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7

The Role of Information
Management in Making
Competition Work
Bridget M. Anderson
How great are the savings one can expect from competition? Historically,
public sector entities have focused on service delivery and not necessarily on
competitiveness; therefore, this has been a difficult question to answer.
Before the savings question can be answered, two fundamental but extremely
important questions must be asked: (1) What services does the government
provide? and (2) How much does it cost to provide each service?Cost analysis is an important consideration in determining competitiveness,
as this is the baseline from which all "make or buy" decisions will be made.
In fact, the cost tool, coupled with performance measurement and process
improvement tools, provides management with the type of useful information
necessary to select the appropriate service delivery method. These tools, both
financial and managerial, enable employees to be held accountable and to
operate like a business. In addition, these tools should be coupled with an
information technology system infrastructure that allows for flexible and
timely determination of the costs of each service provided by the government.Governments have many diversified needs for effectively and efficiently
providing services into the twenty-first century. Meeting these needs
requires governments to undergo managerial cultural change. Govern-
ment's plans for the future should include the following:
• Increased emphasis on Activity-Based Costing (ABC) and Activity-Based Man-
agement (ABM)
• Implementation of managed competition

-123-

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Publication Information: Book Title: Local Government Innovation: Issues and Trends in Privatization and Managed Competition. Contributors: Robin A. Johnson - editor, Norman Walzer - editor. Publisher: Quorum Books. Place of Publication: Westport, CT. Publication Year: 2000. Page Number: 123.
    
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