BI in the Public Sector: Enhanced Efficiency with Data Discovery

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1 BI in the Public Sector: Enhanced Efficiency with Data Discovery By their very nature, public sector and non-profit organizations are beholden to greater cost and efficiency standards than most companies. Often stretched thin with finite budgets and heightened fiscal scrutiny, these organizations consistently seek ways to cut costs and improve efficiency. Aberdeen's April 2011 examination of this same topic, Public Sector Analytics: Optimizing Resource Usage with Data-Driven Decisions, demonstrated that 58% of public sector organizations viewed cost reduction as their top business goal for 2011, and 60% of a comparable public sector sample report that same top business goal for In order to identify and act upon these opportunities for efficiency, many of these public sector organizations are now turning to Business Intelligence (BI) technologies and analytical activity. The aim for these organizations is to foster an analytical mindset in their workforce and arm their most crucial decision makers with the ability to ask questions of their data and generate timely and meaningful insight. This Aberdeen Sector Insight investigates the impact of effective BI on organizations operating in the public sector. The research shows that top performing organizations are leveraging a powerful combination of visual data discovery tools and organizational capability to build a more pervasive analytical culture and drive improvements in efficiency as a result. Figure 1: Key Areas for 2012 Technology Investment Data Management Mobile Infrastructure BI / Data Discovery Social Media Cloud Services (Hosted Infrastructure) 21% 25% 29% 37% 35% 38% 45% 35% 30% Public Sector 27% All Other Industries 15% 25% 35% 45% Percentage of Respondents, n = 855 Source: Aberdeen Group, January 2012 Technology in the Business Landscape As the economy continues to rebuild and the business world pushes ahead, the technology landscape is evolving to keep pace. While a slew of April, 2012 Sector Insight Aberdeen s Sector Insights provide strategic perspective and analysis of primary research results by industry, market segment, or geography Statement of Authorization NAVAIR Public Release Distribution Statement A Approved for public release; distribution is unlimited Sector Definition The majority of the data used in this document was taken from a Business Analytics survey, conducted in February 2012, which included 76 organizations operating in a non-profit or public sector industry. Those public sector respondents broke down as follows: Government Organizations (Federal, State, Local) - 26% Higher Education - 35% Non-Profit Foundations - 19% Public Utilities - 12% Other Public Sector - 8% This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

2 Page 2 disruptive new technologies are poised make an impact in the business world, data from the Aberdeen Quarterly Business Review survey shows that data management and BI technologies are still among the top investment priorities across multiple industries including the public (Figure 1).With an effective strategy in place for business analytics, companies are better positioned to capture more of their growing volumes of data, ask the right questions of that data, and deliver business insight to their managers in a more intuitive way. As such, the data in Figure 1 isn't surprising as public sector organizations are seeking ways to capitalize on the potential of BI to deliver the efficiencies they need. The other key areas of investment depicted above show how many companies today are looking for new and transformative technologies to help pave the way for growth and efficiency. Social business activity enables the collaboration of multiple viewpoints and the amalgamation of expertise from across the organization. Mobile infrastructure helps enable and empower the growing remote and geographically dispersed workforces in today's business world. Finally, a cloud or hosted IT infrastructure forms the core foundation of mobile and social activity. Where many might see these three concepts of social, mobile, and cloud as three separate and discrete entities, Aberdeen has pioneered the notion that they actually comprise a next generation IT construct known as SoMoClo. Based on the data in Figure 1, we see more companies investigating one or more of these technologies in combination. Every business faces uncertainty and ambiguity in their decisions and the best managers are able to balance experience and expertise with the facts at their disposal, and this is where BI comes into play. However, in the public sector all too often decisions are based solely on "gut feel" and lack supporting data or analysis. Additionally, as more people in the organization are exposed to the potential of effective business analytics, more managers are raising their hands asking for this type of capability. Ultimately, these are the top pressures driving public sector organizations to explore BI tools and strategies (Figure 2). Definition of "Top Performers" In February of 2012, Aberdeen conducted a survey of 529 organizations to gain an understanding of the impact of business analytics. Within that survey, 76 organizations identified themselves as public sector organizations (government, education, nonprofit foundation, public utility). In order to generate an understanding of performance differentiation, Aberdeen measured all public sector respondents across three key performance indicators: Improvement in process efficiency On-time availability of information Analytical adoption and engagement Respondents were then given a score based on their selfreported performance above. The following categories were created based on those scores: Top performers scored above the 67th percentile (top 1/3 of all public sector organizations) Figure 2: Key Pressures Driving the Need for BI Decisions are overly based on "gut feel" 41% All others scored at or below the 67th percentile (bottom 2/3 of all public sector organizations) More managers need analytical support 34% Growing business data is under-utilized Information is too fragmented / "siloed" 30% 30% Public Sector Organizations 25% 35% 45% Percentage of Respondents, n = 76 Source: Aberdeen Group, February 2012

3 Page 3 The other key pressures in play are related to the data itself. First, organizations are facing an influx of data in an overwhelming variety and speed. They look to BI to help make sense of that data and transform it into something useful. Finally, many organizations in the public sector are challenged by a data environment that is highly fragmented or "siloed," impeding their ability to create and share business insight across functions within the organization. These companies are leveraging analytical technologies to capture, integrate, and leverage multiple disparate types of data and ultimately collaborate and share business insight across these silos. Defining Top Performers in the Public Sector Creating an effective analytical environment can substantially improve operational visibility for public sector organizations and help them execute on their mission of cost reduction. Aberdeen used three performance metrics to distinguish top-performing public sector organizations from all others: Process efficiency is measured as a percentage of survey respondents reporting that the cycle times of their most vital processes were either "improved" or "substantially improved" on a year over year basis On-time information delivery is measured as a weighted average percentage of the time that key decision-supporting information is available on-time or within the pre-defined "decision window" Analytical engagement is measured as an average number of BI users who are active with business analytics on a weekly basis or more often Figure 3 shows the extent to which top-performing public sector organizations have outperformed their peers across the metrics listed above. Figure 3: Top Performance in the Public Sector Defined 100% 75% 50% 25% 0% 72% 39% Saw Y/Y improvement in process efficiency (% of Orgs.) 86% 51% Avg. percentage of information available "ontime" 48% 14% Avg. percentage of users actively engaged with analytics "In combination with budget reductions for three years running and in anticipation of projected reductions for the next two years, we are faced with a reduction in the work force as well, ultimately impacting our need to assure that we are applying our limited financial and employee resources in the most effective, expeditious and optimum manner. And that all begins with good decisions based upon solid and reliable data and analysis. Fast Facts Top performers achieved: 10% year over year increase in operational efficiency Compared with ~ IT Director U.S. Government Agency 1% increase for all other public sector organizations Top Public Sector Performers - (scored in top 1/3 of respondents) All Other Public Sector (Scored in Bottom 2/3 of Respondents) n = 76 Source: Aberdeen Group, February 2012

4 Page 4 These three metrics depict a pathway to improved efficiency and cost reduction for public sector organizations. Working backwards, these organizations first need to feed the analytical mindset within their organization and deliver BI capabilities to more decision makers, ultimately building a greater degree of adoption and engagement in business analytics. The next step is to arm those decision makers with the data they need in a timely fashion. By delivering actionable information on time, decision makers are better positioned to act upon tangible business opportunities. Finally, by improving the fluidity of their key operating processes, public sector organizations are able to reduce process waste and put themselves on a path toward cost reduction. Fast Facts 45% of public sector organizations are using or planning to implement mobile BI 44% of public sector organizations are using or planning to implement Software-as-a-Service (SaaS) or cloud-based BI Case Study U.S. Navy Like any government organization beholden to public scrutiny and oversight, the US Navy is compelled to maintain tight controls over their spending of taxpayer dollars. However, as a major branch of national defense, the meaning and magnitude of these decisions take on a fundamentally enhanced importance. In order to govern the appropriation of billions of dollars in defense spending, the Navy employs a military process called Analysis of Alternatives (AoA) designed to ensure that multiple options are thoroughly explored when making costly investments. While comprehensive, the AoA process is time consuming, manual, and generates thousands of pages worth of performance metrics, warfighting effectiveness metrics, cost data, risk assessments, and subject matter expertise qualitative assessments. Given the sheer volume and complexity of this data, Naval analysts are presented with a major challenge when it comes to delivering AoA results in an organized and consumable fashion to a committee of executive officers and decision makers, typically comprised of very senior officials in the U.S. Navy within an Executive Steering Committee (ESC). The challenge was not just related to data integration, but data visualization of a vast amount of information. We have a massive volume of written reports and hundreds of Power Point slides of data to summarize typically within 2 hours for a typical ESC session, recalls Raymond Critter Coutley, Senior Analyst and Study Lead for multiple recent AoAs within the Navy. We, as study leads and analysts, owe it to our sponsors and decision makers to do a better job presenting a more consumable and navigable view of the data and results. After an extensive search, Coutley and his team selected a Business Intelligence (BI) and data discovery solution that would enable a single dashboard view of the AoA, while facilitating extensive drill-down capabilities. With this BI / visualization solution in place, the Navy expects to streamline the AoA process and facilitate a much smoother decision Continued

5 Page 5 Case Study U.S. Navy making process for the Executive Officers. Perhaps the biggest benefit though, will be the ability to create effective decision making frameworks for one project, and apply that knowledge toward multiple projects within the Department of Defense (DoD), thus creating economies of scale in the decision making process. Within our current AoAs, we re using data visualization to consolidate our findings into a single comprehensive dashboard to present to Senior Navy leadership and flag officers, says Coutley. Utilization of BI / visualization tools facilitates for the analysis team effective data management across multiple studies, as well as presentation of findings/data using interactive dashboards, charts and other visualizations that decision makers can easily digest, engage, and act upon. Characteristics of a Top Performer One thing consistently shown through Aberdeen's research is that the path to enhanced performance is paved with organizational maturity. In other words, the companies that have the right processes and skill sets in place, share data and knowledge appropriately, and reliably measure and manage to the right metrics, are the same companies that are able to deliver business performance improvements. The same ideology holds true in the public sector. Particularly with government and educational entities, the ability to govern access and usage of data is a key underpinning of an efficient data infrastructure. In order to identify and act on opportunities, key decision makers need to have access to data, often residing outside their specific function. On the flip side of that coin, certain types of data are more sensitive and should only be accessible by very specific job roles in the organization. Top performers in the public sector are twice as likely as all others to have policies in place governing end-user access to data (Figure 4). "Strain on budgets necessitates better and more focused decisions to maintain/improve ROI; that means better, faster metrics on which to base those decisions. ~ CIO Mid-Size Non-Profit Foundation Figure 4: Top Performers Are Organizationally Mature 100% 75% 72% 86% 50% 39% 51% 48% 25% 0% Saw Y/Y improvement in process efficiency (% of Orgs.) Avg. percentage of information available "ontime" 14% Avg. percentage of users actively engaged with analytics Top Public Sector Performers All Other Public Sector n = 76 Source: Aberdeen Group, February 2012

6 Page 6 From an organizational standpoint, the ability to drive tangible business value from BI has just as much to do with the user's mindset as it does with the user's skill set. Organizations are increasingly seeing value in building analytical curiosity and culture in the workforce - a mindset that values data driven decisions and recognizes the value in supplementing experience with timely fact and insight. Leading companies in the public sector are 2.5-times more likely than all others to report a performance or analytically inclined culture or mindset within their organization. Finally, top performers are also more inclined to develop a cohesive and consistent ROI methodology for BI projects. With a firm commitment to measuring and continuously improving the financial and operational impact of BI, top performers are able extract the maximum value from their investment of precious resources. Fast Facts 63% of top performers report having "highly pervasive" or "strong" analytical adoption within the finance department Compared with: 37% of all other public sector organizations To round out their analytical strategy and support better decisions, top performers are also leveraging a variety of technology enablers. On the data side, top performers are leveraging tools like data warehouse software and data quality technology to help organize and ensure the cleanliness and usability of their data. Aberdeen's research shows that top performers are 60% more likely than all others to use technology for data management / data quality. On the presentation side and perhaps most notably, top performing companies are leveraging a variety of technologies for visualizing and delivering insight in a meaningful and intuitive way (Figure 5). Figure 5: Data Discovery / Visualization Technologies in Use Data Exploration / Discovery Tools 38% 72% Dashboards - Executive / Stragic Dashboards - Operational / Tactical 27% 29% 56% 64% Interactive / Drill-Down Charts 27% 46% 0% 25% 50% 75% Top Public Sector Performers All Other Public Sector Percentage of Respondents, n = 76 Source: Aberdeen Group, February 2012 Tools for data exploration and data discovery are a key piece of business analytics in today's environment. Automated or manual reports are great for delivering answers to pre-defined questions, but what about if the answer begs further analysis? More importantly, what if the questions change? Data discovery tools help not only answer questions, but help define new questions that can shed crucial light on areas of the business that were previously unexplored. From a strategic or tactical standpoint, top performers are utilizing visual dashboards to help display and manage the metrics that are most vital to the organization. Top performers are 93%

7 Page 7 more likely to use these dashboards on a transactional or tactical basis to improve operational visibility, and 2.4-times more likely to use dashboards at an executive level for better strategic, long-term transparency. Additionally, top performing organizations in the public sector are also more likely to perform drill-down analysis on those dashboards and charts through the use of interactive charting tools. For top performers, it's not good enough just to have the answer to a pre-prescribed question. These companies are more interested in continually asking why, and drilling into the root causes of their most pressing business issues. Fast Facts 56% of top performers report having clearly defined and frequently measured KPIs across their department Compared with: 28% of all other public sector organizations Key Takeaways and Recommendations While public sector organizations may not be subject to the same Wall Street scrutiny as a typical publicly traded corporation, the network of stakeholders involved either directly or indirectly with these organizations is as varied as it is powerful. These organizations are charged with anything from the judicious spending of our tax dollars to the upkeep of our public infrastructure, to the education of our children. As such, these decisions take on a different kind of importance. Top performers in the public sector recognize the need to leverage their data as a strategic asset and to nurture the collective analytical brainpower in their organizations to support more informed and less ambiguous decisions. Those organizations contemplating an initial deployment or deeper engagement in business analytics should consider the following recommendations: Develop a more agile data infrastructure. The average public sector organization reports a 32% year over year increase in the volume of data used for analysis. This extra volume comes in the form of more data per data source, but also in the form of net-new data sources. Aberdeen's December 2011 benchmark report, Data Management for BI: Big Data, Bigger Insight, Superior Performance, showed that Best-in-Class companies were able to integrate new data sources into their analytical infrastructure 6.2-times faster than Laggard organizations. This data agility enables greater accessibility and speed of delivery of key business data. Improve analytical adoption and engagement. Particularly in the public sector where resources are just as scarce, if not more so, than the rest of the business world, effective allocation and utilization come at a premium. Regardless of the size of BI investment, the more users engaged with the technologies and activities associated with analytics, the greater impact to the organization, and the further each dollar spent will go. The research shows that top performers in the public sector have equipped a larger portion of their user base with access to BI capability, and have also developed a far greater level of active engagement. Moreover, top performers also report a greater degree of selfsufficiency when it comes to BI. According to the research, top

8 Page 8 performers are 45% more likely than all others to have self-service access to BI with minimal, if any, assistance from IT. This type of self-service environment not only helps nurture analytical creativity in the organization, but also helps free up IT resources to be repurposed for more important strategic tasks. Consider deploying interactive discovery tools. While often times rooted in good intention, automated and pre-built reports can often become the enemy of analytical creativity. This is mainly because static reports only display one perspective on the data they depict and can have the effect of stifling the curiosity of the consumer. Giving the end-user options when it comes to their consumption of business data is typically a powerful way of nurturing that creativity and generating new insights. For some organizations, this would require changes to corporate culture and the decision making process, but in most cases these changes prove accretive to the decision making process. Top performers are almost twice as likely to deploy interactive visual discovery tools for this purpose. For more information on this or other research topics, please visit Public Sector Analytics: Optimizing Resource Usage with Data-Driven Decisions; May 2011 Data Management for BI: Big Data, Bigger Insights, Superior Performance; January 2012 Related Research Embedded BI: Boosting Analytical Adoption and Engagement; March Strategies: Putting the Intelligence in Mobile BI to Work; January 2012 Author: Michael Lock, Research Director & Group Leader, Technology Markets For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen or call (617) , or to learn more about Harte-Hanks, call (800) or go to This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2011a)

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