The Economic Case for Permitting and Licensing Software

November 13, 2020

The Economic Case for Permitting and Licensing Software

Digital technologies in the public sector help maximize existing revenue streams, and uncover new opportunities hidden by inefficient processes and high operation costs. And amid an economic downturn when state and local governments in the U.S. are projected to see a revenue loss of $155 billion in 2020, government technology can play a pivotal role in economic recovery and growth.

So, where should you focus digital efforts first? 

The choice can be tough, especially considering often limited IT budgets that only allow for the allocation of funds to one or two departments at a time. Although, presented with the choice, in their recent report on Licensing Modernization, Deloitte argues that the decision should be easy, as existing and growing evidence points to “...digitizing licensing and permitting [as offering] one of the biggest payoffs.” 

To see the savings and revenue possible with a digital permitting and licensing system, calculate your estimated ROI with our free calculator

Not only can digitizing permitting and licensing processes uncover new revenue streams, but it can ensure existing revenues are collected on-time, and even faster. Plus, by fast-tracking permits and licenses, governments can better facilitate the processes that  drive community development -- like building and environmental permits -- powering economic growth. 

A digital permitting and licensing platform allows governments to reduce overall operational costs, and increase department revenue. Not only can cities, counties, and states expect a boost to revenues, but by reducing processing times, can also expect a boost to community growth. 

Increasingly, governments like the State of Massachusetts are embracing permitting and licensing software to solve operational inefficiencies and facilitate community development. By adopting cloud-based software, the State has fast-tracked development permits and inspections to easily meet the demands of an ongoing development boom -- successfully processing over $20 million worth of transactions since moving online. 

Though Massachusetts is not alone in its use of digital technologies to better citizen services, predominantly, governments still lag behind other industries when it comes to technology adoption and innovation. And in times of sudden change, when resilience is key, manual legacy systems fail to adapt and meet citizen demands. 

As we inch closer to 2021, the call to digitize government services has never been greater; and in deciding where to focus efforts, agencies should consider the significant returns yielded by a digital permitting and licensing system.

Examples of Digital Permitting Success

In a study looking at the economic impact of reduced business permitting approval times in South Carolina over 10 years, the Department of Health and Environmental Control concluded that a 40% reduction in permit approval times, in part attributable to the department’s transition to e-permitting, generated between $72.9 to $103.9 million for the state of South Carolina annually; and between $35.6 million and $50.7 million in new labor income for South Carolinians that would not exist otherwise.

In Canada, in looking at the impacts of electronic permitting and streamlining construction approval processes in Ontario, the Canadian Centre for Economic Analysis (CANCEA) found that reduced permitting delays would result in significant employment, GDP, and taxation revenue benefits for the province.

“Over the short term, reducing delays by six months with no increase in investments could contribute an additional $4.5 billion to Ontario’s economy annually in 2025… and could support [the creation of] an additional 40,500 jobs across Ontario. Over the longer term, [a] 10 percent increase in investment, [accompanied by] a six-month reduction in delays, [could result in] $17.2 billion of additional economic activity by 2040.” - CANCEA

The report also found that this additional economic activity would drive more government revenue through income and corporate taxes; and by 2040, the (Canadian) federal government could be receiving an additional $2.2 billion annually, while the Ontario government could see an additional $1.8 billion in revenue.

Five-year economic impacts of reducing permit approval times in Ontario, Canada
Source: Impacts of Streamlining Construction, Approval Processes in Ontario, A Socioeconomic Analysis,
Canadian Centre for Economic Analysis (2020)

Similarly, in Vancouver, BC, COVID-19 fast-tracked a multi-year effort to streamline the city’s development and permit processes -- pushing city officials to quickly move from a paper-based system to a digital ecosystem. The expedited transformation was an immediate success, prompting increased community engagement, and resulting in an immediate reduction to permitting backlogs, and noticeably faster processing times. 

As explained by Deloitte, “By distilling processes into a set of core functions that apply to the full spectrum of [permit and] license types, agencies can achieve wholesale and sustainable change. We know from the private sector the tremendous impact it can make, and with pressures to drive economic growth, meet customer expectations in the digital age, and cut down on inefficiencies, government agencies can hardly afford not to modernize.”

So, why go digital? What benefits can your agency expect from moving permitting and licensing services online?

The Case for Going Digital

Tight budgets and limited resources have made change management difficult for governments; with many still relying on outdated, paper-based processes to serve a modern society where the majority of services are available online.

Public sector technology adoption is growing, however, as agencies realize the efficiency gains of moving to a single digital platform. 

The benefits of a digital permitting and licensing system are especially convincing, as agencies can see considerable returns on investment, ensure service continuity, and significantly reduce potentially dangerous miscommunication and errors. And as Deloitte explains, “With at least 40 agencies independently issuing licenses and permits for any given state, the potential efficiency gains of moving to a single [online self-serve portal] are compelling.” 

By consolidating permitting and licensing services into one platform, jurisdictions can vastly improve cross-department communication to fast-track applications and approvals, and in turn, drive community development and economic growth.

The Benefits of Electronic Permitting & Licensing

Ultimately, making permitting and licensing more efficient and reliable through digitization can benefit citizens, businesses, and the economy. 

The U.S Department of Housing and Urban Development lists the following benefits of an electronic permitting and licensing system:

  • Improved transparency, accuracy, and consistency
  • Process optimization
  • Standardized, accessible information
  • Enhanced communication between citizens, agencies, and staff
  • More efficient use of staff time and less duplication of effort
  • Better internal management tools for tracking department efficiency and spotting problems
  • Cost Savings

Evidently, with an online permitting and licensing system, your agency can achieve remarkable results. Benefit from complete process transparency, and the ability to house all key information necessary for a complete and compliant application in one place -- remotely accessible to both the applicant and reviewing authority. 

Interested to find out more about how your agency can benefit from a digital permitting and licensing platform?
Contact us to learn more about Clariti’s industry-leading solution helping deliver efficient services to millions of citizens across North America. 

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