Spending Money to Save Money

Even if the only business you ever ran was a lemonade stand, you know it takes money to make money. But it also takes money to save money -- an especially important lesson when it comes to technology.

In fact, according to the non-profit, educational organization American Council for Technology (ACT), the US government could trim the budget deficit by $220 billion a year with effective use of information technology. The details are spelled out in a November 2012 report entitled "Unleashing the Power of Information Technology to Reduce the Budget Deficit."

ACT, in conjunction with the Industry Advisory Council (IAC), recommends government agencies increase investment in data analytics, technology to increase productivity, and other technological solutions to reduce waste, fraud, and abuse. It concludes the potential savings will far outweigh the $80 billion a year the federal government currently invests in technology.

By way of background, ACT was created in 1979 to improve government through the efficient and innovative application of IT. A decade later, ACT established the IAC to bring industry and government executives together to collaborate on IT issues of interest to the government.

The report concludes that investment in IT innovations is the best way for federal agencies to continue to deliver essential services at reasonable costs. Specifically, it makes three recommendations:

  1. Accelerate the use of data analytics to identify opportunities to reduce government costs. "Gathering and analyzing data from a variety of internal and external sources can help determine performance and outcomes for federal programs," the report notes.

  2. Invest in technology to increase productivity and reduce costs. "The federal government has the opportunity to accomplish its missions in a cost effective manner while providing the citizenry with expected levels of service by strategically using IT as a part of the solution."

  3. Use technology to combat fraud, waste, and abuse. "The federal government is in a unique position to strategically apply IT investments to reduce federal outlays and the federal deficit. Further, IT investments typically result in many ancillary benefits, such as providing jobs and much needed tax revenue."

Although the government has reduced the amount of "improper payments" in recent years, we still waste a lot of tax dollars -- about $115 billion in fiscal year 2011. In that period, federal agencies reported a government-wide improper payment rate of 4.69 percent, a decrease from the 5.3 percent improper payment rate reported a year earlier, government data shows.

“Improper payments" occur when:

  • funds go to the wrong recipient
  • the right recipient receives the incorrect amount of funds (including overpayments and underpayments)
  • documentation is not available to support a payment
  • the recipient uses funds in an improper manner.
One of the key recommendations in the report is for the federal government to establish "analytical shared centers of excellence (COE) focused on enterprise-level operations to reduce fraud, waste, and abuse and strengthen program integrity."
These COEs, whether dedicated to an agency, or shared among agencies, will enable sophisticated modeling and simulation of historical data, e.g., to identify anomalous thresholds based on multivariate factor analysis, disparate data fusion to include advanced geospatial analytics, testing of new means, methods, and tools, etc. Further, the COEs can develop more sophisticated rule systems (rather than simple filters) to screen incoming entities and outgoing transactions with acceptable false positive rates.

As data professionals, how do you feel about these recommendations? Do you believe investment in IT solutions, specifically analytics, can help bridge the gap between smaller budgets and essential services?

Noreen Seebacher,

Noreen Seebacher, the Community Editor of Investor Uprising, has been a business journalist for more than 20 years. A New York City based writer and editor, she has worked for numerous print and online publications. Her work has appeared in The New York Times, the New York Post, New York’s Daily News, The Detroit News, and the Pittsburgh Press. She co-edited five newsletters for Real Estate Media’s GlobeSt.com and served as the site's technology editor.

She also championed the commercial real estate beat at The Journal News, a Gannett publication in suburban New York City, and co-founded a Website focused on personal finance. Through her own company, Stasa Media, Noreen has produced reports, whitepapers, and internal publications for a number of Fortune 500 clients. When she's not writing, editing, or Web surfing, she relaxes in an 1875 Victorian with her husband and their five kids, four formerly homeless cats, and a dog.

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Re: Self-Fulfilling Data
  • 1/25/2013 8:52:12 AM

@SaneIT I haven't looked into that. I'm not sure the government is completely transparent about how much of our personal data it collects and shares among agencies. I have seen articles about the government extracting that data from Google, like this one: 

Google is reporting yet another uptick in government requests for its users' data.

Google's latest Transparency Report indicates governments want more user data than ever.

Governments want Google's data more than ever.

That's the conclusion of the search engine giant's latest Transparency Report, which indicates that governments around the world filed an increasing number of requests for user data in the second half of 2012. In the United States, some 68 percent of those requests came through subpoenas, while 22 percent came through Electronic Communications Privacy Act (ECPA) search warrants; the remainder was "mostly court orders," according to Google's Jan. 23 blog posting on the matter.

Google received a total of 21,389 requests for information about 33,634 users for the July-through-December timeframe. The United States topped the list with 8,438 user data requests, followed by India with 2,431, France with 1,693, Germany with 1,550, and the United Kingdom in fifth with 1,458.

The United States also headed the list of countries issuing court orders to remove government data from Google services, with 209, followed by Germany with 180, Brazil with 143, Turkey with 48 and France with 37. When that same data is broken down by "Other requests (executive, police, etc.)" instead of court orders, Turkey tops the list with 453 requests, followed by the United Kingdom with 79, Germany with 67, and the United States and India with 64 apiece.

slashdot (http://s.tt/1yQCz)

Re: Self-Fulfilling Data
  • 1/25/2013 7:34:12 AM

That's great and exactly the kind of thing I was thinking of.  The amount of weather data that NASA and NOAA both hold is immense, why not share it and make our tax dollars go further.  Have you seen any that are doing this with personal data? 

Re: Self-Fulfilling Data
  • 1/24/2013 3:44:25 PM

@SaneIT there is some attempt to do that now with collaborative projects. For example, in 2012 NASA listed a number of of big data intitiatives, and some are to be collaborative efforts with DOE or NOAA and the EPA. Much of what NASA investigates now relates to weather and climate changes, which does overlap with the interests of other government agencies.

Re: Self-Fulfilling Data
  • 1/24/2013 9:28:09 AM

Absolutely SaneIT. I don't think the federal government is willing to acknowledge that some of the data that was once proprietary to an agency is now readily available through many sources -- including melissa data, white pages, etc.

Re: Self-Fulfilling Data
  • 1/24/2013 7:34:42 AM

That's exactly what I was talking about Noreen.  There seems to be huge gaps in awareness of what other agencies have, can do or have done.  I'm wondering how much we could save by pulling some of that data into one pool and make them share it.  The initial project would be expensive but the end result would be less waste.

Re: Self-Fulfilling Data
  • 1/24/2013 7:32:38 AM

I agree that not all data is the same but we have many overlapping government agencies that have overlapping functions and sometimes I think of how nice it would be if they had similar procedures when dealing with them at the very least.  When you think about all the government agencies who have data on you and the fact that if you update data with one it doesn't necessarily trickle down to the others it's obvious that they could do better.  I also think about things like local government issues we've seen around here lately of agencies leasing space when there are empty government owned buildings. Chances are most of them don't know that this space exists and that leads me to believe that they don't know about other things going on around them like databases they could be using to sanity check their data or that they could use instead of duplicating data.

Re: Self-Fulfilling Data
  • 1/23/2013 8:38:41 PM

In the interest of eliminating redundancy, strive for uniformity and promote efficient cost controls, all federal tech initiatives and implimentation should be under the directive of a newly formed autonomous agency with the symple mandate of applying the best available technologies to government operations. Much like the concept of the GSA.

Re: Self-Fulfilling Data
  • 1/23/2013 1:33:45 PM

@SaneIT - Sorry, I was trying for irony rather than sarcasm but sometimes there's just a fine line between the two.

I agree with your sentiment that if there are any agencies that know what to do with data they should share. But all data is not created equal or agencies either. Often Government agencies don't know what their other hand is doing or want to work together due to interagency competition (and jealousy). I.e., the FBI and CIA. Another issue is the contract funding process that can frequently tie an agency's hands or limit their flexibility to make changes.

Re: Self-Fulfilling Data
  • 1/23/2013 1:06:04 PM

I've wondered the same thing. The education dept outsourced an address canvassing operation for a survey in 2011 that duplicated work the census bureau had performed in 2009. And either agency could have obtained the same info from any one of a number of private companies for a lot less money!

Re: Self-Fulfilling Data
  • 1/23/2013 8:23:07 AM

@Callmebob, I'm reading that comment with a touch of sarcasm, but I'd rather the government was spending money on real usable systems and paying real companies who are doing more than just soaking the government fraudulently than let the government keep paying out blindly.  In the short term the cost might look similar to what they are already paying out in fraudulent transactions or even less than optimal transactions but in the long run as waste is reduced the cost is recovered.  I just wonder if we have any government agencies that are good with using the data they have since we hear so many horror stories.  If there is one agency that is good with data why can't we get them to share some of that savvy with other agencies?

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