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Big analytics for inclusive growth

Building a better future with advanced analytics

By Mikael Hagstrom, SAS Executive VP

The public sector is facing a period of monumental strain as governments around the world attempt to reduce huge budget deficits. Yet even as budget reduction efforts are taking place, demands on public services have never been higher, and these demands will only continue to increase as populations grow, age and diversify. Meanwhile, climate change, natural disasters, system complexity, global risks and socioeconomic challenges grow at an ever-increasing rate, and international terrorism further complicates public sector planning and priorities.

None of these issues are new, but the complexity, interrelations, global dependencies and growth rates of the issues are unprecedented. While the private and public sectors have been wrestling to increase efficiency for many years, the critical need to reduce government debts of unprecedented sizes is more urgent than ever before. As a result, the opportunity to use advanced analytics in government has never been greater and the need for social insight has never been more critical.

Fact is, 90 percent of the world's data that exists today did not exist two years ago. A constrained government cannot afford to ignore 90 percent of the available data assets by continuing to use an outdated analytics strategy. A big analytics strategy can pave the way for the beginning of a new and digital world. And high-performance analytics will make history in the era of inclusive growth, defined as an era that involves the broadest possible spectrum of people in wealth creation.

Predict and prevent
Overall, the new world of big data and high-performance analytics promises to give public sector organizations the opportunity to use their data to "predict and prevent" rather than "fail and fix."

The fail-and-fix method is all too common across the public and private sectors today. For example:

  • We recognize where fraud has occurred, and then – only after millions of dollars have been lost – we set out to close the loophole that allowed it to occur.

  • We identify an unprecedented risk to which our business has been exposed, and then – only after the entire system has nearly collapsed – we set out to manage the risks more thoroughly.

  • We diagnose our citizens with lifethreatening diseases that are often accompanied by potentially fatal comorbidities, and then – only after their bodies have almost entirely shut down – we set out to fight those diseases without addressing the causes of poor health in the first place.

There is a better way. Using advanced analytics to predict and prevent allows our leaders to recognize and identify the conditions for fraud, risk and poor health– and many other concerns – much earlier in the process. With this knowledge, changes can be made and programs can be created that prevent the fraud, risk and diseases from occurring.

With these insights, public sector programs can ultimately have a much greater impact on the overall health of the region. It is only through high-performance analytics that technology of any kind can meet the 21st century needs of governmental and
social intelligence.

This issue of Intelligence Quarterly offers many examples of how the predictand- prevent concept can meet the immediate demands for cost-cutting while contributing to longer-term transformational objectives, including:

  • A recent study from the United Nations' Global Pulse that uses linguistic analytics to demonstrate how government agencies can harness data from social media to help formulate policies to address joblessness before unemployment rates grow beyond control. Any government that's not using social intelligence now soon will be.

  • Instead of waiting years to identify income tax fraud and then trying – without success – to recover back taxes, HM Revenue & Customs in the UK uses analytics to predict and prevent fraud. The project has an anticipated ROI of £7 billion and also promises to improve the quality service provided to taxpayers.

  • Rather than calculating average demands for military equipment, military leaders are using forecasts to better predict spikes in demand that more accurately reflect the readiness needs of the military to reduce expenses and win wars.

Data's influence on the future
Most public sector agencies are still in the early stages of information management implementations, using historical data to report and infl uence decisions. But we live in unprecedented times, so we can no longer rely on understanding the past to guide us in the future. Instead, government leaders should move toward using data for insight, enabling the public sector to predict and prevent so that their operations are more efficient.

To reduce deficits and improve citizen services, all government agencies must develop the agility to optimize their performance for today but also to anticipate the challenges of tomorrow. Big data has a much bigger role to play in these efforts than simply advancing the effectiveness of cost-cutting programs and reporting structures. Indeed, big analytics can be the step-change needed to transform public sector services into the effi cient, effective programs that citizens deserve.

What water was to prosperity in the past and oil is in current times, data is about to become – with one very fundamental difference: If we treat data as the new asset class, it can help reduce confl ict and tension instead of proliferating discord, for it exists in abundance.

Bio: As head of an expanding global team of 4,500 professionals in 48 countries, Mikael Hagstrom is passionate about providing a culture where innovation can flourish, resulting in market leadership for the organization and its customers. He leads SAS' Europe, Middle East, Africa (EMEA) and Asia Pacific regions, which accounted for 53 percent of SAS' 2012 revenue, or $1.52 billion.

Mikael Hagstrom, SAS Executive VP