Microsoft officials have been hammering home a key theme to government leaders gathered this week in Lisbon: modernising their IT systems will provide better service to their citizens and save them money.

The software giant is hosting hundreds of high-ranking government officials at its Government Leaders Forum in Lisbon, a two-day conference tackling topics such as the role of IT in education, government and economic growth. Microsoft wants to play a large role in those areas.

Bill Gates, Microsoft's chairman and founder, is scheduled to make an announcement this afternoon around the theme of innovation in a knowledge-based economy.

Gerri Elliott, corporate vice-president for Microsoft's Worldwide Public Sector division, told delegates this morning that the company can help governments provide what it calls "seamless service delivery" – essentially, IT systems that allow governments to provide faster response to citizens and easier use for a range of governmental functions.

"E-government cannot only revolutionise the way services are provided to citizens; it can drive significant productivity efficiencies in the system itself in providing those services," Elliott said. "Your governments recognise these opportunities, and you've set some goals."

Microsoft announced a plan earlier this week to capture government business with its Public Services and eGovernment Strategy, part of its Microsoft Connected Government Framework program. The plan is aimed at helping governments map out a service delivery strategy with its IT systems, focusing on identity management, CRM (customer relationship management) and case management, along with document and forms management.

Elliott said e-government systems can eliminate red tape and break through "mind-numbing bureaucracy". The cost of inefficient bureaucracy is estimated at €400bn (about £273bn) every year in Europe, she said. In the US, it amounts to around $843bn (£476bn) per year, she said.

If governments could save 15 percent of those costs, the savings would amount to 1.5 percent of all government expenditures, Elliott said. In most countries, that represents about half of the public health budget.

"The savings are real," she said.

The Government Leaders Forum ends today.