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Solving the “Cost/Reach Equation” in the Public Sector

When the world economy went into recession, many political officials and commentators talked about “not wasting a crisis” – making sure we took the opportunity to learn some lessons from the downturn and solve problems that would make the economy -- and the world -- more cost efficient. Today, while there are brighter signs around economic recovery, we still face a seemingly intractable parcel of outstanding issues.  Indeed many countries around the world are still struggling with both growing their economies and reducing budget deficits.

Rather than “not wasting a crisis” perhaps we should be thinking about not making a “crisis of waste.”  Said simply, there are enormous efficiencies available to public entities to improve the lives and well being of citizens through transformational efforts that can lower the cost and increase the availability and quality of citizen services. 

Across the globe, the public sector faces one clear and present challenge: the reality of increased service requirements bonded to constrained or declining budgets.  Demographic shifts, growing social expectations, and an increasingly more complex and dangerous world are driving enhanced public sector requirements to serve and protect citizens.  However the need to address deficit spending remains the defining paradox. The conundrum created by increasing need to serve and decreasing ability to pay is a “cost/reach gap.” 

For the first time in several generations public leaders worldwide are rethinking both how they deliver citizen services as well as how they consume information technology.  Many experts believe governments should not revert to traditional processes and IT practices.  Instead, they should look for ways to improve both cost effectiveness and service.  Indeed, the public sector could actually lead the private sector in transformational approaches to building efficiency and driving customer satisfaction through innovation in cloud computing services, cyber security, mobility, and video. 

Governments are looking to technology to improve efficacy and efficiency of service delivery in key mission areas – intelligence, defense and security, economic development, education, and health care. In the area of healthcare, practitioners and payers are looking at remote forms of care like Cisco’s HealthPresence to extend the reach and availability of medical services, and particularly to help leverage and defray the typically high cost of specialist consults and other services that are typically geographically scattered.  Being able to remotely “visit” with a medical specialist means less waste for everyone. For the patient, it means greater availability and quality of service, for the health practitioner, it means more time helping patients and less time travelling, and for the employer it means lower productivity losses.  

Cloud computing is another area where governments and other public entities are cutting waste.  Replacing large one-off department and agency- level system resources and sharing IT capabilities through a secure government cloud, or G – cloud, are becoming realities and gaining traction in the UK and Germany as well as a range of other nations.  

While in the past technology has been often lauded for streamlining back office operations and speeding transactions, today’s challenges mean thinking about technology in a much bigger and more far-reaching way. Today’s needs are about cutting costs, for sure. What’s new is the triple expectation of reducing costs while increasing high-quality public support and driving new and higher-performing internal processes that connect people to solve problems and advance new ideas in highly useful and efficient ways. 

A good example of this was recently announced by our partner, AT&T, with the U.S. General Services Administration (GSA).  The GSA recognized that it needed to accelerate collaboration among a range of government agencies and put in place a managed, pay-as-you-go TelePresence service.   The GSA took advantage of a public/private partnership with AT&T so regional meetings, training, inter-agency planning, crisis management, partner and supplier discussions can all use this service and pay for it on an hourly basis, avoiding agency start-up costs. 

This is just one example of public and private partners working together to overcome the cost/reach gap and it is the tip of the iceberg.  As technology solution providers like Cisco and forward-thinking public sector leaders work together to address how to best support increasingly complex public needs, I believe we will build a new public sector paradigm that will address the cost/reach gap in ways that will be both cost effective and provide new and better solutions for our citizens.

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8 Comments.


  1. nice article, hopefully we are all spared from crisis

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  2. Alan,

    We have been working with the Center for Digital Government on a new white paper and webcast.-- Cutting the Costs of Government: Uniting Finance and Technology for Innovation. I think folks would benefit from hearing this discussion and reading the whitepaper!

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  3. nice thought sir, thanks a lot.
    http://www.cordobahotelsstay.com

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  4. good article, we wait for the next article

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  5. thanks for sharing the article, this is very useful for us

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  6. Really interesting articles. With the recent protests in England I think policitians have to figure out ways to supply the population with public services without spending more. I think technology can do exactly that.

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  7. nice. thank you.

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  8. hi i loved this article is was great and i have subscribed so i can read your posts later.

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