2013 Outlook on the Public Sector
Interview with Jessica Blume
To contend with tight budgets and fundamental shifts in policy, government organizations are leveraging innovations such as cross-agency collaboration, incentive-based pricing, mobile technology and data analytics, according to Jessica Blume, vice chairman and U.S. Public Sector leader, Deloitte LLP. Read on for her perspective on the year ahead.
What are the big issues facing federal and state governments in 2013?
The major issues come down to budgets, uncertainty and complexity. Congress and the president swerved to avoid the fiscal cliff, but people in government know there are more sharp turns coming in the form of the debt ceiling debate and sequestration (the automatic $1.2 trillion cuts across agencies). The debt will hit the ceiling in January, and the new sequestration deadline is set to take effect March 1, 2013. How the federal budget is balanced (or not) and how the debt is addressed will also affect state budgets. This generates uncertainty, particularly because states are required to balance their budgets every year and depend heavily on federal dollars to stay in balance. Sequestration may not impact some programs, but funding for those programs that are untouched in this round are likely to be targets in ongoing debt and deficit discussions. It’s unlikely we’ll know the extent of the federal budget’s effects on its programs or the states until September or October of this year.
The convergence of tight fiscal times and the fundamental shifts in policy and programming brings complexity in government to new heights. For example, all states must have an operating health insurance exchange by 2014. They can use the one the federal government is building, or they can build their own. In either case, states and the federal government have complicated work ahead that involves the private sector and their own policies, processes, operations and technology solutions.
It’s easy to be disheartened by the challenges the country and government face, but times like this are catalysts for innovation and imagination. This kind of environment provides unmistakable opportunities for the optimists and the innovators. We are seeing the collision of motivation and necessity for creative and meaningful transformation of government. The tools to capitalize on this opportunity are available — and agencies are stepping up even more to use them.
What innovations are you seeing in government?
“The extent to which agencies are suddenly interested in sharing resources and costs is remarkable and exceeds anything I have seen in my years working in and around government.”
Cross-agency and cross-sector collaborations stand out. The extent to which agencies are suddenly interested in sharing resources and costs is remarkable and exceeds anything I have seen in my years working in and around government. States are sharing emergency response resources across their borders — both human and technical. They are building single, integrated cross-agency systems to manage health and human services programs that have historically lived in silos. The federal government is building software services for states to use for data matching, rules-engines and other repeatable and reusable operations.
Government is also getting creative and bold with incentive-based pricing, using market forces to get the desired result from citizens. Use the electronic payment option on the toll road and pay less for your commute. Complete the form online and your processing fee is reduced. States are using the Internet and mobile applications to make information accessible and to facilitate transactions. It’s a win-win: Citizens perform the data entry and get faster service while agencies control their headcounts and costs and improve data capture so they can focus on activities that support their mission.
What are government organizations doing to foster innovation and efficiency?
They are leveraging technology and creating new processes rather than simply changing entrenched processes, and they are getting aggressive. It’s easy to imagine the low-hanging fruit has already been picked. But has it? People often think a dramatic overhaul of a process is required to make a dent in costs. Tools like mobile technology and information analytics mean incremental changes could have big impacts (and enterprise-wide changes have the potential to deliver enormous results). Imagine purchasing tablets for staff on the go. Eliminate the need for case managers, inspectors or engineers working in the field to travel to and from the office, print case information, maps and reports, and return to the office to submit and retype findings. Results? Dramatically reduced cost of paper, printing and travel and increased time serving citizens. Big savings and large strides in productivity can be realized with creativity and the will to get it done.
Mobile’s not the only innovation. We are seeing agencies pursue advanced analytics to address issues and improve services and outcomes despite budget pressures. Applying simple and complex data mining and analytics to big data — massive quantities of structured and unstructured information — can improve an agency’s understanding of expenditures, service quality, process effectiveness and risks, and turn focus to a more efficient, productive future. Leveraging technology requires investment, but the returns are usually significant, even in the short term.
What about talent?
It’s not just about retaining talent. It’s also about recruiting and developing it. Government needs high-talent, flexible and skilled people now more than ever. If you have fewer people to get the work done, they should be good and motivated to excel. These skills come at a cost; premium benefit and retirement plans are largely history.
So what’s the good news? The newer generations of workers are not just in it for the money — they get excited by opportunity, innovation and flexibility. Organizations that stress mission importance, provide fulfilling work and empower employees to make decisions and innovate can position themselves for the future. In fact, we know from the 2012 Best Places to Work in the Federal Government® rankings, produced by the Partnership for Public Service and Deloitte, that effective leadership and aligning employee skills to mission can be significantly more important than pay. If you’re trying to attract talent and you don’t have a lot of money, you have to offer stimulating work and an environment that fosters engagement. When you do, there’s a good chance you can recruit the people you need, develop them while they are there and retain the people you want. And given this environment, innovative, flexible and creative people can make all the difference.
As used in this document, “Deloitte” means Deloitte LLP (and its subsidiaries). Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.