Updated: Sep 21
There are a lot of great organizations in the world. From NPO's and NGO's to Corporations and even Sole Proprietorships. The sheer amount of assets and infrastructure that some of the largest organizations in the world manage can cause one's head to spin just thinking about it. These organizations often deploy thousands of employees specializing in many disciplines across multiple continents to keep these organizations running profitably and efficiently.
There is one type of organization however, that may deploy a more diverse array of expertise than even the largest companies in the world and they are closer to you than you think.
Local governments perform an array of functions and services with operating budgets much smaller than many of their counterparts in the private sector.
We analyzed publicly available data from private sector, publicly listed companies and compared it to a mid-sized municipality, Michigan's capital city of Lansing, a Mayor-Council city with a population of 112,000.
Lansing has a 2022/2023 budget of $243 million with around 900 employees based on the city's 2023 Budget and FY 2021 ACFR, including over 375 employees in Fire and Public Safety.
In the private sector, there were 140 publicly traded companies with listed revenue between $250 million and $300 million. Of these companies, the average number of employees (unweighted) was 1121.
While there are myriad factors beyond this basic comparison that would need to be considered to truly get an exact picture of the efficiency of these organizations, a quick glance at the numbers would seem to indicate that not only are municipalities operating within the range of efficiency of these for-profit companies, they may be surpassing them.
There is one key element however that is hard to dispute, municipalities are unrivaled in the diversity of functions and services many of them perform. In the private sector, most businesses are focused on specific verticals and can invest and deploy their resources aggressively toward those missions.
In local government, organizations are often required to spread these same resources across a spectrum of functions and services that is not replicated in the private sector. While there are some large corporations which have diversified greatly to expand revenue opportunities, none come close to offering the array of services many municipalities do. Here is a list we put together of the many disciplines that communities must be proficient in and provide resources for:
Water and Sewer Systems
Building Safety (Permitting, Plan Review, Inspections)
Park Design and Maintenance
Park and Rec Programming
Facility Design and Maintenance
Vehicle Repair and Maintenance
Road Design, Repair, and Maintenance
Waste Management and Recycling
Event Management (Parades, Festivals, etc.)
Financing (Bond Markets, Tax Increment Financing, etc.)
Information Technoloy (Networks, Hardware, Software, IoT, Phones, etc.)
GIS and Mapping
Real Estate Acquisitions
Affordable Housing and Co-Ops
Emergency Preparedness and Management
Media Productions (City Council Meetings, Public Hearings, etc)
Even with our research, there are likely services we missed. It's true that many communities will contract some of these services or even leverage a shared services agreement with neighboring communities to lessen the logistical burden, but those are still just methods of managing these needs. Municipal leaders need to be well-versed in these topics and be able to articulate their organizations needs in these areas whether it be to vendors or internal teams. Also, it's the same financial resources being used, regardless of who is providing the service.
In disciplines such as Community and Economic Development, staff must be able to understand not only the services offered by the municipality but also about the business functions of the companies they want to attract and support. This creates immensely voluminous caverns of experience within municipal departments.
This isn't to say that the private sector lacks depth of experience, financial discipline, or efficiency. In fact, it's well-known that for-profit companies must be efficient to be profitable and grow their business. The US economy is often a benchmark of productivity, however there is often a misconception about the inefficiencies of governmental entities in comparison. When it comes to local government specifically, this argument breaks down quickly.
So, why Does It Matter?
Until recently, local governments were among the last to acquire new technology. Tight IT budgets were flexed as far as they could go, decades old hardware and software sat on desks often taking up space and slowing down department workflows.
These same organizations, with their vast number of functions and services, have the biggest need for technology -- a catch-22. They are charged with oversight of the most visible initiatives within communities and are required to manage complex and highly logistical projects as well.
In the past decade, a GovTech movement has emerged and municipalities have begun to aggressively innovate. Municipalities have invested (and continue to invest) in Enterprise Resource Planning (ERP) systems that help them consolidate and manage data across their organizations to allow for real-time aggregation and reporting of data between divisions and departments. They've leaned into website upgrades for a better public experience and added new ways citizens can engage with them such as online bill pay, self-service issue reporting, online permitting and inspections, electronic plan review, and more.
Municipalities have also looked beyond the traditional management of data and implored new technology such as advanced GIS systems, asset management tools, IoT, remote meter reads, RPA, Business Intelligence, etc., to their operations.
A sector once confined to outdated operating systems, CD-ROM software installations, and dial-up internet now deploys virtual servers, SaaS software, and state of the art peripherals.
While there are still some municipalities on the trailing edge of this movement, many have acted and are already beginning act 2. The number of companies within the various GovTech niches have risen sharply in recent years. There are over 70 permitting software solutions available according to recent (2022) research of ours, for instance. While they aren't all created equal, this competition has made it possible for even budget-strapped municipalities to find a solution within their range.
If you are just beginning your GovTech journey, or are looking at taking the next step, give us a call. We'd love to chat with you about your goals. We do not use any pressure sales techniques and we meet you where you're at so that you can implement solutions that make sense for your situation. Whether it's procuring new community development software, an entire ERP system, or other services such as project management, training, document digitization, employee onboarding, or even drone mapping solutions (new!), we may be able to help.
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