Epistemological Puzzle

Business intelligence helps agencies solve the performance conundrum.

People in government with responsibility for major programs live with an "epistemological conundrum," declared the Coast Guard's Rear Adm. Patrick Stillman in a memorable tongue-twister connoting both the necessity and the difficulty of getting the right information to measure performance.

Epistemology, says Webster's Dictionary, is the study or theory of the nature, sources and limits of knowledge. A conundrum is a puzzling question or problem.

Stillman is the executive officer for the Coast Guard's Deepwater program, designed to replace the service's inventory of ships, aircraft and other assets at a cost of $19 billion to $24 billion during the next 20 years.

The conundrum for Deepwater centers on keeping track of the program's many moving parts and assessing how well money is being spent. Using sophisticated business intelligence systems from SAS, a business analytics software company headquartered in Cary, N.C., Stillman and his team are able to "live in the light," as he says, producing data to guide internal management of the program and also offer accountability to armies of overseers on Capitol Hill and in the executive branch. Within the Coast Guard, the systems promote a "devotion to performance that borders on religion," Stillman says.

But the conundrum seemingly has not been solved to the satisfaction of Congress.

The House Appropriations Committee voted on May 10 to withhold more than $700 million from the Homeland Security Department (including $446 million from Deepwater) because it had not met congressional requests for information about its programs.

That cut may well be reversed. But not likely to reverse course is the continuing drive by agencies to measure, and then to improve, performance. Every dollar spent is precious. And information is the currency that can help husband these dollars and provide knowledge that's essential in virtually every field-intelligence, cybersecurity, fraud prevention and more.

During a panel I moderated at an SAS conference on business intelligence, Zack E. Gaddy, director of the Defense Finance and Accounting Service, also testified to the utility of epistemological power. DFAS oversees huge payment and accounting programs-disbursing $415 billion last year, processing 5.9 million payments to people, 12.3 million payments to commercial entities and 6.8 million travel vouchers. Sophisticated data analysis has helped DFAS reduce fraudulent claims against federal health care programs, and has shown the way toward savings of millions in travel reimbursement costs.

Deep analysis of data has many other uses, as Jim Goodnight, founder and CEO of SAS, has pointed out. It contributes directly to a healthy economy by enabling huge retail chains to discern patterns in buying, thereby promoting better pricing and profits. It helps financial institutions respond to the demands of the USA Patriot Act for better analysis that can turn up suspicious transactions.

These are essential business objectives of the kind that federal chief information officers are helping to address. We depict 18 CIOs on our cover this month, and Shane Harris writes about their evolving role as core business advisers, ranging beyond the bits and bytes of information technology.