Data analytics: a perfect investment for tight budgets
- By Shawn McCarthy
- Mar 13, 2013
For many government IT organizations, data analytics is an area that's worth a little extra investment, even in tight budget times. In fact, the rise of cloud-based data analytics solutions make this an opportune time to explore analytics solutions even further.
"Analytics" refers to a broad category of solutions, encompassing business analytics, fraud analytics, identification of improper payments, threat evaluation, statistical modeling, Web traffic review and much more. The main goal for many agencies is to use data analysis to drive their missions, meet mandates and improve citizen services and outcomes.
Such solutions can cost hundreds of thousands of dollars to implement, yet the potential for fund recovery and improved business efficiency can make such investments very worthwhile. Analytics can help government organizations improve their overall performance, identify waste and even detect fraud.
Agencies that can make a clear business case for an investment in analytics will find the funding required. But making the case could require conducting a detailed return on investment analysis and showing that the investment will pay for itself via fund recovery or other valuable data insights. Such computations can be complex, so it's often worth bringing in a third party, such as a CPA firm, to help with the valuations and predictions.
One way to expand an agency's use of analytics is to look to cloud-based services that allow an organization to load and review relevant data without making big internal infrastructure investments. For example, both IBM (via its Business Analytics in the Cloud offerings ) and the SAS Institute (via its OnDemand Solutions) offer a variety of business analytics and statistical analysis functions in a hosted environment. Both have try-before-you-buy opportunities (with SAS offering a way to upload your own data sets as part of the trial.)
Both of those companies also have a proven track record in various types of data analytics.
SAS provides fraud detection solutions to the Michigan Enterprise Fraud Detection System and the Washington State Department of Labor and Industries. IBM provides solutions for optimizing audit case selection for the New York State Department of Tax and Revenue, and also provides predictive analytics software for North Carolina to help identify potentially fraudulent Medicaid payments. In these cases, the solutions helped pay for themselves through the money saved via fraud detection.
Other companies also are providing effective solutions. Nuix Inc. recently received a contract from The Transportation Security Administration to provide fast analysis of large data sets (over 1.5 terabytes per day in some circumstances) during the agency's investigations and electronic discovery operations.
The Homeland Security Department designated Google Analytics as the official agency tool for Web internal search data collection and traffic analysis, and it also set a metrics plan which guides employees to use the service and share the data with a central internal resource.
IT service providers and systems integrators also are in a good position to offer data analytics as a service. Deloitte touts its group of Federal Business Analytics professionals who can help with such implementations, and CSC offers hosted SAP in the Cloud solutions.
But while solutions for data analytics are plentiful — including both cloud-hosted and locally installed — shaking loose the necessary funding still remains a challenge. Yet there are several drivers that can help spark CFO- and CIO-level interest in investing in enterprisewide data analytics, and all are worth considering when evaluating whether budgeted IT money should be directed to data analytics solutions. For example:
- Big data analytics can help organizations be proactive vs. reactive. This is becoming increasingly important as data sources and available information skyrockets in most organizations.
- Visual analytic tools have also made remarkable gains in recent years. Being able to show data in easy-to-understand charts and graphs helps boost the overall value of these solutions.
- A greater volume of data is being collected every day by many government agencies. High-performance analytics provide a path for proactive management of big data. Government agencies need the right tools if they plan to address these sprawling resources.
- Visual analytics, data visualization and democratization of IT all allow the users of analytic solutions to shift focus to the line of business — understanding how key data points affect day-to-day operations and how new demands are being placed on existing resources.
For many government agencies today, the challenge remains in understanding what to do with internal information resources and how visual, predictive analytics can improve government service delivery. Take a second look at new data analytics solutions. Spending the time to evaluate how these investments can pay off is a worthwhile endeavor for any government IT shop.
Shawn McCarthy, a former writer for GCN, is senior analyst and program manager for government IT opportunities at IDC.