E-government not only helps provide service to citizens, it is use a system of ICT hardware and software to improve internal and external government functions.

Even though some countries have found improved systems and efficiency using e-government tools, there are many problems with design and implementation that are both internalized and externalized. These problems range from improper systems emphasis, changing visitor needs at the citizen level, interoperability problems between different software packages, outsourcing issues and problems with procurement.

The research literature suggests that implementation of e-government services poses challenges even for more developed country. The subject is a fast-growing one with important consequences for national economies and competitiveness. In a sense, it represents a revolution in the way that services are provided to citizens.

E-government is a fast growing industry. Like all such things that expand rapidly, there are great gains to be made, but also periodic setbacks. For example, in India, a country with a well-established governmental system, e-government has posed problems with regards to the process of electronic procurement.

This country has a bidding system for purchase of governmental goods and services and the e-procurement system has increased average bidders from three to 4.5 (Payne, 2006). By moving governmental procurement to the Internet, it has managed to complicate the supply chain, therefore leading to the need for more database storage ability and more information technology support. This example is a useful illustration of one of an important issue relating to e-government.

In the United States, e-government has created a need for internal organizational changes that demand decentralization, rather than its traditional top-down leadership hierarchy.

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