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Governments are transforming the way they interact with their constituents. The “Amazon Effect” has set the expectations high and now citizens are putting the pressure on their government, increasingly demanding a more efficient, friendly, and transparent service. At the State and Local levels, agencies are transitioning from their traditional process-driven strategies and are becoming outcome-driven.

But what is an outcome-driven agency? Let’s consider, for instance, Tax Collection Agencies. With a traditional process-driven approach their focus was mainly managing the tax returns filed by taxpayers. Outcome-driven agencies, on the other hand, focus on the end-result (in this case increasing taxpayer’s compliance in order to get more revenue) so they shift their efforts into enabling those citizens to pay their taxes in an easy, timely, and flexible way.

Now, how can different State and Local agencies become outcome-driven? Despite an undoubtable cultural aversion to change, Governments are also lacking the technological skills and resources. In this blog we will focus on the latter, discussing how Cloud-based data analytics can drive that transformation and how agencies can leverage their existing infrastructure to take it to the next level with a hybrid architecture.

Leveraging data to become outcome-driven

Becoming outcome-driven requires a fundamental transformation in the way agencies manage and analyze their data. In order to achieve better outcomes, agencies need to become data-driven, asking complex questions that sometimes result in even more complex answers. Looking at Gartner’s Analytics Capability Framework below, we can categorize agencies based on the analytical questions they ask:

  • Descriptive: Data analytics for process-driven agencies consisted mainly of Business Intelligence Analysis, which provides information on the past. However, this remains a highly manual process, in which success relies mostly on human skills (Data Analyst).

  • Diagnostic: Agencies that want to take it a little bit further, to look not only at “What happened?” but also “Why did it happen?”. Despite being a great first step towards becoming outcome-driven, these analytics methods still do not help agencies prepare for the unexpected.

Four Types of Analytics Capabilities
(Source: Gartner)

  • Predictive: Understanding what the future might look like and be prepared to react fast is crucial in order to deliver a better service for the citizens. These agencies use Predictive Analytics tools to understand “What Will Happen?” by combining data from multiple sources.

  • Prescriptive: Forward-looking agencies are going one step further… In addition to all the previous questions, they want to get recommendations on what the best possible course of action is. Prescriptive Analytics assist them in their decision process, reducing Human Intervention to the minimum and even automating certain decisions.

Agencies on the last two categories focus on evidence-based public policy, leveraging data as an asset to improve the efficiency and effectiveness of government. And to do that they need the flexibility and agility that only Cloud-based solutions can provide; that’s why public agencies are starting to move to the Cloud. However, these agencies typically have an established on-premise infrastructure in which they have been investing for decades. So, how can agencies keep using their legacy systems while moving to the Cloud?

The Best of Both Worlds: Hybrid Analytics

A hybrid analytics architecture is the perfect approach for those who are reluctant to move to the Cloud, as their on-prem tools are not replaced but complemented and expanded with a powerful Cloud-based solution.

As mentioned earlier, data-driven agencies need to respond to complex questions by cross-pollinating data from various sources. With their current on-premise tools, government agencies spend too much time and effort processing data. Extracting, combining, enriching, analyzing data and finally creating reports leads not only to a slowdown in time-sensitive analysis but can also potentially corrupt the data.

To ensure the veracity of the data, break silos, prevent alterations, and simplify its IT Landscape, Government agencies should have one unique copy of the data, that would serve as a single source of truth. On top of that, a powerful Cloud-based solution needs to consume that data to create the reports, the predictions and help respond the above-mentioned questions. Besides, to preserve its sovereignty data should not need to leave the Government’s premises: with live data connection, the Analytics can be done where the data resides.


To summarize, State and Local agencies can become outcome-driven by:

  • having a forward-looking mindset to determine their key priorities

  • asking complex questions and maximizing the use of their data to provide answers

  • leveraging their existing infrastructure and adopting cloud-based solutions

Despite their differences, all state agencies share some commonalities in terms of maturity and use case adoption based on the questions from the Analytical Framework. In the next blogs from this series, we will see how agencies from three representative government areas such as Finance, HR, and Operations can become outcome-driven and how Hybrid Analytics can help them.

If you want to know more about Hybrid Analytics and how SAP can help your agency become outcome-driven, please visit this link.