Your Guide to Government Spending, Budgeting & Value-Driven Decisions

I have to admit – when it comes to money, early into my career in government, I was a tad…naïve. Of all places, an Uber ride led to my wake-up call. 

I still remember the moment I learned how out-of-touch I was when it came to how governments spend money. My car was under maintenance, so I called an Uber to get back to the office. Routing the destination turned into a conversation, as I told him about my work. We dove into government operations and philosophy, from legislative maneuvering to the truths of servant leadership. He was in tune with how the government works and had been educating himself – clearly, he was paying attention to the bigger picture. 

I told him about a project I was working on – and it was big, bold, and at face value…expensive. This project was the start of our first ServiceNow CSM implementation. Explaining all of the associated benefits, I was enthusiastic to say the least. I outlined how we could save taxpayers SO much money over the course of only a few months – not to mention how our savings would exponentiate in the coming years. Once this plan was underway and generating savings, we could return tremendous amounts of overhead back to the taxpayer. Maybe if we lower our operating costs enough, we could even lower taxes. If government gets cheaper, shouldn’t we pay less for it? 

He didn’t even try to contain his laughter. 

“HA!” he cawed. “That will NEVER happen.” 

I thought he was just being bitter and pessimistic. He explained: 

“Spending is how they GET more money. It’s not about how they GIVE money back. They need to look like they’re doing a lot with your money so they can get more of it.” 

At first, I was wildly offended, but then it clicked. Practically speaking, he was right. 

How Does Government Spending Actually Work?

That conversation transformed the way I listened at work and discussed budgeting and expenditure. Sure enough, even when all program requirements and customer service standards were met, underspending was an unwelcome concept. If we had funds (i.e. tax dollars) available, we needed to find ways to “apply” it. Previously, I was under the impression that simply spending what you needed to administer programs and returning what you didn’t need, was the best approach. As funny as it feels to say now, I never realized how flawed my mentality was until that year - it completely transformed my approach to ROI in government. 

Instead of promoting savings, I talked about increasing value. Instead of returning taxpayer dollars, we planned how we would ‘stretch’ it. And it worked. After 18 months of internal lobbying and networking, we finally got the green light to launch. Our ServiceNow CSM implementation was approved – because of its value. 

So, what is the key to selling to government?

Value must be central to the conversation. Government purchasing has come to understand this. I was there as the priority shifted from ‘Lowest Bid Award’ to ‘Greatest Value Bids’. This change is still relatively new for many government entities, so how do you convince them you are worthy of an invitation on this journey? You prove that you are deserving of their trust. Governments are spending in ways that they never have before, and they need to venture into this unknown territory with people and partners they trust. Sure, price points will always matter... but instead of competing to be the lowest priced bid, show them your solution solves their problem and generates the greatest value for their agency and citizens. Government trusts those who share its interests, and when it comes to purchasing software, there is more caution than confidence. Only trusted solutions and partners will make it in the door, and the key to that door of trust is value. 

3 Tips to Keep in Mind When Speaking About Government Spending

Many vendors and services are still new and unknown to the government sector. This can change with a considerate approach that emphasizes trust-building and proof-of-value. Here are a few important tips as you present your offering to a government organization: 

• Every single penny used by a government entity uses must first be requested and authorized (typically months or even years in advance). What does this mean? All decisions that require funding have been proposed and proven. Why is this important? Sales and outreach must help government prospects prove the value of an expense. Oftentimes, the influencers and deciders in government must also sell their proposal internally. Help them however you can to support your mutual purpose. 
• Annual budgets determine all government spending patterns and priorities. Sales personnel should align with government budgeting cycles to intentionally time their approach. Federal, state, and local fiscal years differ – and that means their planning cycles also differ. Don’t know your local budget office’s spending schedules? Not a problem – anyone can contact them and ask! 
• Government is well-known for its reactive nature. One can usually find their reasons for spending by researching the political environment. Not only does the media, markets, and even social media incite government action – they also provide incredible context and material for targeted outreach. Understanding the forces that mold government’s financial decisions will dramatically improve trustworthiness and outcomes. 

Government prospects endure painstaking efforts and often spend tremendous political capital to acquire funding and select vendors for software they may not even fully comprehend. From a government perspective, this effort should never feel like a gamble. Prove you are worth the risk and earn their trust by understanding what their money means to them. It’s your money too, after all. Don’t you want to it to be spent wisely? 

This blog in our special series “Business with Government: Doing More Work, Better” touches on a critical part of selling to these entities: when and how does government spend? Supporting government with reliable products and strong partnerships is more important than ever – particularly proven by this unusual, unprecedented year. This ecosystem is not only profitable and ripe for opportunity; it is also a rewarding service sector that affects every citizen. The future will be built on successful public-private partnerships, and the coming years of technology’s burgeoning relationships with government are paramount to a secure and people-focused tomorrow.

Written by  Landon Cook 

Landon Cook is a proven change leader and future-maker. Landon shaped his career within state government, where he inspired the art of the possible by leading and executing the challenge to implement Customer Service Management (CSM) on the ServiceNow platform.  

For more insights, check out the previous blogs in his series. Landon provides best practices, tips and thought-provoking insights revolving around doing business with government.

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