Earlier this week UK chancellor George Osborne announced his first budget as “tough but fair”. His action on debt echoed austerity measures being taken across other parts of the world.
As I write this blog, President Obama and the G20 are assembling in Toronto. Opinions are mixed with Europe pushing hard on reduced spending and Obama stressing that should be a medium term goal, warning that clamp downs could jeopardize the recovery.
I personally believe that draconian style budget cuts typically compromise an organizations ability to grow, improve or simply maintain quality and standards. Sure, there are places where budgets should be cut – sometimes by 100%; but in others, the smartest thing to do could be to increase by 200%.
Business analytics allow governments and any organization for that matter, identify where they can cut cost without impacting service or quality. In many cases, service and quality goes up – not incrementally, but dramatically.
So what are smart government departments doing?
The State of Wisconsin’s Department of Revenue (DOR) have eliminated thousands of hours of manual activities and improved both the rate and speed of revenue collection. By using an analytical approach to prioritization, agents can identify which returns to audit to maximize returns. They were able to collect $32m in a short period of time v the typical 1 year plus using conventional methods. They also brought in $5m that might have been missed with their previous process. The DOR are also able to respond to customer inquiries much faster and have reduced the need to repeatedly contact a taxpayer undergoing an audit. Costs down, productivity up, risk of raising taxes reduced.
In many countries around the world healthcare falls under government spend. Healthcare fraud can cost billions of dollars a year. The industry estimate is that between 4 and 10 percent of all health benefit dollars are paid out on fraudulent claims. Health Care Service Corporation focus on proactive identification of fraud before money goes out the door. By using predictive analytics they can take steps to stop bad behavior faster and save money.
London Fire Brigade (LFB) use predictive analytics as a risk prevention tool. They target communities and homes for safety checks, smoke alarms and providing good old fashioned advice to those that need it. Like any other local government structure, LFB also faces various operational pressures, from availability of resources to time pressures and controlling costs. So working in a more informed way - ensuring staff are deployed and activity is targeted where it can have the biggest impact – also helps address the ‘efficiency agenda’ in the public sector.
