Thursday, 5 January 2012

It's Not Just the Economic Times - IT Makes Sense!

I can’t remember whether it’s the current government or previous which was recently criticised for the amount of consultancy fees it paid out on IT projects. This was a statement I heard on the news not too long ago and came short and sharp with no explanation on what these fees were for.  I can remember feeling that it was an ashamedly high amount and wasn’t the government rubbish!

In hindsight I guess that was the desired reaction however after a few experiences I’ve had working with local and central government organisations I would like to share with you a positive story to show that not all of this consultancy is unnecessarily bad spending on the government part.

The experience I would like to share was with a client in the public sector who had agreed to our proposal to carry out some value engineering consultancy as an exercise to justify the proposed investment in a BI solution. In total this was a 5 day exercise including write up and short informal group and individual interviews with the project stakeholders.

In doing the interviews I have come to realise that maybe ‘value’ isn’t the right word to use? Today we find both public and private organisations ‘outcome’ focused for sure. Private organisations invariable relate ‘outcomes’ as ‘financial value’. In justifying the investment of implementing an IT solution they invariably will write a business case that highlights the financial value of increasing sales or market share and/ or decreasing costs. Public organisations tend to have non-financial focused ‘outcomes’ so value is not always the right terminology to use. For example the NHS state one of its key objectives is to improve patient outcomes. At first thought, achieving this outcome cannot directly be related to financial value as mentioned with private companies. Achieving this particular outcome for the NHS could be the result of a number of non-financial improvements such as better training of staff. Therefore ‘Outcomes’ such as these are not easy to define in terms of financial value and thus without a financial benefit make it harder to justify a proposed investment.

However, dig a little deeper and you uncover that many of the decisions associated with non-financial outcomes do in fact have financial implications. An example of which was seen in how training funds are distributed. This can equate to budgets of thousands if not millions of pounds being spent with third party organisations who provide the courses that train NHS staff. 

So should the government state that we will have x number of newly trained midwives in the NHS by 2014?  There is a decision being made concerning course programme budget allocation or withdrawal which could have a huge impact on achieving the set outcome as clearly the objective you want to achieve means you want to guarantee that the courses with the best success rates are benchmarked for the learning benefit of other courses that are not so successful. Or another way of saying let’s not waste the tax payers money on courses that have a low pass rate compared to others. Similarly you want to know how many midwives are currently being trained and when they will be qualified to know how many will need to start to hit the numbers needed by 2014. Ultimately answering questions like this will help them to make informed decisions on training budgets. Accountability is such a necessity in public organisation for the very reason I mentioned at the beginning of this blog, every penny spent is scrutinised...

Value Engineering or Outcome Management offers both assurance and governance by providing the evidence that the outcomes are supported by IT processes and tools that enable them to be reported against and ultimately helps them to be achieved. If you like, it’s a blueprint for success.

Now as I say I’m sharing my experience in response to what I feel is a general negative perspective that Government IT consultancy expenditure is wasteful. The aim of this blog is to show that for a  minimal investment why not work out what the benefits are of implementing your BI solution, how are they going to be measured? How else will you know if the projects been successful or continues to be? This process has shown time and time again the ROI of BI is very good and in most examples I am aware of will pay for itself within an 18 month period.

Just to heighten the positivity even further take a look at this short video of the experiences another local government organisation had with value management

Whether your organisation is public or private, ‘value’ or ‘outcomes’ driven, making the investment in Business Intelligence a strategic part of your business is an informed decision.

Source:  Ben Hedger, Senior Business Development Consultant, DSCallards

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