Expect resistance from data insights

“Everyone thinks data is a great idea until you start making decisions based on it,” says former New Zealand Prime Minister Sir Bill English.

An increased capacity for data analysis is providing new insights for organisations – but don’t expect everyone to welcome it, was the message from former New Zealand Prime Minister Sir Bill English to the World Congress of Accountants (WCOA) in Sydney.

“Everyone thinks data is a great idea until you start making decisions based on it,” says English, who was finance minister from 2008 to 2016 and prime minister from October 2017 to March 2018.

“As soon as you start saying: is your money going to the wrong places, you get resistance to the change, not to the data.”

The National Party government pushed through significant welfare reform using actuarial tools and predictive analysis, with the aim of addressing the most persistent disadvantage by putting the focus on the individual.

English, speaking to the World Congress of Accountants, said government departments were defined by the information they controlled so were uncomfortable with others understanding what they did. Departments were challenged by the “enormous insights” from data analysis.

“When you focus on the customer you get a lot of resistance from suppliers [government departments]. It is very challenging for them because they are used to a world that does what works for the supplier and they are generally monopolies.”

Analysis that used to take two years now took half a day, he noted.

Related: See CPA Australia’s full WCOA 2018 coverage here

The Government used analysis to address disadvantage, for instance building a longitudinal picture of the interaction that a 21-year-old disabled person would have with the system.

Predictive analytics showed that someone who was not costing much at 21 was very expensive over 40 years “and you can probably do a lot more to alter that trajectory,” says English.

“You need to think about what works for them and deliver it to them rather than hoping they will find it.”

Information on the person would be held by both the welfare system and the health system and neither wanted to “open the curtain” between them.

There are significant rewards “if you can crack that,” he said.

Read next: Harnessing data analysis to shape stories: the rise and rise of the management accountant

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October 2021
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