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Policy

The need to know: Business Intelligence & the public sector

By Amelia Kwok | 18 February 2009

With torrents of information flooding into your organisation, do you have that sinking feeling? Amelia Kwok learns how government agencies are leveraging Business Intelligence (BI) for operational effectiveness.

Government is collecting more information than ever before, but is it effectively leveraging this information for strategic advantage? Talking with senior officials in a range of countries and different public sector verticals it is clear that the deployment of analytics and decision support solutions is critical to effective execution.

Business Intelligence (BI) is not just useful – it is mission critical, says Zhang Li Chuan, Director of the Statistics Department of Customs General Administration of China.

“The environment of China’s general external economy has been greatly transformed since the change in policy nearly 20 years ago. A rapid rise in our external trade value has meant an increase in data in recent years,” explains Zhang.

“Our observation of clearance has up to 50 million entries and the data load is 12 gigabytes, up from only two gigabytes five years ago.”

Faced with this volume of information, BI is essential to being able to sift through data to uncover meaning, and to being able to do this in real time so that decisions can be taken with all necessary information to hand.

Business Intelligence 2.0

When BI applications first started attracting broad interest in the late 1990s and early noughties there was a stampede of vendors into this category – and more recently, there have been attempts by vendors to create very fine distinctions between predictive analytics, decision support, data mining, OLAP, querying and reporting. In essence it involved establishing KPIs and then highlighting where these are being hit or missed in real time.

As BI becomes more widely deployed, government agencies of all types – health, and human services, transportation, justice, public safety, treasury, higher education and defence – are seeing improvements in their operations as a result of having the information to make a decision, when a decision is required.

BI brings context to the performance management process by highlighting performance areas of the business that require improvement. The regular monitoring and analysis of the business allows organisations to adjust execution and help optimise output on a timelier basis. “BI therefore tells you what you need to change and whether your changes have been positive,” says Helena Schwenk, Senior Analyst at Ovum’s Technology Group.

If BI is to reach its full potential of providing the right information to the intended person at the optimum time, it needs to break down some of its established limitations. To deliver on its promise, BI needs to be timelier and more relevant to users by becoming more closely aligned with the strategic and operational needs of the business.

More recently some vendors have sought to emphasise that their solutions enable a more active, rather than reactive stance. This can allow for the making of decisions based on expected future outcomes rather than actual current outcomes. It is this latter category which is already seeing substantial interest from the likes of China Customs and indeed from senior government IT officials around the world, such as John Gillispie, Government Chief Information Officer of the State of Iowa, and President of the National Association of State CIOs in the United States.

Speaking exclusively to FutureGov, he explained that a key challenge was ensuring that government decision makers were kept ahead of the curve.

“We collect immense amounts of data internally for operations and externally for citizens,” says Gillispie. “Our agencies face incredible pressure to use this information to improve financial and service performance, and we need all the tools we can get to take advantage of the myriad of information at our disposal.”

This data is of no use if it overwhelms and prevents action from being taken. According to Gillispie BI is a key tool to ensure that numbers and words can be turned into information from which patterns of meaning can be uncovered for both legislators and citizens.

“For a long time, statistics only meant giving facts. A breakthrough idea for us was that customs data recorded not only procedures of external trade but also procedures and results of customs management. This makes it possible for us to assess administrative performance by analysing our data in real time,” notes China Custom’s Zhang.

This is where BI takes on the importance in equipping government agencies with the capability to analyse the plethora of information in their system, to enhance the decision-making process.

“The primary use of BI is in the extracting of data from multiple internal and external information sources. BI simplifies the generation of ad-hoc custom reports and can be targeted to agency or line of business focus, resource planning or historical analysis. The ability to aggregate and examine data in this way lends itself to assess and improve performance management and programme outcomes,” said Gillispie.

BI is integral to the work of any big organisation, but none more so than government according to analysts. This has fuelled interest in BI by government, and led to a spate of industry consolidation as the key enterprise solutions vendors have scrambled to ensure that they have a credible offering for their customers.

“2007 was an extraordinary year in the world of BI – it will be primarily remembered for the decimation of the independent BI market as all of the leading pure-plays were acquired. Amazingly, IBM, SAP and Oracle spent over US$15 billion on BI acquisitions in 2007 alone,” Schwenk notes.

More gain, less pain

Like any other technology, implementing BI in the public sector involves challenges not found elsewhere.

“Data tends to appear in various formats and quality, and usually in significant amounts. If not properly managed, government agencies can face inconsistency, silos of information and a lack of transparency. Governments also have to hold on to data much longer of about seven years, as required by law,” said Adaire Fox-Martin, Vice President, Public Services, SAP Asia Pacific and Japan.

This is particularly apparent in government-linked organisations which are required to provide a high level of reporting as part of their funding accountability – and universities are a good example of this.

“We provide reports on our student load four times a year. The data has to be correct and conform to strict government compliance regulations,” says Michael Gibson, Data Warehouse Manager at Deakin University in Australia.

“We have a large number of systems across the university about almost every aspect of our student enrolments including course information, academic results, lecturers and locations. The data is used to fulfil a variety of statistical and reporting requests that help the university to create policy, manage demand and meet government reporting requirements. Up until 2005, that data was maintained manually. While it was a partial solution, it was error prone and time consuming.”

Similarly, China Customs faced problems with disparate data sources. “There was much hidden information and we had to rely on empirical judgment. China Customs is responsible for trade data collection, processing, compilation and publication. Our figures must be comprehensive, reliable and internationally comparable,” reveals Zhang.

The National Healthcare Group (NHG) in Singapore manages over 11,000 employees across a network of four hospitals, one national centre and nine polyclinics. NHG also employs 900 staff and receives more than two and a half million patient visits annually.

Linus Tham, CIO at NHG shares that, like any typical healthcare sector, it faced problems with achieving a faster turnaround time, including sharing knowledge and information across the cluster.

“The structure of data in our mirror database was not suitable for reporting and heavy information analysis, such that the NHG was only able to execute reports requiring a volume of at least one year of data,” Tham says.

The emergence of real-time government has forced agencies to streamline their operational systems. In addition, growing security concerns combined with increased internet activity mean that government agencies are under more pressure than ever to maintain secure informational systems.

“Managing the security and access to reports was also difficult to implement and manage. Security such as access rights and privileges to sensitive information at the individual data item level, not just the report level, simply could not be enforced in the previous systems,” added Tham.

Removing the thorns

With strict budget and performance goals and reporting requirements, as well as diverse and demanding constituencies, government agencies need BI solutions that allow them to make better decisions, keep tight tabs on their operations and control information security to applications including financial performance management, revenue and expenditure tracking, and performance reporting.

At the Department of Revenue in the State of Iowa, BI is a key component in the agency’s effort to address the gap in tax compliance. The State of Iowa auditors and special investors have used BI to flag which purchase and travel card transactions and other disbursements should be investigated; projected budget shortfalls by government programme or line of business given expenditure patterns, and which cash accounts show patterns of unusual activity.

“With the inclusion of numerous data sources not normally contained in the agencies’ tax return processing information systems, we have been able to join data from the federal Internal Revenue Service, other state agencies and the department to provide personnel with access to a more comprehensive picture regarding the individual or business,” says Gillispie.

Certainly Singapore’s NHG acknowledges the benefits of BI: “Good understanding of data leads to correct interpretation of the information. By empowering our staff with the ability to generate reports and analyse information quickly, it helped to educate our staff on how to relate the data to business operations and realise the impact of operational workflow changes on the figures that would be reflected in their Key Performance Indicator reports,” asserts Tham.

Previously, the NHG in Singapore took an average of five days to author a report and between 15 to 30 minutes to generate a report. After implementation, the average time for authoring a report is now five minutes and generating a report can be achieved in zero to four minutes.

Gibson at Deakin University is similarly enthusiastic. The university’s move to BI has delivered new flexibility in filtering and building ad-hoc reports to support decision making across the entire university.

“Performance management is another area that Deakin University is working on. It’s a critical process for the university which uses goals and key performance indicators to assist in the allocation of budget resources, and as essential elements in the institution’s reporting accountability and evaluation cycle,” he says.

At the Statistics Department in China Customs, the Enforcement Assessment System (EAS), deployed using a solution from SAS Institute, was proposed as a method of internal statistical supervision. “The purpose of the EAS is to have an objective reflection of the procedures and results of customs enforcement, that is to say, to have an assessment of the quality of administration and management,” explains Zhang.

It is this performance management aspect of BI that has met the needs of New South Wales’ Department of Health (NSW Health) in Australia, which comprises a network of over 230 public hospitals.

“The best performing hospitals and health services in NSW are those with timely access to information and performance feedback. Our staff and patients have benefited from these evidence-based decision-making information tools, which has helped drive an increased emphasis on better decision making, and build support for organisation-wide performance management capability at all levels within NSW Health,” said Tony Dunn, NSW Health’s Director of the Demand and Performance Evaluation Branch.

Looking ahead What has been exciting the past two years for the State of Iowa, is the shift of the IT systems from being an audit or compliance dominated programme to a BI solution in which the agency’s collection and process staff are able to quickly identify special reports and have them developed from the information systems they require, shares Gillispie.

“Web 2.0 platforms are shifting the focus of public sector BI from a document management centric model to a search discovery model and from a traditional approach of rigid filing taxonomies and filing processes embodied in document management systems to more flexible processes based around the power of everyday content creation and management platforms such as Microsoft Sharepoint and IBM Lotus Connections,” said Steve Hodgkinson, Research Director for Public Sector, with Ovum.

While the private sector will be drastically reducing their budget of all types including IT spending in the wake of the economic crisis, Fox-Martin at SAP believes that BI will ultimately help government save money. The key is to choose the right solutions provider.

“It is important to consider not only the services available, but also the extent of the vendor’s network of consulting and training partners, the availability of employee with BI skills and the number of other companies using the products. The greater the extent of this vendor ‘ecosystem’, the more likely the vendor will remain a leader in the future,” said Fox-Martin.

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