Big Data Can Save Big Government Big Money

By Peter Bernstein July 03, 2012

It may seem applicable only to policymakers in the U.K., but the recent report by London-based Policy Exchange Think Tank, “The Big Data Opportunity: Making government faster, smarter and more personal,” has lessons for governments worldwide. In fact, much of the report actually makes a compelling case for how and why large and medium enterprises, regardless of industry, can leverage big data and big data analytics to increase customer intimacy while reducing/saving significant expense. 

Author Chris Yiu, Head of the Digital Government Unit at Policy Exchange, presents an analysis as to  how up to £33bn ($51.8bn) a year, which is the equivalent to £500 ($785) for every person in the country, could be saved from public spending without cutting services if the government made better use of data already in the system. 

Purposes and findings

The goal of the report was straightforward:

·         Inspire policymakers around the opportunity for data and analytics to transform public service delivery.

·         Sound a note of caution about the challenges this agenda poses for the public sector.

·         Make recommendations for how government might begin to realize the former while addressing the latter.

Concentration was on basic things the government currently collects data on including passports, driving licenses, tax returns and social media. Three broad areas where the payoffs could be substantial and substantiated were looked at which yielded the following ranges on yearly savings based a few simple baseline data assumptions to arrive at the total of £16-33bn:

Enhanced operational efficiency: £13-22bn ($20-35bn)

Reduced fraud and error: £1-3bn ($1.6-4.7bn)

Increased tax collections: £2-8bn ($3.1-12.6bn)

These are impressive numbers to say the least as author Yiu explains.

 

What feel out of the analysis were the following recommendations:

  1. A new Advanced Analytics Team should be established in the Cabinet Office, with responsibility for identifying big data opportunities and helping departments to realize them.
  2. Government should adopt a Code for Responsible Analytics, to help it adhere to the highest ethical standards in its use of data and analytics.

The analysis and recommendations were interesting, but some of the other advice offered was possibly more cogent. Yiu noted that, “Big data technologies alone are not, however, a silver bullet for transforming the public sector. Underlying data issues like quality, standards and bias still need to be recognized and addressed. And governments must have the capability to conduct, interpret and consume the outputs of data and analytics work intelligently. This is only partly about cutting-edge data science skills. Just as important – if not more so – is ensuring that public sector leaders and policymakers are literate in the scientific method and confident combining big data with sound judgment.” 

He added that, Governments will also need the courage to pursue this agenda with strong ethics and integrity. The same technology that holds so much potential also makes it possible to put intense pressure on civil liberties…We can and must hold our leaders to the highest possible standards.”

But the best advice, and the most universally applicable came at the end of the report in a series of questions that were recommended that government leaders, and this should include enterprise executives as well, should be asking to start the conversation inside their organizations on the role that big data and big data analytics can and should play:

  1. Do we know what we know? This should trigger an audit so a baseline of understanding as to what is being collected is established along with aiding in realizing what does not exist and should be collected and analyzed.
  2. Are we using data to drive decisions? The usefulness here are about getting to the issues of: if not why not? If so how so? If so to what effect? How can we do better? Etc.
  3. How quickly can we get answers? In a world where real-time is almost the only time, putting the best information in front of the right people at the right time to improve the speed and quality of decision-making is critical.
  4. What’s our strategy for big data innovation? As the author points out this is a non-trivial question since the proper use of big data and big analytics is going to involve increasing headcount for people skilled in this area, as well as creating new types of relationships within organizations and with ecosystem partners.
  5. Who is responsible…and is this the right person? Yiu may have save the best for last. In fact, this question is not just about responsibility, and identifying what those are and who has the background to coordinate what will be needed, it also ultimately goes to the question of are the responsible parties also accountable? Will the person in charge have the authority to act, and will their performance be measured as well. If the organization culture does not believe people with responsibilities do not have authority, the best of plans can fail.

As stated at the top, this may have been a broadside with a powerful call to action aimed at a U.K. government in the throes of dealing with austerity budgeting, but the lessons here are ones that are universally applicable. This is one report worth bookmarking.  




Edited by Amanda Ciccatelli
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