Opportunities for change in the new budget reality

opps for change under current budget chaos

One of the things I think this new budget reality has created for public sector organizations is an extraordinary need to make better decisions.  In previous years budget situations have been tight and there’s been a fight for resources but I think that this past year and next year the situation has and will become much worse. I think it has become so dire that it has really begun to affect performance and to significantly impact the capability of some programs to deliver. Every agency has begun to find itself in the position of needing to understand better than it ever has before the things that it:

  • asks itself to accomplish
  • the places where dollars are slipping through the cracks
  • opportunities for savings based on consolidation
  • reducing vendor spend
  • less complicated technology environments

I think this may also be one of the huge drivers for cloud based services. In previous years there’s been hesitancy to be an early adopter or the first one out of the door on these new initiatives but this new budget reality is going to force people to look at some of these opportunities. In order to continue to deliver, they’re going to need to overcome some of the hesitancy to move their application over to an environment that they don’t completely control.  You have two things at work in a lot of agencies.

  1. There should be a serious look at what capabilities the agency needs to deliver on the mission and how to help support those activities.
  2. There needs to be a real focus on how do we, if possible, innovate our way out of this.

I think you’re going to see two camps divided on this.  You’ll have one camp of folks that falls into the “hunker down, cut costs, operate and maintain” only camp. In the other camp you’re going to see people that say we’re going to find a way to plan better and innovate our way out of the mess that we’re in. I think that we may have reached a limit of what the first camp can deliver.  The last few years we’ve seen smaller budgets. From my personal experience I’ve seen public sector in many of these cases try to recompete contracts around cost and do other things to help cut enough cost to keep going. I don’t think that as we look at the kind of year over year trend that we’ve been seeing that that is going to be something that is sustainable for a long period of time.  I think that agencies are going to have learn another way and I think that starts with doing better planning and ends with finding better ways of doing things.  I’m curious what other folks think.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

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