SAS is the underwriter of a MeriTalk study released today that focuses on “The Federal Efficiency Opportunity”. The study uncovered meaningful insights into how federal managers and professionals are trying to meet their goals while facing enormous budget cuts. The study was done after President Obama’s Deficit Commission suggested in November 2010 that the federal government develop a regimented plan to reduce spending by 16 percent by 2015.

The big question on people’s minds is: how do we reduce spending but still maintain current service levels to the American public? A press release about the study indicates that when attempting to preserve citizen programs and service levels, the first choice among respondents is to look for ways to increase efficiency. 43% of Federal managers and professionals surveyed say their agencies always or often take advantage of efficiency and savings ideas.

While that number may seem low, the study also says that Federal managers and professionals say a better understanding of their spending could help them expand efforts to capitalize on efficiency opportunities and reprioritize 13% of their budgets as funding tightens.

That’s part of the problem: many respondents in the study said they rely on manually compiled reports and spreadsheets to analyze data and uncover inefficiencies. This method is time and labor intensive and prone to error. In addition, the sheer abundance of data demands more sophisticated techniques, such as the use of analytics to identify significant patterns, trends and anomalies in a more timely fashion.

Other insights include:

• 33 percent of respondents said their department or agency does not have a formal plan to uncover inefficiencies.
• Nearly half stated they search for inefficiencies through ad-hoc investigations, usually in the area of operational costs.
• 27 percent look at program overlap or duplication for efficiencies.
• 18 percent look at their enterprise information technology architecture for ways to save money or increase productivity.

There is a huge opportunity in all of these areas to apply analytics to data that already exists in order to mine for ways to save time and money.

For instance, there are tremendous cost avoidance opportunities associated with improper payments. Often, inefficiencies manifest through duplicate or incorrect payments, for example. In 2010, $125B was spent on improper payments, according to an April report from the Government Accountability Office. There are analytics technologies that can be applied to root out irregularities and stop improper payments before they are made.

Consolidation of data centers is a big initiative of the current administration in the quest for more efficient ways to run government IT operations. The Wall Street Journal recently published an article stating that White House officials estimate just 27% of a typical data center is utilized, far below private sector counterparts, and that the administration would be shuttering another 137 federal data centers by the end of the year. Analytics can provide a centralized view of IT resources across the entire enterprise. IT organizations can deliver services more efficiently and cost effectively, which supports better business decisions, including those on consolidation and allocation.

Another area where efficiencies can be found is in supply chains scattered throughout government. Better forecasting of demand with analytics can greatly reduce overages and shortages from everything from paperclips to spare parts. Defense organizations, in particular, can reduce cost and increase readiness if they are able to assess the maintenance status of their equipment and reduce costly unscheduled maintenance.

In the end, government managers are stewards of our tax payer dollars. Every day they have to make difficult decisions on resources allocations, processes, scheduling, policies and a myriad of other complex issues. The results of the MeriTalk survey should be heartening to citizens as leaders clearly prefer to increase efficiency to meet goals instead of cutting employees or services. The challenges in acting often come from not knowing where to begin or how to get there. Analytics is not a silver bullet, but can play a critical role in capitalizing on efficiency opportunities and supporting better and more confident decision making.

A panel of experts will discuss the survey results at the SAS Government Leadership Summit, June 15 in Washington, DC.