I come across many government agencies that are tackling very important issues (i.e. fraud & improper payments, bio-surveillance, patient outcomes, etc.) using rules, basic analytics and intuition. These are techniques that have been used successfully for years especially when government was smaller, the dollars involved were less significant, and the stakes were not as high. Boy, have times changed. Budgets are under pressure like never before, healthcare costs have been rising rapidly for years and terrorism is no longer something that happens overseas. The old ways of tackling these issues cannot reasonably be expected to keep up!

Advanced analytic techniques have enormous potential to improve people’s lives and government finances, yet they are not always used. Why?

Let me address a few of the most common reasons given for not using advanced analytics:

1. The use of advanced analytics requires a PhD.

Not true! Some of the most talented analysts I’ve met did not have a PhD, but they did have a good grasp of the business issues and the data available for analysis. But most importantly, they learned on the job and/or through specialized training (SAS being one provider) how to apply mathematical techniques to solve difficult business problems. Today, software is making things much easier by automating many of the processes, providing intelligent defaults and easy to use graphical user interfaces.

2. We already have methods and techniques in place.

That is good!! Existing business rules and human intuition will never be obsolete. Rather, they are leveraged and built upon.

3. These techniques cost a lot of money. Is it worth it?

Let’s put it into perspective…imagine a government program that administers a social service worth $100 million for a small state. Imagine the rate of fraud is 10% (which is the national average for that program). If current techniques identify 2% of fraud and you were able to conservatively improve detection by 2-3%, that is serious money! Much more than the initial investment on technology.

4. These techniques will make my job irrelevant.

Not true!! Advanced analytics are tools used by people! They do not replace people, but make them more effective and efficient (not to mention more marketable).

There are other reasons, can you think of any? Do you work for a government agency that has overcome some of these misperceptions? How did you do it?