The Public Sector Squeeze: Doing More with Less. And Probably Less with Less.

Things are getting tense in the U.S. public sector. While the uncertainty and unusually high number of unfilled positions that have so far accompanied the first presidential transition in eight years marks a major source of strain, there are other causes. Sagging revenue, a demographic crunch, intensifying infrastructure-improvement needs, surging cybersecurity risks, 21st Century citizen expectations and a technological reckoning confront public sector organizations at a time when most budgets seem likely to grow significantly leaner.

"Discretionary spending is not going to be increasing," says Carlos Otal, National Managing Partner of Grant Thornton's Public Sector practice. "It's just not possible. We used to talk about doing more with less. Now, we need to figure out how to do less with less. Decisions need to be made regarding priorities—what are you going to do? What aren't you going to do, and why?" Even after organizations have pruned the number of major investments they will pursue, they still need help doing more with less. No wonder The Boston Consulting Group's Danny Werfel points to a pervasive need throughout the sector to "manage the tension" of increasing requirements and decreasing budgets.

New technology platforms and tools can help public sector navigate through these difficulties, but only if: 1) their implementation risks are minimized and their returns are optimized; and 2) legacy system environments stretching back to the Reagan (or even the Kennedy) administration do not get in the way.