Decisions based on bad information can lead to poor results and be quite costly to organizations. This may culminate in the squandering of opportunities, taking on unnecessary risk, misallocating resources, and ultimately not achieving strategic goals or objectives. At a time of shrinking budgets and increasing expectations to do more with less, making better decisions based on informed judgment has taken on even more significance for both private sector and government organizations. In a world inundated with all kinds of information, timely, relevant, and more predictive data can drive better decision making. This video explores the usefulness of the tool - risk management - that can, when employed at an enterprise level, assist government agencies in strengthening their decisionmaking capabilities and, in turn, improve their overall performance.

The four reports covered in this video include:

The first report on risk management is "Strategic Use of Analytics in Government" by Sirkka L. Jarvenpaa and Thomas H. Davenport.  Governments use analytics (often described as "business intelligence") to enable and drive their strategies and performance in an ever more volatile and turbulent environment. Analytics and fact-based decision making can make a powerful contribution to the achievement of government missions, just as they are now making to the accomplishment of corporate business objectives.

In their report, Professors Davenport and Jarvenpaa explore several important applications of analytics in government agencies and develop an assessment framework for those that either have not yet embarked on the analytics journey or are still in the early stages. The report focuses on four governmental mission and management areas -health care, logistics, revenue management, and intelligence- to which analytics has been applied.

While the opportunities from analytics for improving efficiency and effectiveness in government appear limitless, there is much less clarity about the readiness of government to embrace analytics. While analytics is often depicted as a technological innovation, Davenport and Jarvenpaa are careful to point out that the use of analytics requires managerial innovation.

You may also read a summary of their report, "Analytics and Decision Making: A Conversation with Tom Davenport, Distinguished Professor in Information Technology and Management at Babson College."

The second report on risk management is "Managing Risk in Government: An Introduction to Enterprise Risk Management" by Karen Hardy.  This report explores how federal chief financial officers (CFOs) and financial managers can help guide their agencies to take a more holistic approach to risk management by implementing an Enterprise Risk Management (ERM) system. This approach helps reduce the total cost of compliance, while helping agencies achieve greater value from their risk management activities.

You may also read a summary of her report.

The third report is "Strengthening Control and Integrity: A Checklist for Government Managers" by James A. Bailey.  With the enactment of the American Recovery and Reinvestment Act (ARRA) of 2009 and the extensive reporting requirements stemming from this new legislation, government managers are faced with even greater demands for fiscal accountability and transparency. Maintaining financial integrity over agency data is especially important given the amount of information the public can now access through websites such as Recovery.gov and USASpending.gov. Because of such public scrutiny, government managers must be even more vigilant in ensuring the soundness and quality of their data. The report by Professor Bailey provides valuable information to public officials across the nation, from senior management to staff responsible for overseeing day-to-day operations, in managing financial and ethical risks inherent in most governmental activities. The best practices examples from local governments and financial oversight and integrity checklists contained in the report provide sound guidance to facilitate the strengthening of financial controls and integrity across government.

You may also read a summary of his report.

The fourth and final report is, "Strategic Risk Management in Government: A Look at Homeland Security" by Joe Eyerman and David H. Schanzer.  David H. Schanzer and Joe Eyerman describe the recent history of strategic risk management in the department and set forth a series of findings and recommendations directed to the Executive Office of the President, the Department of Homeland Security, and Congress. A key recommendation is that the department enhance the analytical capability necessary for strategic risk management. 

You may also read a summary of their report.