Wednesday, July 26, 2017

Gary made me care about math: Cost avoidance at the State of Colorado

Gary Hodge has achieved something my parents and teachers would be proud of; he made me care about math. I’m a history major -- driven by heart and emotion rather than vulcan logic -- with parents who are still pretty proud I even have a job. Point being, I freely admit math is not my strong point.

Gary, however, showed me how to use math to tell a story that I care deeply about -- cost avoidance. The money we spend is not OIT’s money. It is my money. It is my family’s money. It is my friends’ hard earned dollars that has ended up as tax dollars. When government asks for money to spend it is on the hook to demonstrate the return on that investment and the cost savings or avoidance; and there is so much room for improvement here. How often does it feel like we start a project, hurl a few numbers at a board and jam on, finishing that project and immediately jumping to take on the next challenge? Time goes on and lessons learned are lost, past project fiscal analysis discarded or forgotten, and the world of the “now” taken over.

A few years ago, I met Gary and started talking with him about how to invert that. My team is made up of liberal arts majors, who rely on tip calculators to get by (myself included). In talking with Gary, we wanted to front end, standardize, document and track our cost avoidance, meticulously noting contract stand-downs, reduction in duplication of spends, etc. We saw value in the story, but didn’t know quite how to tell it.

Gary helped us by giving us guidelines and templates, and patiently explaining the ins and outs. He provided resources such as the National Association of State Procurement Officers (NASPO) Benchmarking, Cost Savings and Avoidance Guidelines -- something I would’ve never found nor read on my own in a million years -- to help get our information in order.

The result? In the past several years we’ve reported north of $12.5 million in cost avoidance from our three person Google team -- WAY in excess of what we’ve actually spent for the system. In the first two years our reporting constituted 80 percent for each year of the total reported cost avoidance for OIT. While we are certainly proud of that, we were way more proud of the fiscal year ending in 2016. We doubled our numbers ($7.2 mil) yet only constituted 50 percent of the total reported cost avoidance, because other programs started to also identify, track and report.

There are two convergences here that are important and why we aim to improve further:
  • The money pile isn’t getting bigger for government.
  • Increasingly, platforms are having major impacts further up the chain on policy outcomes. Put simply, IT services are owning more of the budget and being looked at to help deliver not only technology -- but policy outcomes. This forces us to become better at business analysis, intelligence, process improvement, and technology if we are to maximize our dollars for value.
Gary ROCKS. Not only as a fiscal officer that we’ve grown close with professionally, but personally just because he is Gary. Patient, guiding, kind and funny. We’re still working on a plan where he can retire AND still play and help us break a few more things :)

Watch my Walk & Talk with Gary and learn more>>

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