Measuring Returns from e-Government: The Case of French Local Government

Measuring Returns from e-Government: The Case of French Local Government Benjamin Vossey Professional thesis for the MSIT Academic tutor: Shirish Srivastava – Assistant Professor – HEC Professional tutor: Maud Franca – e-Administration – Caisse des Dépôts December 2009

Acknowledgements This thesis would not have been possible without the support of my tutors: Mr Shirish Srivastava (HEC) and Miss Maud Franca (Caisse Des Dépôts) providing resources, encouragement, subjects and offering direction. Their help and advice were always useful. I want to express my gratitude to Miss Marie-Hélène Delmond and Mr Robert Mahl, scientific director of the MSIT for accepting me into the Mastère programme. I am also grateful to all the people interviewed for this thesis and I would like to extend my thanks to all my class colleagues this year, for the study trip in South Korea and all the good memories together. Lastly, I offer my thanks to all of those who supported me in any respect during the completion of this thesis. i

« Measuring Returns from E-Government: The Case of French Local Government » Executive summary The purpose of this study was to investigate the definition and the measurement of added value in e-government in French local authorities. Another aim was to find out the existing methodologies that can apply to local government. In the decision making process, the added value of a project is a significant part and is often the element on which deciders makers rely. Added value is more than a simple question of financial return on investment. Four methodologies were analysed and rated according to regarding six criteria: auditable process, simplicity of the method, French availability, simplicity of the final indicator, tools provided and adaptability. A practical approach was done with interviews of local authorities and consulting firms. The results of the study were that there is no methodology used or even defined for French local government. Few local authorities try to define or modify methodology but those which do do not share result with other local authorities. The principal conclusion was that one methodology analysed, the French MAREVA methodology, could be applied with some modifications. A well-being indicator including reference to sustainable development should be added in the analysis of value. ii

« Measuring Returns from E-Government: The Case of French Local Government » Table of contents EXECUTIVE SUMMARY ..................................................................................................................................... II TABLE OF CONTENTS ....................................................................................................................................... III LIST OF FIGURES .............................................................................................................................................. IV 1 INTRODUCTION ........................................................................................................................................ 1 1.1 CONTEXT .................................................................................................................................................... 1 1.2 OBJECTIVES ................................................................................................................................................. 2 1.3 METHODOLOGY OF THE STUDY........................................................................................................................ 3 1.4 LEXICON AND SCOPE OF THE STUDY .................................................................................................................. 4 1.4.1 Lexicon ............................................................................................................................................. 4 1.4.2 Scope of the study ........................................................................................................................... 6 2 THEORETICAL APPROACH ......................................................................................................................... 8 2.1 DEFINITION OF ROI ...................................................................................................................................... 8 2.2 ROI IN IT.................................................................................................................................................. 11 2.3 WHY ROI IS NOT RIGHT FOR PUBLIC SECTOR AND E-GOVERNMENT ...................................................................... 13 2.4 ADDED VALUE IN E-GOV .............................................................................................................................. 16 2.4.1 Concept of Public Value of IT (Gartner) ......................................................................................... 16 2.4.2 MAREVA Method (French Administration) .................................................................................... 18 2.4.3 eGEP Measurement Framework (e-Government Unit of EU) ........................................................ 28 2.4.4 Public Value Framework (Albany - State University of New York) ................................................. 37 2.5 THEORETICAL APPLICATION TO FRENCH LOCAL GOVERNMENT .............................................................................. 40 3 PRACTICAL APPROACH ........................................................................................................................... 41 3.1 LOCAL GOVERNMENT APPROACH ................................................................................................................... 41 3.1.1 Strasbourg urban community case................................................................................................ 42 3.1.2 E-Bourgogne project...................................................................................................................... 43 3.2 CONSULTING APPROACH .............................................................................................................................. 45 4 SYNTHESIS .............................................................................................................................................. 46 5 CONCLUSION .......................................................................................................................................... 47 6 BIBLIOGRAPHY ....................................................................................................................................... 48 7 LIST OF ACRONYMS ................................................................................................................................ 51 8 ANNEXES ................................................................................................................................................ 52 8.1 INTERVIEW GUIDELINE ................................................................................................................................... A 8.2 MAZARS SURVEY.......................................................................................................................................... B 8.3 MAPS OF DEPARTMENTS AND REGIONS IN FRANCE METROPOLITAN ....................................................................... C iii

« Measuring Returns from E-Government: The Case of French Local Government » List of figures Figure 1 : IT Portfolio Management As Part Of IT Governance (Forrester Research)............................... 6 Figure 2 : Project Alpha Analysis ................................................................................................................ 10 Figure 3 : Financial and non financial returns of an investment ............................................................... 11 Figure 4 : Hexagon of risks .......................................................................................................................... 12 Figure 5 : Public Value of IT by Gartner ..................................................................................................... 17 Figure 6: The five complementary components of MAREVA ................................................................... 19 Figure 7 : A constant analysis of value (MAREVA Methodology) ............................................................. 19 Figure 8 : Illustration of the result of MAREVA ........................................................................................20 Figure 9 : Approach and tools (MAREVA) ................................................................................................. 21 Figure 10 : Home page of the profitability tool - Excel file in MAREVA method..................................... 22 Figure 11: Screenshot of the key parameters of the project ....................................................................... 23 Figure 12: Themes for each aspect of the value .......................................................................................... 24 Figure 13 : Screenshot of the MAREVA Excel sheet for external consideration for individuals aspect . 25 Figure 14 : eGEP Theorical Perspective (eGEP) ......................................................................................... 29 Figure 15 : eGEP Analytic Model (eGEP) ................................................................................................... 29 Figure 16: Steps of the eGEP measurement process ..................................................................................30 Figure 17 : Indicators for the measure of Efficiency outcomes ................................................................. 31 Figure 18 : Indicators for the measure of Effectiveness outcomes ............................................................ 31 Figure 19 : Indicators for the measure of Openness outcomes ................................................................. 32 Figure 20 : Global Composite Indicator Formula ...................................................................................... 35 Figure 21: Public Value Framework ............................................................................................................ 37 Figure 22: Kinds of impacts on the interests of public stakeholder ..........................................................38 Figure 23: Public Return on Investment Value Chain (Public Value Framework) .................................. 39 Figure 24: Location of Strasbourg in France .............................................................................................. 42 Figure 25: Burgundy region (red) in France Metropolitan ....................................................................... 43 List of table Table 1: Sequence of cash flow for Alpha project ......................................................................................... 8 Table 2: Estimated NPV for Alpha project ................................................................................................... 9 Table 3: Public social ROI models .............................................................................................................. 13 Table 4: Table of outcome, indicators, stakeholders and proxies (SROI Guide UK) ............................... 14 Table 5: Studies / Concept analysed in this thesis ..................................................................................... 16 Table 6: Service quality improvement: mapping of replies and score (MAREVA) .................................. 26 Table 7: Mapping between the theme points and the final appreciation / scoring (MAREVA Method) 26 Table 8: Mapping between the sum of theme point and the final mark (MAREVA Method) ................. 27 Table 9: Risk Accounting Procedure (eGEP) .............................................................................................. 35 Table 10: Description of the impacts (Public Value Framework) .............................................................38 Table 11: Result criteria for the methodology analysed .............................................................................40 List of equations Equation 1: ROI Formula .............................................................................................................................. 8 Equation 2: NPV Formula ............................................................................................................................. 9 Equation 3: eGEP: Index composite formula ............................................................................................. 33 Equation 4 : Expected value of driver value (composite indicator) with risks procedure (eGEP) .......... 35 iv

« Measuring Returns from E-Government: The Case of French Local Government » « We recognise that e-Government has not only become mainstream in national policies but has also reached beyond national boundaries to become an important enabler to deliver European-wide policy goals across different sectors, from justice to social security, to trading business services and beyond.» «We aspire to a vision whereby European governments are recognised for being open, flexible and collaborative in their relations with citizens and businesses. They use e-Government to increase their efficiency and effectiveness and to constantly improve public services in a way that caters for users’ different needs and maximises public value, thus supporting the transition of Europe to a leading knowledge-based economy. » Extracts of Ministerial Declaration on e-Government Approved unanimously by Ministers responsible for e-Government policy of the European Union (EU) Member States, the Candidate Countries and the European Free Trade Area (EFTA) Countries - Malmö, Sweden, on 18 November 2009 v

« Measuring Returns from E-Government: The Case of French Local Government » 1 Introduction 1.1 Context Leaders, managers and decision makers always have choices to make to achieve their objectives and to develop their business. But in the present times of financial crisis, each choice is strategic given that they have fewer resources than before. This is even more the case for information technology (IT) : their choices are even more important than others as an IT project often has a multiple stakeholders and multifarious consequences in management, processes and organization. In order to help them to make the right choice at the right time, each person has their own method of decision making: analysis based on theories or on their own experience; following others ideas; mind mapping; asking for the advice of consulting firms and even leaving things to chance. Some of the IT case studies handled this year in the Mastère are directly linked to the justification of decisions or the search for the “best” option. We particularly focused on decisions impacting business in companies and not so much those affecting government or administration. Thereby, in contrast to most studies undertaken in Mastère program, my thesis deals with IT implementation in government. Indeed, in the context of the current financial crisis, improving e-government is a means to develop growth (Attali, 2008). Europe also sees the same solution in developing e-Government (Ministerial Declaration on eGovernment, 2009). According to the last UN 2008 e-Government Readiness Index (United Nations, 2008), France is in the top 10 countries - ninth place for France. The top three is composed of Nordic countries (Sweden, Denmark and Norway). A lot of available reports or studies concern e-government at a State-level. (For example :(M. Gérard BRAUN, 2004)). But today, French local authorities like départements or cities have the skills and freedom to spend money. This is the consequence of the decentralization process undertaken over the last 25 years and the recent modification of the French Constitution in 2003. Local authorities are even more independent and powerful regarding their decisions where those decisions cover their territories. (La documentation Française, 2009) The number of local authorities is considerable: nearly 37 000 and each of them have skills, budget and independence. Decision makers have choices to decide in order to develop their territories. Half of them think that using information and communication technologies - ICT - (including e-government) can improve productivity, reactivity, performance and services. (Mazars, 2007) 1

« Measuring Returns from E-Government: The Case of French Local Government » The financial impact of local authorities is significant. In 2005, the overall budget for all local authorities in France was more than 160 billion Euros – half the French State budget. (La documentation Française, 2008). Despite the crisis, in 2009 local authorities continue to believe in and invest in IT (Sopra, 2009) but the difficulty in demonstrating the added value of e-government projects is an impediment for new investments for 15% of the decision makers (Mazars, 2007). For the IT staff of local authorities, convincing decision makers (i.e. elected officials) is the greatest difficulty – depending on the type of local authority, this was the response of up to 30% of respondents to the survey. (Sopra, 2009) 1.2 Objectives The objective of this thesis is to inform the reader about the definition and methods of measurement added value of e-government in local authorities’ projects. The analysis is structured in three parts: First part: Theoretical approach The main objective of this first part is to analyse the theory and evolution of ideas over time by looking at the different methods developed by researchers, administration and companies. Second part: Practical approach As real life is not always the same as the theory, the practical approach is here to study how local authorities work in practice and how the added value is seen by the companies which have local authorities as clients. To this end, interviews and meetings with relevant figures in this area have been conducted. Third part: Synthesis Once we are aware of the existing theory and practices, a synthesis is possible with recommendations and new ideas in order to better assist the decision makers. 2

« Measuring Returns from E-Government: The Case of French Local Government » 1.3 Methodology of the study In order to be clear with local authorities’ particularities and the concept of ROI, I started this study by undertaking considerable research of bibliography. The sources are diverse:  Books  Studies of firms such as Gartner, Forrester…  Newspapers (Les Echos, La Tribune…)  Websites (Vie-publique.fr, Journal du Net…) Then, with this knowledge, I searched for precedent works, theories regarding e-government and especially existing methods of added value in e-government. Thirdly, I carried out seven interviews of some key people to have an insight into their practical experience. This stage was necessary to obtain different points of views and take a step back from the theory. Here is the list of the key people met and interviewed: People interviewed Organisation (Local authority or company) Nicolas Desmoulins – Director / Sector Gouvernement– Author Capgemini Consulting of book in 2009 on “Accroitre la valeur ajoutée des Systèmes d’Information“– maitre de conférence à Sciences Po Yvan Maltraire – Senior Manager Mazars Responsable de l’offre aux collectivités territoriales Louis-François Fléri – directeur de GIP E-Bourgogne GIP E-bourgogne Alexandre Desrousseaux - chargé de mission - participation Région Nord Pas de Calais citoyenne et TIC, DREAM+ Maud Franca, in charge of e-Administration Caisse des Dépôts Nicolas Monsarrat, Partner, Public Sector Accenture Gilles Moutet, CIO eGOV-Solutions Philippe Molès, Owner and CIO Strat-Up 3

« Measuring Returns from E-Government: The Case of French Local Government » 1.4 Lexicon and scope of the study 1.4.1 Lexicon Before embarking on the analysis, it seems essential to have a definition of some terms used in during the course of the study. Local authorities Local authorities - called in French “collectivités territoriales” are French administrative structures, separate from the State administration, which must support the individual interests of a specific territory.(Insee, 2009) Maps are available in annexis of this paper - please have a look to Map of départements (Metropolitan France) and Map of régions (Metropolitan France). Are considerate as local authorities:  Regions: There are 21 regions in metropolitan France and 4 ROM (overseas regions).  Departments: There are 96 departments in metropolitan France and 4 DOM (overseas departments).  Collectivités d'outre-mer (COM): There are 6 COM, all overseas.  Provinces: There are 3 provinces, all in New Caledonia.  Communes: There are 36,782 communes, in all the French inhabited territories except Saint- Barthelemy, Saint-Martin and Wallis and Futuna. Each type of local authority is defined in the French Constitution and all of them are concerned by the constitutional principle of free administration: local authorities are meant to make decisions for all matters that can best be implemented at their level. (La documentation Française, 2009) The decisions are taken by assemblies. The assembly of a region and of a ROM is called a Conseil Régional. They are presided over by a Président du Conseil Régional. The assembly of a department (except Paris), a DOM, or that of Mayotte, is called a Conseil Général. They are presided over by a Président du Conseil Général. The assembly of a province is called an assemblée de province. It is presided over by a président de l'assemblée de province. A commune's assembly (except that of Paris) is called a conseil municipal. It is presided over by a mayor. Paris' assembly is called the conseil de Paris. It is presided over by the maire de Paris. 4

« Measuring Returns from E-Government: The Case of French Local Government » The overall budget of local authorities is 160 billion Euros of which the IT budget represents approximately 4% - 6.4 billions of Euros. (Sopra, 2009) E-government E-government (short for electronic government, also known as e-gov, digital government, online government or transformational government) can be defined as contacts between citizens and government officials through the medium of Information and Communications Technology (ICT). (Nordfors, Ericson, Lindell, & Lapidus, 2009) E-government is now part of all administration strategies. For Atkinson & Castro in their Digital Quality of Life: Understanding the Personal and Social Benefits report, e-government objectives are easily identified. (Atkinson & Castro, 2008) E-government objectives:  Making government more efficient  Improving government services  Facilitating citizens’ access to information  Promoting government transparency and accountability E-government is actively promoted especially by the European Union (Ministerial Declaration on eGovernment, 2009). Every two years, the European Commission organises an initiative called the European e-Government Awards. The aim is to identify and select good practices in the use of ICT in public services and highlight the benefits of ICT to society, including improved quality of life of citizens, increased public trust in government and increased competitiveness of European enterprises.(European eGovernment Awards, 2009) 5

« Measuring Returns from E-Government: The Case of French Local Government » 1.4.2 Scope of the study As you can see in the Figure 1 below, the measurement is used by the IT portfolio management. (Forrester, 2005) But, this study will not focus on the global portfolio management in local authorities or in the governance processes for these projects. The subject’s study can be condensed to the two following questions asked by a projects manager: - How can I identify the added value in local e-government projects? - How can I measure this added value? Figure 1 : IT Portfolio Management As Part Of IT Governance (Forrester Research) 6

« Measuring Returns from E-Government: The Case of French Local Government » Which local authorities? The local authorities concerned in this study are the French local authorities. Indeed, due to the particular organisation in France, there is no same administration system in the world so an exact comparison cannot be done although some similar issues may also arise in others structures. The reason I chose to focus on local authorities in France is quite simple: as presented in the lexicon, local authorities are independent and number more than 30 000; the number of e-gov projects and e- gov initiative can be considerable. From this point, a method to analyse and measure the added value is very useful for all local authorities. But, local authorities are smaller in term of IT staff and each local authority has its own vision and culture: in consequence priorities are not ordered the same way as other local authorities or the State. As they do not have the same strategic vision as the State, they do not share the same objectives. Indeed, local authorities are closer to citizens than the State – so they often try to adapt their methods for the benefit of the citizen’s affected by their decisions. Impact of reform announced about the local authorities in France During the study, local authorities were in the news following the announcement of a proposed reform by the French President, Nicolas Sarkozy. At the end of 2009, the reform is a proposed bill which has not yet been debated let alone adopted by the French national assembly. (La Tribune, 2009) The local authorities’ competences are still the same in the proposed bill but if they agree, local authorities could organize better between themselves with the possibility of mergers between regions and the creation of “pôles métropolitains” – a new entity in which cites or structures can pool their resources together and strengthen synergies. This reform project does not impact this study as e-government is not concerned by the changes proposed. The main effect is the reduction in the number of the elected representatives: 6000 to 3000. The same people will be “Conseiller Général” and “Conseiller Régional”. (Cossardeaux, 2009) With this reduction, decision makers should have more decisions to take and so they should have more indicators and tools to help them to take the best decisions. 7

« Measuring Returns from E-Government: The Case of French Local Government » 2 Theoretical approach 2.1 Definition of ROI ROI is the acronym for Return On Investment – also called ROR - Rate Of Return. It is a financial ratio which measures the amount of money gained or lost regarding the amount of the investment done. Although ROI and other formulae are originate from financial sectors , it is used to justify an investment to stakeholders or others parties in others domains. (FAO, 1997) For each investment made, the expected return is calculated before the decision of the investment. The basic formula for the ROI is quite simple: �� − �� = �� Equation 1: ROI Formula Where: - Vi : Initial Value of the investment - Vf : Future Value of the investment Sometimes, Vi and/or Vf do not have a defined monetary value but for the calculation, these values must be clearly stated. Rate of return of Example 1: The returns of the project Alpha have been estimated. The investment required could be given by the sequence of cash flows: Year (n) Cash Flow (Cn) 0 -4000 1 1000 2 1200 3 1600 4 2000 Table 1: Sequence of cash flow for Alpha project As project Alpha required an initial investment of 4000 and the future value of the investment will be 5800, the rate of return will be 45%. 8

« Measuring Returns from E-Government: The Case of French Local Government » We can easily remark that 1000 in year N will not be 1000 in year N+4. Indeed, today we have the opportunity to earn risk-free interest. So 1000 in N+4 could be 1200. In order to be relevant for projects over years, another formula could be used: the NPV – Net Present Value. NPV allows a company to project the project’s potential profitability by discounting future cash flow expectations and comparing the sum of these cash flows to the initial capital expenditure required to fund the project. �� = − ��0 (1 + ��)�� =1 Equation 2: NPV Formula Where: - t : time of the cash flow - Ct : the net cash flow at the time t - Co : the first net cash flow (t=0) - r : the discount rate A positive NPV indicates that the investment can be done. This formula is widely used and implemented in projects software - and of course in Microsoft Excel. NPV of example 1: For the same project Alpha, the estimated discount rate r is 8%. The following table is established. Year Cash flow Present Value t=0  4000 -4000 (1  0.8) 0 t=1 1000 926 (1  0.8)1 t=2 1200 1029 (1  0.8) 2 t=3 1600 1270 (1  0.8) 3 t=4 2000 1470 (1  0.8) 4 Table 2: Estimated NPV for Alpha project 9

« Measuring Returns from E-Government: The Case of French Local Government » Instead of 1800 with the first formula, the project obtains an NPV (sum of the present value) of 695. As the NPV is positive, the project is considered profitable for the stakeholders. A lot of formulae are also used regarding the situation: we can also quote the internal rate of return - IRR. Here is the graphic analysis of our project Alpha: Project Alpha analysis Annual gain/cost Updated (not updated) in k€ movements in k€ 4000 3000 3000 2000 2000 1000 1000 0 0 N N+1 N+2 BPN+3 N+4 -1000 -1000 -2000 -2000 -3000 -3000 -4000 -4000 Updated cumulative -5000 value -5000 Gains (left-hand scale) Cost Accumulated movements (righ-hand scale) Figure 2 : Project Alpha Analysis BP is the Break-even Point indicates the moment when the gains made cover the cost of the project. 10

« Measuring Returns from E-Government: The Case of French Local Government » 2.2 ROI in IT Application of the ROI in IT is not a new issue since the investment could be in millions of Euros and an important project in terms of management. The same methods exist and studies have been conducted in order to evaluate the returns of an IT project. Traditionally, when IT professionals and senior management discuss the ROI of an IT investment, they were mostly thinking of “financial” benefits but business leaders and technologists also consider the “non-financial” benefits of IT investments.(Resource Management Systems, Inc., 2002) Figure 3 : Financial and non financial returns of an investment In 2002, Jean-François Daret - also a MSIT student - wrote his thesis about the ROI in IT project. (Daret, 2002). After analysis of formulae, he proposed a new formula based on the NPV formula. He added a risk parameter (named α) to obtain this new formula. Indeed, as IT projects include both a human aspect and a systems aspect, integrating risks into the formula is relevant. Six categories of risk are measured: - Process - Organization - Application - Location - Technology - Data 11

« Measuring Returns from E-Government: The Case of French Local Government » To determine the risks, he used the following hexagon: Figure 4 : Hexagon of risks The risk measurement is specific to one project and must be done by decision makers regarding risk evaluation available. Then, once you have a mark for each risk, you obtain a surface by connecting the dots. On the Figure 4, the maximum surface is traced; five is the maximal note for a risk. With this new parameter in the formula, risks balance returns and it can help decision makers to choose between projects. Of course, this formula is not perfect for all IT projects; studies showed that there is no single, simple methodology that will give a consistent, reliable and optimal solution to managers facing an IT investment decision.(Schniederjans, Hamaker, & Schniederjans, 2004) ROI is still a tool in constant evolution regarding projects but ROI in IT has several limits and does not explain how to calculate and evaluate non-financial benefits especially in the public sector. 12

« Measuring Returns from E-Government: The Case of French Local Government » 2.3 Why ROI is not right for Public Sector and E-government Despite the models or formulae used to evaluate ROI in IT, E-government is still a case apart. Indeed, the ROI and other methods are only interested in the financial aspect. IT has been viewed first as a cost and after as a value generator but other values such as social, political, environmental and democracy are not analyzed and not represented in the final ratio. The measurement is incorrect and leads to investments in a non-optimal way. (Gartner, 2003) In order to measure the returns, various different public ROI models have been published especially during the last decade.(Carrata, Dadayan, & Ferro, 2006) Name Acronym Year Source Social Return on Investment Model SROI 1996 Roberts Enterprise Development Fund Value Measuring Methodology VMM 2001- US Social Security Administration and 2003 the General Service Administration Balanced E-Government Index BEGIX 2002 Bertelsmann Foundation and Booz, Allen and Hamilton Federal Enterprise Architecture PSV 2003 Accenture in cooperation with Kennedy Performance Reference Model School of Government, Harvard Public Sector Value Model PSV 2003 US Federal Interchange of Data between IDA VOI 2003 European Commission, DG Entreprise Administration Demand and Value Assessment DAM & 2004 Australian Government Information Metholodogy VAM Management Office Méthode d’Analyse et de REmontée MAREVA 2004- ADEA, French Government de la VAleur 2007 e-Government Economics Project eGEP 2007 e-Government Unit of EU Advancing Return on Investment PVIT 2007 Center for Technology in Government Analysis for Government IT: A University at Albany - State University Public Value Framework of New York Table 3: Public social ROI models 13

« Measuring Returns from E-Government: The Case of French Local Government » The first one - Social Return on Investment Model - is a model for measuring the social and financial returns created by the third, public and private sectors. This model has several frameworks and approaches but the idea is the same in all: the monetisation principle – the assignation of a monetary value to things that do not have a market price. In order to measure non-financial benefits, SROI used financial proxies in order to put a value on the outcome to different stakeholders. By combining the estimations of these proxies; the SROI produces an estimate of the total social value created by the project. Indicators are used as ways of knowing that change has happened. Proxies are the way to evaluate in a monetary value the outcome (and not the indicators). Even though the SROI Model was established in 1996, it is still in the news. A few months ago, in May 2009, the Office of the Third Sector (OTS) of United Kingdom published practical guides encouraging the adoption of the SROI. This guide is available for free online at http://www.sroi-uk.org. The following table contains examples of outcome, indicators and proxies from the SROI guide. Stakeholder Outcome Indicators Proxies Local community Improved access to Take-up of those Savings in time and local services services and by whom travel costs of being able to access services locally Person with Improved physical  Number of  Cost of visiting physical health health visits to GP surgery private GP clinic problem  Extent of  Cost of health improvements in insurance  health (self-  Cost of gym reported) membership  How often they exercise The environment Less waste  Amount of  Cost of landfill waste going to landfill charges  Level of carbon  Cost of CO2 emissions emissions Local community Improved perception of Residents report  Change in the local area improvements in local property prices area  Amount spent on home improvements Table 4: Table of outcome, indicators, stakeholders and proxies (SROI Guide UK) 14

« Measuring Returns from E-Government: The Case of French Local Government » Then, with the combination of the proxies, the final value can be directly compared against the value of other projects. All those methods which concern the public sector can also be applied to eGovernment; indeed, E-Gov can be considered as a part of the public sector. But as e-Government combines both IT and the public Sector, specific measurement frameworks for e-Government have been developed (with sometimes same core ideas as the public sector methods). We will focus on them on the following part. 15

« Measuring Returns from E-Government: The Case of French Local Government » 2.4 Added Value in E-gov With the emergence of Internet and the possibilities offered to the government by IT, research has been done by academics and consulting firms on the added value in e-government and how to measure it. Four main studies regarding their impacts on the ideas and their possible application to work of the local authorities have been chosen. In order to understand the evolution of ideas, it will be done in chronological order. Name of the study / Organisation Year concept PVIT Gartner 2003 Mareva ADAE with BearingPoint (France) 2005 eGEP e-Government Unit of EU 2006 Public IT Value Albany - State University of New York 2007 Table 5: Studies / Concept analysed in this thesis 2.4.1 Concept of Public Value of IT (Gartner) In 2003, Gartner declared that classical ROI measures will fail in Government (Gartner, 2003) and created the concept of Public Value of Information Technology – PVIT. Gartner defines PVIT as measures that demonstrate how IT-related changes and investments contribute over time to improved:  Constituent service level  Operational efficiency  Political return Constituent service level includes the impact on time and cost for external users or beneficiaries of government services to access services, as well as quality and convenience. Operational efficiency looks at the internal impact, both inside individual departments, and increasingly across government organizations. Political return covers the degree of alignment with and impact on key policy areas as well as any impact in terms of political consensus 16

« Measuring Returns from E-Government: The Case of French Local Government » Figure 5 : Public Value of IT by Gartner Gartner’s study was one of the first on Public Value analysis in IT and defined some criteria that all frameworks must have in order to measure public value in the right way: - Value separation: Independent measurement of each dimension where no value belongs to more than one dimension - Balance: The measure must consider each dimension at the same value and doesn’t forget to cover one dimension. - Multiple value score: The final result of PVIT should not be a unique indicator but at least one aggregated measure per dimension. - Inclusion of risks: The framework should include the evaluation of risk factors. - Mandatory use: In order to promote the method and to obtain a better application, a pre- defined budget and planning process must be established. 17

« Measuring Returns from E-Government: The Case of French Local Government » Analysis and applications to the local authority However innovative at the time of publication, this study was only theoretical; no framework was submitted by the authors. Therefore, an immediate application is not possible: you must build your own methodology with the criteria and ideas suggested. Building your own methodology implies a cost which can be quite significant. This study was also only available in English so it could be difficult for all French local authorities to use it. 2.4.2 MAREVA Method (French Administration) 2.4.2.1 Presentation MAREVA is a methodology developed in 2004 by the French ADAE – a State structure (Agence pour le Développement de l’Administration Electronique – Electronic Administration Development Agency) with the help of Bearing Point. (Ministère du budget, 2008). ADAE is now the DGME – Direction Générale de Modernisation de l’Etat. MAREVA is an acronym for Méthode d’Analyse et de REmontée de la VAleur - Methodology of value analysis and return on investment. It was developed using experience of return on investment (ROI) calculations for large public projects and comparable approaches in the private sector. This method has been applied on more than 140 projects of e-government in the ADAE (named ADELE for ADAE). This method has also been used in several countries; for example Canada, Germany. Following these experiments, the MAREVA method has been improved with the suggestions and remarks of users. MAREVA has been released in many versions; the last one is the v3.1 revision 4 released in 2007 (more than 3 years after the beginning of the project!). Now, it seems that MAREVA is no longer developed or in evolution. 18

« Measuring Returns from E-Government: The Case of French Local Government » Risk control Internal Necessity of considerations project public domain MAREVA External Profitability - Value of considerations State sphere the for individuals project Figure 6: The five complementary components of MAREVA The MAREVA Method has been designed to be used: - ex ante, to contribute to the decision-making process - during the project, to justify resources and to do some readjustments if necessary - ex post, to share experience with others Figure 7 : A constant analysis of value (MAREVA Methodology) 19

« Measuring Returns from E-Government: The Case of French Local Government » Assessment of value in the MAREVA method is based on five aspects – one quantitative and four qualitative: - Profitability – State sphere (Quantitative): What is the return of investment for the State? - Internal considerations public domains (Qualitative): What are the benefits of the project for public sector employees and public services? - External considerations for individuals (Qualitative): What are the benefits for the user if an individual, an association or a business? - Necessity of project (Qualitative): Does the project have an obligatory nature? - Risk of control: What is the level risk of project? In order to represent the result, MAREVA give a mark from A to D for each value. Then theses values are plotted on a radar graphic like below on Figure 8. MAREVA Value of the project Profitability – State sphere : B Risk of control : C Project necessity : B External considerations Internal considerations for individuals : A public domains : B Figure 8 : Illustration of the result of MAREVA 20

« Measuring Returns from E-Government: The Case of French Local Government » With this radar graphic, decision makers can easily have an overall vision of the returns of the project. No unique indicator is calculated from the marks. The comparison between projects is done with the different radars and decision can be taken in accordance with priorities of the decision makers. 2.4.2.2 Method details To obtain the MAREVA’s marks of a project, two steps are necessary: the profitability calculation and then the value evaluation. The Figure 9 illustrates the MAREVA’s approach. Figure 9 : Approach and tools (MAREVA) MAREVA uses two Excel files prepared (Profitability tool and Value tool) both in French so that the analysis and calculation can easily be done by the people concerned. 2.4.2.3 Profitability tool With the profitability tool, investments and expenditure - both direct and indirect costs are calculated on the base of two hypotheses. Impacts on business are measured in order to obtain the gains evaluated by the project. Once all data are collected, the financial ROI table is generated and the 21

« Measuring Returns from E-Government: The Case of French Local Government » graphic analysis can be drawn (like Figure 2 : Project Alpha Analysis). The research of the costs must be concentrated on the 20% of the costs which impact 80% of the profitability (Pareto distribution). Figure 10 : Home page of the profitability tool - Excel file in MAREVA method The main added value of this profitability tool is the suggestion of a model for full staff cost until 2024. Indeed, a table is used to calculate the right cost for each category of job required by the project. In France, four categories of employees are defined: A+, A, B and C. As the salaries are not the same, full costs are different too. These full cost values have been estimated by the ministries and include salaries, charges, and the total cost of ownership (TCO). These values put a value on FTE (Full Time Equivalent) for the calculation of the costs or the gains. Of course, users can also define their own model calculation for the full cost of the staff, but if the goal while using this method is to compare projects between them, the model used must be the same for each project. 22

« Measuring Returns from E-Government: The Case of French Local Government » Figure 11: Screenshot of the key parameters of the project Once the profitability have been analysed, the main results of this analysis are reported in the value tool. 2.4.2.4 Value tool This second step in the method is also crucial but less time-consuming than the profitability. The profitability phases needs documentation and data sometimes from different people hence why it could take some time to complete the tool. Indeed, the MAREVA method suggests a list of themes in order to give a mark to each aspect.(MINEFI/DGME, 2007) 23

« Measuring Returns from E-Government: The Case of French Local Government » •NPV Profitability •IRR •Project risk •Technical risk Risk control •Legal risk •Deployment risk •State employees valorisation Internal considerations •Improvement in Public Services efficiency public domains •Help the decentralization implementation •Additional Financial Value - Public Services without State •Number of users impacted External considerations •Saved time / money for individuals • Service quality improvement •Responsible Citizenship •Legal or political obligation Necessity •State's policies efficiency •Necessity for others projects Figure 12: Themes for each aspect of the value Each theme has parameters defined for obtaining his final mark. In order to understand the reasoning, only one of the five aspects will be handled in this thesis. The choice of the external considerations for individuals is not neutral; indeed, the benefits can’t be directly measuring in Euros. Example of the External considerations for individuals The value tool is also an Excel file prepared by MAREVA. As illustrated with the Figure 13 below, users only have to reply to the question – sometimes just a choice in the proposed list as shown in the figure. A justification of their replies is often required in appropriate cells to obtain automatically the mark for each aspect of value. The justification is necessary to have an auditable process. 24

« Measuring Returns from E-Government: The Case of French Local Government » Figure 13 : Screenshot of the MAREVA Excel sheet for external consideration for individuals aspect Each theme has several questions to obtain its score. By way of example, the table below contains following the details regarding the theme of Service quality improvement. 25

« Measuring Returns from E-Government: The Case of French Local Government » In the table below, the mapping between replies and score is done. Detailed questions / Reply Yes, very significant Yes No N/A Is the project improving user’s information (content, personalization, transparency ...)? 3 1 0 0 Is the service easier and more understandable for user? 3 1 0 0 Is the project allows to reduce the number of contacts for the user? 3 1 0 0 The project brings new services or a more comprehensive service 3 1 0 0 compared to the initial situation? Are traditional ways always available (phone, service desk...)? N/A 1 -1 0 Will the deployment of the project cause a temporary significant N/A -2 0 0 perturbation of the service? Excellent Average Bad N/A If the product is already available, 6 1 -3 0 what is the satisfaction of the users? Table 6: Service quality improvement: mapping of replies and score (MAREVA) The mapping of the sum and the final appreciation and scoring for the theme is described in the following table. Sum of points (For one theme) Final appreciation and scoring for the theme Service quality improvement [-6 ; 3 [ Low / 0 [3; 6 [ Average / 1 >6 High / 3 Table 7: Mapping between the theme points and the final appreciation / scoring (MAREVA Method) 26

« Measuring Returns from E-Government: The Case of French Local Government » Final mark for External considerations for individuals As the final mark for the axis External considerations for individuals is between A and D, a calculation is necessary to obtain the sum of the scores from different themes scores. The mapping of the sum and the final mark is described in the following table. Sum of themes points Final mark for the aspect External considerations for individuals [-2 ; 1 [ D [1; 4 [ C [4;7[ B >7 A Table 8: Mapping between the sum of theme point and the final mark (MAREVA Method) Once the five aspects are filled in the tools, the radar can be produced and the user can easily compare projects and communicate about the project with this information. 2.4.2.5 Analysis of the method MAREVA is one of the most accomplished methods; the tools are easy to install - only Excel files to copy on your disk- and easy to use – since the sheets and cells are password protected, error or the unauthorized modification is less possible. A major feature of MAREVA is the key parameters already defined. This FTE calculation can be difficult to do for local authorities whom often do not have data and time to do it. Nevertheless, the MAREVA method seems adapted for State projects with budget of 50 000 € or more: the impacts measured in some themes are designed for the State and not a small collectivity - number of users impacted seems a right measure but for a score of A, the project should impact more than 10 million of people. As local authorities do not always have a centre of documentation and access to theory research about e-government, the internet is the only tool used to find some information and methods. One important point is the difficulty in finding and accessing MAREVA: the knowledge diffusion about this 27

« Measuring Returns from E-Government: The Case of French Local Government » method is not adequate. The Wikipedia page of MAREVA has broken links about the definition or others WebPages have an old version. In addition, we can notice that some items like democracy, transparency or environment ecology are not measured or included in the methodology. 2.4.3 eGEP Measurement Framework (e-Government Unit of EU) 2.4.3.1 Presentation In 2003 the Commission of the European Union organised a review of e-Government and in 2005 they purposed strategy plans like i2010 for better use of e-government in members’ countries. In order to measure the advancement and the use in EU, a measurement framework has been done for the e-Government Unit of EU. This study compiled the studies and methods used in EU at this time: - The Danish e-Government Singposts methodology; - The French Mareva methodology; - The German WiBe 4.0 methodology; - The Dutch Monitor: Multiple Use of Information; - The UK business case methodology. One aim of the framework is to obtain reliable measurements in order the comparison between countries of EU in e-government. This goal can be apply to local authorities to compare project between them. To achieve this goal, the framework must define and measure the added value for projects or services. The Figure 14 below is the logic model for e-Government for the eGEP team : e-Government is a process of organisation change that enables innovation and change in public sector. The eGEP develops an economic hypothesis : “in medium term, this modernisation drive should produce consolided productivity gains eventually reverbarating indirectly on macro systemic impact such as GDP (Gross Domestic Product) growth.”(eGovernment Unit, 2006) 28

« Measuring Returns from E-Government: The Case of French Local Government » Figure 14 : eGEP Theorical Perspective (eGEP) In this cycle, efficiency, democracy and effectiveness are the three value drivers defined to provide a multidimensional assessment of the public value. As seen in Figure 15, the drivers are each measured within three categories to obtain the final value. Figure 15 : eGEP Analytic Model (eGEP) 29

« Measuring Returns from E-Government: The Case of French Local Government » To measure an e-gov project, eGEP defined a clear process as illustrated in the Figure 16. To do this process, eGEP uses seven Excel sheets. However, these Excel sheets are not available online. 3. Calculate the 2. Calculate the composite index composite 4. Calculate the 5. Calculate the 1. Choose or find for each value indicator for each expected value for Global composite new indicators driver categories in each each value driver indicator (with the risks or value driver not) Figure 16: Steps of the eGEP measurement process 2.4.3.2 Indicators The framework comes with a list of 92 indicators. These indicators are dedicated to one driver value and one category. These indicators come from several sources: administrative records, official statistics, and assessments of qualitative impacts internal to public administration, user’s satisfaction data and web metrics. As the data are reliable and trustworthy, the process is auditable and different projects can be compared to each other. 30

« Measuring Returns from E-Government: The Case of French Local Government » Figure 17 : Indicators for the measure of Efficiency outcomes Figure 18 : Indicators for the measure of Effectiveness outcomes 31

« Measuring Returns from E-Government: The Case of French Local Government » Figure 19 : Indicators for the measure of Openness outcomes As defined in Figure 17, Figure 18 and Figure 19, most of indicators are measured by the percentage of increase or decrease. GEP explains their choice of percentage indicator with the goal to avoid the fact that, for Member States already scoring very high, their score in percentage terms goes down over the years. “We propose to retain the formulation in terms of percentage changes, but to measure indicators with respect to the so-called distance from the mean, by which the (weighted or un-weighted) mean value is given at 100, and countries are given scores depending on their distance from it.”(eGovernment Unit, 2006) These 92 indicators are not imposed: they are only proposed. For specific projects, managers have to choose the right indicators and sometimes find new ones. 2.4.3.3 The calculation of the Global Composite Indicator 32

« Measuring Returns from E-Government: The Case of French Local Government » For each value driver, individual indicators are grouped by a specific area. (Like the themes in the MAREVA Method) The driver value called the composite index is calculated using the computation of its areas indicators according to the following formula: n I   X i  wi i 1 Equation 3: eGEP: Index composite formula Where: - I : the composite index (driver value) - Xi : normalized index - Wi : weight of the normalized index For the sake of simplicity, the eGEP framework defines the same weight for each indicator and leaves the opportunity to change this weight on the basis of a technical as well as political subjective judgment. Risk accounting procedure On the assumption that the probability that value driver indicators could differ from their expected value, a risk accounting procedure integrates three kinds of risk: operational risk, political risk and external risk. Based on an analytical evaluation, eGEP sets the impact of each type of risk and the probability associated cf.Table 9. The weight of each type of risk has been defined: operational risk has an overall weight of 40%, political risk 30% and external risk 40%. Then in each type risk, a risk impact measure has been associated with a probability. For example, the probability of an operational risk occurs with an impact of 80% of the project is 40%. 33

« Measuring Returns from E-Government: The Case of French Local Government » Risks Risk type weight Risk impact measure Probability 20% 40% Operational Risk 40 % 60% 20% 80% 40% 100% 40% 20% 5% 40% 10% Political Risk 30% 60% 80% 100% 85% 20% 5% 40% External Risk 40% 60% 80% 34

« Measuring Returns from E-Government: The Case of French Local Government » 100% 95% Table 9: Risk Accounting Procedure (eGEP) Using the table above, the expected value formula is: �� = �� ∗ �� ∗ �� + �� ∗ �� ∗ �� + �� ∗ �� ∗ �� ,�� ,�� ,�� Equation 4 : Expected value of driver value (composite indicator) with risks procedure (eGEP) Where: - ORW : operational risk weight - operRIM : operational risk impact measure - PRW : political risk weight - polRIM : political risk impact measure - ERW : external risk weight - extRIM : external risk impact measure - CI : value driver composite indicator already calculated - p : probability that risk may occur - Last step: the global composite indicator Once all three composite indices are calculated with or without risk accounting, obtaining the global composite indicator is just the sum of these three values (as weight have been applied in the composite indicator process) Financial and Global Political Constituency organisational Composite Value Value value Indicator Figure 20 : Global Composite Indicator Formula 2.4.3.4 Analysis of the method 35

« Measuring Returns from E-Government: The Case of French Local Government » eGEP provides a method for evaluating public value dividing into financial, political and constituency value. The main goal is to compare countries policy about e-government. With a unique indicator, the comparison is easier and more revealing. But the stakeholder’s analysis is limited and the indicators can be subject to political judgment. Also even though study was conducted for the European Commission, the final report is only available in English. In addition, this method does not diffuse the Excel sheets so this implementation would require hours of work. 36

« Measuring Returns from E-Government: The Case of French Local Government » 2.4.4 Public Value Framework (Albany - State University of New York) 2.4.4.1 Presentation In September 2006, the Center for Government at the Albany University (State of New York) released their public value framework. This publication was explained for three following main reasons: (CTG, 2006) - Incomplete analysis of public value, resulting in too narrow a scope of what can be considered returns to public - Lack of systematic attention to how government IT generates results of value from the point of view of the public - Weak or absent methods for tailoring a public ROI assessment to the specific context and goals of a government IT investment Although this study has been conducted by a University, we must considerate that the funding and guidance was supply by the business company SAP.(SAP, 2006) The aim of the framework is to identify and assess public value. This public value is present through the activities illustrated on the figure below. Figure 21: Public Value Framework On the left of the Figure 21, actions in government are shown and the impacts on the stakeholder are presented on the right. Activities of government identify potential value linked to the stakeholder and risks. Six kinds of impacts are described for public value resulting from the investment in IT by the government. The framework includes both the benefits directly to citizen and the value of government as a public asset. 37

« Measuring Returns from E-Government: The Case of French Local Government » Social Strategic Political Ideological Financial Public Stewardship Value Figure 22: Kinds of impacts on the interests of public stakeholder Impact Description of the impact Financial Current or anticipated income, asset values, liabilities, entitlements, and other aspects of wealth or risks to any of the above. Political Personal or corporate influence on government actions or policy, role in political affairs, or influence in political parties or prospects for current or future public office. Social Family or community relationships, social mobility, status, and identity. Strategic Economic or political advantage or opportunities, goals, resources for innovation or planning. Ideological Beliefs, moral or ethical commitments, alignment of government actions or policies or social outcomes with beliefs, or moral or ethical positions. Stewardship Public’s view of government officials as faithful stewards or guardians of the value of the government itself in terms of public trust, integrity, and legitimacy. Table 10: Description of the impacts (Public Value Framework) The complete analysis of ROI can be divided into four main parts: costs, internal returns, public returns and risks. 38

« Measuring Returns from E-Government: The Case of French Local Government » This framework provides a guide and some steps to respect in order to avoid omitting any one return or impact on a stakeholder. No tools or calculation details are provided. Figure 23: Public Return on Investment Value Chain (Public Value Framework) 2.4.4.2 Analysis of the method The stakeholder analysis is far more complete than other methodology. But this completeness is synonymous with complexity in its application: framework is simple in concept but its application is complex by the authors' own admission. The fact that there are no tools provided implies that if a government (local or State) wants to apply the methodology, it must build the tools before. The large impacts are also benefits: ideological impact and stewardship impact are qualitative significant impacts not analysed in previous methodology. The vision to consider the benefits for citizens as being equal to the government value as an asset are the two kinds of public value. 39

« Measuring Returns from E-Government: The Case of French Local Government » 2.5 Theoretical application to French local government Of course, all the methods analysed before can be applied to local government but in order to compare them, five criteria have been chosen regarding the theoretical needs of French local authorities: - Auditable process: With recent laws, local authorities have to justify their investment in IT. - Simplicity of the method: the goal is not to have this value analysis task too much time- consuming otherwise it will not be done. - French availability of the method: This is not to say that English is not well known by the French but we can assume that if the methodology is in French, his diffusion, comprehension and application will be optimal. - Simplicity of the final indicator: The decision maker should understand and compare easily the project’s values. - Tools with the methodology: Support, formation, implementation of the methodology are essentials to diffusion and integration in classic tools of the local government. - Adaptability: As local authorities are specific, the methodology should be open for specific change decided at the local government level. If the tools are available, the tools must be not protected to easily adapt them. Methodology Auditable Simplicity French Simplicity Tools Adaptability process of the availability of the final provide method indicator Gartner PVIT MAREVA eGEP Public Framework Table 11: Result criteria for the methodology analysed 40

« Measuring Returns from E-Government: The Case of French Local Government » 3 Practical approach 3.1 Local government approach Regarding the criteria of this thesis, MAREVA seems the logical methodology that should be at least known by the different actors. (See Table 11: Result criteria for the methodology analysed). MAREVA is in the French language and already have implementation tools ready as PowerPoint presentation and user guide. In August 2009, La documentation Française, French State book publisher about government and administrative affairs released a French book of 110 pages the title of which can be translated as “Finally understanding the Information System”. (La documentation française, 2009) The target readers are politicians, decision makers and IT staff in local government. The book explains the strategic value of IT in local government. It also introduces the IT management, the organization change, the budget with practical information and a lot of feedback explained with previous experience. However, even if the portfolio management is addressed, a mention to the measurement of the value can only be found in the last page of Annexes. No method or advices are given or suggested (MAREVA is not quoted in this book) This observation indicates that the use of a methodology or evaluated returns in IT for local authorities is not required in a systematic way and even sometimes knows by the actors. The Caisse Des Dépôts et Consignations (acronym CDC) is a French financial organization, part of the Government institutions under the control of the Parliament created in 1816. The CDC is a stakeholder of the most important French companies like Saint-Gobain, Veolia or Schneider Electric. CDC also plays the role of a bank for the State and local authorities. At the CDC, the department Digital Development of Territory was created in July 2000 with defined objectives: - Supporting local community projects in engineering, consulting and investment in infrastructure, services and uses digital - Incubate at the national echelon projects for the action of local government ( - Dissemination and promotion of interoperable repositories 41

« Measuring Returns from E-Government: The Case of French Local Government » Currently, the CDC and the department Digital Development of Territory have not an established methodology to evaluate and to measure the added value of the e-government project in local government. As no approach is defined, some local governments were interviewed on this subject based on the interview guideline available in Annexes. The result was unanimous: no method is used and the added value is only measure with some indicators not following in the time. Even if no structured method is used, all the people interviewed want to know more about existing models and some keys features to improve their knowledge and process. At least two cases must be distinguished from that observation: the Urban Community of Strasbourg (CUS) of Strasbourg and the E-Bourgogne project. 3.1.1 Strasbourg urban community case The city of Strasbourg is the capital and principal city of the Alsace region in north-eastern France. It’s located close to the border with Germany. The urban community of Strasbourg (CUS) is an intercommunal structure and includes Strasbourg and some of its suburbs. It is one of the biggest urban communities in France along with Bordeaux, Lille and Lyon. The corresponding law was voted by the French Parliament on December 31, 1966. Figure 24: Location of Strasbourg in France In 2006, with the help of Bearing Point, the Urban Community of Strasbourg (UCS) implemented the AVALYS Method inspired from the MAREVA method. The goal was to use AVALYS for all projects and 42

« Measuring Returns from E-Government: The Case of French Local Government » even non IT projects. A final indicator is the same radar as MAREVA (see Figure 8 : Illustration of the result of MAREVA) Thanks to this effort, UCS won a prize in 2007 from the association AFIGESE (Association Financial- Management and Evaluation of local authorities).(CUS Strasbourg, 2007) Figures on the cost of implementation are not available – the only data we have is the time passed for this adaptation: two months. Two months of staff and working time together with the involvement of a consulting firm, means we can assume that the final cost of definition and implementation may have been be significant – too significant for a city alone or a smaller local authority. It is also to be regretted that no feedback in communication or sharing of information is done from the UCS about AVALYS method. 3.1.2 E-Bourgogne project Burgundy is a region gathering four departments: Yonne, Côte-d'Or, Nièvre and Saône-et-Loire (71). Approximately 30% of his surface is forest and the Burgundy has only nine cities with more than 20 000 inhabitants. Most of the cities can be considerate as small (less than 35 00 inhabitants). Figure 25: Burgundy region (red) in France Metropolitan As few cities or legal local authorities have a critical size in order to develop the e-government alone, sharing resources is essential and that is what the E-Bourgogne project proposed to them while each local authority kept its independence and its identity. More than 1300 public entities are members of E-Bourgogne. E-Bourgogne is a structure called GIP which permits easier administration between local authorities and private partners. 43

« Measuring Returns from E-Government: The Case of French Local Government » In order to develop attractiveness and contribute continuously to competitiveness of Burgundy territory, E-Bourgogne platform launched services for business companies, for local authorities and for citizens. The most used services are the market place and the dematerialisation services for local authorities. E-Bourgogne won the European Public Sector Award 2009 in November 2009. (EIPA, 2009) Following this initiative, European project named Procure European has been conducted with the participation of five pilot regions in Europe. The E-Bourgogne does not have yet a tool to measure the added value in its services but a study has been ordered to measure it. A study for the added value of the market place is in progress and results will be announced in 2010. For them, the MAREVA method was not good enough in the definition of the value and in his application. Studies and indicators regarding the added value are critical for the E-Bourgogne in order to justify their budget and to convince the decision makers and new members. E-Bourgogne releases all documents on their website and the software used for Procure European is in open source under GNU General Public License. 44

« Measuring Returns from E-Government: The Case of French Local Government » 3.2 Consulting approach The consulting firms are of course very interested in local authorities. New projects and revenues can be generated from them. Some of them were interviewed about the measurement of the added value: Bearing Point, Mazars and Capgemini Consulting. In order to respect the confidentially of certain interviewees, their replies are not transcribed here. Following the guidelines, here are the five main conclusions that can be drawn from the interviews conducted. - All the consulting firms used their owned experience gained from the local authorities and not from a State or ministry. There are difference in the needs and the working between State and a local authority. - All the consulting firms consider that the measurement of added value is useful for the decision makers. - All the consulting firms know and use the MAREVA methodology or an evolution of MAREVA in their projects. - All the consulting firms distinguished the value for the citizen and the value for the local authorities. - Not all the consulting firms used systematically a methodology in theirs commercial proposals. 45

« Measuring Returns from E-Government: The Case of French Local Government » 4 Synthesis After the analysis of the methodologies and contacts with local authorities, we can note that there is a gap between the theory and practice: methodologies and research exist but they are not used by the local authorities. Some reasons could explain that fact: - The methodologies are not known by the local authorities - The methodologies are known but resources are not provided - The methodologies are too complex / too expensive to apply However, the systematic use of methodology and should have impacts on the benefits for the local authorities, the citizen and the taxpayer. Regarding the six criteria defined (Auditable process, simplicity of the method, French availability, simplicity of the final indicator, tools provided and adaptability); the MAREVA Method seems the best to use for the French local government. Nevertheless, this method could be improved in several ways. - Definition of new indicators: new indicators like sustainable development and democracy value must be taken in consideration at a proper level. Well-being could also be a new value driver with the definition of Nobel Prize Joseph Stiglitz (STIGLITZ, SEN, & FITOUSSI, 2009) - Scoring system: The scoring system in the method should be adapted for local authorities with their participation. - Communication: In order to be at least known by the greatest number of possible users MAREVA methodology should have a single point of entry (like a website) with resources identified and explained if possible in different languages. Also, regarding the needs and the budget of local authorities, methods must be proposed but not imposed by the State. The experience and feedback exchange initiatives must be supported. The model of the E-Bourgogne must be an example for sharing resources and expenses between different local authorities. 46

« Measuring Returns from E-Government: The Case of French Local Government » 5 Conclusion Defining a useful measurement tool is not an easy project and requires a lot of effort and time. In this thesis, four models are described and compared to the needs of French local authority. No methodology is really convenient for them. A proposed methodology cannot come from the local authorities themselves as they do not have enough resources in people and time but the State or community of local authorities can do this project with benefits for everyone. If State and local authorities look deeply into the methodology aspect and develop resources to apply it, the method could be exported and adapted to other issues in other countries. Maybe an e-government measurement methodology could inspire society and others businesses. With the financial crisis, the days of looking only at the financial aspect are now over, sustainable development and well-being could be integrated into the indicators even for an IT project once people are affected by the project. Again, Albert Einstein was right. "Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted - Albert Einstein 47

« Measuring Returns from E-Government: The Case of French Local Government » 6 Bibliography Atkinson, R., & Castro, D. (2008). Digital Quality of Life: Understanding the Personal and Social Benefits. Washington: ITIF (Information Technology and Innovation Foundation). Attali, J. (2008). Rapport de la Commission pour la libération de la croissance française. Paris. Carrata, T., Dadayan, L., & Ferro, E. (2006). ROI Analysis in e-Government Assessment Trials: The Case of Sistema Piemonte. Turin (Italy): Istituto Superiore Mario Boella Via Boggio. Constitution française. (2008, 07 23). Retrieved 09 24, 2009, from Legifrance: http://www.legifrance.gouv.fr/html/constitution/constitution.htm Cossardeaux, J. (2009, 10 04). Collectivités locales, nouveau mode de scrutin. Les echos , p. 6. CTG, U. a. (2006, 10 26). Summary. Retrieved 10 14, 2009, from Advancing Return on Investment Analysis for Government IT: A Public Value Framework: http://www.ctg.albany.edu/publications/reports/advancing_roi CUS Strasbourg. (2007). Prix 2007 de l’innovation financière. Retrieved 12 15, 2009, from Afigese - Association finances gestion evaluation des collectivités territoriales: http://www.afigese.fr/index.php?option=com_docman&task=doc_download&gid=43&Itemid=50 Daret, J.-F. (2002, 11). Le Retour Sur Investissement dans un projet informatique. Paris: Thèse MSIT - HEC - Mines de Paris. eGovernment for Development Information Exchange Project. (2008, 10 19). What is eGovernment? - eGovernment Definitions. Retrieved 11 27, 2009, from eGovernment for Development: http://www.egov4dev.org/success/definitions.shtml eGovernment Unit. (2006, 05 15). Measurement Framework Final. Retrieved 10 24, 2009, from .eGep Final Deliverables: http://82.187.13.175/eGEP/Static/Contents/final/D.2.4_Measurement_Framework_final_version.pd f EIPA. (2009, 05 11). E-Bourgogne obtient la plus haute récompense de l'Institut Européen des Administrations Publiques. Retrieved 12 10, 2009, from Ensemble simplifions: http://www.ensemble- simplifions.fr/sites/default/usercontent/file/091113%20CP_EPSA_PRIX_e-bourgogne_final.pdf European eGovernment Awards. (2009, 11 20). Retrieved 11 24, 2009, from ePractice: http://www.epractice.eu/en/awards FAO. (1997). Chapter 6 - Investment decisions - Capital budgeting. Retrieved 10 07, 2009, from Basic finance for marketers: http://www.fao.org/docrep/w4343e/w4343e07.htm Forrester. (2005, 09 30). Optimizing The IT Portfolio For Maximum Business Value. Retrieved 11 08, 2009, from Forrester Research: http://www.forrester.com/Research/Document/Excerpt/0,7211,37387,00.html 48

« Measuring Returns from E-Government: The Case of French Local Government » Gartner. (2003, 07 09). Traditional ROI Measures Will Fail in Government. Retrieved 09 05, 2009, from Gartner: http://www.gartner.com/resources/116100/116131/traditional_roi.pdf Insee. (2009, 03 11). Définition Collectivité territoriale. Retrieved 09 14, 2009, from Insee: http://www.insee.fr/fr/methodes/default.asp?page=definitions/collectivite-territoriale.htm La documentation Française. (2008, 07 16). >Les ressources des collectivités locales - Finances et action publique - Découverte des institutions. Retrieved 10 28, 2009, from Vie-Publique.fr: http://www.vie-publique.fr/decouverte-institutions/finances-publiques/collectivites- territoriales/ressources/ La documentation française. (2009). Comprendre enfin les systèmes d'information. Paris: La documentation française. La documentation Française. (2009). Les collectivités territoriales. Paris: La documentation Française. La Tribune. (2009, 10 12). Une réforme territoriale en quatre projets de loi. La Tribune , p. 4. M. Gérard BRAUN, f. a. (2004). Pour une administration électronique au service du citoyen. Paris: Sénat. Mazars. (2007). 5ème enquête sur les SI dans les collectivités territoriales. Paris. MINEFI/DGME. (2007, 12 05). Paramètres du modèle MAREVA. Retrieved 12 03, 2009, from Ministère du Budget, des comptes publics, de la fonction publique et de la réforme de l'Etat: https://mioga.minefi.gouv.fr/DB/public/controlegestion/doc/analyse_de_la_valeur/MAREVA/MAR EVA_-_Parametres_du_modele.pdf Ministère du budget, d. c. (2008, 12 09). Les Ateliers: Espace ouvert de Analyse de la valeur. Retrieved 10 27, 2009, from Ateliers de la modernisation: https://www.ateliers.modernisation.gouv.fr/ministeres/domaines_d_expertise/budget_et_controle_ d/public/kit-formation-en-session/view Ministerial Declaration on eGovernment. (2009, 11 19). Retrieved 11 29, 2009, from se2009.eu - Swedish Presidency of the European Union: http://www.se2009.eu/polopoly_fs/1.24308!menu/standard/file/Ministerial%20Declaration%20on %20eGovernment.pdf Nordfors, L., Ericson, B., Lindell, H., & Lapidus, J. (2009, 11). eGovernment of Tomorrow - Future scenarios for 2020. Retrieved 12 16, 2009, from Swedish Governmental Agency for Innovation System: http://www.vinnova.se/upload/EPiStorePDF/vr-09-28.pdf Resource Management Systems, Inc. (2002). What is ROI? How is it used to support IT decisions? An elementary approach that provides answers to a sometimes complex and often hard to understand concept. Retrieved 11 21, 2009, from Resource Management System: http://www.rms.net/lc_faq_other_roi.htm SAP. (2006, 09 11). Measuring public value from government IT. Retrieved 11 03, 2009, from SAP Tips: http://searchsap.techtarget.com/tip/0,289483,sid21_gci1229196,00.html Schniederjans, M., Hamaker, J., & Schniederjans, A. M. (2004). Information Technology Investment: Decision-Making. Singapore: World Scientific Publishing Company. 49

« Measuring Returns from E-Government: The Case of French Local Government » Sopra. (2009, 02 10). L'évolution du budget des DSI en collectivités territoriales. Retrieved 10 30, 2009, from Journal du Net: http://www.journaldunet.com/solutions/dsi/actualite/les-dsi-des- collectivites-territoriales-face-aux-defis-du/des-budgets-stables-en-2009-sauf-pour-les- departements.shtml STIGLITZ, J., SEN, A., & FITOUSSI, J.-P. (2009, 06). Report by the Commission on the Measurement of Economic Performance and Social Progress. Retrieved 09 23, 2009, from Commission on the Measurement of Economic Performance and Social Progress: http://www.stiglitz-sen- fitoussi.fr/documents/rapport_anglais.pdf United Nations. (2008). UN E-Government Survey 2008. United Nations. (2003). World Public Sector Report 2003: E-Government at the Crossroads. New- York, USA: UN, Department of Economic and Social Affairs. 50

« Measuring Returns from E-Government: The Case of French Local Government » 7 List of acronyms Acronym Meaning ADAE Agence pour le Développement de l’Administration Electronique ADELE ADministration ÉLEctronique BP Breaking Point CDC Caisse des Dépôts et Consignations CUS Communauté Urbaine de Strasbourg eGEP e-Government Economics Project EU European Union FTE Full Time Equivalent GDP Gross Domestic Product ICT Information and Communication Technologies IRR Internal Rate of Return IT Information Technology MAREVA Méthode d’Analyse et de Remontée de la Valeur MSIT Management des Systèmes d'Information et Technologies NPV Net Present Value PVIT Public Value of IT (Gartner concept) ROI Return On Investment ROR Rate Of Return SROI Social Return On Investment TCO Total cost of ownership UN United Nations 51

« Measuring Returns from E-Government: The Case of French Local Government » 8 Annexes Interview guideline……………………………………………………………………………………..……………………………..A Mazars Survey…………………………………………………………………………………………….……………………………..B Maps of departments and regions in France Metropolitan……………………….……………………………..C & D 52

« Measuring Returns from E-Government: The Case of French Local Government » 8.1 Interview guideline This guideline was used in support for all interviews conducted in the context of this thesis.. Choice of project - How do you decide the GO for an e-gov project? - Who decides to do it? - Do you calculate the added value (before the launch of the project)? If yes, do you use a guide or a specific method? Development of project - Do you implement indicators or do you use tools to measure the added value? Review of the project - Do you have committee meetings to follow the project? - Do you follow indicators over the lifetime of the project? - Do you update the added value each year? (and maybe, change your method for all your future projects) Feedback - Do you communicate to other local authorities the results of your project? - Do you participate in conferences in order to share information with others parties? A

« Measuring Returns from E-Government: The Case of French Local Government » 8.2 Mazars Survey Extract of the Mazars Survey in 2007 More than 450 local authorities (18% of the total) replies (Mazars, 2007) B

« Measuring Returns from E-Government: The Case of French Local Government » 8.3 Maps of departments and regions in France Metropolitan Map of départements (Metropolitan France) C

« Measuring Returns from E-Government: The Case of French Local Government » Map of régions (Metropolitan France) D

Measuring Returns from e-Government: The Case of French Local Government

by Benjamin Vossey

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Measuring Returns from e-Government: The Case of French Local Government Document Transcript