Budget Deficits Put Government's Sacred Programs Under Scrutiny

"In crisis lies opportunity."

It's an oft-heard phrase these days, and it was a common theme of last week's Conference on California's Future in Sacramento. But at The Leadership Imperative: Managing in Challenging Financial Times, an IT leadership Summit at the conference, experts from industry and academia explored how the state should go about turning its $15 billion budget deficit into an opportunity.

In California, as in many other states, there is clearly an opportunity for drastic changes. "Everything is on the table," said panelist William D. Eggers, global director of Deloitte's Public Sector Research, who told attendees that the willingness to examine all possibilities was pervasive in both political parties.

"The sacred cows are a little less sacred today," agreed Dr. Christopher Gorton, vice president for medical management at EDS Global Healthcare. Gorton noted that governments spend years launching some programs, and because of it are unlikely to look critically at whether the program is performing as it should. "Government, in many cases, starts to look like a coral reef, and it grows by accretion. And there's some beautiful stuff there, but there's some stuff that frankly the ocean needs to wash away," he said, adding that the current environment presents a good opportunity to pare some of the less valuable programs that may have been traditionally been untouchable.

Because of the current fiscal crisis, Eggers said, government entities are asking themselves the unthinkable: "Should we be doing this in the first place? If we were to start anew, would we still be in this business?"

If the answer is yes, Eggers said, agencies should be - and are - asking, "Is there a way that we could do this better?"

Have Any Bright Ideas?

Eggers said organizations need to have a good system in place for generating ideas. Some of today's technologies, such as social networking applications and technologies that allow collaboration among the masses, could be useful tools for idea generation.

In addition, he said, government organizations must create an environment that encourages risk-taking and experimentation. As examples, he pointed to private-sector "serial innovators" that regularly produce new innovations.

However, idea generation is only part of the equation, he said. Organizations must have a way of selecting the best ideas and seeing them through.

Cutting Corners Can Be Fatal

Later in the discussion, Eggers warned of the dangers of rushing to squeeze the savings out of new initiatives without thorough planning and careful execution. As an example, he pointed to a project in Texas that aimed to save the state money by outsourcing health and human services eligibility. But in the rush to make the savings immediate, he said, the project ultimately failed. In order to carry out some of the consolidation initiatives and big redesign projects, those responsible for funding must consider the upfront investment required.

"I think a lot of failures result when you don't have a lot of resources to do that and people scrimp on a lot of things that make the difference between success and failure," Eggers said.

Alisoun Moore, director of health and human services at Northrop Grumman, said that kind of money won't happen, but it creates an opportunity to innovate in a different way. Finding another way to accomplish goals with the dollars available was something Moore was often forced to do in her public-sector experience as CIO of Montgomery County, Md., and the state of Maryland.

"What it should drive," she said, referring to the lack of funding, "is a different way of looking at the problem."