Research surveyed latest technology developments and public sector CFO responses

A recently released survey, Trends in Technology 2011: The Information Explosion, conducted by the Association of Government Accountants, concluded that governments must reexamine business processes to take best advantage of the deluge of data available while managing new threats. Failure to do so means governments can become overwhelmed and lose opportunities of great significance.

Both software tools and human judgment are needed to make effective and efficient use of the data, made possible by an ecosystem of technologies built around the Internet, communication systems and storage capacities. Technologies mentioned in the study hold the promise of great progress—the ability to create a smarter planet, use resources more efficiently, avert disasters and confront some of our greatest challenges. On the other hand, they create new vulnerabilities to our age-old weaknesses for destruction, fraud and abuse.

Nimble organizations in the private sector will use these technologies to gain competitive advantage and provide better value to shareholders. For them, it is one of the imperatives of survival. It is even more so for government agencies. Governments at all levels are the generators and users of huge amounts of data, they are the fiduciary agents for trillions of dollars of spending, and they are the proposers and enforcers of regulations. In each of those functions, the discerning use of technology can make for huge social gains at every level. The challenge of managing change within government organizations to embrace such technologies will be a key factor for success.

While the study covers much ground on emerging trends in hardware and software development, greening of computers, cloud computing, smarter planet, social networking, mobile apps and new vulnerabilities, it hones in on the Information Explosion as the central theme of latter day technology development. As the world becomes more interconnected, instrumented and intelligent, the digital universe of information is exploding:

  • In 2010, the digital universe set a record. It grew by 62 percent to nearly 800,000 petabytes. A petabyte is a million gigabytes.
  • In 2011, the digital universe is expected to grow almost as fast to 1.2 million petabytes, or 1.2 zettabytes.
  • This rapid pace of growth means that by 2020, our digital universe will be 44 times as big as it was in 2009, with approximately 35.2 zettabytes of data.

And the challenge of ‘big data’ is not just one of size; it is one of the volume, velocity, variety and vitality of data. Fortunately, the ability of databases to handle petabyte-level information stores has grown over the past few years. The sheer size of such collections has led to heroic efforts to keep the underlying hardware reliable because the classic relational databases do not have built-in, hardware-independent availability mechanisms. This has led to keen interest in approaches, such as Hadoop, in which reliability is built into the software. Properly designed, Hadoop-based data stores can be extremely available and can be expanded to vast, multi-petabyte scales. Google, for example, has vast information stored in Hadoop-like data stores. Yet Google can search this entire collection so quickly that it now posts potential search results at the same time a user types in a query.

Another promising trend is the rapid growth of analytics. An entire industry has developed around the business analytics paradigm, incorporating business intelligence, predictive and advanced analytics, financial performance, governance and risk analysis, different enterprise functions such as customer, human capital and supply chain. Organizations should familiarize themselves with this new technology—not only to see how much more efficiently old processes can be implemented, but also to take advantage of new insights and new processes.

Federal, state and local government organizations are collecting massive amounts of data to properly administer programs, regulate markets and maintain infrastructure. However, legacy, silo-based information systems in the midst of a budget crisis can cause managers to be too conservative and fall back on legacy processes. But the real efficiencies and increased effectiveness lie in using the additional data that comes with such volume that it feels like multiple fire hoses. Simply adding a business analytics system may not be enough. Financial and business processes need to be thought through again, from the ground up, based on vastly increased visibility potential.

The bottom line is that taking advantage of the information explosion requires not only hardware, software and algorithms, but also a reexamination of business processes. CFOs should look for ways to exploit the new data and in the process make their organizations more competitive and responsive.

 

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