Photo: Robert Dolan, government and education industry executive, IBM. Photo courtesy of Robert Dolan.

Recovery spending from the American Recovery and Reinvestment Act is well under way. The challenge for state and local CIOs will be striking the right balance between the expediency of getting new spending initiatives under way, with the assurance first that their internal systems and processes can properly live up to demands for enhanced transparency. The enormity of this requirement multiplied by the ferocity of the schedule threatens to paralyze.

But a closer look reveals that we are at the crossroads. This is the time and place where CIOs can choose the best way to move into this new era of openness. Analytics and performance management technologies -- with its inherent reporting, analysis, planning, dashboarding and strategy mapping capabilities -- offer a proven approach to driving new intelligence into stimulus spending, understanding the allocation of funds and disclosing the overall economic activity resulting from recovery efforts.

Ensuring that accountability and transparency strings do not strangle, analytics and performance management can help state and local CIOs more effectively address five key challenges of managing their recovery funds:

1. Ensuring Oversight and Minimizing Risk

• The accountability demands of recovery spending require rigorous internal controls and oversight mechanisms. Many departments and agencies have assigned a work force to be responsible for recovery-related efforts. But oversight is only possible with a view into allocation, disbursement and spending. Managers require information at their fingertips, helping them to best avoid potential implementation risks and track funding, contracts and grants.
• Uniting information from many different data sources into one view enables managers to test various scenarios, paving the way for proper risk mitigation. Real-time, automated planning and budgeting can help agencies streamline and possibly accelerate standard processes for fund management, procurement and control to meet aggressive time frames and higher transparency. In this way, smart analytic and performance management systems can help spur processes that threaten to slow the speed of spending, getting dollars into the economy while keeping a firm audit trail on all activities.

2. Choosing the Right Projects

• Recovery funds are being directed at projects that spur economic activity, with a preference for projects that are "shovel-ready." But how to choose projects that create jobs and encourage growth in the longer term without a crystal ball?
• Strategy maps provide an effective means to forecasting the effects of investment and prioritizing projects. Strategy maps represent how specific department-level goals and results contribute to high-level strategy. They show interdependencies among efforts within a city, state or country. For example, a goal of 5 percent economic growth within a state might depend on 10 factors, including the issuance of construction permits and the influx of tourist dollars. A close look at increased foreclosures may show us that they are causing reduced tax revenues, higher crime, falling property values and fuller human services caseloads. Such maps point to areas influencing economic growth, letting executives drill down into shovel-ready projects that will lead to economic development.
• Strategy maps clarify relationships and goals -- a kind of status report and wish list rolled into one. Scenario planning, on the other hand, is the element of performance management that lets government executives look into the future by tweaking variables and predicting outcomes. "What-if" planning projects a current trend into the future and forecasts economic activity and job creation resulting from