Public Sector Analytics: Where Should We Start?Posted on May 3, 2013 12:00:00 AM
On an accelerating basis, the public sector is moving into the Analytics Age. Multi-dimensional data strategies are being explored and employed for a variety of uses in schools, cities, and counties. Given the significant amount of data that these entities collect and generate, analytics represent a golden opportunity for local governments to monetize information into substantial and sustainable financial resources.
For local governments that have begun to deploy analytic strategies, the applications range from the simple to the complex. Numerous examples are surfacing in the areas of government services, student performance, public safety, and others – with many that are producing immediate returns for community stakeholders.
Budgeting - You Can't Look Forward Without Looking Back
For local governments that want to explore the potential benefits of analytics, a logical question is “Where should we start?” A great starting point is a set of financial statements and a blank piece of paper. The financial statements will help initiate the brainstorming across the various service areas of the entity, as well as, prioritize the ideas based on financial significance. The blank piece of paper will help to sketch out and work through three critical questions – ‘What, Why, and How’…
- What are you trying to measure?
- Why is it important?
- How will you collect the data?
Question 1: What are you trying to measure?
Analytics can be deployed across many facets of government. Is the information you are seeking related to financial performance, customer satisfaction, achievement, efficiency or other areas of government service? In considering this question, you will start to develop an analytics thesis as well as begin to identify the potential inputs and outputs for the project. The type of information you are seeking will also drive your approach to Question 3.
Question 2: Why is it important?
In a public sector environment, the amount of data that can be measured is staggering. So, it becomes very important to prioritize data projects with specific business reasoning. For example:
- “We want to develop analytics on our payroll…because; it represents 70% of our expenses,” or
- “We want to measure the types of community service requests we receive…in order to optimize our staffing strategy.”
Before you spend any time collecting data or developing analytics you should be able to answer the key question, “How will I use this information to make key business decisions?” Are the analytics actionable or just nice to know? Prioritize towards the actionable.
Question 3: How will you collect the data?
After you have answered the first two questions, the third question is crucial and probably dictates whether you can pursue the opportunity. “Is the data accessible and what is the magnitude of difficulty in terms of collecting it?” If this question can be answered to your satisfaction, then you have made it over an important hurdle. But, prior to engaging in the project, additional challenges will need to be assessed in terms of data quality and consistency.
As you consider your capacity to collect the information – as well as the effort it will take to organize it – you may want to vet the project again by considering your answer to Question 2 again…”Am I confident about the business purpose and does this project provide enough return on investment (ROI) potential to justify the effort?”
By using this simple methodology and assessing the opportunities from a business value and ROI perspective, local governments can benefit significantly from analytics.