Net Smart

s executives at the U.S. Mint prepared to open an online store in March, they realized they could save, well, a mint. In fact, every time a person ordered coins via the Web rather than by phone or by mail, the Mint would save $5 in processing costs. Orders submitted on the Web site would feed directly into the Mint's computer system, so the agency would avoid the data entry and paper costs associated with traditional ordering methods. So Mint executives decided to pass those savings on to their customers by waiving the $3 to $4 shipping and handling costs customers pay when they order by phone or mail.

Not surprisingly, orders started to pour into the Mint's Web site. In late April, the Mint's online store began with $2,000 in orders a week. By late September, online sales had boomed to $1.4 million a week, with up to 5,000 orders every day.

For the Mint, the Web is serious business.

"To compete on the Net, you have to break the mold on how you do business. That's true for a commercial entity, but much more so for a government agency," says Mint Director Philip Diehl. "When you compete in Internet time, everything speeds up exponentially."

Forty percent of the people who purchased products on the Mint's Web site this year had never bought anything from the Mint before. That statistic points to a growing trend: When Americans want information, want to make a purchase or want to communicate with an agency, their first point of contact may begin with a "www."

The number of Americans who use the Internet is approaching 100 million, according to CommerceNet/Nielsen Media Research surveys. People are going on to the Web to get news, to do research and to buy products. They hop on the Web from home, from work and from school.

Federal government sites are feeling the boom. In August 1999, the Web sites of NASA, the National Oceanic and Atmospheric Administration and the Postal Service each garnered roughly 2 million visitors, according to MediaMetrix, a New York-based Internet measurement firm. The National Institutes of Health, the Treasury Department, the Navy, the Army and the Education Department each checked in with more than 1 million visitors in August.

Every aspect of federal agencies' operations are becoming Web-enabled. Name a function-information dissemination, service to citizens, procurement, human resources, forms processing-and there's a federal agency somewhere doing it online.

"There's a shakeout going on on the Internet. It's not just about clicks anymore," says Rich Kellett, an Internet policy specialist at the General Services Administration's Office of Governmentwide Policy and co-chairman of the Federal Webmasters Forum. "You have to combine the clicks with the mortar and the bricks."

In other words, there's no such thing as cyberspace. There's no "online world." The Web is part of the real world; it's a way for your agency to connect with citizens. And if they don't already, your customers and suppliers will want to see you there soon.

The Case for E-Business

The conventional wisdom is that almost anybody can build a Web site easily and cheaply. While that's roughly true, it's also true that there are many cheap and worthless Web sites. To build a professional Web site, managers have to pay for labor, design, production, technology infrastructure and security, just to mention some of the basic costs.

Federal executives, in general, are not being convinced that Web projects are worth more than a modest investment, says Kellett. "Webmasters have been working their agency chain of command to express their needs, but the funding is falling short of what is needed to create and maintain robust Web sites."

But making the case that there will be a return on Web investments is not always easy. The primary measure of success for most federal Web sites is the number of hits or visitors they get each month. Though traffic numbers indicate the popularity of documents, they offer no additional information that could bolster the business case for sites.

"I can tell you exactly how many times a news release has been downloaded, but I can't tell you the impact of that news release," says Capt. Jim Knotts, webmaster for DefenseLink, the Pentagon's Web site. "As we formalize our planning process for Web sites, we need to build in measures at the beginning so in mid-stream and toward some end, we can measure our success and then modify our efforts accordingly."

Customer surveys are one way to measure the return on investment of Web efforts. Surveys often show a high degree of customer satisfaction with the speed of service the Web provides. At the Mint, online orders take a couple of days to deliver, compared to up to two weeks for orders that require manual processing. Users of NASA's Web site clearly crave the real-time updates of information the agency provides. In July 1994, for example, when the comet Shoemaker-Levy collided with Jupiter, thousands of space enthusiasts flocked to the NASA site in the middle of the night to download photos of the event.

Back-end cost reductions can also bolster a Web site business plan. NASA avoids $2.2 million a year in operating costs by posting solicitations and synopses online for all of its contracts worth more than $25,000.

J. Timothy Sprehe, a Washington-based information resources management consultant, and Charles McClure, a Florida State University professor, are starting a project to identify performance measures for federal Web sites. Their initial work has identified six areas in which measures could be developed.

• Completeness. Are all of an agency's major information resources available
  online?
• Timeliness. How long does it take to get new information posted to an agency Web site?
• Customer Satisfaction. Are Web site users satisfied with the agency's delivery of services and information online?
• Efficiency. How much does it cost to run the site, especially compared to other business methods like phone and mail?
• Effectiveness. How is the site contributing to the agency's overall mission?
• Policy Compliance. Does the site adhere to relevant agency guidelines, governmentwide rules and statutes?

Uncovering Inefficiency

The costs of Web sites increase when managers try to link them to internal agency systems, particularly when those systems are inefficient. Diehl says the Mint would not have been able to implement an online ordering system and save processing costs had it not previously installed an enterprise resource planning system to handle internal processes.

The Mint's Web site ends up acting as a direct link between customers and a speedy automated internal processing system.

"Internet sales have become a means for us to circumvent our paper bottlenecks," Diehl says.

For other agencies, the drive online has helped managers uncover inefficiencies in existing pro-cesses. Before the Web, people who wanted to obtain a copy of the official Defense Department seal had to send an official letter requesting the seal, which would then have to be answered with an official response. Pentagon officials reviewed that procedure when they wanted to post the seal on DefenseLink. They discovered that they could post a slightly altered version of the departmental seal for people to download and use in business presentations as long as the site included a legal notice that the seal was only for official purposes. As DefenseLink grew, the Pentagon also eliminated redundant steps in its process of clearing a news release.

"From a managerial perspective, figuring out how you can reengineer all of your processes to take advantage of this new technology to increase efficiency and effectiveness is one of the biggest challenges," Knotts says.

Stephen Rohleder, managing partner for Andersen Consulting's federal practice, cautions that federal executives should take a holistic approach to reengineering their processes and integrating the Web into their operations. Many citizens will continue to want to deal with agencies in person or by phone, but an increasing number of public inquiries-perhaps 50 percent to 75 percent in the next 10 years-will be made electronically, Rohleder says. Agencies should integrate all of their processes so that citizens get the same level of high-quality service through whichever method they choose to deal with the government.

"If you believe there's going to continue to be budget pressure on agencies, you're going to see pressure to reduce expenses and the first place you see that pressure is on physical infrastructure," Rohleder says. Pressure will also build in the form of customer-and congressional-demand, he says. "Those agencies that don't proactively develop e-government strategies will be testifying in five years as to why they can't deliver the services the citizens are demanding."

Netting Customers

Some agencies have been lucky enough to find that they didn't have to work hard to attract visitors to their Web sites. NASA, for example, benefited from widespread media coverage of its Mars Pathfinder mission, which has helped garner the mission's Web site roughly 750 million hits.

Others have discovered that marketing and outreach are an important part of Web management. After all, the Web is huge. In July, the Internet Software Consortium counted more than 56 million computers hosting information on the Internet.

E-mail has become one method of making people aware of an agency's Web site offerings. Some agencies ask people to sign up to receive updates about new features of Web sites. The General Accounting Office, for example, issues daily e-mail updates with links to new reports and decisions.

Some agencies also make sure their Web address is on every document they issue.

The Housing and Urban Development Department has assigned one of its Web managers to get the word out about the Web site: Cynthia O'Connor is HUD's director of Web marketing and outreach.

O'Connor says her focus is on building relationships with HUD's customers. To that end, she promotes HUD's Web site at conferences, state fairs, home and garden shows, and home-buying fairs. She has also developed brochures and CD-ROMs describing HUD's Web services, which have been distributed around the country. She also arranges focus groups with customers, whose feedback is incorporated into the design of the site.

"Folks really feel like they have a say in what the Web site's going to look like,"
O'Connor says.

Unwanted Guests

Unfortunately for many federal Web sites, some people want to take a more hands-on approach to offering their feedback: They break into Web servers and deface the sites.

In the past year, malicious hackers have defaced at least a dozen federal Web sites. Several other sites-including the White House-have been forced to shut down temporarily while they fix security holes.

Federal webmasters must be on constant guard against hacker intrusions, identifying security problems and fixing them immediately. The Bureau of Public Debt hires third party auditors to periodically review the security of its Web site, says Webmaster Kim Clancy. Brian Dunbar, NASA's Internet services manager, says that if a security breach occurs at one of NASA's myriad Web sites, the agency looks at whether an unknown security hole was involved, or whether documented security procedures were not followed. When the main NASA Web site was hacked in 1997, the agency discovered that it had neglected its own security procedures.

Defense Department officials have focused on another kind of security concern this year. As Web sites around the military flourished in recent years (there are thousands of military Web servers), reams of defense-related information were made publicly available without being cleared for release. Some of that data-maps of facilities for example-could be used by enemies of the United States. So the Pentagon ordered a departmentwide security review of its Web sites.

"We have to make sure processes are in place to ensure proper clearances are followed," says Knotts. "The goal is to strike a good balance between the need to provide information and the need to protect security."

Master of the Web

The Defense Department's security review shed light on another Web management issue facing federal agencies. There's no consensus on who should be in charge of Web operations.

In many agencies, Web sites were initially developed in the information technology department, and that's where responsibility for them still lies. At the Pentagon and at NASA headquarters, the public affairs office oversees Web efforts. The Mint is planning on moving its site out of the information technology office and into the business office. At HUD, the Web site's managers work in the Special Actions Office, a division that build's HUD's relationship with stakeholders. The Bureau of Public Debt's Web operations are housed in its administration office.

Some agencies require all content to be funneled to a single office, which controls all information published on the Web. For others, a decentralized approach works best.

At the Census Bureau, a staff of 13 people under Internet Branch Chief Thomas Berti keeps the Web site humming on the technology end. Overall Web policy is coordinated by the Internet Management Team, which is made up of high-level managers from across the Census Bureau, who meet once a month. A lower level body called the Internet Coordinators Group, which includes 40 managers who oversee hundreds of data disseminators, reports to the management team. The disseminators work throughout the bureau and are responsible for posting data from their respective divisions to the Census site. This decentralized approach helps Census keep its site constantly updated with the massive amounts of information that the bureau produces.

"There are 60,000 static pages on our site, not to mention all the dynamically generated pages," Berti says. "We have 438 disseminators in 75 distinctive groups. They are free to publish in any fashion they see appropriate, as long as they abide by the bureau's Internet policy and procedures," adds David Raszewski, one of the bureau's Internet specialists.

Knotts says it's important for organizations to set a Web policy. DoD's policy includes a description of laws and regulations that affect federal Web sites, privacy restrictions, operational security considerations, coordination requirements, an external link policy and design standards.

Legal Awareness

As they craft Web policies, managers need to be aware of federal laws covering Internet operations. As Web sites have grown in importance, Congress and the executive branch have spent time interpreting the meaning of statutes for online operations. A number of legal issues have come to the forefront for federal webmasters:

• Accessibility. Amendments to the Rehabilitation Act passed in 1998 require federal agencies to make sure their Web sites are accessible to people who are disabled. That means providing alternatives to sound recordings for the deaf and alternatives to visual content for the blind. Web pages can be written so that text-to-voice translation software can read them.
• Privacy. By Dec. 1, agencies must have privacy policies posted throughout their Web sites, according to an Office of Management and Budget directive issued on June 2.
• Paperwork elimination. The 1998 Government Paperwork Elimination Act requires agencies to accept digital signatures in place of handwritten signatures and mandates that they set up systems to process widely used forms online by October 2003.
• The Electronic Freedom of Information Act. E-FOIA requires agencies to set up electronic reading rooms to make frequently requested documents available to the public online. "You can avoid FOIA requests by making sure information is online," notes Ari Schwartz, a policy analyst with the Washington-based Center for Democracy and Technology.
• Information collection. The Paperwork Reduction Act requires agencies to limit the burden of information collection they place on the public, while the Federal Advisory Committee Act places restrictions on meetings, which can include Web conferencing.

The Human Element

When Hurricane Floyd swept up the East Coast in September, it knocked out electronic and telephone service to the Mint's Customer Care Center in Lanham, Md., for nearly 24 hours. During that time, about 1,300 orders placed through the Mint Web site were accidentally erased, and then a back-up system didn't work as it was supposed to. The weakness was corrected, so the error will never occur again, Mint Director Diehl promises.

Plus, he says, the public recognizes that the Web is still experiencing growing pains.

"If you're doing business on the Internet and your customers see you making a good faith effort to keep the site lively and engaging, and that you have a strong commitment to customer service, they're going to be relatively forgiving," Diehl says. "People understand that Web commerce is new and growing extraordinarily fast."

The consensus among federal managers running successful Web sites is that the Internet is a way to bring people closer to their agencies. So they make a point of finding out what customers want and then find a way to give it to them. The technology of the Web is secondary to the people it serves and the information and services it delivers.