Inside the growing analytics opportunity

Data analytics technology is starting to pay dividends for state and local governments. Vendors in the analytics market have an opportunity to introduce their products to these government decision-makers now, even though budgets may be restricted.

Worldwide use of big data and analytics technologies is experiencing rapid growth. IDC predicts by 2022 the compound annual growth rate will be over 13 percent. In calendar 2019 alone, more than $190 billion was spent worldwide on big data and analytics. State and local government entities are starting to see that same boom as well.

The explosion of spending on data analytics has created a corresponding rise in the number of companies developing big data and analytics solutions. State and local governments have a wealth of solutions to choose from to help them understand their data environments.

For vendors, this means that competition is strong and is likely to get even stronger. Clearly differentiating your solution and its benefits will be crucial. The benefits you present must go beyond the technological aspects of organizing or cataloging and focus on the return on investment that state and local government entities can expect to receive.

Making sense of data

he proliferation of data collected by state and local governments comes with a corresponding need to make sense of that data. States are starting to realize, however, that making sense of data is a full-time job. They're hiring chief data officers or chief analytics officers whose sole job is to understand what data they can access, and then to begin collecting, organizing and utilizing it. Over half the states have established a chief data officer position, with another seven states considering one. This growth in chief data officers will, not surprisingly, lead to further increased use of data and analytics technologies.

The applications for data analytics can impact many facets of state and local government. For example, data analytics can help increase government transparency in the form of open data portals or improve decision-making through better resource allocation. Some agencies are seeing productivity increases from software-based data manipulation that requires less hands-on staff time. The use of data analytics technologies can help improve workforce effectiveness and ultimately, help drive ROI.

That improvement in workforce effectiveness is also a fantastic metric for vendors selling into the state and local government market. As a vendor, you must position your solution and its benefits in delivering citizen services. (For example, if agency X uses your technology, not only will it see a decrease in inefficiencies, but that reduction will enable faster on-time processing of unemployment insurance claims.)

Where SLED data analytics is focusing

States can apply data analytics to areas like agriculture, transportation, health and human services or education. Every state has departments and agencies that serve and manage these analytical functions, and they all collect data – typically large amounts of it. Here are some specific areas:

Cybersecurity and fraud detection. If you approach a state or local government with an AI-based analytics project, know that over 75 percent of such entities reportedly expect the biggest impact to come in the areas of cybersecurity and fraud, waste and abuse. A great deal of staffing resources is spent combatting these issues – usually retroactively, unfortunately.

Transportation. We will see more transportation agencies deploy data analytics for traffic management and crash mitigation. Soon we will all be able to communicate through our digital assistance devices to report traffic congestion and crashes to 511 systems, so resources can be deployed in real-time. Google assistants are already being used to assess arterial traffic footage to more accurately predict where congestion might occur and identify solutions more quickly.

Overcoming hurdles to procurement

The opportunities described above come with hurdles vendors must address. Here are a few ways to respond to the four biggest challenges facing IT decision-makers at the state and local level.

Budget shortfalls. It’s true that budget tightening is pervasive across government. It’s also true, however, that state and local government data analysis is both tedious and manual, requiring considerable time to yield results. Make the case to state or local government procurement officials that your tool will help free up staff time, deliver faster results and improve operational efficiency. You might start to sway their opinion on making the investment.

This hurdle goes hand in hand with:

Talent shortage. Most state and local governments battle for IT recruits in any field, and analytics is no exception. If you have a tool that helps make the best use of existing staff by automating data cleansing and visualization, then you've given the agency another reason to invest in your technology.

Legacy state and local infrastructures. Many governments are still trying to modernize their infrastructures. Unfortunately, data silos still exist. Data silos perpetuate the need for tedious manual data cleanup. With proper tools this manual cleanup can be drastically reduced, if not eliminated, which again frees up staff time to focus on delivering results. Your argument must be able to tie your offering to effective legacy infrastructure modernization.

Results. This is the area where state and local governments typically need the most help. As vendors, you already have the tools they need, but interpreting the output of those tools so executive leadership can understand and make decisions is another matter. So much of an agency’s time, money and manpower is spent organizing, cleansing and visualizing their data that resources are often unavailable to translate those results into streamlined, simple language and to track the results.

We are already experiencing a rapid proliferation of data analytics in our daily lives — and state and local governments will most certainly be contributing to that growth in the not-to-distant future. As states begin to recognize the potential of analytics, this is the time for vendors to gain an early foothold, showcase their capabilities, and address obstacles to procurement.