Features: February 12th, 2010

By Richard Broad

The greatest use of information across the public sector is to record what happened in the past. But business analytics opens up a whole range of possibilities for using the same information as a means to predict and prevent. The author argues for a culture change that values information as highly as people, property and pounds and uses it to look forwards as well as backwards.

There’s a plethora of Government-produced papers and media-hype about the importance of information management within public sector and how data needs to be used and seen as a strategic asset – many of these reports risk subverting public sector organisations from the operational efficiency programme. A rush to cut costs could make these organisations lose sight of their need to be forward thinking. This article explains how business analytics enables public sector organisations to use their data to predict-and-prevent, rather than fail-and-fix. This helps meet today’s national indicators by doing more with less and working smarter.

Private sector businesses already use business analytics to gain useful customer insight, develop new revenue streams and scrutinise their business models. As these businesses become more agile and innovative, they become more successful. The same business analytics tools will also enable public sector organisations to implement a proactive approach by using information management as a strategic asset, which will help enable operational efficiency and effectiveness across government – from preventative health and welfare services through to public safety and security.

Most public sector information management strategies are still in the early stages of the ‘information evolution’ cycle. Organisations that focus only on compliance with legal and regulatory requirements are condemned to a continual cycle of reactive “fail-and-fix” – after using historical data to report on. Cultures should change to use existing data for insight and enable the public sector to “predict-and-prevent” helping to make their operations more efficient. Public sector bodies require a step-change in their information management strategies if they are to continue their overall transformational agenda.

There is a mounting pressure for the public sector as a whole to reduce its costs. However, any cost-cutting efforts cannot be made at the expense of public service delivery. These organisations need to Work Smarter – both more efficiently and effectively – to meet the immediate demands for cost-cutting, but also remain in line with longer-term transformation objectives.

Identifying Good Costs and Bad Costs

The Government’s Operational Efficiency report on public spending and reporting (May 2009) suggests that too many public sector organisations cannot differentiate between muscle and fat when it comes to cost cutting.

They must first identify the essential ‘good costs’ and the expendable ‘bad costs’. With this knowledge, these organisations can use a ‘surgical scalpel’, instead of a ‘blunt axe’, to reduce their costs – and focus efficiency efforts on the right initiatives.

Good costs can be investments in technologies that address underlying problems and/or enable on-going resource optimisation. These ‘costs’ are the building blocks of a true information management strategy and the foundation of citizen-centric services.

The gap between increased demands and reduced budgets in the public sector is growing, and the only way for organisations to bridge it is to transform the way they manage their most under-utilised asset: information.

Visibility in Information Management: Go Beyond Efficiency

Visibility of data and processes is essential for any government organisation to successfully transform. By working smarter the public sector can manage reduced resources and increase customer service in line with fragmenting demand.

Visibility and improved information management are the themes that run throughout the many government reports published this year.

These reports include:
– “In the Know” – Audit Commission – “Information Matters”
– Knowledge “Transformational Government Review” – Central Government
– “The Power of Information” – The Cabinet Office
– “Strategic Procurement / Procurement Capability Review” – National Audit Office
– “Operational Efficiency Report” – Central Government

Lessons to be learned from best practice

Increasingly, private sector organisations are taking their core data, integrating it across existing silos of information and then analysing it to gain insight into their business and customers. This insight helps them understand past performance and customer behaviour amongst many other trends and will help them communicate the right messages to the right audience. These practices are positive steps towards helping elevate organisations to positions of excellence and leadership.

One example is Vodafone. The company needed a central reporting system, which brings together measurement data from a wide range of sources. Business Analytics makes the necessary information available to the relevant people, on which they can base sound business decisions. Government departments can make the same use of business analytics to make evidence based decisions.

Business Analytics – the public sector possibilities

There are beginning to be a number of visionary uses of Business Analytics solutions in the public sector – one of which is the NHS Information Centre (NHS IC), England’s authoritative, independent source of health and social care information.

Brian Derry, executive director of information services at NHS IC: “Historically, quality has looked at one dimension at a time. It might look at mortality rates, patient feedback or healthcare associated infection. We’re starting to use these data sets together to fully understand the effectiveness and efficiency of the NHS in providing high quality services.”

Business Analytics is enabling the NHS IC to clean, manage and analyse information held on disparate systems more efficiently. It also automates information management and sharing across the different trusts around the country, which informs better local decision-making.

London Fire Brigade (LFB) uses Business Analytics to decrease the number of fire incidents and save the lives of London’s residents. Predictive analytics helps the LFB to prioritise the allocation of fire prevention resources because it can predict and pin-point specific households most at risk of fire.

A key aim of London Fire Brigade is to prevent fire incidents before they occur. Part of this drive is a programme of home fire-safety visits to advise London’s households on how to prevent and safeguard against fire. To be most effective, the brigade must direct resources where fire risk is highest. Business Analytics software analyses, amongst other factors, demographic information, geographical locations, historical data, land-use and deprivation levels to create life-style profiles for London households. The profiles highlight those at the highest levels of fire risk.

Business Analytics has allowed the London Fire Brigade to move away from allocating resources based purely on historical data; it can now predict much more accurately where fires may occur, which means it can take preventative action to target and educate those at highest risk.

Predict-and-prevent helps target resources. For example business analytics can predict and map areas where government/industry regulations are most frequently breached. This information enables these agencies to more efficiently allocate their resources to fulfil their duties of enforcement. In being more efficient, they also become more effective.

Predict-and-prevent is a sustainable method for on-going improvement benefits, but business analytics can also improve best practices for internal compliance in the short-term. It can help report against benchmarks and targets; detect and stop fraud; and comply with a range of regulations that govern public sector operations. The combination of efficiency and effectiveness – working smarter – is the step-change required in information management to transform public sector services.

See benefits fast – no need to ‘Rip-and-Replace in order to Predict-and-Prevent’

Business analytics provides a quick return on investment – it can provide analysis and insight in a short time frame. In addition, there is no requirement to rip-and-replace, because business analytics works across any application, hardware or operating system.

Cultural Shift Required

A culture that values information as highly as people, property and pounds could have a significant difference: Data Connects estimates that poor customer data quality costs each Local Authority on average more than £1m every year – so fixing this data quality imbalance could have a significant financial benefit, for example more effective debt management, debt collection, and reducing avoidable contact (NI14).

In addition to financial benefits, better information management could help to prevent future social costs, such as Baby P, Victoria Climbie, Soham and Shipman.

A positive cultural transformation will stop information being locked away and not used, which has, in some areas, created a ‘data crunch’ to rival the credit crunch. Once data is viewed as a strategic asset, not a toxic liability, organisations can finally navigate with 20:20 vision and foresight. The more sustainable approach of valuing information must be embedded into an organisation’s strategy and DNA – from the top-down.

To achieve this, the excellent approaches developed by organisations such as the Knowledge Council and the Audit Commission must be widely and rapidly deployed throughout the public sector.

Richard Broad is Head of Public Sector at SAS UK.