Analytics: Applying the lessons from Wal-Mart to reducing costs Government Part II of II

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Analytics: Applying the lessons from Wal-Mart to reducing costs Government Part II of II

Monday, December 19th, 2011 - 17:46
Tuesday, December 6, 2011 - 16:34
Government agencies today experience unrelenting pressure to improve their mission effectiveness while using fewer resources. Government executives must compellingly state the value their agencies provide. They continuously restate their message throughout the planning, programming, budgeting, and execution phases of their operations.

In our last post, we provided an example of how one commercial organization, Wal-Mart, has effectively used analytics to improve its operational performance. Today, we will provide some examples of government departments and agencies that have implemented analytics and explain how they are using analytics to improve their service to citizens.

How are government agencies already using analytics to improve their service to citizens?

Analytics can be a powerful part of department or agency leaders’ toolkits.  The right well-supported numbers make for highly compelling stories.  Many government agencies are already unlocking the power of analytics.

  • The Veterans Health Administration (VHA) is conducting an informatics program.  This initiative analyzes data contained in electronic health records for hundreds of thousands of patients.  VHA physicians are discovering the medical-treatment factors that most influence the effectiveness of medical care.
  • Many agencies are using analytics to detect and combat fraud.  Key examples include the U.S. Postal Service Contract Fraud Program, the US Department of Agriculture (USDA) Risk Management Agency's Crop Insurance Program, the Defense Financial Accounting Service, the Internal Revenue Service, and the Veterans Health Administration.  Analytics allows agencies to discover patterns of behavior that most often indicate the occurrence of fraud.  Suspicious transactions can be referred to human investigators for closer examination.  The USDA alone has saved taxpayers more than half a billion dollars.
  • Several agencies are employing analytics in the human-resource domain.  Patterns in retirements and resignations have been discovered.  This supports increased effectiveness of workforce planning.

These agencies have started down the path to becoming analytics-driven organizations.  An analytics-driven organization appears transformed compared to its peers.  Many leaders are mistakenly tempted to focus first narrowly on the technology aspects of analytics.  Achieving the benefits of analytics involves cultivating an organizational culture within which information drives decisions and actions.

Throughout this blog series, we will explore aspects of applying analytics to reducing cost and improving performance in government. Making the journey to becoming an analytics-driven organization may appear to be a formidable task.  However, the payoff is compelling.  Analytics-driven organizations — exemplified by Wal-Mart — achieve results that are dramatically superior to their peers.  Such an opportunity cannot be ignored, particularly in the present fiscal environment.

Coming up next

Join us next time as we discuss the future of analytics in government.

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David Treworgy

Mr. Treworgy has over 20 years of analytics and project management experience. In addition to his primary focus on United States departments and agencies, he also has carried out work for a number of government organizations in Europe and Africa. A thought leader in the area of strategy and information analytics, Mr. Treworgy publishes frequent articles, presents often at conferences, and has provided expert witness testimony on several occasions, including at a joint Senate / House of Representatives hearing. He graduated with a BA in Economics from Williams College and an MBA from Harvard University.

David Treworgy (david.treworgy@us.ibm.com)

 

 



Greg Greben is Vice President and Market Leader for Business Analytics and Optimization (BAO), IBM Global Business Services, US Public Sector.