Original Post Date: Monday, February 2, 2009

In a seminal RAND Corporation report, Bureaucracy Does Its Thing, author and former CIA agent K.W. Komer promotes the idea that the mindset of America’s institutions led to problems in Vietnam. His thesis is that the bureaucracies of the U.S. were fixated on fighting the Vietnam War according to how the bureaucracies had prepared and organized instead of in manner that the situation required.

As I read the stimulus package before Congress, I see a focus on the idea that new technology will create jobs. Yet I also have read that Governor Schwarzenegger is consolidating the technology departments in the California state government to reduce redundancy. This seems to make sense since technology tends to be scalable with a low marginal cost. Therefore, technology consolidation is strong budget-cutting tool but one that inevitably leads to workforce reduction.

Here is the question: should the government rely on technology investment as a way to bring jobs to the economy or has Governor Schwarzenegger discovered a blue print for reducing costs in cash-strapped states. My answer is: it depends on the situation.

This is where business case analysts and cost estimators become important. Indeed, technology creates jobs in terms of implementation but tends to reduce them in terms of operations. Business case analysts should take that into consideration as they consider cost-benefit trade-offs. Cost estimators also must take into account total cost of ownership of a project. Often times, there are implicit tasks that are "hidden" and thus, actual job creation may not be considered.

I choose not to hazard an opinion on the merits of the stimulus’s approach versus that of the California Governor. However, I will say that strong business case analysis and cost estimation will help eliminate pre-conceived notions in a given scenario. Therefore, these skills can keep us from falling into the trap that Komer described in his report.