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Op/Ed:
The US Government's Sequester - Anything versus Everything
By Gary Cokins, CPIM

March 2013I tend to be an apolitical person. I try to be internally apolitical within organizations I am employed by as well as related to government politics.



But now I have a dilemma. It is not with an employer. At the age of 64 I recently “semi-retired” from my employer, a large business intelligence software vendor, after being 16 fun years there. I now have time to write more and present seminars, talks, and webcasts. My dilemma is that I have been invited to present a keynote talk in Washington DC on March 28 to US Federal government civilian and military executives. What should I say to them?

Money for anything versus everything

Here is what I am thinking. Given the reality of the “sequester,” I will likely have little to no impact on what they are already doing. With forced spending cuts many of them are doing the standard “shaving the ice cube” and “slicing the baloney.” That is, they are doing percentage across-the-board cuts and furloughs. That may be an exaggeration, but how exaggerated?

Of course, spending reductions using those crude methods have little consideration as to where might there be more wisdom and impact than using a meat axe approach.

What I think I may say to them is this. “Look, you always have enough money to do anything. But you do not have enough money to do everything.” Am I on the right track?

Enterprise performance management (EPM) for the future

Public sector government agencies at all levels – Federal, state, and local – have been talking and writing about enterprise performance management (EPM) for many years. Some are implementing EPM methods like strategy maps, KPI balanced scorecards, bottom-up driver-based budgeting, and activity-based costing (ABC) to measure the conversion of budget spending “inputs” for visibility of their “output” costs. Some do it well, but I sense only a few. There is some legislation requiring use of EPM methods such as ABC. But are their costing models too simple and highly aggregated to gain insights? Do they calculate them for compliance but not for decision support?

When they measure and report KPIs, how much is linked to accountability with consequences?

What should I say?

Since I cannot alter the crude cost cutting today, maybe I can provide them with a vision of what they can do going forward. After all, their agencies will not be shut down (although some might be). Why not manage their resources and outcomes using progressive EPM methods?

It is not about monitoring the KPI dials of their scorecards (presuming that correct KPIs have been selected). It is about moving the KPI dials with the appropriate projects, initiatives, actions, and decisions.

And while I am at it lecturing to them, I can encourage them to begin embracing analytics of all flavors. These include segmentation, clustering, regression, and correlation analysis. One no longer needs to be a statistician to do these. The software vendors are making it easier to.

But government agencies need to think beyond just using business intelligence (BI) tools. BI is mainly limited to reporting and drill-down queries usually of past history. BI consumes stored data. What they need are analytics that converts the BI information into context to solve problems and pursue opportunities. They will also need better forecasting and predictive analytics to anticipate the workload demand that will be placed on them in future time periods,

Can I have an impact? Or will I just be another opinionated voice? We’ll see.

 

Editor's Note: This article was reprinted with permission. It originally appeared in Gary Cokins' Big Fat Blogs for Business Finance magazine at http://bigfatfinanceblog.com/category/strategy-management

ABOUT THE AUTHOR

Gary Cokins, CPIM
gcokins@garycokins.com 
919 720 2718
http://www.garycokins.com 

Gary Cokins (Cornell University BS IE/OR, 1971; Northwestern University Kellogg MBA 1974) is an internationally recognized expert, speaker, and author in advanced cost management and enterprise performance and risk management systems. He is the founder of Analytics-Based Performance Management, an advisory firm located in Cary, North Carolina.  He began his career in industry with a Fortune 100 company in CFO and operations roles. He then worked 15 years in consulting with Deloitte, KPMG, and EDS. In 1992 he joined SAS, a global leader in business intelligence and analytics software, as a Principal Consultant. His two most recent books are Performance Management: Finding the Missing Pieces to Close the Intelligence Gap (ISBN 0-471-57690-5) and Performance Management: Integrating Strategy Execution, Methodologies, Risk, and Analytics (ISBN 978-0-470-44998-1). Mr. Cokins can be contacted at gcokins@garycokins.com .

SmartPros Ltd. 2013

Editorial and opinion content does not represent the opinions or beliefs of SmartPros Ltd.

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