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State and Local Government Operations Excellence

Rising tide


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It’s hard to recall a more challenging moment in recent history for state and local governments. As demand for programs surges, resources are already at the low-water mark and may plunge even further. It’s not as if government leaders haven’t already taken drastic measures to stay afloat to continue delivering essential services. But hiring freezes, furloughs and similar measures can only go so far when the challenges are structural. State and local governments need a new way of doing business – now.

We understand the public sector. With one of the largest consultancies focused on state and local governments, Deloitte knows the ins and outs of policy, talent, infrastructure, finance and operating models. When we engage on a project, we bring a full range of capabilities to the job – tax and accounting, risk, financial advisory and more. Our strategies are developed with an intimate knowledge of the details of front-line implementation, and we’re able to draw on time-tested approaches and templates developed on similar initiatives. Learn more about the offering.

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Saving money, preserving wisdom
Demographic changes are creating massive headaches for government at every level. The aging population is expected to create record levels of demand for services while contributing less by way of tax revenues. And with a large portion of their workforce retiring soon, state and local governments need to ensure that years of knowledge doesn’t walk out the door with those employees. On top of that, some regions face strained pension systems, infrastructures in need of repair, and longer-term imbalances between revenues and expenditures.

Service and operational improvements are effective ways to address these challenges. They can result in new levels of efficiency that eliminate unnecessary costs and improve processes and service delivery, giving the government some much-needed breathing room to plan for upcoming challenges. At the same time, this approach typically includes new technologies and processes for better managing data and information, helping the government retain important information while making it more widely accessible for decision making within an organization.

How we can help

We understand the public sector. With one of the largest consultancies focused on state and local governments, Deloitte knows the ins and outs of policy, talent, infrastructure, finance and operating models. When we engage on a project, we bring a full range of capabilities to the job – tax and accounting, risk, financial advisory and more. Our strategies are developed with an intimate knowledge of the details of front-line implementation, and we’re able to draw on time-tested approaches and templates developed on similar initiatives.

Whether at the state, county, city or agency level, we have experience that has produced results. We have national specialists in health care, human services, transportation, finance and administration, and tax and revenue who can help you achieve a better government operating model for the future.

Here are some of the services we offer:

  • Cost reduction
  • Revenue enhancement
  • Consolidation and integration (with and between government entities)
  • Shared services
  • Finance transformation
  • Performance improvement (program and back office)

Bottom-line benefits

We help our clients generate benefits such as:

  • Save 10 to 15 percent on actionable spend
  • Cut administrative and financial transaction processing times by up to 50 percent or more
  • Improve citizen satisfaction by 20 percent or more
  • Simplify business processes
  • Improve service delivery models
  • Enhance security and controls
  • Build new knowledge capture and transfer capabilities
  • Streamline regulatory compliance

Six ways to get more value now

We have led more than one thousand private and public sector consolidation and integration projects, as well as more than 500 shared services projects. Here are a few things we’ve learned along the way.

Make the case. How will your initiative affect risk and quality? What will it deliver? How will the workforce feel the change? It’s inevitable that you’ll encounter questions like these – so it’s better to address them in the business case from the start.

Get aligned. Everybody knows that executive sponsorship is important for any major initiative, whether it takes place in business or government. But for state and local governments, you’ll need the support of a wider range of stakeholders: legislators, unions, executive officials, citizens, businesses and more.

Plan for accountability. Leaders need to be held responsible for each project and initiative. Take the time to plan together, establishing reasonable metrics on which the initiative can be assessed. Make sure everyone knows the implications of success or failure.

Understand the implications for people. Big changes to processes and systems typically require correspondingly big changes from employees for the organization to reach its goals. Make sure your people know why changes are being made, and have a clear plan for putting new processes and systems to work on the front lines.

Take it one step at a time. It’s always important to have a clear, widely understood vision for transformation. Once that’s in place, move quickly to break the initiative down into manageable, bite-size chunks that make it easy to build momentum and demonstrate progress along the way.

Cast a wide net. Take the time to involve a wide range of executives, citizens and staff at the outset. Sooner or later, you’ll need to account for their perspectives. Better to do it from the start to help identify risks and opportunities, build awareness, and drive consensus.

State and Local Government Operations Excellence in action

  • When a state government faced a $2 billion budget shortfall, it looked to fragmented procurement operations across agencies as a key area for savings. Executives suspected that there was duplication and inconsistent purchasing, but no one knew exactly where and how. As a result, the state generated $180 million in annual savings from strategic sourcing. Just as important, it benefited from greater buying power, increased efficiency and better service.
  • Facing pressure to control operational costs and stem a mass exodus of employees from key technical positions, this state needed a new approach to operations and service delivery. Deloitte helped weed out redundant processes and multiple inefficient systems using a shared services approach. We worked closely with state leaders to transform administrative and support services, a continuing effort that has already achieved more than $500 million in savings.

As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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