Bench-Marking in Local Government IT is Vital. Here’s Why

He who exercises government by means of his virtue may be compared to the north polar star, which keeps its place and all the stars turn towards it.

Confucius (551 BC – 479 BC)

The budget season of 2010 for local government was particularly brutal. Many localities were taking deep cuts and scaling back. Departments were bracing for the unthinkable and the inevitable: layoffs and budget reductions.

There is nothing like a crisis to spur people to creativity and ingenuity.

I was convinced that my IT department was delivering outstanding value and that deep cuts would be detrimental to the citizens. I was searching for a way to illustrate that in light of the looming budget debacle. While doing research I came across an article from Gartner that described a metric that focused on one key area: IT budget expressed as a percentage of locality revenue. The national average was just over 5%. For a locality with $500M in revenue, the average IT budget should be $25M. That is just the operating budget, not capital.

What? According to this benchmark, the national average IT budget for my locality should be three times what it is. A 300% increase! Woohoo!

While my measurement against this metric was a paltry 1.67% (as compared to the 5% national average), I suspected my peer localities were in the same ball park. I worked with a budget analyst and using publicly accessible data, I bench-marked against other localities in my state. The results were surprising. The highest percentages were in the 2% to 3% range, and the lowest was, well, the lowest was mine at 1.67%. The slide looked like this (actual data, names changed):

Bingo. By itself, the metric tells only part of a very important story. By all other measures we were delivering an outstanding level of service. When I added the “lowest cost IT provider” metric to the budget narrative, the message became much more compelling. Not only were we really good, we were really efficient. Best in class. Go someplace else for budget cuts.

That metric has been part of my budget presentation every year since, and we have expanded it to a dozen peer localities. While that is a great measure, it is not the full story.

Some of the reasons why this bench-marking in the local government IT space is so vital:

1. Perspective – The metrics will tell you where you are in relation to other entities. You may think you have a pittance of capital investment in technology. How do you know? Is your staff retention rate good? How do you know?

2. The Story – You have to be able to tell your story in terms others will understand. Many times the best way to do that is by comparing yourself others.

3. Competition – There is a natural competition between localities. For citizens to live there, for businesses to relocate there, who can have the best quality of life, who has the lowest taxes, etc. Comparing your key metrics fits well with the mindset of your local leaders. They like winning!

4. Analysis – If you get enough metrics to compare against, analytics become very powerful. They can point you in directions you may not otherwise go and can show opportunities for improvement.

As they say, if it were easy everyone would do it … There are some problems with comparisons like this. First of all, local governments are organized differently. Two counties or towns beside each other geographically may have different accounting systems, different organizations and different approaches. For example, the level of centralization of the IT function varies widely. One IT department may have a small budget comparatively but only due to the fact that much of the IT responsibility is in each and every department.

Secondly, the process of extracting the data may be difficult. The data required for bench-marking may be in a dozen places and formats and databases or locked up inside vendor applications. It takes manpower and expertise to expose the data.

Thirdly, data ownership can sometimes turn into turf wars. Departments can consider data to be “theirs” instead of being owned by the local government or (gasp) the citizen.

Even if you can conquer your own data and produce valuable metrics, you will still need to do the same for the other localities. That is where it gets really tough. So here is the biggest obstacle, there are no standards or taxonomy for reporting of local government business function data. Certain organizations like ICMA or NACo may have a format they prefer for normalizing the data, but it is far from a standard.

The strategic goal should be to work for standards in this area of local government metrics. The short term goal for you should be to look for areas that bring solid wins, there the data is available and defensible, and to make sure you are doing comparisons that strengthen your story!

Barry Condrey is part of the GovLoop Featured Blogger program, where we feature blog posts by government voices from all across the country (and world!). To see more Featured Blogger posts, click here.