Putting the Cart in Front of the Horse

Good Government Management is a Balancing Act

The key to sound city government management is balancing costs with revenue ... but city budgets are under growing pressure from increasing costs and decreasing revenues. The traditional solution is belt-tightening, cutting jobs or services, or both. But there's another way to bring back balance, a better way: using new tools and new processes to work smarter.

A Perfect Storm of Bad News

A perfect storm of negative economic trends threatens city budget managers in cities both large and small with direct and indirect consequences.

Rising Fuel Costs. As the price of gasoline soars, unbudgeted city fuel expenses must be accommodated.

Rising Food Costs. World food prices have dramatically risen, and impacts are now being felt here in the US.

Sinking Home Values. Real estate values have dropped at unprecedented rates.

Declining Sales Tax Revenues. As people quit spending, the revenue from transactions contracts.

Declining Property Tax Revenues. With sinking property values come lower revenues for city coffers.

In the face of such bad news, city management staff have few options under traditional business practices. Typically, departmental budgets are scrutinized, salaries and wages are frozen, reductions are implemented across the board. There will be pain, and it must be shared. Because when governments fail at their job of keeping the books balanced, they can't just shut down and start over, like individuals or businesses. They must continue to work through their problems until they find a solution. We're stuck with the problem and the only way out is to work out a solution.

Pinned Down by Old Assumptions

People and Processes. Governments are bureaucracies that use labor inputs to deliver services to citizens.

Taxes and Fees. Governments raise money by taxing and charging fees.

The classic argument in government is between those who believe in keeping a tight lid on costs, no matter what, and those who believe in delivering services to those in society most in need. A rising economy eases pressures, while a sinking economy sees tensions mount as factions argue over how to adjust to increasing pressures.

Sticking with old assumptions limits the range of solutions to variations of painful belt-tightening. Thinking about old problems in new ways unlocks new win/win solutions that improve on belt-tightening and ease tensions.

Digital Transformation: A New Set of Tools and Assumptions

New Digital Processes, Applications and Equipment

Under the twin shocks of uncontrollable added costs and reduced revenues, the standard response is to cut labor costs and reduce services, but that leaves the city weaker and provides citizens less.

The urgency of added budget pressures provides an opportunity for a better way of looking at government operations, which introduces new digital processes, applications, and equipment to make the city stronger and more productive.

Digital Processes. New technology lets us look at old problems in new ways. Sending staffers out into the field in cars and trucks to gather information, returning to the office when necessary, is inefficient, when alternatives exist.

Digital Applications. From Voice over IP (VOIP) to Automatic License Plate Recognition (ALPR), a variety of digital applications are enabled by new communication options that enable mobile workers to cut out inefficient steps and added costs, to do their jobs more effectively.

Digital Equipment. Converged dual-use cell phones (iPhone, RIM Blackberry), wireless "netbooks" (Asus EEE), and wireless video surveillance cameras are only the first wave of new digital equipment that leverages new communication options to transform traditional business processes.

Transformation by the Numbers

A quantitative analysis of current business processes sets a benchmark for improvement. A straightforward business case projection demonstrates savings by challenging assumptions and looking at things in new ways.

Step One: Analysis. Transformation starts with a departmental review of select business processes and costs.

Step Two: Strategy. Departmental managers strategize to transform operations with new digital technology.

Step Three: Focus. Key benefits will accrue in three distinct areas.
a. Public Safety. Typically the department with the highest costs, public safety can be transformed to eliminate inefficiency and ultimately, trim labor growth to provide dramatic savings.
b. Voice Telecom. Local and long distance & cellular budgets offer yet more efficiency.
c. Field Mobile Data. All departments with field activity contribute to the cost savings strategy = every dollar counts.

Folks, the smart city management will be reading the tea leaves and already be thinking outside the box, along the lines of the argument presented above. The rest, well, the rest will realize at some point that it's all gone to shit, but it will be too late for them. They will be stuck digging out and enduring the pain of slashed budgets, spread across the board to all departments, as they suck it up to bull their way through the bad times and hope for good times ahead. Yechhh.

There's a better way, and that is using technology to do things differently. First, you invest in a network, either city-owned or privately-owned, that will depend on the particular circumstance of the city. Then you pay yourself instead of others - you quit buying services from outsiders. Second, you change the way you do what you have to do - quit driving around and wasting gas and time - start doing the work out in the field and recognize that each trip back to the office costs big bucks.

We'll see how this goes, and who steps up to grab the brass ring. Times have changed - the first organizations to realize that fact and make changes will be the first ones to reap the rewards and thrive.