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INDUSTRY INSIGHT

ARPA and the infrastructure bill don’t look like calls for advanced analytics – but they are

Denver is facing a good problem to have. Rock-bottom interest rates and a solid credit rating have brought about a proposal for a $400 million bond issue -- payable without raising taxes -- aimed at building infrastructure to stoke economic growth in the wake of the coronavirus pandemic.

This does not, on the surface, look like a use case begging for advanced data analytics -- and, historically, it would not have been. Perceived need would be the primary driver; politics the secondary one as leader decide which overpasses appear to be crumbling or what council districts should get what projects. Even with data analytics, perceptions of need and machinations of politics will predominate -- we’re in a democracy, after all. However, advanced data analytics can be decisive in informing investment decisions that maximize citizen benefit per taxpayer dollar spent and then enable the transparency into the decisions as well as the projects they seed.

Denver may decide to skip the bond issue, so the difficult choices -- whether to build a new multiuse arena, invest in the zoo or the botanic garden, in the parks or the streets, in enhanced services, the list goes on -- may not be necessary. But Denver and thousands of state and local governments across America are already facing similar, major investment decisions thanks to the American Rescue Plan Act of 2021 -- not to mention the possibility of the billions of dollars that could flow from a major infrastructure bill. Colorado, for example, has $3.9 billion in ARPA funds alone to spend by the end of 2024.

Advanced data analytics figure into infrastructure decisions in two main ways. First, the intelligent spend management that data analytics make possible can provide a deep, dispassionate basis for evaluating alternative investments. This begets better insights into the costs and benefits of potential projects and enables more in-depth comparison of various options. How would the economic impact of the jobs created through the construction of a new multiuse arena plus the long-term revenues that arena generates stack up against the economic and other benefits of a new zoo pavilion plus a few miles of badly needed highway expansion or against the revitalization of an existing, aging multiuse arena somewhere else in town?

Such multivariate problems cry out for systems that can wrangle diverse data from multiple sources -- data that’s so often out there just waiting to be loved -- into straightforward visualizations that can then form a dispassionate basis for shared decision-making. Corporate America has long made use of advanced data analytics in investment decisions; state and local governments -- which own 90% of U.S. nondefense public assets -- could benefit too.

Second, data analytics enable unprecedented budgetary transparency and accountability and, by extension, can do much to enhance trust in government -- not to mention avoid PR disasters and public ire in the wake of surprise evidence that that trust has been breached. This, too, is already happening. Indiana’s Management Performance Hub’s Transparency Portal leverages data analytics to deliver detailed data on vendors, expenditures, revenues and assets to state leaders, personnel, government watchdogs and others to help improve how Indiana spends its taxpayer dollars.

Pennsylvania is using advanced data analytics to act on insights distilled from troves of data from all corners of the Commonwealth. Among other uses, it’s taking a jumble of financial transactions, grants, contracts and other siloed information and turning it into holistic views of spending by type of spend, agency, vendor and so on. That same system is serving up candidates for internal audits based on hard data -- rather than the old way based on manual, subjective processes.

We stand before perhaps the greatest infusion of U.S. governmental infrastructure spending in our lifetimes. Advanced data analytics will itself be a critical asset in making those investments wisely -- and then proving it to the taxpayers we serve.

About the Author

Dante Ricci is director of public service at SAP.

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