I think – value in this era of technology is delivered horizontally, not in vertical silos. ‒ CARLY FIORINA (2004), FORMER CEO OF HEWLETT-PACKARD
Analytics is a relatively new buzzword in professional circles. The Institute for Operations Research and the Management Sciences (INFORMS) defines analytics as the “scientific process of transforming data into insight for making better decisions.” Used strategically and systematically, analytics has the potential of assisting public servants to address government challenges associated with budget pressures, increased service demand, and rising citizen expectations.
There has been a massive proliferation of data and a variety of analytical software tools available. Dr. E. S. Levine, chief scientist of the U.S. Department of Homeland Security’s Office of Risk Management and Analysis, has observed a rapid increase in incorporating analytics in the public sector’s drive towards evidence-based decision-making.
Traditionally and arguably still today, public administration is at risk of operating in silos. Public institutions in Canada will benefit from investing in in-house analytics offices that provide industry-standard advice and support across business functions.
Case for shared analytics offices
Analytics offices should be developed much the same way as other shared services such as human resources, project management, and information technology. They can be modelled centrally or locally. A centralized model enables analytics professionals to have visibility of available data, business processes, and requests across multiple business functions. They are in a better position to propose broader rather than specific solutions. A shared local unit, on the other hand, embeds analytics professionals quickly in the business to gain a better grasp of business operations and offer contextualized solutions.
Nesta, an innovation foundation based in the United Kingdom, published case studies of nine British public institutions with analytics offices. While their composition varied, all the offices studied use data from different sources to diagnose the magnitude and breadth of service delivery problems and identify opportunities for improvement. Most importantly, these offices are changing the way public sector organizations work, enabling better collaboration.
McKinsey & Company conducted an extensive, primary research survey of over 1,000 organizations across industries and geographies to understand how companies have been able to scale analytics across their enterprise. It found that an analytics transformation usually requires new skills, new roles, and new organizational structures. It also found that scaling analytics capability can be a competitive advantage, which is missing in many organizations.
Leadership support
It is fundamental to get support at the top of the organization for a culture of analytics to be corporately embedded. Without a strategic framework, alongside consistent buy-in to using analytics, it is difficult to incorporate analytics into data-driven decision making. The public sector cannot afford to be left behind. For example, the City of New York has actually codified into municipal law an analytics office that would “… prioritize risk more strategically, deliver services more efficiently, enforce laws more effectively, and increase transparency.”
The paradox is that analytics offices that are meant to tackle budget pressures themselves require set-up and operating budgets. The two are not at odds; there is no need for a big investment upfront. The size and breadth of analytics offices vary according to perceived needs. More importantly, analytics offers return on investment—evidence-based solutions that reduce costs in policy development and program implementation. The initial budgetary investment is modest to achieve promising returns. Risk can be managed prudently by piloting in the first instance.
The advent of Big Data means that analytics is here to stay. To avoid falling into the trap of creating and resourcing highly localized, siloed analytics units, public servants need to recognize analytics as an essential shared service. Senior leaders must proactively create analytics offices with economies of scale and internal capacity to provide decision-makers with the analytical tools to make better, evidence-informed decisions.
