7 steps to better budgets

Budget decisions are too often disconnected from outcomes, and many budget officials know it. The problem, according to one contractor, is that agencies don't know how to prioritize, set targets and analyze results. And that means there just might be a business opportunity out there for the right contractors.

This probably isn’t much of a news flash, but a lot of people developing budgets in the federal government don’t think the budgets are producing results.

John Saaty, president of Decision Lens, shared with me survey results from a recent conference of the American Association for Budget Program Analysis. A core group of the attendees were budgeteers from the federal government. Budgeteers is Saaty’s’s word, but I like it.

  • 58 percent see no clear link between budget outputs and outcomes.
  • 5 percent don’t know what the outcomes are.
  • 50 percent cannot produce the full cost of programs and activities.
  • 32 percent say they have only a rough cost allocation method.
  • 83 percent said the best place to find waste is in high and low priority programs.

Folks, those are some pretty distressing results, particularly in today’s tough budget environment because if you can’t do those things, how do you make budget cuts without unnecessarily damaging your agencies’ budget? The answer is, you can’t.

One of the culprits is that agencies don’t use a systematic process of prioritization, Saaty said. And yes, Decision Lens makes a product for that, but he and his company have produced a report that outlines seven criteria for making intelligent budget cuts, and prioritization is just one of the seven.

1. Target Setting
What is the impact of a specific topline target?
 
2. Budget Scrub
How will funds be spent?
 
3. Prioritization
What programs/activities are least important?
 
4. Results Analysis
Which outputs contribute the most to priority outcomes?
 
5. Cost Analysis
What is the cost of producing an output?
 
6.Process Analysis
How efficient is each process?
 
7. Portfolio
What is the relative return on investment for outputs?

While Saaty didn’t say this, it seems to me that each of these areas represents a business opportunity for contractors who want to help agencies weather this budget cutting era.

While the seven steps seem logical and almost obvious, it doesn’t make them any easier to do, he said.

Part of the challenge is that the process blends qualitative and quantitative data, and it creates a system of prioritization and tradeoffs.

And it is different; “The biggest hurdle is cultural,” he said.

Decision Lens has customers across the government, including the Joint Improvised Explosive Device Defeat Organization at the Defense Department, the Army Special Operations Command, the Agriculture Department, Coast Guard and FAA. So, the idea does resonate.

Interestingly, the roots of Decision Lens, founded by Saaty and his brother Daniel, goes back to their father, who worked at the State Department on nuclear weapon treaty negotiations.

Thomas Saaty developed the analytical hierarchy process, or AHP, to use math and psychology to make complex decisions.

In a nutshell, it’s a process for identifying priorities, outcomes, criteria and other factors in making a decision. Numerical values are assigned, and then you can analyze the impact of different decisions on your outcome.

The Saaty brothers used AHP to found Decision Lens in 2005.

The process isn’t just for budgets. Decision Lens counts a few professional sports teams as customers, including the Green Bay Packers, the Oakland A's and the Arizona Diamondbacks.

NEXT STORY: Sequestration remains a mystery

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.