This month, we welcome Daniel Ramos to the Authorium Podcast. Daniel Ramos is the Executive Director of the Office of Management and Budget for Harris County, Texas – the third largest county in America. Along with Authorium Co-CEOs Kamran Saddique and Jay Nath, and Michael Wilkening, a veteran of state and federal government, the panel explores the pros and cons of centralized and decentralized spending, how to proactively prepare for lean fiscal times, and the role of technology and AI in helping governments achieve meaningful outcomes.
One of our favorite takeaways from the conversation was the discussion of outcome-driven budgeting.
Ramos recalls a train ride that he took early in his career. A group of people were sitting nearby discussing their plan to open a bar. They spoke about the space of the bar, the revenue they needed to generate per square foot, how many seats would fit in the space, and the necessary staff. These figures informed what they would need to charge to remain operational.
This casual commuting moment stayed with Ramos.
“We need to do more of that in government,” he says. “What is the real cost of providing the service, and is there a better outcome?”
Whether a government is in the midst of a budget challenge or proactively making choices about where and how to invest, Ramos says,”…a more outcome-driven budget process to me is the real secret in the sauce – that’s where you’re really getting down to the prioritization. And that’s really what we end up doing in these jobs is deciding what’s a priority. And what is it?”
Consider a family caring for a child whose power has been cut-off due to unpaid bills. In many parts of the country, fire and police are often called upon to intervene on behalf of the child’s welfare. Once the child is taken into custody, the courts are involved, and sometimes a third-party foster care provider is contracted to look after the minor. The financial costs quickly escalate and oftentimes, the outcomes for the child are negatively affected. They may be moved to a different school, absenteeism may increase, and statistically, academic performance drops.
How much does it cost to supply electricity for the family, instead? “I can tell you, having run the numbers, there is no comparison on the value, the return on investment and the value statement there, ” says Ramos. “Once you commodify a person, it’s really hard to get them out of the system…I think that’s the tipping point of government – being a service as opposed to responding…and really ask ourselves those hard questions, ‘why are we doing it this way when it’s more expensive?’”
Michael Wilkening discusses the magnitude of engaging in these tough conversations especially when facing a deficit in the current budget year. Government leaders need to drive down costs immediately, and often make assumptions about the down line costs.
For Jay Nath, he recalls an effort in San Francisco to reduce wait times for translation services for non-English speakers during 911 calls from two minutes down to 30 seconds. When the city sought to find a solution, instead of reaching out to a known telecommunications company, San Francisco looked to a challenge-based procurement that sought results and efficiency over brand recognition. Like other outcome-driven processes, the city started by identifying the desired actions they wanted to achieve and worked in reverse to engineer a solution that would deliver the best value and results.
Hear more about outcome-driven procurement and budget decisions in government in the podcast episode, The High Cost of Inefficiency; stream it now.
