February 02, 2004
ROI Analysis for Local Governments
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Welcome to GISWeekly! “Even small cities can afford sound ROI analysis,” according to Brandt Melick, GIS program supervisor for the City of Springfield, Oregon, adding, “My objective is to provide some meaningful information to assist those facing ROI analysis within their organizations.” Melick's presentation was part of a webcast entitled “Building a Rock-solid Business Case” hosted by GITA this week. Read about it in this week's Industry News.
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ROI Analysis for Local Governments
By Susan Smith
This week GITA presented a webcast entitled “Building a Rock-solid Business Case” featuring Brandt Melick, GIS program supervisor for the City of Springfield, Oregon; Bill Meehan, director, Utilities Solutions at ESRI; and Mark Millman, independent consultant, Mark Millman & Associates. The webcast offered some sound advice to an audience of managers who want to make a case to decision-makers for upgrading or implementing a GIS and/or IMS project in their organizations.
Although much of the information was quite basic, there were some moments of profundity and great guidance offered, the emphasis not being on any particular software or GIS configuration, but on business strategies for those who are facing return on investment analysis (ROI).
I picked out one of the three presenters to profile this week that would have broad relevance to GIS professionals. Brandt Melick presented on the topic of calculating ROIs, or cost benefit analysis for local governments, with limited staff and limited financial resources. His mantra was “Even small cities can afford sound ROI analysis.” He added, “My objective is to provide some meaningful information to assist those facing ROI analysis within their organizations.”
their facilities on a common base. We encourage them to use our existing data holdings and look forward to the opportunity to share data with them.”
of sewer map maintenance activities. It was a big project for a small organization like Springfield. We had a lot of integration work to do behind the scenes as well. We faced reconciling our work order management systems' records with our existing CAD and GIS features, developing common spatial behaviors and database domains. We proposed the use of Caice tools to handle view behaviors like symbology annotation as well as spatial data translators to provide truly interoperable solutions to support both our CAD and GIS users with native data formats. We even hope to provide links for future integration with regional enterprise systems.
how much it will cost once we are finished. We calculated costs per day, per year, etc. We accomplished this by focusing on specific infrastructure activities that are required to meet certain program outcomes. We worked with local area experts and stakeholders across the city, borrowed from IT archives from old business system design documentation and business area analysis which our GIS group had worked on in the past. We walked around with engineers, timing our activities and we explained and lobbied along the way, describing the benefits of the new system and describing how we were deriving our cost savings. We wanted everyone to understand that ROI analysis is definitely something you
don't want to be black boxed. It has to be simple and clearly linked to our integration project objectives.
developed a unit cost, a cost before and after. We estimated the yearly number of units being processed, and then we calculated our yearly cost. Then we used these numbers to not only show our ROI but to argue urgency, that is, each year we did nothing, was actually a cost. We could avoid significant costs by doing it sooner rather than later.”
Melick's words to the wise were as follows: “Keep it simple and don't over do it. A simple, conservative, easy-to-believe ROI analysis is highly desirable. Always remember your audience. They need to be able to be able to walk around and see what your talking about. They need to be able to feel confident to take it to the next level.”
Melick also recommended focusing on cost savings as opposed to savings on increased efficiencies, as increased efficiencies tend to increase service. For this particular project, about 10 hours of ROI analysis resulted in significant funding--about $100,000 to integrate all their pipe and sewer infrastructure and sufficiently reduce automated mapping, facilities management and GIS systems administration overhead.
VARGIS LLC, geospatial and mapping services and products company, and Infotech Software Solutions, Inc., (ISSI) a Riverside-CA-based GIS and engineering software services company have signed a merger agreement whereby ISSI acquires complete ownership of VARGIS. The acquisition creates a major new resource for GIS and mapping solutions for US government and commercial markets. Following the acquisition, the geospatial product and service offerings of both companies in the US will be consolidated under VARGIS.
DigitalGlobe® and Keyhole© announced a multi-faceted agreement to provide DigitalGlobe's QuickBird satellite imagery and Keyhole's Internet-based 3D earth visualization solutions to customers. By deploying DigitalGlobe's high-resolution imagery in concert with Keyhole's applications for business decision makers, the agreement further accelerates the adoption of DigitalGlobe's satellite imagery by commercial markets, and provides Keyhole customers with coverage and currency of earth imagery.
Calgary-based North West Geomatics Ltd. announced that it has acquired 100% of the outstanding shares of Pixxures Canada, Inc., a online provider of aerial and satellite imagery for Alberta and the continental US. Pixxures Canada Inc. was a wholly owned subsidiary of Pixxures, Inc. of Arvada, Colorado.
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