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When It Comes to BI, Government Is More than Just Another Big Organization

by Charles Kaplan
Let’s face it, with a projected federal budget deficit of $350-400 billion this year and an overall national debt of $7.8 trillion, the U.S. Government must find ways to measure and evaluate the performance of its programs and resources.

Let’s face it, with a projected federal budget deficit of $350-400 billion this year and an overall national debt of $7.8 trillion, the U.S. Government must find ways to measure and evaluate the performance of its programs and resources—directing more budget dollars to programs that work and cutting back or eliminating ones that don’t.

The good news is that federal initiatives such as the President’s Management Agenda (PMA) are raising public awareness of agency and program performance through the use of highly visible scorecards that show progress toward goals such as the Improved Financial Performance and Budget & Performance Integration initiatives. The goals of a results-oriented government can be achieved with the best practices and technologies of data warehousing (DW) and business intelligence (BI) that have been deployed by leading global corporations to increase profits and improve their competitive positions.

Government agencies share many of the BI and DW challenges facing large conglomerates in the private sector. However, there are many unique challenges facing BI in government that must be raised and addressed so that BI and other performance management initiatives can succeed. The result gives citizens, taxpayers, and government officials a better accounting of how their tax dollars are being spent.

Unique Challenges Facing BI in Government

It is not uncommon for large, complex organizations to face challenges as they implement BI programs. While the technical issues are generally well understood and have best-practice approaches for resolving them, the business issues continue to be a hurdle in many companies. In the public sector, the challenges are further compounded by unique organizational, procedural and regulatory processes. Based on a recent survey and series of interviews with government employees, as well as feedback obtained during The Unique Challenges Facing BI in Government half-day course taught during the TDWI Spring 2005 Conference, four of the most challenging issues for BI in government include:

  • Defining relevant business metrics
  • Motivating employees and project teams
  • Removing project silos
  • Managing around political agendas

Mapping Missions to Metrics
The Office of Management and Budget (OMB) describes one of its biggest performance management challenges as getting agencies to figure out what to measure. In the private sector, corporate performance is ultimately measured by profit and loss. In the public sector, government agencies are measured by the amount of public benefit produced. Under the guidelines of the PMA, it is no longer enough for government leaders to manage their costs and avoid wasteful or fraudulent spending. It is also no longer enough to assume that spending more money on effective government programs will produce proportionally greater public benefit. Additionally, cutting budgets from underperforming programs is not necessarily the right thing to do without taking the time to understand the relevant performance drivers. The focus is shifting from managing the outputs to managing the outcomes of government programs. Many in leadership positions are struggling to define performance metrics that align their operational processes with the desired outcomes.

Motivating Employees to Achieve Maximum Performance
The private sector has the means to offer incentive programs, rapid career advancement, and other rewards to encourage the types of risk-taking behavior and leadership that are often required to achieve BI success. Strict government HR policies that make it difficult to fire underperforming employees, strong labor unions that insist on getting involved in even the most insignificant workplace issues, and bureaucratic fiefdoms that serve to protect the status quo have all inculcated a change-resistant mindset among many government employees. The historical criterion for moving up the ranks in government is the ability to leverage political savvy to further one’s longevity. The enormity of the government leadership challenge becomes obvious when you compound this climate of risk-aversion with the fact that 50 percent of the 1.6 million federal workers will be eligible for retirement by the end of 2008, making it even harder to push aggressive new initiatives such as business intelligence.

Funding Process Leads to Stove-Piped Systems
In the current economic and political climate, government program spending is being scrutinized and budgets in many cases are being cut. In the aforementioned study on the Unique Challenges Facing BI in Government, several government agencies pointed out that when funding for BI/DW gets appropriated, it is generally targeted to specific programs. Such targeting virtually eliminates any incentives to build out the required infrastructure to support an enterprisewide view of agency information. Program managers implement the tools and technologies to support their own reporting and analysis because there are generally no rewards for carrying the cost burden of funding the larger infrastructure development. This challenge is further amplified by the silos that have often built up in the IT organizations to protect access to the specific departmental transaction systems. The risk of having a mission-critical system fail as a result of making changes to a database in support of a large-scale BI/DW initiative causes IT organizations to restrict access to these systems to the point that BI project timelines are delayed and budgets run over.

Influence of Political Agendas
The average tenure of a political appointee is less than 24 months, which doesn’t leave much time to design and lead long-term, organization-changing initiatives such as BI. Gaining executive sponsorship from these individuals is a challenge because there is a high probability that they won’t be in the office to see (or take credit for) the fruits of their labor. BI initiatives must compete for executive-level attention with other programs and policy-driven agendas that provide high visibility and a high degree of impact in a relatively short timeframe. Career government executives are more able to provide consistent leadership from start to finish, but they face many of the same challenges described earlier: how to measure performance, how to create a culture that focuses on measuring and achieving results, and how to bridge organizational divides that have been built up over many years. The influence of politics and the political bureaucracy that are at the heart of government process are not well-suited to the best practices of BI that have developed in the private sector. Nevertheless, they can and must be addressed.

Addressing the Challenges Facing BI in Government

The following examples outline some of the actions being taken to address the issues mentioned above:

Mapping Missions to Metrics –

  • OMB is working with agencies to develop green plans detailing not only the steps the agency intends to take toward getting to green on the PMA objectives, but also detailing the steps to stay at green.
  • The Program Assessment Rating Tool (PART) is increasingly being used to assess Federal program effectiveness.

Motivating Employees to Achieve Maximum Performance –

  • Early, frequent, and open communication about the expected impacts of the BI program helps win support at all levels, and taking time to understand the impacts of BI-initiated change helps address employee concerns.
  • Proposals for a civil service modernization bill that would substantially overhaul the General Schedule pay scale and replace it with a more performance-based system are soon to go before Congress.

Funding Process Leads to Stove-Piped Systems –

  • The Department of Labor has successfully implemented an IT Crosscut Fund that helps manage interdepartmental projects and eliminate duplicative IT spending.
  • The Clinger-Cohen Act, which established the CIO Council, along with the Federal Enterprise Architecture (FEA) continues to set standards for system interoperability and reuse of IT investments.

Influence of Political Agendas –

  • OMB Circular A-123 (Sarbanes-Oxley for government) defines management’s responsibility for internal control in Federal agencies and is highlighting the need for BI/DW infrastructure.
  • Increasingly, program funding is being influenced by PART scores.

The good news is that there is current policy, legislation, and active support for the metrics-driven management processes that align so well with business intelligence and data warehousing. Government leaders are generally upbeat and positive, stating that while there is much work left to be done, progress is being made. Best practices that have been developed and applied in large corporations provide a powerful starting point for addressing the challenges that are unique to government agencies.

Charles Kaplan -

Charles Kaplan, CBIP, is a Director with DecisionPath Consulting and has more than 15 years of experience in information technology and applied information analysis. Charles works with DecisionPath clients to identify their information needs, and structure BI programs that result in measurable business impact. His prior experience includes management of pricing and revenue optimization departments for American Airlines and Marriott International.