December 18, 2006 By Tod Newcombe
In the wake of the fiscal crisis that engulfed government a few years ago, authors Peter Hutchinson and David Osborne wrote The Price of Government. The book argued that the ongoing cost-saving battles in Congress, state legislatures and city councils were a no-win dilemma for public-sector leaders trying to balance the books through short-sighted cost cuts, and for taxpayers who rarely saw services improve.
So society would receive a better return on its investment in the form of improved government service, Hutchinson and Osborne called for leaders to follow a new path focused on outcomes and performance rather than outputs and savings. Otherwise government would stagnate as citizens refused to pay more for a government they no longer trusted.
On Oct. 17, Mark Birdwhistell, secretary of Kentucky's Cabinet for Health and Family Services, addressed an audience of CIOs at the National Association of Chief Information Officers' annual meeting, explaining how his government is reforming Medicaid so more eligible people will receive quality care without ruining the state's budget. The federal government was so impressed, it granted the state a special waiver on how it allocates its Medicaid funds, and hopes this value-oriented approach will become a model for other states.
In this issue of Public CIO, two articles focus on how CIOs can use their role in government to deliver, not only cost savings, but value as well.
Our cover story on outsourcing quotes statistics from Accenture's global survey that found governments are increasingly turning to IT outsourcing -- not to cut costs, but to deliver value. As a result, more government executives report having success with their outsourcing initiatives compared to leaders who used outsourcing mainly to cut costs.
Second, Martin Cole and Greg Parston present their definition and explanation for measuring value in the public sector. They show how the public sector can adopt core concepts from the private sector to determine the value of public-sector outcomes. IT is key to this concept, primarily because the "public-sector value model" calls for the precise tracking of outcomes over time.
Finally, in the Online Exclusives section of our Web site, the article Finding Government's ROI analyzes a report by the Center for Technology in Government and SAP that looks at how governments worldwide invest in IT to deliver value to their citizens. The objective was to identify ways government can measure the "social and political benefits of IT."
While these examples don't add up to a wholesale change in how the public sector invests in IT, measures outcomes and delivers value, they do indicate a growing desire among progressive government leaders and their private-sector and nonprofit counterparts to pursue a new path when investing and spending tax dollars. That's a change worth embracing.
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