Three Benefits from a Small Investment in ROI Calculation
No matter how work is done today, there’s room for improvement. In today’s workplace that improvement is likely to be a technology change. It might be new software, hardware or a new way to organize data. Deciding what kind of change will help most is one challenge. Convincing executives to believe in and fund the change may be even more difficult.
While organizational leadership may champion technology and even have successful projects behind them, each potential investment requires due scrutiny. Executives will only invest in one project over a second option if they have significant confidence in its success. A small investment in a return on investment (ROI) study may be the key to exploring, and ultimately funding and implementing, meaningful technology changes.
From our experience, the benefit of ROI studies is both quantitative and qualitative. AppGeo work in Vermont illustrates three types of benefits.
The Vermont Agency of Transportation (VTrans) had a technology improvement project in mind. It envisioned a modernization project to locate all statewide right of way (ROW) data and to bring as much as possible into a common platform for viewing and research. Intuitively, introducing a system to quickly find needed ROW data sounds like it would increase labor efficiency (e.g. time savings and higher productivity) and organizational effectiveness (e.g. higher quality results and business process improvements) yielding benefits for the state and its citizens. But how could VTrans be sure the effort would be a good investment?
The agency tasked AppGeo with two modest efforts that would be run in parallel. The first involved creating a pilot data collection and delivery system for a subset of the state road network ROW data. The second, an ROI study, gathered details of how staff in technical disciplines and business functions found and used ROW data.
The VTrans ROW section championed the projects in order to build a business case for a comprehensive statewide effort. The aim was to convince executives of the foundational nature of ROW data across agency business functions as well as its value to external public and private stakeholders.
The first benefit and result of the study was an overall positive ROI (the “high” ROI estimate was 7.75 and the “low” estimate was 5.31) that helped executives determine to proceed with the statewide ROW data modernization project. (ROI values are based on: [Discounted Benefits – Discounted Costs]/Discounted Costs.)
A second benefit of the ROI study was more qualitative. VTrans gained appreciation of the extent to which staffers within the agency, as well as other state agencies, use whatever ROW data they can access to support their work, no matter the accuracy or freshness. Through the survey, ROW data users were able to express support for more accurate, discoverable and accessible ROW data.
Future use of the study results provides an third benefit. The data use surveys also serve as a baseline to confirm whether data search and use practices do indeed change as the new delivery solutions become available. By comparing workflow before and after project implementation, VTrans can measure the resulting time savings, productivity, and quality results and business process improvements.
The ROI and pilot projects yielded an additional unexpected result: The American Association of State Highway and Transportation Officials (AASHTO) recognized VTrans as a leader in managing and modernizing ROW data and applications. VTRANS, with AASHTO funding, was invited to teach other state transportation agencies about its approach!
ROI studies are a great way to determine if ideas should be turned into investments: they quantify the costs and benefits in a consistent manner, they provide additional insight into the extent of stakeholder needs; and they contribute to defining a baseline of current practice for comparison with investment outcomes. Helping executives to invest confidently in new geospatial technology or data modernization is part of the job of today’s geospatial IT professional.