Insight by Decision Lens

Automation and analytics can help agencies modernize planning and budgeting processes

The need to define budgets for programs two or more years before spending a single dime creates a challenge ensuring allocations align with spending at most Def...


Using Data to Evaluate Modernization Initiatives

People who are looking at the long range often are slightly different than people who are looking at the midrange. And those people are different than the financial managers, who are trying to figure out what to spend money on next month.


Priorities in the Planning Process

We’re trying to help [Defense agencies] automate the collection of their requirements for the midrange planning process, the Program Objectives Memorandum, and then be able to more effectively connect that to how they spend dollars.”

Federal agency decision-makers at nearly every agency face a common challenge: how to ensure they have the budget for future programs in the correct allocations and at the right time.

This challenge comes from the long planning and budgeting process itself. It begins at least two years before a planned spend. Through its Planning, Programming, Budgeting and Execution (PPBE) process, the Defense Department takes a five-year view of its requirements.

Despite decades of tinkering with PPBE via DoD Directive 7044.14, the process remains complex, resource-intensive and prone to eventual mismatches between goals and dollars.

Dependency on manual spreadsheets

One reason so many DoD components have problems with PPBE is because of the manual processes they employ, said Dan Saaty, chief scientist and co-founder of Decision Lens. It remains common, he said, for an agency to use multiple, unwieldy spreadsheets — each derived from different data systems.

The spreadsheets and the hunting for data and merging manually “creates breakage in planning and a misallocation of resources,” Saaty said. He noted that a single organization, such as an Army command, might need to merge as many as 30 spreadsheets, each with thousands of rows and columns. Each change in plans results in myriad error-prone, manual tasks just to keep everything synchronized and up to date, he said.

“It puts planners in a permanently reactive state to be using these antiquated processes.”

One budget, many influencers

A second challenge comes from different elements of budget planning belonging to different bureaus and offices.

“When you look at most organizations, the people looking at the long range often are slightly different than people who are looking at the midrange,” Saaty said. “And those are different than the financial managers, who are trying to figure out what to spend money on next month.”

Beyond making it difficult to do budgets and spend projections, dated processes impede change and innovation. Accounting for any new initiative can founder because when leaders “try and roll that out to the organization, the people who actually operate the day-to-day business are barely able to sustain what they do today,” Saaty said.

Getting around this requires automation and a data analytics­­-oriented approach, he said. It starts with sorting out the important metrics for different types of programs. Planning for base or camp operations and maintenance differs from planning for a new weapons platform, for instance.

“Within each of these planning processes, as planners define requirements, they need to define what their performance measures are,” Saaty said. “They must ask themselves, ‘How am I going to drive effectiveness in the organization?’ ”

By pulling data and spreadsheet calculations into an automated framework, organizations can move to a continuous planning and execution model. That then allows a fast way of running what-if scenarios with the assurance of determining accurate answers, Saaty said.

Moving to a more real-time data approach to budgeting

Within what Saaty called a living planning framework offered by the Decision Lens platform, stakeholders can collaborate, test assumptions, track history and ultimately become more effective at budget allocation.

The Decision Lens application helps civilian agencies, said Saaty, and cited the Federal Aviation Administration, which, like DoD, balances the need for large, long-term capital investment with the operational demands of its air traffic control system. Even agencies with smaller capital and equipment levels — like the Animal and Plant Health Inspection Service — need flexibility to respond to unplanned events, such as disease outbreaks, that can create budget and planning issues.

An effective framework should bring in data that exists outside of the financial and acquisition systems of record but that nevertheless affects planning and resource allocation, Saaty advised. Information in doctrine statements and pre-decisional documents often exists in Word or PowerPoint formats, for instance.

An effective planning framework also lets organizations more carefully prioritize spending in ways that might not be obvious. “Sometimes by spending a dime today, you’re going to save a dollar in the future,” Saaty said. “You really need a multi-dimensional view of these investments that lets you look at their value, the ultimate cost of the investment and the risk associated with it.”

So what would an effective process, from the Defense Program Objective Memorandum to budget execution, look like? It would be automated and incorporate all of the critical data needed to make smart trade-off decisions, which would let planners identify gaps in their ability to deliver on their missions, Saaty said.

“I believe if we don’t do this, it erodes our competitive position against our adversaries. The way we stay ahead of them is by smartly allocating resources.”

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