January 30, 2006 By Andy Opsahl
The idea is to systematically compare the efficiency of state government business processes to those of other governments and organizations of similar complexity.
Two states recently implemented multi-agency benchmarking projects, and more look to adopt the budding trend.
The Usual Comparison
People often taunt the public sector for lagging behind the private sector in efficiency, but only few make relevant comparisons. While private companies can centralize authority, allowing decisions and tasks to be executed quickly, government disperses responsibility across multiple agencies by authority of a constitution.
So what is a non-hasty comparison of government that can help it improve?
It is one that compares a government to metrics collected from other governments and private organizations of similar complexity -- or benchmarking, according to the National Association of State Auditors, Comptrollers and Treasurers (NASACT).
Since the inception of benchmarking in the 1970s, private businesses have used it to measure their own effectiveness against metrics collected from similar companies. Now public-sector organizations are beginning to catch up.
"I wouldn't consider this a fad, like you would consider some new management theory or management philosophy, or something like that," said Doug Darling, director of accounting and auditing for the Florida Comptroller's Office. "This is really measuring one state against another -- so comparing apples to apples is where I think the value of this is going to be.
"If it takes Florida 50 people to produce a payroll for 100,000 state employees, and it takes California 25 people to produce payroll for 100,000 employees -- there is something Florida needs to do differently," Darling said.
Benchmarking actually has been used sparingly for years by state and federal agencies, but NASACT took the plunge in August 2005, offering a statewide benchmarking services contract to all 50 states with consulting firm The Hackett Group in partnership with Accenture.
The idea behind negotiating one contract is to build a single metrics database of all states in the republic, measured under the same taxonomy.
"We're very excited about the development of a first database of state government metrics and what that database can do for our member states," said Kinney Poynter, executive director of NASACT.
States can now benchmark four administrative areas through the NASACT contract: finance, human resources, IT and procurement -- all back-office functions that have proven difficult targets for performance measurement in the past.
"If you look at government today, and you look at the citizen-facing programs, there are ways of measuring how successful those programs are -- how many students are being educated, how many are graduating, how many highways are being maintained or built, or how many children are being fed through child support programs," said David Wilson, managing director for finance and administration industry within state and local government at Accenture.
"In a world where we are trying to figure out how to create more citizen-facing programs for less cost, one of the areas for opportunity is to wring some of the costs out of the back office," he added, noting that there was no systematic method for measuring the back office before benchmarking caught fire in the private sector.
"Ultimately, as taxpayers and voters, we don't really care about that back-office stuff," Wilson said, adding that roughly 10 percent to 20 percent of state agencies' budgets go toward back-office tasks.
When a state signs up for benchmarking services, representatives from The Hackett Group and Accenture hold conference calls with the state's leaders to establish the most convenient way of approaching agencies for information.
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