E-Government Push Bolsters Data Warehousing Demand
E-Government Push Bolsters Data Warehousing Demand
By Trish Williams
A desire to jump on the electronic government bandwagon is unleashing strong demand for data warehousing systems that allow agencies to retrieve a wide range of information and deliver more useful services to citizens and other users.
As federal, state and local government agencies step up to the e-government plate, they increasingly are turning to data warehousing solutions that can pry helpful information from their databases, fortify their services and increase their organizations' efficiency.
When these organizations more fully embrace the delivery of information and services through the Internet, the scope of data warehousing projects in the public sector will expand significantly, information technology executives said.
"It used to be a case of build it and they will come. With the proliferation of data throughout federal, state and local governments, it has created an environment where this is almost a necessity," said Rich Bishop, technical program manager at SAS Institute, Cary, N.C. The privately held software company, which had 1999 revenue of $1.02 billion, has more than 80 pilot programs, from data warehousing to Web delivery, under way for government clients.
A data warehouse is a repository for data organized in a format suitable for querying, reporting and analysis. Data warehouses are built from operational databases; after the operational data is cleaned, it is transformed for fast retrieval and efficient analysis.
With data warehouses, government officials can rapidly access and analyze information and make decisions to improve citizens' quality of life.
"There is a very healthy pipeline of data warehousing projects in the federal government," said Ben Plummer, vice president for customer operations at Cognos Inc., Ottawa. Cognos, which is expanding rapidly in the U.S. federal market, has participated in data warehousing projects for the Defense Department, the U.S. Postal Service and the Marine Corps.
Plummer's company has used its Defense Department business as the foundation for its new civilian agency business.
"We have done well in the past at DoD. Now we're seeing a much bigger upsurge in interest on the civilian side in accessing information," he said.
Today, it is important for different departments within agencies to share information in order to get a coordinated view, he said. Cognos' business intelligence tools also enable government officials "to answer questions about how this agency is doing and whether it is serving the public the way it should," Plummer said.
In September, Cognos reported that revenue for its second quarter of fiscal 2001, which ended Aug. 31, 2000, set a record at $118.2 million, a 34 percent increase over revenue of $88.1 million for the same period last year.
Increasingly popular uses for data warehousing include detecting fraud and abuse in health care and welfare programs, measuring the quality of education programs and monitoring compliance with tax and revenue laws. Plenty of opportunities also exist for deploying data warehousing solutions in the criminal justice and public-safety space, industry executives said.
The worldwide market for data warehouse and intelligence services is expected to grow at the brisk pace of more than 50 percent annually and reach an estimated $113 billion by 2002, according to a Palo Alto Management Group/World Research Inc. study, "1999 Business Intelligence and Data Warehousing Program Competitive Analysis Report."
Federal government spending on projects related to data warehousing is expected to jump from $579 million in 1999 to about $911 million in 2004, according to the market research firm Input of Vienna, Va. And state and local government spending is rising at a faster clip.
IBM Corp. of Armonk, N.Y., ranks No. 1 among companies providing data warehousing solutions, with nearly 20 percent of an almost $25 billion worldwide market in 1998.
Joining IBM in hotly pursuing public-sector data warehousing business are database market leaders such as Oracle Corp. of Redwood Shores, Calif., Microsoft Corp. of Redmond, Wash., Sybase Inc. of Emeryville, Calif., and Informix Corp. of Westborough, Mass.
Systems integrators going after this business include Andersen Consulting of Chicago and Unisys Corp. of Blue Bell, Pa. Other players are Bull Worldwide Information Systems Inc. of Billerica, Mass., NCR Corp. of Dayton, Ohio, and SAS Institute.
Other vendors in the crowded data warehousing space include France's Business Objects, Cognos, Computer Associates International Inc. of Islandia, N.Y., Hyperion Solutions Corp. of Sunnyvale, Calif., Informatica Corp. of Palo Alto, Calif., MicroStrategy Inc. of Vienna, Va., and Sagent Technology Inc. of Mountain View, Calif.
The data warehousing market covers components such as databases and extract/transform/load tools, as well as business intelligence tools. Business intelligence can cover any computerized process used to extract or analyze business data.
"A lot of what's driving data warehousing today are government initiatives that require agencies to adhere to certain metrics or meet certain criteria," said Steve Jones, a solutions specialist for Oracle's federal business. "Agencies are now realizing they need something to help them measure these and report back to Congress or whomever."
With annual revenue of more than $10.1 billion, Oracle's products span the entire range of data warehouse offerings. They include a leading database designed for data warehousing as well as support for data extraction, transformation, and loading and business intelligence tools that support the full spectrum of analysis.
One of Oracle's more recent data
warehousing implementations involved
an effort for the U.S. Geological
Survey (USGS), which wanted to
extract water quality information from
different data sources and make it available to end users, said Jones.
USGS began its National Water Quality Assessment program in 1991, collecting chemical, biological and physical water quality data from basins across the nation. There are more than 50 water quality assessment study teams around the country, collecting and analyzing data, and five or more national synthesis teams, according to Oracle documents.
Using a variety of Oracle products, USGS was able to build a data warehouse and conduct data retrieval and investigation that could not be done before. Using Oracle's solution, agency officials can integrate water quality, biological and ancillary data for effective analysis on a national scale.
The data warehouse supports 200 USGS users with concurrent access of about four to 15 people, according to Oracle data.
"They have done all the work for their end-user community by making the information business friendly. They can now go and build reports, as opposed to waiting for reports to come out from the staff," Jones said. "It's enabling the end-user community for self-service."
Another recent government customer to purchase Oracle's Warehouse Builder product is the Military Traffic Management Command, Alexandria, Va. Part of the U.S. Transportation Command, the Army command bought the solution for a system called MEDSS, or MTMC Enterprise Decision Support System.
In addition, the Health Care Financing Administration is building a data warehouse with Oracle products, company officials said.
"We have a huge installed base within the federal government, and obviously, we are leveraging that to take it to the next step," Jones said.
A prominent player in the state and local data warehousing market is Bull Worldwide Information Systems Inc., a $4.2 billion company whose corporate headquarters is in Paris. The company is taking aim at four major sectors: health and human services; criminal justice and public safety; tax, revenue and treasury; and e-government, according to Jack Ginsburg, vice president of Bull's public-sector division. Ginsburg's unit also is looking at jumping into the federal space.
Formed four years ago, the division has generated $170 million in new contracts from data warehousing and document management-related work from state and local customers. The latter includes large counties, such as Clark County in Nevada, Fulton County in Georgia, Genesee County in Michigan and Davidson County in Tennessee, he said.
"We're not trying to be an all-purpose vendor to the state and local market," said Ginsburg. "We are in the data warehouse arena, dealing with very large, very complex decision-support-related applications."
The company's data warehousing solutions have helped a number of states more effectively manage their Medicaid programs. Bull's data warehousing solutions help agencies retrieve information in minutes or days, rather than weeks or months, and analyze the data so that it provides comprehensive information about Medicaid programs, Ginsburg said.
Among Bull's recent data warehousing contract wins is a June award of a three-year, $6 million deal for Utah's Department of Health to administer Medicaid, as well as its Medical Assistance Program and the Children's Health Insurance Plan.
The latter is a federally funded, state-managed program that provides supplemental health care coverage to children who do not qualify for Medicaid assistance.
Utah's new system is based on a two-terabyte data warehouse that Bull designed to analyze the 10 million claims filed annually for the combined programs, according to Bull data.
An even bigger prize was the role Bull landed on a contract award by New York's Department of Health to Computer Sciences Corp. of El Segundo, Calif., to improve the quality of service and management of the state's Medicaid program. Under this effort, Bull's data warehouse will help the department's eMedNY program process annual claims totaling $22 billion. The work is worth $65 million to Bull, Ginsburg said.
New York officials have said the Bull data warehousing solution will help prevent or detect fraud, provide comparative results of service providers, reduce administrative costs and improve the health department's service by significantly speeding up access to and the exchange of agency information.
"If you look historically at any of these areas in the Medicaid space, the feds have a lot of mandatory systems that need to be run. There has not been a lot of decision support structure to allow states to analyze what is happening within these programs and to make difficult decisions," Ginsburg said.
So far, New York is the only place where the company has bid as a subcontractor on an effort to help manage a state's Medicaid program. The company also has won contracts from Michigan and Minnesota to help manage their Medicaid programs.
Bull did not have a relationship with Computer Sciences before the New York award, said Ginsburg, adding that such decisions are based upon "whatever is happening at a given location. The way we come at this market is truly from a systems integrator scenario. Depending on the needs and requirements of a given situation, we establish whatever relationships are appropriate."
At SAS Institute, which has built a strong name for itself in the data warehousing arena, company officials are seeing a tremendous need for government organizations to Web-enable their legacy systems, said Jeff Babcock, vice president of public sales and marketing.
"The bulk of e-government pilots and data warehousing projects we have been doing have been aimed at surfacing the agency's data and making it available to the general public," he said.
"There are also new uses for warehousing. Today, information security is also on the top of all these agencies' lists," Babcock said. "We use data warehousing to collect and analyze all the infrastructure information and look for abusive information practices or cyberattacks."
In the state and local arena, SAS officials see three areas that have strong potential for applying its data warehousing solutions: health care, education and e-government.
"We're doing a lot of work for states in the area of [health care] fraud. Also, the concept of third-party liability in terms of who's responsible for paying for a patient. Those two things can represent tremendous savings if a state can get their hands on the data and analyze it properly," Babcock said.
The states also need warehousing services to comply with new education regulations and standards, industry officials said. Not only must the states submit report cards to the Education Department, but in many cases, they also must provide to the public far more data than before relating to the performance of school districts and individual teachers.