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As mentioned in the previous blog of this series, a new mindset is spreading within government agencies: to better serve their constituents they need to become outcome-driven agencies. To illustrate this concept, the following blogs will deep dive into three key areas of State and Local: Finance, Human Resources, and Operations.

The Office of the CFO is arguably one of the most pivotal departments for any government agency. Managing finances efficiently does not only benefit the community but it’s also a sign of a healthy and prosperous government, that eventually leads to increased citizen trust. With that in mind, how does a finance agency become outcome-driven and why can Hybrid Analytics be an optimal strategy?

To understand the value of transitioning from process-driven to outcome-driven agency we first need to look at some of the goals that the Office of the CFO focuses on:

  • Solid and improving credit rating

  • Structurally balanced budget and growing reserves

  • Growing pension fund status

  • Healthy rate of return on the assets that were invested to support that pension fund

  • Robust use of financial shared services

  • Minimal fraudulent rate on travel and expenses

Asking the Right Questions and Finding the Right Answers

To achieve these goals, CFOs need to properly analyze the vast amount of data they produce. And that means asking the right analytical questions. Looking at the four levels from Gartner’s Analytical Framework (Descriptive, Diagnostic, Predictive, and Prescriptive) we can identify two types of questions:

  • Questions focusing on the past: “What was my budget last year?” or “How much travel fraud expense did we eliminate last month?”, while still important, only scratch at the surface.

  • To get meaningful value from the data, CFOs need to go one step beyond and look at the future, asking questions such as “What will be my revenue forecast?” or “What assets should I focus my investments on?”.

Other common questions related to the above-mentioned goals are shown in the following picture.


Once we know what questions to ask, we need to ensure we have the right sources of information to provide adequate responses. Looking at the different sub-verticals from the CFO’s office (depicted below), we can identify multiple core processes for each one that will serve as data sources for the CFO. Once the different analytical questions have been mapped out to one or multiple sub verticals, we can select the most relevant data sources to provide answers to the questions.


How does the Hybrid approach help?

As covered in our previous blog, a Hybrid scenario consisting of on-premise and cloud analytical tools can be the most suitable option for any government agency. This can be especially true for finance agencies for a good number of reasons, mostly:

  • Investment protection: Public finance agencies were amongst the first to invest in modern technologies to make sense of their data. That’s why they are more likely to have large on-premise deployments with legacy systems that require high maintenance costs but lack the analytical capabilities and flexibility that cloud solutions provide. A Hybrid approach allows them to benefit from cloud solutions while protecting their original investment

  • Single source of truth: CFOs don’t want to spend valuable time debating the veracity of the data they are presented with. Traditional Analytics tools require significant data extraction, manipulation and replication which can potentially end up corrupting the data. With powerful data management solutions, agencies just can have one copy of their data that can always be unaltered.

  • Data sovereignty: Due to the sensitivity of the data managed by the CFO, there are usually rules in place to prevent data from leaving the agency’s-controlled environment and that makes it incompatible with typical cloud solutions. This prevents agencies from getting the maximum out of their data. Nevertheless, with live data connection capabilities, the data flow is reversed: instead of sending the data to the cloud, the Analytics is performed where the data is, ensuring that it never leaves the premises.

  • Speed and agility: CFO’s need to make decision quick and confidently. Pulling data from disparate sources to get valuable insights can take days or weeks using legacy on-premise systems. With AI infused Augmented Analytics, answers can be visualized with the click of a button.

Government CFOs can become more outcome-driven by asking forward-looking questions and consuming data from multiple sources with a single lens. This will allow them to act with confidence when making important decisions and therefore provide better citizen services.

In the next blog we will explore how the office of the CHRO can use analytics to overcome their challenges and empower the public workforce. If you want to know more about Hybrid Analytics and how SAP can help your agency become outcome-driven, please visit this link.