No matter what savings result from the current deficit reduction negotiations, there's little hope for long-term, structural savings if we continue to run the government using 20th-century management. That's why the final package should also include a management package building on similar innovations that both the GOP and White House recently proposed that would radically alter the way government agencies report on their own operations and process reports from corporations.
The benefits could include billions of dollars in operating savings, improved operating efficiency and delivery of services, transparency that would earn public trust, and substantial savings for businesses.
In June, Rep. Darrell Issa (R-Calif.) introduced DATA (the Digital Accountability and Transparency Act). Among other things, it would require government agencies and recipients to report quarterly on all spending, including grants and contracts, using global open-standard systems. The same day, the Obama Administration issued an executive order to promote greater governmental efficiency and accountability. It included, among other measures, a requirement for systems to ensure the reliability of government spending data and to collect and display that data.
Technology now exists so that, building on the Issa and Obama approaches, we could have a "one report" system for use by both government and business both for their daily internal operations and their external reporting, with a wide range of benefits to the organizations and the public.
The key is XBRL, the eXtensible Business Reporting Language, a free, global, standard set of "tags" that give data context by bonding additional information to that data (for example, 6, which gives the number 6 meaning). With the right support systems, that data could flow automatically and in real time to anywhere that it was needed, so at least hypothetically data would only have to be entered once within an organization, with major improvements in data accuracy and efficiency. Within companies and agencies it could give their personnel the real-time information they need to make better decisions.
Externally, the same data would let them better coordinate with their suppliers and customers to improve efficiency and earn public confidence through transparency. The tagged data is machine (i.e., computer) readable, which would also allow many currently manual processes to be automated.
Mandated reports, such as the ones under the Issa and Obama plans, could essentially be generated automatically from that same operating data, at a fraction of the time, effort and cost of current systems.
The key elements of such an approach are already in effect in the Netherlands and Australia, with what is called Standard Business Reporting. It allows businesses to file a single XBRL report with the central government: the data then flows automatically to the relevant agencies. Companies can save up to 25 percent on their reporting costs, while the public interest is better protected because multiple agencies can analyze the same company simultaneously.
But Standard Business Reporting is only the start of a "one report" system: to realize the full benefits, the government agencies and businesses would need to start using an expanding version of XBRL, XBRL GL (for Global Ledger) to run their daily internal operations. If the deficit reduction act mandated such a reform by government agencies, their experiences might inspire companies to follow suit.
Doesn't it make sense? Why have differing systems to run your operations and to do external reporting when the same system can do both functions? With single reports, that becomes feasible.
A group of technology innovation companies, The Technology CEO Council, recently reported that the federal government could save $1 trillion by pursuing a variety of proven private sector innovations, such as cloud computing. Single reporting could further add to those savings, and perhaps begin to heal current rifts by allowing smaller, more efficient government while simultaneously encouraging economic growth. That would constitute 21st-century management not only for government, but also the private sector.