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Government Analytics, Technology

Business intelligence is more critical for governments than ever

By Amelia Kwok | 1 January 2009

Governments have watched as economic storm clouds have continued to gather; in such a climate, it’s only natural that governments would slash spending and investments, maintaining a defensive posture just to survive. But, in truth, economic adversity represents opportunity, says Shantanu Srivastava, Regional Manager ASEAN, Business Intelligence & Performance Management at Cognos, an IBM Company.

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That’s because slowdowns can actually lead to new opportunities to emerge smarter, leaner, and in a far better competitive position. A downturn becomes the impetus for subsequent waves of new innovation because it forces governments to embrace greater efficiencies and find or invent new solutions to problems.

Those administrations that find ways to invest in their infrastructure, in their efficiencies, and in their efforts to develop sustainable innovations emerge from lean economic times with momentum. They’re ready to pounce on opportunities and seize leadership when the economic winds change direction.

Perhaps one of the greater opportunities for that investment allocation lies in IT spending – often the site of early cuts during challenging financial periods. IT is typically the source of innovations and the automation and optimisation of business processes. It’s through IT that governments become more agile and more competitive. And rising to the top of the agenda for most government CIOs: Business Intelligence (BI) and Performance Management (PM).

Business Intelligence refers to technologies that enable a department’s senior leadership and knowledge workers to aggregate, filter, analyse, and navigate through information to make better decisions faster. Typically this encompasses rigorous business planning, reporting, analysis, and scorecarding. With BI, governments can identify trends and take corrective actions sooner to capitalise on opportunities and mitigate threats.

By applying BI in numerous functional areas, governments can supply that clarity, develop competitive advantage, and achieve strategic agility at a crucial time. After all – if BI and PM are all about enabling an administration to conduct its mandate more efficiently and make the hard decisions easier, there may never be a more advantageous time to make that investment than now.

Evidence suggests that the market is heeding this advice. Despite the economic downturn, BI spending is on the up. According to a March 2008 Gartner report, worldwide BI platform spending is expected to grow at a compound annual growth rate of 8.1 per cent through 2012, reaching US$7.7 billion in 2012.

So where can governments best harness the power of BI and performance management to turn adversity into advantage? The answer – at any level of the administration. Two high profile examples come readily to mind.

The global subprime crisis has been well-documented over the past year. While many observers focus their study of its impact on the financial services market, the crisis has also created an often-overlooked victim: local governments. The hollowing out of neighbourhoods wrecked by waves of foreclosures is creating a series of direct and indirect impacts that are being acutely felt across cities and towns of all sizes. Fewer properties and lower valuations mean lower property tax revenues. That’s creating funding crises across all aspects of municipal and local governments – including school districts.

Neighbourhoods that have lost their core residents are often the sites of increased waves of crime, which creates a need for a stronger police presence. Simultaneously, local governments will need to ramp up infrastructure investments in these districts to encourage new homeowners to buy and occupy these vacant homes. There are even public-health impacts to consider. For example, waves of abandoned homes with untended backyard pools create ideal breeding grounds for disease-carrying mosquitoes.

Thankfully BI isn’t strictly a corporate proposition. Many local governments can turn to BI to help combat the ill effects of the subprime crisis. For instance, BI can help track and analyse foreclosure rates to identify risk-prone neighbourhoods, enabling cities and towns to mobilise appropriate resources for maintenance, community support, or public health.

For public safety, BI presents visual dashboards to enable governments to track and monitor crime statistics, identify potentially troublesome spots, and deploy forces to prevent incidents and neutralise crime rates. Essentially, rather than reacting, instant access to accurate information allows departments to redeploy in response to crime trends as they occur.

And of course BI coupled with planning offers the detailed kind of forecasting and modelling they’d need to track future tax revenues, note where shortfalls will occur, then adjust budgets and programs accordingly using ‘what if’ analysis to either deal with the shortfall or bump up revenue streams elsewhere.

At the central government level, BI can play a strong role in government’s efforts to support and comply with new initiatives to improve accountability and performance. In an effort to control programme costs and optimise delivery, many national governments are mandating agencies to set clear annual goals, lay out specifics for achieving them, and designate ‘performance improvement officers’ to assess progress toward meeting their goals and reporting status to the public.

BI can play an instrumental role in central agencies that are initiating the sweeping organisational changes they need to address today’s management challenges. In this financially constrained environment, BI gives government leaders at all levels new tools to focus their attention on these ambitious transformations. BI provides the visibility needed to ensure budget compliance, variance management, and optimal citizen service.

While no one can say with certainty what our economic future is, it’s nonetheless safe to say that our climate will continue to challenge governments to achieve higher levels of efficiency and performance.

Business intelligence solutions can help government organisations of all types and sizes achieve greater levels of accountability, innovation, and agility, and position them to capitalise on opportunities and respond to threats on a more timely basis.

The key is to avoid standing still or succumbing to the temptation to scale back on the very investments that can best position the department or agency to withstand rough economic times. Instead, the proper course is to move forward - with BI providing the information senior management needs to navigate.