Arizona Drivers Ready to Lay Rubber on the Internet

Russell Pearce is one businessman doing all he can to drive business from his door.

As the director of Arizona's Motor Vehicle Division (MVD), Pearce has spent the last year working overtime to empty out the state's 70 divisional offices and off-route service traffic to utility company offices, car dealerships and other third parties set up to handle MVD business. Now, shifting that concept into higher gear, Arizona is poised to launch a three-pronged initiative that Pearce hopes will change the way Arizonans interact with their motor vehicle registry.

By the end of July the MVD, in partnership with IBM Corp.'s Government Service Delivery Program, will launch a Web site that will let citizens renew registrations, order duplicate licenses, request driver records and purchase special plates, around the clock from the comfort of their computers. That initiative will be followed later this year by automated telephone and kiosk services as well.

Demographics

"We have citizens out there who have computers, who have a telephone and would rather not have to come to an office to do business," Pearce said. Of the three delivery mechanisms-phone, kiosk and Web site-the computer-enabled demographic is the smallest, Pearce admits, but it is the one with the most growth potential. "Computers are the least, but people are coming on [the Web] in droves."

Pearce hopes all three methods together will siphon off 10 to 20 percent of the traffic in the MVD offices, leaving on-site employees better equipped to handle more complicated transactions face to face. The plan is part of a bigger re-engineering project designed to reduce the MVD's overall workload by 50 percent in the next two to three years. The alternative-delivery plan should save the state millions of dollars in cost avoidance, Pearce says, particularly because the project is self-funded. IBM will run the service entirely, in exchange for a fee of $1 to $3 levied on every transaction.

Many states have informational Web sites that provide locations and directions for motor vehicle departments. In addition, sites often offer information on the required documents and fees that can help speed transactions once a citizen is in a department of motor vehicles office. But very few support actual transactions on-line, according to Jay Maxwell, president and chief operating officer of the American Association of Motor Vehicle Administrators, Arlington, Va.

"The Web is one of those things they're going to take baby steps with," Maxwell said. "Right now, there are two major considerations: reliability and security." Motor vehicle departments will first put on-line services that are not time-sensitive, such as registration renewal. But transactions where response time is critical, such as cross-checking license applicants with other states, probably will still be handled in an office, he said. As for security, the Arizona system will accept credit cards and debit cards. On-line transactions will be made secure most likely using some form of the Secure Sockets Layer security protocol commonly used in Web commerce, says Jack Alderson, manager of IBM's Government Service Delivery Program, Houston.

Although some consumers might balk at typing a credit card number on-line, Alderson hopes education can fix that. "It is still cutting-edge to introduce that type of transaction," he said. "We will most likely have introductory pages to explain the process for people who want to know more."

Once the secure transaction is received by IBM, which will maintain its own page hot-linked to the Arizona MVD page, the company will perform more transactions before passing the data and requisite monies on to the MVD, according to Craig Stender, manager of MVD special projects.

Standard Interface

The interface between IBM's system and the MVD's mainframe will be over the American Association of Motor Vehicle Administrators' network, a situation both groups prefer because it allows them to build a standardized interface rather than a proprietary interface. Arizona also wants the option of being able to interface with other Web-based providers, should the need arise, and IBM is hoping to replicate its expected success with the Arizona project in other states.

Massachusetts was the first state in the nation to instigate on-line motor vehicle transactions, and, like Arizona, it offers similar on-line services, such as registration renewal and traffic citation payments, 24 hours a day. But the two pioneering systems differ markedly in one key area: funding.

Massachusetts charges no fee for its services. In fact, citizens can deduct $5 from a $35 transaction fee if they renew their registrations by mail, telephone or the Internet. According to a spokeswoman for the state's Registry of Motor Vehicles, the rebate comes from money the registry would have had to pay in labor costs and therefore did not require an increase in the department's budget.

In Arizona, where the MVD faces an average growth in transactions of 9 percent annually, Pearce is convinced privatization is the way to go. His department planted the seeds for the current third-party offices and IBM partnership five years ago, when it worked to change the laws under which it had to operate.

"We wrote the legislation and lobbied it, so now we don't have to go through [a request for proposals] process," Pearce said. "We can sit down and partner with people for whatever the market will bear."

Now Pearce and IBM are betting that consumers are willing to pay for convenience up front rather than funding a project through higher taxes. "We want to offer not just the same service but better service and tax relief. These things are supported by consumers," Pearce said. "Would I rather pay $2 than drive across town? I would think so."

Tracy Mayor is a Beverly, Mass.-based free-lance writer specializing in information technology. She can be reached at tmayor@shore.net.

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Return on Investment

Arizona Motor Vehicle Division Phoenix Ariz. (www.dot.state.az.us/MVD/mvd.htm) * Transactions processed in 1996: 6 million

* Project: To ensure that motor vehicle transactions are available via the Internet telephone and kiosks.

* Organizational Payback: By reducing foot traffic in MVD offices up to 20 percent over the next two years the department hopes to hold the line on its current budget and avoid millions of dollars in cost increases.

* Citizen Advantage: For a small processing fee ($1 to $3) citizens can renew registrations or order duplicate licenses special plates and driver records without having to enter an MVD office.

* Cost Containment: Because the project is outsourced to IBM and is entirely self-funded by a per-transaction surcharge the Arizona MVD incurred no added costs.

* Tools: IBM's RISC System/6000 a 166 MHz PowerPC and Domino AIX 4.2 as well as IBM Server Network Gateway Services.