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July 28, 2021 Article 3 min read

As governments are forced to do more with less, they're waking up to the huge potential of data analytics to improve efficiency, make better spending decisions, and predict future trends. Here's how to build a data-driven culture in your organization.

Two business professionals looking at a laptop computer screen.The data analytics revolution has swept through the private sector in recent years, enabling companies to see and use data in ways that empower them to make better business decisions. Companies that use data in smart ways have gained a key competitive advantage.

Governments are also waking up to the huge potential of data analytics to improve their delivery of public services, address social issues more efficiently, and build transparency and trust with citizens. 

As companies have discovered, a wide range of data sources can be harnessed to create a “single version of the truth” that enables them to see the big picture, make smarter choices about how to allocate resources, and to better predict future trends.

It’s no exaggeration to say this approach has the potential to transform governments at all levels. McKinsey estimated that governments globally stand to capture $1 trillion just by using data analytics to improve their revenue collection and cut waste.

It’s no exaggeration to say this approach has the potential to transform governments at all levels.

Data at the state and local government level often sits in silos at different departments with their “data diamonds” waiting to be mined and integrated into data warehouses and utilized by policymakers to identify patterns, reduce waste, and make better spending decisions.

U.S. authorities that were first movers on data analytics have reported strong outcomes. Cincinnati, for example, reported a positive fiscal impact of $6.1 million in its first two years of using data analytics to drive process improvements.

Data analytics can help governments solve very real social and economic problems. In April, the State of California — in partnership with Plante Moran and some of the world’s leading technology and data companies — launched the Homeless Data Integration System, a first-of-its-kind data warehouse integrating data on its homeless population of over 150,000. The system unifies data from the state’s 44 different continuums of care, enabling state and local providers to better understand gaps in health and human services systems and to target interventions more effectively.

The social disruption and heavy demands on health services brought about by the COVID-19 pandemic have been a major catalyst for the public sector to start embracing data analytics.

New York City Health and Hospitals, for example, built a reporting solution with up-to-the-minute visualizations of trends in COVID-19 cases and the system’s capacity to deal with them. 

Governments are becoming more receptive to data analytics as more local leaders become educated about their potential, as tech tools get better and more accessible, and as governments are forced to do more with less. 

Still, they’re only scratching the surface of what data analytics can do for the public sector.

Organizing and visualizing data is only the first step. The next part of the puzzle is to adopt prescriptive and predictive analytics that will give authorities a clear view into the future and allow them to take more proactive policy steps.

Public safety is one potential beneficiary of this approach. Artificial intelligence tools, for example, can help local governments predict crime patterns in certain neighborhoods to proactively plan policing improvements with an eye toward crime prevention.

Leveraging data analytics requires a lot more of governments than just buying software and creating dashboards and graphs. That’s just the tip of the iceberg. Under the waterline lies a much larger chunk of ice involving data governance and the integration of disparate technologies and data sources that enable the analytics to be reported on top.

To achieve the full potential of data analytics and ensure the change is beneficial and sustainable, governments — like their private sector counterparts — need to adjust their own processes and people.

Committing to create a data analytics center of excellence, identifying priorities, changing team structures and getting the right talent in place, are the important first steps. To find out how data analytics can improve efficiencies in your organization, give us a call.

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