Jim Sparks Indiana Geographic Information Officer May 8, 2013

Why measure ROI? Why measure ROI? Review GIS ROI studies Review GIS ROI studies ROI: The Process ROI: The Process Discussion and Questions Discussion and Questions

To garner support for your GIS program To garner support for your GIS program To document or estimate impact of changes To document or estimate impact of changes To compare effectiveness with other programs To compare effectiveness with other programs ??? ???

Authors: Richard Zerbe and Associates Location: King County Washington When: 2012 Target: Net benefits from 1992 to 2010 Results: The use of GIS produced approximately $775 million in net benefits over the eighteen year period Google “King County GIS ROI”

Authors: Geospatial Information Technology Association (GITA) Location: State of Iowa When: Target: 99 counties, 11 state agencies, three utilities plus Iowa One Call, and consulting firms Results: 20 year Net Present Value of $271 million Stewart, 2008

Author: Jill Saligoe-Simmel, PH. D. Location: State of Indiana/IndianaMap When: Target: 314 respondents of 1521 registered users of IndianaMap Results: – 35:1 ROI – $1.7 billion worth of projects and operations supported by the IndianaMap

Bolder County, CO Road Maintenance Dept. Road Maintenance Dept. Sign Inventory Sign Inventory Over 7,000 signs to manage Over 7,000 signs to manage Results: $20,000 inventory cost savings Results: $20,000 inventory cost savings

Los Angeles County, CA Los Angeles County, CA Automated Cadastral Map Books Automated Cadastral Map Books Results: Results: – Eliminated 200 Overtime Hours – Eliminated 20,800 Regular Hours – Annual Savings of $90,000

Martin County, FL Geo-Auditing for Commercial Property Taxes Geo-Auditing for Commercial Property Taxes Results: Increased County Tax Base by $3.5 Million Results: Increased County Tax Base by $3.5 Million

Create ROI Team ROI Planning & Prep Conduct Interviews Calculate Costs Calculate Benefits Prepare ROI Report Assess and Organize Information

4 to 8 people 4 to 8 people Skills needed: Skills needed: – Knowledge of the Enterprise – GIS Experience – Accounting – Report writing

Gather and review GIS Returns On Investment Gather and review GIS Returns On Investment Think about: Think about: – Methodology (with versus without) – Forward looking (estimating) or backward looking (quantifying) – Who to talk to that can give insight into how an operation has been improved by using GIS – Study time frame (1, 5, 10, or 20 years) – Audience

How can business impact be quantified? How can business impact be quantified? What will be the initial and ongoing expenses? What will be the initial and ongoing expenses? What are the resources required ? What are the resources required ? When will the business benefits be delivered? When will the business benefits be delivered? What’s the financial case? What’s the financial case?

Purpose: identify business processes that have been or could be improved using GIS Purpose: identify business processes that have been or could be improved using GIS Take notes and record interviews Take notes and record interviews Drill down to details. Not “our snow plow routes are better” but “We trimmed 48 miles from our routes for each event.” Drill down to details. Not “our snow plow routes are better” but “We trimmed 48 miles from our routes for each event.”

Organize and document Organize and document Create lists of business process improvements Create lists of business process improvements Categorize into quantifiable and qualitative benefits lists Categorize into quantifiable and qualitative benefits lists Prioritize lists, and move everything beyond the 10 top to a “look at later” list Prioritize lists, and move everything beyond the 10 top to a “look at later” list

Look at all costs associated with day-to-day operations (not project specific) Look at all costs associated with day-to-day operations (not project specific) – Personnel – Hardware – Software, including maintenance – IT charges Populate year chart for study time period Populate year chart for study time period Determine an inflation rate and apply through study period Determine an inflation rate and apply through study period

Save Time Save Time Increase Efficiency Increase Efficiency Increase Accuracy Increase Accuracy Increase Productivity Increase Productivity Increase Communication and Collaboration Increase Communication and Collaboration Support Decision- making Support Decision- making Aid Budgeting Aid Budgeting Automate/Improve Workflow Automate/Improve Workflow Build an Information Base Build an Information Base Manage Resources Manage Resources Reduce Costs/Save Money Reduce Costs/Save Money The Business Benefits of GIS: An ROI Approach, ESRI

Creating Data Creating Data Revising Data Revising Data Locating Data Locating Data Distributing Data Distributing Data Using Data Using Data Gillespie (1994) states that efficiency benefits arise when GIS is used to reduce costs of a task that, in the absence of GIS, would be handled by some other method.

Creating spatial data and spatial products: Creating spatial data and spatial products: The Riverside, California, Planning Board used to take up to four hours to manually produce a single map for a board meeting. They now produce an equivalent map in about half an hour using their GIS. Typical efficiency ratios of 2:1 to 5:1

Revising spatial data: At the City of Indianapolis, a full time draftsperson and two part time drafters were unable to keep up with base map updates that involved subdivisions. After GIS implementation, these same activities were accomplished with a half-time staff position and the base maps were kept current within a few days. Typical efficiency ratios of 3:1 to 10:1

Locating spatial data: Lee County, Florida frequently requires an assortment of information about land use, flood zone, watershed, zoning restrictions and variances, parcel frontage, parcel acreage, and owner verification for land development issues. GIS has reduced time requirements from hours to less than five minutes per occurrence. Typical efficiency ratios of 5:1 to 20:1

Distributing spatial data: Spatial data distribution on a network is instantaneous and replaces such tasks as making copies, mailing copies, replacing copies in books and files. Typical efficiency ratios of 10:1 to 100:1

Using spatial data: The Metropolitan Sewer District of Greater Cincinnati saved 10 to 16 workweeks in a single instance by using GIS rather than manual methods to estimate the number of customers in a particular drainage area as part of a permit renewal process. Typical efficiency ratios of 2:1 to 8:1 Graphic from

Quantitative (Predictable) Quantitative (Predictable) – Money/time saved Improved efficiency related to spatial data activities Improved efficiency related to spatial data activities Elimination of redundant data collection and data creation efforts Elimination of redundant data collection and data creation efforts Quantitative (Not predictable) Quantitative (Not predictable) Qualitative Qualitative – Does access to better information generally lead to better decisions? – What is the value of a better decision? – What is the value of better customer service?

The City of Indianapolis used GIS to discover non- paying sewer customers. These additional accounts were worth about $1.3 million for the two-year period of 1992 and 1993, and have continued to see about $1 million per year in cash revenues from this one application of GIS. The City of Indianapolis used GIS to discover non- paying sewer customers. These additional accounts were worth about $1.3 million for the two-year period of 1992 and 1993, and have continued to see about $1 million per year in cash revenues from this one application of GIS. According to Wyandotte County, Kansas, Surveyor Murray Rhodes, the county collected $500,000 in delinquent taxes in a single year that otherwise would not have been collected under the county’s (pre- GIS) manual system. According to Wyandotte County, Kansas, Surveyor Murray Rhodes, the county collected $500,000 in delinquent taxes in a single year that otherwise would not have been collected under the county’s (pre- GIS) manual system.

The Metropolitan Sewer District of Greater Cincinnati reported that for the first time ever --sewer system problem areas were being analyzed by matching complaint locations with storm event, frequency, and proximity to other complaints. The Metropolitan Sewer District of Greater Cincinnati reported that for the first time ever --sewer system problem areas were being analyzed by matching complaint locations with storm event, frequency, and proximity to other complaints. Scottsdale, AZ. was able to use their GIS to successfully protest findings of the U.S. Census Bureau that declared Scottsdale’s population to be some 8,000 to 10,000 less than the city’s projections. The city believes the appeal will result in $9 million of additional federal, state, and county funds from 1996 through Scottsdale, AZ. was able to use their GIS to successfully protest findings of the U.S. Census Bureau that declared Scottsdale’s population to be some 8,000 to 10,000 less than the city’s projections. The city believes the appeal will result in $9 million of additional federal, state, and county funds from 1996 through 2000.

Faster and better public service Faster and better public service New services and products New services and products Increased design and planning capacity Increased design and planning capacity Increased analytic capacity Increased analytic capacity Increased interagency communication Increased interagency communication Improved decision making Improved decision making Increased transparency Increased transparency

Work with the priority list Look for ongoing benefits of really significant one time winners Consider factors that impact the yearly value of the benefit (inflation(+), ramp-up(-))

“We trimmed 48 miles from our snow plow routes per event.” Cost of gas Cost of gas Other costs of equipment operation and maintenance Other costs of equipment operation and maintenance Personnel time Personnel time Average events per year Average events per year

Make it interesting: add graphics, charts, maps. Newspaper format? Make it interesting: add graphics, charts, maps. Newspaper format? Use conservative numbers (use the lowest number if given a range) Use conservative numbers (use the lowest number if given a range) Be transparent about assumptions and methodology Be transparent about assumptions and methodology Add a section for qualitative benefits – these are compelling (and not everyone is a numbers person) Add a section for qualitative benefits – these are compelling (and not everyone is a numbers person)

Prepare for several review iterations Prepare for several review iterations Include a non-technical reviewer Include a non-technical reviewer Include an executive summary that highlights the methodlogy and results Include an executive summary that highlights the methodlogy and results

Jim Sparks Indiana Geographic Information Officer (317)