savings been translated into productivity, many more may be willing to sit down and ask you to tell them more.”

The calculation he did showed that by consolidating all these services online, it would save approximately 30 million days of productivity annually. “If these 30 million days are dedicated to work, how much value can be created? If these 30 million days are invested in travel, how much GDP will the service industry generate?” he says. “Few decision makers can resist such a temptation.”

Su Chun-jung, Director General, Financial Data Centre, Ministry of Finance, is taking a similar approach. Among the many projects he runs is the automatic e-calculation & e-deduction of salary tax. He also used detailed figures of productivity savings to demonstrate the tangible benefits. Besides, the project received strong backing from citizens, who are saved from the hassle of going back and forth with the tax system.

I remember years ago Jack Dangermond, CEO of ESRI, the world’s largest geospatial system company, told me about a case in the US where he was challenged in congress. A home delivery company spent US$3 million on a GIS routing and fleet management system using government data. The result? The company achieved US$43 million in cost savings through more efficient routing. Some legislators exclaimed “they are making all that money out of us” as the government had spent US$200 million over a 10 year period to build the system. (Remember, back then, the notion of open government was not even in its infancy).

Dangermond was smart – all he did was showing the figures: the government was already compensated by the additional corporate tax the home delivery company paid. And the sum was US$180 million over 10 years.

At the end of FutureGov Forum Taiwan, Ho Jung-tsun, Deputy Director General of National Immigration Agency, shared his experience and perspective as both a business leader and an IT functional head, which gave the attending IT directors a very nice summary of what is needed to get decision-maker buy-in.

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