| © December, 2000 Carole Keeton Rylander Texas Comptroller of Public Accounts Report of the e-Texas Commission |
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| | Chapter 3 | Endnotes |
Personalized Attention:
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| Examples of Mass Customization | |
| Customized pricing | Priceline.com, eBay |
| Customized content | Amazon, My Excite, My Yahoo, Wall Street Journal on the Web |
| Customized computing | Dell Computer Corporation, Cisco Systems |
| Customized goods | Levis Original Spin jeans, CDs containing any combination of songs, one-of-a-kind “friend of Barbie,” golf clubs, automobiles, sneakers, coffee |
| Customized services | American Airlines Web site, Web-based concierge services, Web-based shopping services |
It’s easy to find examples of advances in customization that promise to change our economy. Clothing manufacturers, for instance, are moving to give their customers a role in the actual design of their products. In the near future, “body scanners” may lead to affordable clothes designed to match your own frame as well as any tailor could.
Levi Strauss & Co., the famed blue jeans manufacturer, already has made great strides in this direction. In 1995, the company launched its “Personal Pair” program for women’s jeans. Personal Pair customers participated in a fitting session at any of 56 Levi stores across North America. The results were transmitted electronically to the company factory, where they were matched against more than 10,000 stored designs to select the best fit; the jeans then were produced individually from the selected pattern.
This technology allowed Levi Strauss to offer a selection of sizes that dwarf those available in any store, reduce its need to store inventory, and take losses on products that fail to move, and greatly improving customer satisfaction. Company surveys, in fact, found that Personal Pair customers were four times more likely to repeat their purchases than buyers of off-the-shelf Levis.[2] The company has since expanded the program, now called “Original Spin,” through a Web site that offers a broad menu of personal styling choices, allowing the customer to create his or her own idea of an ideal pair of pants, choosing among dozens of options such as fit (Low-cut, Relaxed, Classic), leg openings (Tapered, Boot cut, Flared), and so on.
One Internet news service, Individual.com, prepares individually customized daily news summaries via e-mail for its members, assembled from some 40 different worldwide news sources. If you’re interested in biotechnology, for instance, news items on that topic will be culled and assembled in a daily newsbrief and delivered to your e-mail inbox. The e-mail updates, moreover, are themselves customizable, allowing users to change their length, format, and content at will.
The benefits of customization are not limited to consumers. As Levi Strauss has found, customized production can actually be more profitable than mass production. At first glance, this notion may seem too good to be true, but company after company has proven it. The information technology giant Cisco Systems, for example, conducts all but 20 percent of its sales through its Web site. In these self-service transactions, a computer program helps customers configure customized systems to meet their specific needs. After an order is completed, it goes straight to Cisco’s manufacturing partners—no salespeople, technicians, or paper-pushers need to become involved in the transaction, saving the company millions of dollars annually.[3]
Adrian Slywotzky, the author of How Digital is Your Business?, refers to customization systems like Cisco’s as “choiceboards.” “The choiceboard has the potential to revolutionize the way information and value flow through a business,” writes Slywotzky. “The choiceboard-equipped business sells first, then produces. Far less information and value are lost [than under the traditional business system].”[4]
The customization revolution seems poised to extend into every realm of human endeavor. The Internet and other new technologies are putting the customer in charge as never before. Ultimately, this may even include medicine. The progress of the human genome mapping project holds the promise of personalized drugs, designed for one’s own genetic makeup.
Mass customization is also poised to change the way we purchase automobiles. “In the near future, custom-ordering your car could become as common as ordering a Whopper your way,” writes Gerda Gallop-Goodman.[5] A report from J.D. Power and Associates found that 70 percent of automobile consumers had at least considered buying a built-to-order vehicle in 1999, but only seven percent actually purchased one. They predict that when the automobile industry figures out how to lower the cost of custom-made cars and deliver them more quickly to consumers, the percentage of customers who purchase custom-made cars will triple.[6]
American Airlines Personalizes its Service
For many people, few things can be more frustrating than the hassles involved in modern airline travel. Many surveys have ranked the airline industry at or near the top for customer complaints. Dissatisfaction with airline customer service runs so deep it has even triggered congressional hearings.The industry is one of the best possible examples of the strengths and weaknesses of the 20th century model of mass production. Low prices and large fleets have made air travel affordable for nearly all income groups, giving humankind a mobility undreamed of in previous eras. On the other hand, the service most airlines offer is poor at best. When many people think of air travel, what they envision isn’t soaring above the clouds but coping with long check-in lines, overbooked and cancelled flights, chintzy snacks and baffling fare structures.
The airlines are aware of their poor track record, however, and the customization revolution is beginning to take hold in the industry. Recent efforts by American Airlines provide an encouraging glimpse of the future of air travel.
American Airlines’ Web site not only offers its patrons the ability to book reservations online, of course, but goes far beyond this simple action. American’s two million frequent flyers can use the Web site to review and change their travel itineraries, select and reserve seats, and purchase tickets. Moreover, customers can create extensive personal profiles within the airline’s records that reflect their preferences for destinations, travel class, seating assignments, vacation types, hotels, and rental cars. After such records are created, each passenger’s interaction with the Web site becomes uniquely personalized. For instance, he or she may, for instance, be offered special vacation packages to favored destinations—timed during weeks when schools in the client’s home area are on holiday. A simple click on the appropriate icon then will display fares and availability and another click on the desired fare begins the reservation process.[7] Recently, the company began offering an application that allows passengers to access timetables and flight information via the popular Palm electronic organizer.
American’s Web marketing points the way to vastly more pleasant transactions for fliers. Airlines will benefit as well, not only from improved customer loyalty, but from a simple, cost-effective way to notify their clients of special fares and travel packages.
Strategies in Brief
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In view of the revolution under way in the private sector, one might ask what government is doing to adapt to a world in which “mass customization” is fast becoming the norm. Unfortunately, the answer so far is simple: too little.
Governments have done little to meet or even acknowledge the demand for customized service. Yet as expectations continue to rise, people will want more personalized service from their governments. As a recent study put it, “Technology will make it possible to tailor services to the individual, and the customer will demand that public organizations, as well as private, take advantage of this capacity.”[8]
Most current governmental structures and systems are fundamentally incompatible with the movement toward personalization. Here are some steps Texas can take to begin the process of moving toward customized government.
Texans can select from an amazing variety of telephone companies, health clubs, and cable television channels. A 1998 report by the Federal Reserve Bank of Dallas put the astonishing fertility of the present-day consumer market into colorful perspective.
Since the early 1970s, there’s been an explosion of choice in the marketplace—the assortment of new vehicle models has risen from 140 to 260, soft drinks from 20 to more than 87, TV channels from 5 to 185, over-the-counter pain relievers from 17 to 141. The US market offers 7,563 prescription drugs, 3,000 beers, 1,174 amusement parks, 340 kinds of breakfast cereal, 50 brands of bottled water.... Ford’s company still makes black cars for buyers who want them, but it also offers a palette of 46 other colors— toreador red, jalapeño green, Atlantic blue, mocha frost, autumn orange, teal, and more.[9]
But in the public sector, the options tend to be far more limited. The one-size-fits-all mentality still prevails in government. As choices within the private sector continue to grow rapidly, Texans are becoming increasingly frustrated with state services. They want more offerings and options.
Fortunately, the notion of giving Texans more choice for services is beginning to take hold in Texas government (see Table 3-1). For instance, the Legislature has authorized the creation of an Option Payment Program that allows consumers to use vouchers for certain state and Medicaid funded services, such as personal assistance services. Consumers and their guardians receiving this assistance now have the freedom to choose which services they will receive and who will provide them. Similarly, in 1995, Texas authorized the formation of charter schools, private nonprofit schools not subject to many of the bureaucratic requirements faced by local school districts.[10]
Table 3-1
Selected Texas State Services Now Delivered by Customer Choice Mechanisms
• Tuition Equalization Grants. Need-based grants for students attending private universities and colleges in Texas designed to help lower and middle income students afford the higher cost of a college education at a private institution.
• Rental Assistance Pilot Program for Elderly Texans. Provides rental assistance to elderly, low-income citizens who are able to live in an apartment-style property in their community, instead of moving to more institutionalized environments such as nursing homes.
• Voucher Fiscal Intermediary Option Payment Program. Gives people with disabilities who are clients of state health care agencies the option of using vouchers.
• Managed Audits. Allows companies to conduct tax audits of their own operations under the Comptroller’s supervision.
• Individual Development Accounts. Matched savings accounts for low-income individuals that encourage economic security and self-sufficiency by providing incentives for low-income individuals to establish savings accounts.[11]
• Mental Health and Mental Retardation Supported Housing Program. Provides individualized psychosocial rehabilitation and support services, and financial housing assistance to adults aged 18 or older with severe mental illness and intensive housing needs.[12]
• Texas Grant Program. Pays the tuition and fees for students attending public and private colleges and universities in Texas who have demonstrated that his or her family is unable to contribute to financing the tuition and fees. Students attending private institutions receive only the equivalent of public college tuition.
• Parental Selection of Child Care Providers. Allows low-income parents to choose from providers who have established a child care agreement with the state or a provider of choice, such as grandparents, aunts, and uncles.
• Independent Living Training and Assistance. Provides services that enable adults who are disabled to live as independently as possible in their families and communities so that their need for alternative dependent care (such as nursing homes) and in-home services is eliminated or reduced.
• Vouchers for Housing. Vouchers targeted for low-income families, elderly, disabled, and handicapped individuals to provide housing assistance.
• Individual Training Accounts. Vouchers for certain employed and unemployed adults and dislocated workers to purchase training services from eligible providers.
SOURCE: Carole Keeton Rylander, Texas Comptroller of Public Accounts.
With a growing track record in this area, Texas can become a national leader in introducing choice into public services. With recent advances in personalization software and an increasingly sophisticated network of providers, there is no reason why most workforce and health and human services provided by the state should not be open to choice.
“Customizing” government involves more than simply increasing the choices available to citizens. In fact, many of us already feel bewildered by the dizzying amount of choices available in nearly every other area of modern life. Successful customization efforts acknowledge this fact by helping customers find the products, services, and data that fit their particular needs and preferences. Thus, information—the tool needed to allow customers to make important decisions and capitalize on their own talents and ambitions—has become a crucial part of the modern economy. And it should play a similar role in government too.
Indeed, one of the most vital roles for government in the Internet Age is its ability to provide accurate information to citizens and businesses, to help them sort out the complexities of modern life. “Government used to view the information it occasionally collected as a means to some other goal: fixing a street or issuing a license,” explains former Indianapolis Mayor Steve Goldsmith. “Information itself now is a product. In a complex society, the Internet facilitates government’s role in aggregating and distributing information about access, quality, and price.”[13] For example, Texas now publishes school test results on the Internet so that parents can make informed choices about their children’s educational options.
Texans also could benefit from impartial government information in the increasingly complex area of health care and human services. States such as Montana have designed Internet sites to aid their citizens in locating the type of health services they need. Such portals can be designed to walk consumers through an eligibility process or simply to provide lists of questions that they should ask in choosing health care providers.
Following these models, a Web site could be created for people who face the difficult decisions involved in placing a relative in a nursing home. At present, finding appropriate long-term care for a relative is a difficult task, given the bewildering array of programs available. An Internet site could help taxpayers make informed decisions by supplying information about nursing home ratings, the latest surveys of care, and vacancies. It also could explain alternative services such as community care, which can help people remain in their own homes with supportive care.
The Role of Navigators. Unlimited choice without guidance is a recipe for frustration. In private markets, we often rely on professionals or specialized Web sites to help us make choices; examples range from real estate brokers to your local newspaper’s film reviewer.
Brokers, or navigators, are crucial to the success of customized service delivery systems. Navigators can provide shortcuts through the variety of choices and information offered in the marketplace—serving as agents for clients and helping them make the best choices for their own circumstances (see Figure 3-2).[14]
The Texas Workforce Commission (TWC) provides eligible low-income families with vouchers for child care. The state’s 28 local workforce development boards contract with local agencies to act as brokers of child care services, helping parents find the care that best fits their specific needs, work schedules, and other circumstances. Parents can visit these brokers in person or talk with them through a toll-free phone number. The brokers link to an online database that assists them in matching child care providers with eligible clients and tracks all customers and providers.
The brokers also provide some quality assurance, certifying and recruiting providers and offering instructional material and scholarships for training child care providers. “They work to develop the supply of providers based on their experience in helping meet parents’ needs,” explains Nancy Hard, TWC Director of Child Care. The Texas system, a winner of an Innovations in State and Local Government award from the Ford Foundation, is a model for other states.
When designing customized and choice-based delivery systems, it is necessary to determine beforehand what role navigators will play. “Make sure the brokers can customize their services to deal with local issues like multiple school calendars and different workshifts,” counsels Hard. “They also should be able to provide consumer education to their clients.”[15]
Authors David Osborne and Peter Plastrik offer the following pointers in designing systems for navigators:
• The same organization does not have to provide both the information and the brokerage services.
• Give customers a choice of competing brokers.
• Don’t let brokers also provide services that compete with those to which they refer customers.
• Don’t assume all brokers’ offices should provide identical services.
• Brokers can provide some services for free while charging for others.
• Information technology often is critical to the success of the system.
• You may have to market the system.[16]
Curt Mooney, president of Houston’s nonprofit DePelchin Childrens’ Center, is typical of many nonprofit agency managers who often need specialized state services for their clients. Recently, Mooney spent several hours on the phone with state agencies searching for a nursing home facility that could care for a child who had recently undergone open heart surgery. He made about 15 phone calls to various state agencies. In many cases, people referred him to other phone numbers, but no one returned his calls. Finally, Mooney found one staff person who understood what he was looking for and was able to help. “We need a better way for people to find information like this,” he said.[17]
At this writing, the Health and Human Services Commission (HHSC) is working to improve the Texas Information and Referral Network, a consortium of local caregivers led by HHSC that is intended to serve as the first point of contact for information on state health and human services. This effort will include the creation of an informational Internet site, but a simple Web site will not go far enough. HHSC should oversee the construction of a portal that will provide not only timely state health and human services information, but also eligibility criteria, online applications for services provided by public or private entities throughout the state and customized information. The site should be interactive and allow the consumer to communicate via e-mail with a contact person at every state and local service provider. The effort to create a comprehensive Internet site will require agencies to work as partners and think in terms of complementary functions and services rather than organizational boundaries. The portal should be coordinated with and accessible through the state’s “TexasOnline” portal.
A fundamental assumption behind modern government is that all persons—all “clients”—should be treated the same. Once groups are characterized—as disabled, single mothers, mentally retarded, poor, or elderly—they receive treatment deemed appropriate for that group, with little or no consideration for their unique circumstances. This cookie-cutter approach results in waste and, worse, ineffectiveness in programs that have a major impact on many people’s lives.
Yet the personalization trend is precisely about being able to treat people differently, according to their own needs and preferences. Many private companies have recognized this as the most effective way to build trust and establish long-term relationships with customers, and government should take note of their successes.
While Texas’ welfare rolls have declined since 1994, the decline has leveled off in recent months. Texas needs to step up its efforts to help families become self-sufficient because children who live in welfare families are more likely to become welfare recipients themselves. Texas should take full advantage of the flexibility that Congress granted to the states in the new welfare reform law to provide employment-related services to all welfare recipients before they exhaust their five-year lifetime limit for receiving federal assistance. Texas should restructure its Temporary Assistance for Needy Families (TANF) program by providing additional alternatives to the monthly cash grant that eligible families currently receive and by customizing financial assistance and services according to their individual needs. Texas should use existing resources to develop innovative and transformative policies and strategies that fulfill the second purpose of TANF to end dependence on government benefits. To accomplish this task, the Legislature should establish an interim interagency task force to recommend changes to the 2003 Legislature and take immediate action this legislative session to resolve pressing issues and make necessary changes to the current program.
These pressing issues require an entirely new approach to resolve. Tweaking and tinkering with the current program to avoid problems with federal participation rates or time limits will not resolve the fundamental equity, effectiveness, and accountability issues inherent in the state’s current TANF program. Texas should use the substantial flexibility Congress granted states in federal law to design a new TANF program that would fully implement the new TANF goals.
The recommended TANF design would enable all parents seeking help to conserve their lifetime limit for federal assistance, enter employment more quickly, and pursue activities leading to higher wage jobs and a more stable financial future for their children. It would also support the personal dignity and increase the self-responsibility of people seeking assistance. Finally, it would end the need for and controversy surrounding sanctions, federal and state time limits, participation rates, work requirement exemptions, and the geographically uneven application of welfare employment services.
Most importantly, it would end welfare as we came to know it—receiving handouts without giving anything back—so children in families receiving help have employed parents, higher family incomes, and a better chance at a financially independent future.
Personalized approaches can be particularly important in the health and human services arena. Among the most expensive elements of government-funded health care are frequent trips to the emergency room made by lower-income Texans. The number of emergency room trips could be reduced by instituting tailor-made, customized health services for people with chronic diseases such as asthma. Such services, broadly termed Disease State Management (DSM), represent a practical and cost-effective approach that can improve the lives of Texans with such afflictions as health problems.
DSM applies proven clinical practices including patient education, technical assistance, and risk management to ensure that medication and specialized treatments are used appropriately to manage high-cost cases. Many DSM programs use the Internet for outreach to target populations, as well as provide educational materials for healthcare providers and patients alike.
Texas’ need for a highly skilled and educated citizenry requires that all children, including those identified as gifted, achieve their full potential. Services to gifted children can be improved through increased school district accountability; greater student access to Internet-based coursework delivered through the state’s college and university system; increased local flexibility in academic credit, funding, and grading for academic coursework offered over the Internet; and enhanced funding for recognized or exemplary gifted education programs.
As a first step, e-Texas launched a Gifted and Talented Pilot Program in December 2000. This pilot program is a cooperative effort of the Texas Comptroller’s office, IBM Global Education, the Texas Association of the Gifted and Talented, UT High School Distance Learning Center and Cisco Systems, Inc. The main purpose of the program is to enhance the educational experience of “Gifted and Talented” students by giving them better access to educational technology resources.
The Program is being piloted in four school districts in Texas including Donna ISD, Paris ISD, Plainview ISD, and Pharr/San Juan/Alamo ISD. A Web-based course on American government will be administered to those considered “gifted and talented” who are accepted into the program.
Students are first expected to complete workbook lessons on the computer. They can complete these lessons on their own time, day or night, on laptops donated by IBM. Next, are several video conferencing sessions, a live chat, an electronic bulletin board, and a team project led by an Austin-based instructor who interacts with the students on a regular basis. Students will address issues in government in a “real-world” interactive, electronic setting that includes guest speakers.
Citizens are no longer willing to wade through the information they don’t want in order to get to the information they need. Sites such as Amazon.com and myYahoo.com, which provide customized information to consumers every time they log on, have raised expectations.
“Push technology” is the umbrella term for a variety of services that automatically transmit information to users through the Internet. But the term is a bit misleading, since the type and timing of the information is selected in advance by the user (and the “push,” therefore, must begin with a “pull”). For instance, using push technology, an individual can receive periodic Internet updates on the price of a certain stock. They could also use it to tell state government what information they want and when they expect to receive it (see Table 3-2).
Some governments are beginning to jump on this trend. Both North Carolina and Virginia have introduced customizable “MyGov” Web pages that allow citizens to choose from a number of topics including public meeting announcements, interactive government services, legislative sites, local government, local media, local public schools, lottery numbers, press releases, state government, and traffic information. “I think the future is the intelligent Web site,” says Donald Upson, Virginia’s secretary of technology. “It’s not just about information being available online, it’s about citizens being able to tailor a ‘MyGov’ Web page to fit their needs. They’ll be notified when their driver’s license is about to expire. They’ll be notified when their fishing license is about to expire. And they’ll be able to handle all of those things over the network and never go to a government office at all.”[18]
The Federal Department of Housing and Urban Development (HUD) is planning a “MyHUD” portal that will provide customized information for users ranging from notifications of mortgage approval to e-mail notices to a local housing authority that funding is available for housing repairs. “The Old World is product-centric,” explains Robert Silverman, one of the portal’s designers. Companies and the government “are starting to think about what people need, not just what do I deliver.”[19]
The next phase of the online portal should be to provide Texans the ability to create a “MyGov” web page tailored to their needs and interest.
Table 3-2
Services Texans Could Receive through Push Technology
•Ballot information, early voting and voting day reminders delivered via phone messages, wireless text messaging or e-mail.•License plate tag and driver’s license renewal notices sent via e-mail, text messaging or voicemail, and the ability to renew them.
•Notification of bill passage or legislative and commission debate on issues of personal interest, and the ability to immediately and electronically sign up for virtual participation in testimony.
•Instant notices about business license status.
•Notices to vendors by wireless text, voice messaging or e-mail of bidding opportunities in selected areas of interest, and the ability to submit replies with bid information.
State employees have few options concerning many facets of their employment. It can’t even be described as “take it or leave it.” Often, they simply must accept what’s offered as a condition of employment.
For instance, the health maintenance organization (HMO) plans offered to state employees are essentially identical. Insurance companies dealing with the state are not allowed to tailor their products to specific target markets. All HMO plans available to state employees offer the same coverage, identical copayments, and identical prescription drug benefits. State mandates have limited the insurance choices available to state employees and may have contributed to the recent rise in premiums.
State employees cannot opt, for instance, to choose a higher-deductible health insurance plan coupled with a medical savings account. At present, state employees can choose among a traditional health insurance plan and identical HMO offerings—and that’s it.
As with their health plans, state employees are given few options to tailor retirement plans to their particular needs. State employees must have six percent of their gross salaries withheld from their paycheck each month as a contribution to the Employees Retirement System of Texas. Employees have no choice in how these retirement funds are invested.
Table 3-3
Leading Family-Friendly Policies from the Private SectorBank of America Adoption aid, long-term care insurance, tuition reimbursement, child-care expense reimbursement for expenses incurred as a result of business travel and overtime and home ownership loan program. Eli Lilly Excellent flex-time policies (half of all employees telecommute on a regular or occasional basis), two child development centers, summer science camp for children of employees. Fannie Mae Job-sharing, job rotations, full tuition reimbursement, mentoring and 10 hours a month paid time off for volunteer work. IBM Extensive telecommuting program (80,000 IBM employees telecommute in some fashion, saving the company $75 million in real estate costs). Life Technologies In-home sick-child care, time off for school conferences, educational reimbursement, flextime. Merril Lynch & Co. Nearly 30 percent of the firm’s employees use flexible work arrangements, including job-sharing, part-time work, compressed workweeks, and telecommuting. Novant Health, Inc. Three child care centers (one is open 18 hours a day), job-sharing, part-time work and nine-month schedules with summers off for some nurses. SOURCE: Adapted from a survey of America’s 100 Best Companies for Working Mothers by Working Woman magazine, October 2000.
Present state retirement benefits also are geared almost exclusively to career employees. In view of the increasing mobility of workers, state employment could be made more attractive if the state’s retirement benefits were made more flexible.
State employment practices also offer classic examples of the one-size-fits-all approach. State employees are allowed to earn compensatory time only for work performed in the office. For example, if on-call computer programmers are called after hours to provide an urgently needed solution, they can earn comptime only if they travel to their office, even if the work could be performed more quickly and efficiently from their home computers. Moreover, since some state agencies count travel time to and from the office in their calculation of comp-time hours, forbidding comp-time for work provided from home can actually increase the number of comp hours that must be awarded.
Finally, despite the widespread acceptance of telecommuting and other flexible work arrangements in private industry, the state has been very slow in adopting such practices for its own workforce.
These policies can make life hard on public employees. More importantly, however, the lack of choice puts the state at a severe competitive disadvantage to the private sector in attracting and retaining qualified professionals in an extremely tight job market.
Many of the country’s most successful private companies have adopted a host of innovative, family-friendly policies in order to attract and retain good employees, particularly women (see Table 3-3). While the state cannot match the most luxurious benefits available in the private sector, it can take many steps to help its employees juggle job and personal concerns more successfully. Workers with children or dependent relatives are much more productive and happy in their jobs when their employers provide supportive, family-friendly programs. Texas agencies should make flexible hours and other worker-friendly arrangements available to more employees. Many state jobs can be done during nontraditional hours without disrupting service to the public.
Workers must become more adaptable to their changing work environments and better able to use and manage information from different sources. They will need training in technological skills that can be applied in a variety of work situations, as well as skills related to negotiating and managing complex public-private relationships.
Most state training activities involving off-site travel could be conducted much more quickly, easily, and cheaply through customized distance learning strategies, such as teleconferencing or Web-based training. Web-based training has the distinct advantage of being available on demand, allowing employees and supervisors to decide the most appropriate time for training, instead of an external scheduler. Web training would offer employees opportunities for targeted training they otherwise might not be able to attend. Increasing the amount and variety of technology-based training available to state employees would save money and increase productivity. Because costs would be reduced, more training could be made available to all employees, greatly enhancing their skills and development.
In time, the state should also create a state Intranet where a “customized” Web page could provide each state employee with secure access to personal data on such things as payroll, leave balances, retirement account and health benefits, training opportunities and records, career management, the filing and tracking of travel and expense reimbursement claims, and other job-related functions. Many types of transactions currently requiring paperwork could be performed electronically. Efficient access to such personnel functions would improve both morale and productivity. The Wall Street Journal reports that such services were available or in the works in 61 percent of a group of companies surveyed in 1999. Moreover, the use of “intranets” for personnel functions can reduce the organization’s need for HR workers.[20]
TWC Employees Save Tax Dollars through Web-Based Employee Orientation
A few years ago, seven dedicated Texas Workforce Commission employees—Charles H. Hughes, Jr., Brenda Nichols, Nancie Harlan, Stephanie Murphy, Belinda Harvey, Martha Bauer and Brenda Miele—realized that their agency’s new employee orientation program could use an overhaul. TWC was running a seven-hour orientation program that cost the department more than $100,000 annually as well as $200,000 in lost productivity over an 18-month period. Agency regulations required the program, but could it be made more efficient? Yes, as it turned out. The seven suggested a plan to put the entire orientation program on the agency’s Intranet, available to all employees at any time.In mid-1998, they formed a project team to examine the possibility of moving this lengthy training process to TWC’s Intranet. After extensive study, the orientation program was moved online. A cost analysis for fiscal 1998 estimated the total cost of new employee orientation at $164,380. The projected cost of the new, automated Intranet orientation for fiscal 1999 was $73,763, netting a first-year savings of nearly $91,000.
Since December 1, 1998, more than 300 TWC employees have completed the Intranet orientation, and roughly 1,300 employees visit the Intranet site each month, since it also provides information on topics such as leave and holidays, applicable state laws, and Equal Employment Opportunity training. Because of the program’s overwhelming success, other state agencies are asking TWC for demonstrations and assistance in developing their own Intranet-based training programs.[21]
SOURCE: Texas Incentive and Productivity Commission.
Customized Government Highlights
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As we have seen throughout this chapter, databases and personalization software make it easy to compile a profile of individual citizens and businesses. While individual pieces of information collected from different agencies may seem harmless, when compiled they may allow someone to apply for credit cards, bank loans, make purchases, or apply for a job in someone else’s name.
A group of co-workers at Ligand Pharmaceuticals in San Diego became victims of this odd new crime of “identity theft.” Their information was used to obtain 75 credit cards, buy at least $100,000 in merchandise, open 20 cellular telephone accounts, and rent three apartments. The Social Security Administration (SSA) received more than 30,000 complaints about the misuse of Social Security numbers in 1999, compared to 11,000 complaints in 1998 and 7,868 in 1997. The SSA attributes this rise to the ease with which Social Security data can be found on the Internet.[22]
Thus, new technology has been accompanied by new concerns about the availability of personal information.
Texas has adopted the philosophy of open government—all state records are available to the public unless exempted by statute. Open government principles give citizens the right to learn about how important decisions that affect their daily lives are being made in the chambers and hearing rooms of the legislature and administrative agencies. But whether the same principles of openness should be extended to provide for government’s disclosure of personal information about individuals is another matter. Explains State Senator David Sibley:
You have a right to go to see a Senate hearing. But I don’t think you have a right to see my daughter’s medical records. Go down the line and sooner or later you have to make a choice.[23]
Some proponents of full disclosure argue that, since taxpayers funded the collection of this information, they are entitled to it. The media and other private companies who rely on government information for their businesses want access to remain open. However, new technologies that make the collection and compilation of information easier than ever before have raised new concerns about the ease of access to private citizen’s information. In a recent survey, 70 percent of Texans were worried about privacy on the Internet, and 54 percent were “not at all confident” or “not very confident” in the state’s ability to handle personal information (see Figures 3-3 and 3-4). Older Texans and African Americans were the most skeptical about government’s handling of personal information.[24]
Privacy is an issue that is gaining worldwide attention. Nine states have enacted state privacy acts based largely on the provisions of the federal Privacy Act, which only applies to federal agencies. Those states are California, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, New York, Ohio, and Virginia.[25] These laws were enacted not merely to protect citizens from government’s disclosure of personal information, but also to prevent government from misusing personal information within its control for political or other purposes. Five states—Idaho, Iowa, Utah, Wisconsin, and Washington—have passed laws forbidding their motor vehicle departments from sharing personal details about licensees, while Wyoming eliminated Social Security numbers from its driver’s licenses.[26] Canada had to shut down a major database project in Summer 2000 after citizens became concerned about the idea of up to 2,000 items of information being collected and stored in one place about each citizen—information such as tax returns, welfare files, and health records.[27]
Privacy issues must be addressed head on to allow the state to move forward in customizing its services for citizens who want them.
Texas long has followed a tradition of open government, providing most public documents to its citizens upon request. With the advent of information technology, however, open access has taken on new dimensions.
The wholesale release of government information on citizens has caused huge problems and generated significant controversy. For some, it is mere inconvenience from unwelcome solicitors. For others, there is a very real fear that their personal data can and will be used against them by the unscrupulous. Texas should enact a privacy act patterned after existing federal and state legislation to establish guidelines to protect citizen information gathered by government entities from inappropriate disclosure.
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e-Texas is an initiative of Carole Keeton Rylander, Texas Comptroller of Public Accounts
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