Scott Quehl leads Accenture Federal Services Strategic Government Efficiency offering. He formerly served as Chief Financial Officer and Assistant Secretary for Administration at the U.S. Department of Commerce.
Federal agencies are taking advantage of the relative stability created by the two-year budget agreement to drive toward lasting solutions to complex efficiency challenges. With investments in new technology over the past decade such as Enterprise Resource Planning (ERP) solutions, agencies are now capturing the necessary data to understand agency performance.
This data, combined with the emergence of advanced, predictive analytic technology and a focus on change management and execution, is enabling agencies to meet these efficiency challenges head on. They are starting to recognize how data-driven efficiencies can achieve targeted savings and better service delivery at a scale large enough to absorb cuts and sustain mission capabilities. While the data may at times point to tough choices, this analytically-supported, fact-based approach is superior to furloughs and other reactive measures to across-the-board spending cuts.
One example of this proactive approach is an agency, with a budget over a billion dollars and more than 10,000 personnel and 2,000 field offices, that leveraged the right data to solve a complex combination of challenges: absorbing an expected budget cut of seven to 10 percent with a smaller facility footprint and more efficient deployment staff to meet service demand.
Agency leadership decided operational changes needed an analytically-based solution combined with staff engagement, and divided its approach into three phases.
The first phase focused on clarifying the relationship between cost and service delivery levels in field offices. The agency assembled existing data like hours worked and dollars spent along with performance outputs, such as the number of applications or loans processed. It developed additional criteria in workshops with leadership closer to on-the-ground operations, as well as subject matter experts across the organization.
In the second phase, the agency developed different options for distributing time and effort of staff resources, applying the data and program service demand criteria developed during the first phase. The agency applied an analytical method multi-criteria decision analysis, which considers multiple criteria in the decision-making process to make trade-off decisions among the criteria.
In the third phase, the agency focused this approach on its facilities. As options emerged, the agency held stakeholder inclusion workshops to discuss them. This approach led to a greater understanding of how the agency should allocate personnel and facilities to deliver the best benefit with limited resources. Implementation of the plan resulting from this approach aims to save a projected $700 million over 10 years, consolidating the facility footprint by 10 percent.
Other agencies apply analytics to achieve efficiencies in additional mission support functions, such as acquisitions and supply chain management. One agency discovered that it was purchasing more than 60 different models of desktop computers, over 130 models of laptops and 255 models of printers. By reducing the number of equipment models by 30 to 70 percent over a three month period, the agency is in the process of saving over $4 million, or 11 percent of its budget for these categories.
Strategic transportation procurement is an analytics based approach designed to reduce costs and streamline operations, while increasing visibility and ensuring consistent and timely deliveries. Armed with improved understanding of transportation spend by lane and vendor base, agencies can apply findings from a sourcing analysis to put the right freight with the right carrier at the right price and service level. One agency leveraged this approach to reduce its overall air spend by 27 percent, saving $4 million per year.
Advanced analytics also improve efficiencies for supply chain demand. Despite the peaks and valleys created by budget constraints, regulatory changes, and security concerns, advanced analytical models produce accurate forecasts that drive effective planning, better customer service, and lower costs. One agencys improved forecast projections resulted in a five to 10 percent decrease in inventory requirements and a 20 to 30 percent increase in inventory turnovers translating to a decrease of over $200 million in planned spending.
These agencies have not waited to resort to a one-size-fits-all approach to cost savings. By focusing efforts on creating value from existing data and the expertise of their employees, these agencies and others like them are charting a path to sustainable operational performance, savings and productivity improvements in a tough budget climate.