Why Trump should dump spreadsheets

dollar signs 

The federal government is arguably the largest, most complex enterprise on the planet. Its budget is measured in the trillions and its impact on the economy is substantial, with U.S. federal spending exceeding two percent of global GDP. 

President Donald Trump recently proposed increasing the Defense Department's budget and creating $54 billion worth of offsetting budget cuts. This is most likely the beginning of what will be the largest set of federal budget changes in a generation. Programs and organizations will be eliminated, created, combined or refocused. The government will need to be extremely well organized and have the necessary tools to effectively manage the resulting changes.

While this may seem basic, many agencies still create multi-billion-dollar budgets in Excel spreadsheets, making it difficult to avoid the exact kind of waste the Office of Management and Budget wants to eliminate. It will be a challenge for these agencies to make the changes the president is requiring.

From its launch in 1985, Excel helped transform the way we do business Unfortunately, it has not evolved to meet the speeds of other, more automated, budget solutions. Spreadsheets are ill equipped to process the myriad functions that exist in the current budget formulation process. Agencies must record, analyze, categorize, control and report thousands of changing budget data points back to stakeholders. This process is far more complex than simply plugging numbers into a table.

Moreover, the federal government's current budget development processes can have deeply negative impacts when error-prone information is used to make significant decisions. Citizen programs and valuable tax dollars are at stake here, which means the government simply cannot afford to continue draining its resources on this inefficient model. There needs to be a change.

Modernizing begins with automation

Every economic sector has faced automation challenges; the federal government is no different. On his way out of OMB, former director Shaun Donovan made sure to emphasize the importance of modernization. He stated in his exit memo that while the government has made strides in digitization, there must be continued momentum towards modernization.

It would be truly difficult for this to happen in agencies that still depend on Excel. They need to move towards more advanced technology or risk plateauing progress.

Budget processes need to create, capture, and distribute comprehensive data. Budget processes must also be integrated with strategic planning, performance management, accountability and financial management, and must have access to analytics, business intelligence and scenario modeling tools. These are tasks that even the most robust spreadsheets are incapable of doing. In order to maximize ROI, as well as successfully update legacy IT systems, agencies must embrace automation as the most effective first step of the modernization process.

Data analysis is integral to modern budget reporting

As budget formulation applications have become more complex, so have the data entry requirements. Federal agencies must analyze data, in addition to reporting this information in their budgets.

By updating their budget formulation systems, agencies can save hours that were previously spent on monotonous tasks, such as data entry, while also arming them with data insight that leads to better strategic decisions. Modern systems can also plan and track changes to organizational and programmatic changes; enabling the efficient presentation of information in multiple contexts.

Overcome inefficiencies of legacy IT

As the federal government works to streamline processes, such as budget formulation, the inefficiencies of using Excel spreadsheets and other legacy IT systems are apparent.

The continued over-reliance on spreadsheet technologies will frustrate attempts to improve delivery of services. Multiple isolated data streams generated by spreadsheets require time consuming reconciliation. Inconsistencies in spreadsheet content and construct result in costly start / stop processes. The lack of process-spanning, integrative technologies creates manual hand-offs and rework. Spreadsheets do not provide authoritative controls, resulting in errors and frustrations. Together, these realities result in budgets that are focused on numbers, not analytics and program results.

As we continue to progress through President Trump's first 100 days and see what his final budget will require, we should pay close attention to how agencies will comply with their new budgets and whether inefficiencies will be eliminated. It is my hope that the federal government will implement automated tools to streamline the budget formulation process.

About the Author

Jon Hammock is CEO of KeyLogic Systems.

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Reader comments

Tue, Apr 4, 2017 DaveR Inside the Beltway

Ahem. Lotus 1 2 3 preceded Excel (and became the first "killer app" of the PC world) and all spreadsheets go back to LANPAR. "Excel helped transform the way we do business?" Only by driving Lotus out of the market.

Tue, Apr 4, 2017 Owen Ambur Hilton Head, SC

This point is very well taken. However, money is an input and what truly matters are outcomes. Thus, making budgetary data readily available in open, standard, machine-readable format is a necessary interim step toward linking funding with required outputs and desired outcomes. So too is agency compliance with section 10 of the GPRA Modernization Act (GPRAMA), which requires agencies to publish their performance plans in machine-readable format, like StratML. When they do so, it will be possible not merely to see how our money is being spent but also what we are getting for it.

Tue, Apr 4, 2017 Derek

The problem isn't that spreadsheets are incapable of helping formulate a budget. The problem is that we don't actually practice checkbook economics (for which a spreadsheet is perfectly adequate). Government bureaucrats typically don't stop to think if a transaction makes financial sense for the taxpayer -- they have been given money to spend and by Gaia, they'll spend it so they can get the same allocation next year (or more!).
If we want to eliminate waste we need to inculcate an attitude and philosophy of truly being stewards of the taxpayers' money -- an attitude that seems to have disappeared in most federal agencies over a generation ago.

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