4 Reasons to Embrace Technology for Cost Savings During $15B Budget Cuts
Public service organisations are positioned to embrace tech solutions that cut back on spending and improve quality of life.
In an open letter to Canadian cabinet ministers, the President of the Treasury Board Anita Anand mandated a public sector-wide financial restructuring in an effort to cut back on $15.4 billion dollars in spending.
That means departmental budget owners across the country will need to reconsider their current spending, and decide where they can cut back. Minister Anand affirms that no public service employee should expect to lose their job, but these major budget cutbacks will mean that Canadian resources will be reallocated to the public healthcare system. (source)
In the Canadian government’s 2023 budget, federal crown corporations are expected to achieve comparable spending reductions, “…which would account for an estimated $1.3 billion over four years starting in 2024-25, and $450 million ongoing.” (source)
Many public service executives, budget owners, and financial personnel have voiced their concerns against this enormous goal and the relatively short window in which departments are expected to make changes. Even the Public Service Alliance of Canada (PSAC), a union which represents 230,000 public service workers, has raised its concerns against the initiative (source).
But while some concern themselves in how the Canadian public sector will be shaped by this commitment to more regimented budget practices, others are turning to tech for an immediate solution. What they have learned is that the first step to improving your budget is understanding what you have. Tech is helping these public service organisations do just that.
In our research to develop a purpose built at-a-glance budgeting and financial forecasting tool (Budget Manager™), we have discovered four areas where technology vastly improves the efficiency of public service budgeting processes:
- Forecasting
- Data Centralisation
- Process Automation
- Decision Making
In the face of these massive public-sector budget cuts, let’s take a look at how tech solutions leverage their power within these four areas to help you and your organisation save money!
Financial Forecasting:
The future of financial planning and analysis (FP&A) is data.
Hard, verifiable, auditable data.
Essentially, modern tech allows organisations to more accurately forecast and budget to achieve operational and financial goals. The power behind this change?
Data integrity.
Many solutions now have built in measures to avoid the erroneous data that may come from traditional source data like Microsoft Excel spreadsheets. Research has shown that the leading cause of bad data is human error, as can be seen in this Microsoft help article. More often than not, the errors that affect these datasets and the results they produce are unseen and forgotten about until the point where it matters most.
Simple solutions like UX/UI changes, mandatory fields, and past data fact-checking allow for the smart systems being developed today to accurately identify when an error has occurred, and take corrective action – or prevent it from ever happening in the first place. Alternatively, the implementation of secure AI tools allow for the manipulation of “big data” to forecast business trends in relation to your own finances.
With more accurate FP&A processes, organisations in both the public and private sectors will lose less money to discrepancies in data. As early as 2013, we have seen the effect of big data and data integrity on saving government money. The future will hold only greater improvements, as this new technology develops.
Credit: SAP
IBM affirms that, “FP&A professionals are moving away from planning and forecasting in Excel spreadsheets, which are too often created in an ad hoc manner and siloed across business units. A digital-first approach to planning means organisations are adopting strategies that are focused on process automation, agility, transparency and data-driven decisions” (source).
Example:
Employee Management: Accurate forecasting of retiring public service employees allows the organisation opportunity to plan for retirements in a timely manner. By anticipating workforce changes, your team can avoid last-minute hirings and training, resulting in smoother transitions and cost savings associated with recruitment processes.
Data Centralization
One of the leading causes for headaches in the workplace, and subsequently a major driver for inefficiency is the question:
Now, where did I put that spreadsheet?
It might be a long, confusing, and unnecessary email chain with thirty people that could have been a phone call. Or even that the information you need is siloed to one person who knows how to use a particular software. Data often gets misplaced.
Half of a workday can be spent searching for a piece of information that goes into an email, which could have taken you five minutes in the first place, if you had known where to look. The beauty of data centralization is the fact that it’s at everyone’s fingertips. Gone are the days where you are blocked by the fact that you are waiting for someone to email you a spreadsheet. You can just go into the purpose built software and access the files yourself.
This makes communication far more effective as well. Many solutions allow for discussion directly linked to the issue. Think: a user-friendly message board built into your spreadsheet.
The entire conversation would be stored in that place as well, so you would never have to search through your inbox for an important piece of information that someone sent you.
Source: Government of Canada
Data Centralisation directly saves your organisation time, effort, and money. It takes a web of confusing data points, sources of truth, and communications then streamlines it all into a simplified centre for information. The benefits of this tech trend are far reaching as well. Take the Health Data Research Network Canada (HDRN), for example.
Administrative health data, including Covid-19 test results, are now more easily accessible to researchers and policy makers through something called the ‘Dash’ portal. This allows for the breakdown of long, burdensome information flows – replacing it with instant data and access, instead.
HDRN explains that, “[researchers] can now request data from multiple regions through a single form, completed once through the DASH portal. The DAR form collects all project information, requirements, and supporting documents needed for the project to be reviewed for approval in each region.” (source)
Juliana Wu, Chair of DASH working group, says that the centralization of data is an, “important step to reducing the administrative burden on researchers.”
Example:
Project Budgets: Keeping a project’s financial data accurate, up-to-date, and centralised aids in creating realistic budgets. This prevents underestimating costs, reducing the risk of budget overruns, and eliminating the need for emergency funding. This saves time and resources, helping departments work more efficiently and distribute funds better. This effectiveness leads to cost savings, as staff spend less time on data collection and more on important tasks.
Process Automation
It’s become a rite of passage for office professionals to share in their common distaste of mundane and time consuming tasks. If you have ever spent the majority of your workday manually inputting data into a spreadsheet, because the import tool just ‘doesn’t work very well’ then you’ve experienced this exact problem.
An incredible amount of time, money, and effort are spent on high-effort, low-yield tasks – in both the public and private sector. Administrative chores and data labours are common enough that jobs are created to specifically deal with these issues.
Process automation is the latest in tech that aims to solve this problem. Modern tech solutions often come with automation tools to make invoicing, sales orders, accounting reconciliation, data entry, system queries, payroll, employee or vendor on-boarding (source) seamless processes that require very little human interaction.
Source: Paperform
Workplaces are growing even more efficient as this trend evolves with technology. The Gartner research group claims that, “[finance] robotics is evolving from simple individual task automation to full process automation that could improve the accuracy of financial analysis and forecasts. Automating finance processes requires combining finance robotics with other intelligent automation technologies.” (source)
So not only would an organisation that employs process automation save on spending (directed at operation costs surrounding labour-intensive tasks) but it also assists in FP&A efforts that could benefit a team in the long run.
Example:
Financial Statement Reconciliation: A finance manager spends 15 hours per week reconciling financial statements manually. After automating this process, they now spend only 2 hours. This time-saving lets them focus on high-impact activities that directly bring value to their team. This shortens project timelines, decreasing costs and allowing the team to focus on their core business rather than mind-numbing administrative tasks.
(Data driven) Decision Making
The Canadian Government states that, “[a] clear, results-driven data strategy is necessary in a 21st century government. The public service must lead by example in the management, security and use of the data that Canadians entrust to them.” (source)
The pandemic opened the world’s eyes to the importance of data-driven decision making, especially in the case of policy-related mandates that were based on infection rates. The 2023–2026 Data Strategy for the Federal Public Service implores public sector organisations to utilise hard data to drive their operational and financial decisions for the future.
This is particularly relevant in the wake of Minister Anita Anand’s open letter.
A public service organisation that uses data integrity to forecast and budget effectively, can also count on their data to be solid when it comes to making decisions. Above all else, these choices can also be clearly audited through the use of clean and centralised data.
Source: Government of Canada
Modern AI tools also help to make data-driven decision making easier through trend and asset analysis. However, the most recent trend within this movement is the effort to make at-a-glance reporting more accessible to executives and budget owners.
Rather than waiting for metrics at the end of every month or even fiscal quarter, modern financial solutions make it possible to see your data instantly. Every single reservation, commitment, and invoice are input into these systems to immediately change the data in a centralised reporting hub (such as a dashboard).
The practical application of this tech is that, “[data] is readily available and integrated into assessments of [issues] and how they affect resources, the economy, infrastructure and ultimately people and their communities.” (source)
Example:
Public Transportation: A public transportation department wants to optimise bus routes and schedules. With data-driven decision making, the department can analyse historical ridership data, traffic patterns, and user feedback to identify underutilised routes and high-demand areas. With this insight, the department can adjust routes and schedules to align with actual passenger needs, reducing the number of empty or overcrowded buses. This optimization not only improves passenger satisfaction but also leads to substantial cost savings by minimising fuel consumption, reducing vehicle wear and tear, and optimising driver hours
So what should you do?
Take a look at some Canadian businesses. The startup ecosystem is full of business intelligence organisations and finance technology solutions that are working to address these very issues. Let’s get in touch, we have a few recommendations!
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Media Contact:
John Burnside | Communications & User Adoption Officer
jburnside@raintechnologiesinc.com
