Applying Ecommerce To Local Government


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[This is a rough, unedited crib of the actual talk given at the ALGIM 2010 Web Symposium. Also I went over my allocated time so I’ve elaborated on a few areas. If you have feedback on these notes, please write to me: or twitter @mathewsanders.]


Since the start of this year I’ve been working with the Local Government Services team at Datacom, which is a group of about 20 developers, analysts, and project managers who are dedicated to creating software solutions for local government.

But my background and experience is working in ecommerce projects for companies like Air New Zealand, House of Travel, AMI Insurance, The National Bank, Telecom, and New Zealand Lotteries helping to improve their online customer experience.

What I want to share with everyone today are some ideas, tools, and thinking that are established in ecommerce, and hopefully get you thinking about how they can be applied to your own projects in local government.

Why move from offline to online

Often we’re so focused on simply completing online projects that we forget to step back and look at the benefits of why we’re doing these projects in the first place. I believe it’s important, and healthy to step back and reflect on why we’re doing what we’re doing.

In ecommerce, I think of there being three main benefits to moving from offline channels to online channels:

To reach more people
To operate with more efficiency
To create new business models and opportunities
To reach more people

Here’s a Google map showing all the retail locations for Flight Centres in New Zealand. As you can see they have clusters of stores n the main centres of Auckland, Wellington, and Christchurch, and a range of stores scattered in other locations throughout New Zealand. They have a great network, but at the same time if you live outside one of the towns that has a store it’s very difficult to do business with them. And even if you live close to one of their stores you also have to visit them within their opening hours, which might be difficult depending on your work situation.

With online channels of course you remove these barriers of time and location, and have the ability to reach anyone who has an internet connection, 24 hours a day.

To increase efficiency

When you interact with people through offline channels (such as phoning a contact centre or interacting in person in a store) the total cost to interact with people is directly related to the number of people you interact with.

For instance, it costs about double the amount to interact with two people as it costs to interact with one, and about triple the amount to interact with three people as it does to interact with one.

But online channels can follow a different pattern. The total cost does increase with the number of people that you interact with (because bandwidth and server costs will increase as you reach more people) but it doesn’t follow a linear relationship, instead it doesn’t cost much more to interact with 10,000 people as it costs to interact with 1,000 people.

Something exciting happens when you think about costs as cost per interaction instead of total costs.

With offline channels, you essentially get a flat rate. It costs about the same to interact with your 50th person as it does you 500th.

But with online channels, the cost per interaction decreases with the more people that you interact with, eventually to the point where the cost per interaction trends towards zero.

Two perspectives are important here. Economically and psychologically it becomes a lot easier to interact with people. In ecommerce this can allow for businesses to pass on cost savings to customers, or even offer free services. In local government this can allow an organisation to operate with lower cost per interaction.

When you’re operating in an offline channel, customer interactions may either be consciously or subconsci

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Applying Ecommerce To Local Government

  1. 1. Applying ecommerce to local government
  2. 2. Benefits Why move from offline to online? online? 1 2 3 Reach Operate Create new more with more models of people efficiency opportunity
  3. 3. Reach more people
  4. 4. Increase efficiency $$$ Total cost $
  5. 5. Increase efficiency $$$ offline interaction Cost / $ online
  6. 6. Increase efficiency
  7. 7. Freedom of choice I want to go to Melbourne
  8. 8. Freedom of choice I want to get a valuation of my property
  9. 9. Ecommerce tradeoffs Price Self service Convenience Ease of use
  10. 10. Local govt tradeoffs Convenience Self service Ease of use
  11. 11. Channel Strategy Don’t force people online But make online attractive and easy
  12. 12. Channel Strategy
  13. 13. Channel Strategy co- service model
  14. 14. New models
  15. 15. New models
  16. 16. Who moves first?
  17. 17. What to build?
  18. 18. Founded in 1998 $300m investment capital Liquidated in 2000
  19. 19. How it works
  20. 20. How it works Where can I get building consent information?
  21. 21. The way we think is radically different than the people we design for
  22. 22. Inside out (our natural view) language culture experience knowledge Outside in (everyone else’s view)
  23. 23. research design delivery
  24. 24. Ask (and listen)
  25. 25. Observe
  26. 26. Explore/Refine
  27. 27. Measure 35 continue online 100 arrive 65 exit and… give up? phone? visit? }Why?!
  28. 28. people spend more time on other websites than on yours
  29. 29. Interactions Request product or service Exchange of money Provide information Encourage Participation
  30. 30. Context Request product or service Ecommerce Local government Order books, music, resolve or report a or clothes. problem, apply for Book travel or tickets consent, request valuation… Fun Annoying Time on site Time on site Up sell/Cross Sell Pain
  31. 31. Context Exchange of money Ecommerce Local government Pay for stuff in Pay rates, fines, or shopping cart registration Fulfil a Fulfil an desire obligation Effort to complete Effort to complete Change of mind Pain
  32. 32. Context Provide information Ecommerce Local government News, “news”, games Parks, museums, vacancies Entertain or Answer a distract question Time on site Ease to find Repeat visits Time on site Ad revenue Pain
  33. 33. Context Encourage participation Ecommerce Local government Create content Vote, discuss Organise content Trivial Complex Participation Participation Value Democracy
  34. 34. Context
  35. 35. Models change 1979 SONY Walkman 1984 SONY Discman 1992 SONY MD Walkman 1999 SONY Network Walkman
  36. 36. Models change 2001 APPLE iPod 2010 10 billion songs sold through iTunes Store
  37. 37. Environment changes
  38. 38. Mediums change
  39. 39. Mediums change
  40. 40. Expectations change 1990 2010
  41. 41. Roadmap Benchmark where you are today Define a vision & how success would be measured Create a roadmap that shows how to deliver the vision in achievable phases
  42. 42. Thank you! you! Questions?