The economics of participation in a collaborative effort stem from a cost/benefit standpoint (Chau and Tam 1997). One of the most consistent determinants of technology adoption is relative advantage, which encompasses several different types of benefits such as economic gains and social prestige, as well as different types of costs or risks associated with the adoption (Rogers 1995). Benefits Benefits refer to the perceived potential gains of participating in information sharing with state agencies.
Perceived benefits play an important role in organizational adoption of innovations (Mansfield 1993, Frambach and Schillewaert, 2002). Reduced costs and increased productivity due to streamlined data management, increased accuracy and timeliness of the information collected, centralized source and support for current information, more accurate, comprehensive data for problem solving, expanded professional networks, improved public image, and greater integration and coordination of government services are found to be among some of the benefits of interagency information sharing (Dawes 1996).
Similarly, based on a literature review and interviews with government managers, Landsbergen and Wolken (2001) classified the benefits of interoperable systems as increased effectiveness, efficiency and responsiveness in government operations. Benefits emerged as a frequently cited factor influencing local agency participation in this initiative. A case study showed that the participant agencies thought that participation in the information sharing initiative helped them to achieve certain benefits such as increased information accuracy and timeliness, streamlined data management, and improved decision-making.
Informants from the state agency pointed out that particularly the agencies that could create a linkage between this system and their other applications were achieving great benefits by using the system. It was also found that non-participant agencies’ perceptions about the benefits of the system were low or they were not aware of the potential benefits. Informants from the state agency mentioned that the lack of awareness of the benefits was a major problem in obtaining agency participation.
It was found that one of the major reasons for low perceived benefits was related to the problems with the initial system configuration. When the system was first introduced to the local agencies, it included front and back-end edits, dependencies, and cross-reference checks. The reason to include these features was to increase the quality of data by preventing error prone data entry. However, these features slowed down the data entry process to a great extent. Moreover, the reports that had mismatching data were falling into a pending situation and it was becoming impossible for the agencies to retrieve their own data.
Costs While benefits of participation in information sharing with state agencies can be significant, agencies constantly consider and assess the costs of such participative initiatives. Costs refer to the perceived potential costs of participating in information sharing with state agencies. Costs of participation might be related to the costs of acquiring the necessary technology for participation including setup costs, running costs, migration costs, integrating/interfacing costs, as well as the training costs.
Landsbergen and Wolken (2001) state that agencies usually lack the resources for sharing information ally and, thus, it is difficult to encourage their participation in a system where the benefits are ill-defined and costs are unclear or uncertain. Since information sharing with other agencies diverts resources from other agency priorities, it is difficult for agencies to use their limited resources to make information available for the benefit of another agency when they already have serious and much more pressing information systems needs (Landsbergen and Wolken 2001).
Similarly, Dawes (1996) states that participation in an interagency relationship entails loosing some of its freedom to act independently when it would prefer to maintain control over its domain and affairs and that it must invest scarce resources and energy to develop and maintain relationships with other organizations, when the potential returns on this investment are often unclear or intangible. In the absence of profitability or return on investment, the cost of implementation might be the only single most important variable in public sector.
Therefore, only the agencies that have slack resources can afford costly innovations, can absorb failure, and can explore new ideas in advance of the actual need. One of the most frequently cited barriers to local agency participation was related to the costs/lack of resources. Participating agencies were found to be financially better off, or they were able to obtain grants from federal government sources to support their participation in this initiative.
Study informants mentioned that the local agencies wanted the state agency to pay for the costs involved in participating in this initiative. However, even though the state agency was providing the computer equipment to the local agencies at no cost, in a lot of cases it was not enough for the local agencies. Most of the local agencies also lacked the time and personnel to participate in this initiative. It was discovered that many agencies were too limited in terms of staff and budget to train even one person to enter data via the Internet.