Many government agencies avoid trying to find out their return on investment for technology projects. But that's not the case with Iowa's statewide data warehouse. Started in 2000 and involving three agencies, the warehouse will eventually provide analytical data support for dozens of agencies.

More importantly, the warehouse is expected to generate a return on investment of 673 percent, or nearly $16.8 million, annually. Some of the money is in the form of cost savings generated by the Department of Human Services, which uses the warehouse to tackle fraud and abuse in its Medicaid program. But millions more in savings and new revenue is coming from a wide range of applications involving child welfare, veterans affairs, criminal justice and tax revenue.

Instead of five or six warehouses performing separate tasks for individual agencies, Iowa has elected to build one central warehouse that will eventually serve the entire state. "We are engineering our data warehouse around the way government really works," said Richard Varn, CIO of Iowa. "From that idea you have opportunities to relate data from different programs to give the state a better ability to deliver services."

Iowa's data warehouse activity reflects a trend in state and local government: a greater emphasis on using large amounts of data to analyze the performance of public programs and to make better policy and management decisions. What's unique about Iowa is it's ushering in a new generation of warehousing where the goal is decision-making and electronic government services on an enterprise scale. The results could help alter the way state and local governments provide services.

Looking ahead, Varn sees a day in the not-so-distant future when Iowa will use its warehouse to track the government and educational services provided to a child as he or she grows up to try to find out why one child ends up in jail and the other does not. Through better analysis of data, the state can accurately decide what policy adjustments can be made so that fewer children end up in trouble. "We have all that information on paper form being collected today," he said, "but it isn't integrated into an analytical environment where it can be easily accessed."

State of Warehousing

State and local governments may not be ready to use data warehousing on such a scale, but the rapid increase in the use of the technology bodes well for the future. Warehouses are central repositories of an organization's most significant data, typically from transactional processing applications, but from other sources as well. The data can then be extracted and organized in a database for use by analytical, query and decision-support applications.

Data warehouses have been used in the private sector for years, primarily to analyze customer buying trends. The federal government has also been a big customer of warehouses. But for the most part, warehouse use in state and local government has been relegated to Medicaid programs to help administrators assess quality of care and to track down fraud and abuse.

However, in the past few years, that picture has begun to change. States and local governments are using warehouses to analyze data for a variety of programs, ranging from criminal justice and finance to education and personnel. As government increases its use of systems that rely on data in a consolidated format, such as enterprise resource planning, customer relationship management, knowledge management and business intelligence, the role of data warehousing will continue to grow, say the experts.

"The value of data warehousing in both government and industry comes from capturing a variety of information across the enterprise," said Chuck Kelley, president of Excellence in Data Inc., and a data warehouse expert. "You can't just rely on transactional data if you plan to use a warehouse for decision support."

Imagine a state policymaker sifting through