RESEARCH & RESOURCES

Mike Schiff

Crackdown on Fraud will Increase Demand for Analytics

The record Federal government deficits are a catalyst for identifying fraud and misuse of Federal funds; data warehouse technology will almost certainly facilitate this analysis because it will be necessary to integrate numerous, disparate data sources, clean and consolidate them, and utilize business intelligence tools.

When an organization is running at a financial deficit, it needs to increase its revenue and/or reduce its spending in an effort to return to profitability. Although public sector organizations may not have profitability among their critical success factors, the record Federal government deficits are serving as a catalyst for identifying fraud and misuse of Federal funds. This is always a desirable goal, and both economic and political forces are currently aligned towards making this a high-priority effort.

Data warehouse technology will almost certainly facilitate many of these analyses because it will be necessary to integrate numerous, disparate data sources, clean and consolidate them, and utilize business intelligence tools. This should translate into increased demand for data integration, data cleansing, database, and BI software -- as well as many additional employment opportunities for people with design and implementation skills. Furthermore, I believe these efforts will be more than mere stop-gap measures; they will continue on for many years (if not decades) while contributing to making business intelligence more pervasive.

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Related Resources

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SaaS BI Tools: Better Decision Making for the Rest of Us
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Enhancing Enterprise Data Warehouse Reliability Using Master Data Management
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(Commentary continues)

Potential Application Areas

Although each of us could certainly come up with a host of potential applications, I suspect that Medicare fraud, tax fraud (including fictitious returns), monitoring and auditing contractor billings on Federal projects and determining which programs and initiatives are performing below expectations, will be at the top of any list. Another likely area will be monitoring both individuals and businesses to ensure compliance with the medical insurance coverage as proposed under the new heath care reforms; this will be the responsibility of the Internal Revenue Service, which will be hiring additional agents and applying business intelligence to analyze vast amounts of tax-return data. BI technology will be deployed to analyze staffing levels in Federal agencies for the purpose of streamlining government operations.

These applications are in addition to the already established large-scale use of business intelligence by government agencies associated with homeland security and national defense. I like to refer to these deployments as "bet your borders" applications.

One major data warehouse-enabled application, the tracking of funds and job growth associated with the American Recovery and Investment Act of 2009, is already in operation. The associated tracking Web site (Recovery.gov) states that "Recovery.gov is the U.S. government’s official website that provides easy access to data related to Recovery Act spending and allows for the reporting of potential fraud, waste, and abuse." In addition to its reporting capabilities, the site incorporates features such as OLAP analysis and map-based visualization technology.

Publicizing the Power of BI

As data warehouse practitioners, we are familiar with the power of business intelligence and have knowledge of a variety of tools, ranging from simple queries and reports to analytic applications and predictive analytics. However, for the typical layperson, an Excel spreadsheet (albeit still probably the most ubiquitous BI tool in use today) might represent the limit of his or her exposure. As governmental efforts become publicized (and successful, as non-defense ones almost certainly will be), they will raise the awareness of the power of data warehousing and just might serve as a driving force for helping to make business intelligence more pervasive.

The Bottom Line

In the 18th century, Benjamin Franklin said that "a penny saved is a penny earned." In the1950s, Senator Everett Dirksen was attributed with saying “a billion here, a billion there; pretty soon you’re talking real money” in conjunction with government expenditures. Without debating the tradeoffs between a balanced budget and deficit spending, at the very least the deficits should not be used to fund fraudulent expenditures. Data warehousing and associated analysis efforts will be strong tools in helping to prevent this from occurring while serving as concrete examples of the power of BI.

Michael A. Schiff is a principal consultant for MAS Strategies. He can be reached at mschiff@mas-strategies.com


Related Resources

White Papers:

   
SaaS BI Tools: Better Decision Making for the Rest of Us     Leveraging On-Demand, Software-as-a-Service
Analytics to Achieve Your Corporate Objectives

Webinars:

David Loshin
Enhancing Enterprise Data Warehouse Reliability Using Master Data Management
September 22, 2010
Speaker: David Loshin

 Philip Russom
Data Warehouse Packages: Quick, Mature, and Extensible
September 28, 2010
Speaker: Philip Russom

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