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Can Government Execute with Private Sector Effectiveness?

With great relief, but little flourish, the Department of Health and Human Services released its Healthcare.gov (ACA Exchange) Progress Report claiming the fix-it “team is operating with private sector velocity and effectiveness”. I’m not too sure what private sector velocity is but that’s not the point of the sentence.

The point is that when it comes to the basic business processes that government must EXECUTE in order to effectively serve the citizens – like Information Technology (IT) or internal financial controls – government can’t compete with the private sector. Survival is a strong motivator. Governments don’t need profits to remain viable. Businesses do.

In government, as in business, the best strategy is only as good as the organization’s ability to execute. At the beginning of a strategic engagement, I interview each of the “C-Suite” Executives separately to establish a baseline understand of the organization, opportunities and obstacles. Of course, I’m not going to give out all the “secret sauce” but one of my last questions always is “how do your internal processes, systems, and IT systems impact your ability to reach your goals”.

Their answer is critical. If current systems hamper execution then the new strategic plan must be scaled back to fit the execution capability. Or, alternatively, the systems must be improved. Improving the systems takes time. Management must decide whether to scale back their ambitions or take the extra time required to upgrade their systems to capture anticipated opportunities.

It is the same in government. To get effective, efficient government we must improve the capability and capacity of government information technology teams at every level of government.

Over the last 20 years the private sector has increasingly retired home-grown systems in favor of buying and deploying pre-packaged software. It started when CEOs voiced their frustrations over business opportunities being lost “because the system can’t handle that” – “it’ll take 6 months to change the system”.

In technology, need inspires entrepreneurship. Entrepreneurs begin by developing pre-packaged systems based on “current in industry best business practices” for ubiquitous functions like order entry and procurement – systems designed to be rapidly customized to the business’s unique situation by “users” accessing standardized templates. In-house IT is more focused on analyzing and designing solutions, using software to enhance business operations and less on writing software and installing new fixes to old systems.

It’s the opposite in government. There’s a common ethos among government employees – what they do is different more noble, more complex, more important than the scheming, unscrupulous private sector. This carries over to IT. Government managers reason no commercial-off-the-shelf (COTS) software package or for-profit software company could possibly satisfy the complex and “special needs” of government. They just keep patching existing old systems – no matter the cost in dollars or in lost efficiency. Contractors refer to this as the “Not Invented Here” (NIH) syndrome.

Need proof that the government could “buy” software just as effectively? If you are one of the millions of Americans whose health insurance policy is being cancelled – you are as close to coverage as clicking on www.ehealthinsurance.com and putting in your zip code! eHealth will even calculate your eligibility for subsidies! It does the “back-office” functions that move an enrollee to an insured accurately!

eHealth is a Center for Medicare and Medicaid Services (CMS) contractor. This profitable Silicon- Valley-based on-line insurance brokerage has publicly said it could have partnered with CMS to deliver a total AC Exchange solution – for +/- 5% of the currently quoted cost.

Private Sector Effectiveness

Congress must not allow this golden moment, this opportunity to regularly achieve “private sector velocity and effectiveness” from government IT investments. There are lessons that can be learned from the ACA debacle, the most significant signaling a need for stronger public/private technology partnerships. Those lessons must lead quickly to a 21st century approach to government technology acquisition and deployment.

Woodrow Wilson imagined a government working at the “velocity and effectiveness” of the private sector when he established Civil Service to execute the will of Congress. But, alas, that was before there was Information Technology!

Photo Credit: Sarat Varanasi/ACG

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