Present a final report that summarizes the results of the ROI study. The report should have a business rather than a technical focus. The most frequently read component of most reports is the executive summary, which in one page explains the background, challenges and opportunities, proposed solution, budget, benefits, and financial metrics.
Here's an example of how a public works department can put each step into practice.
The goals: to increase revenue, retain and improve the community's vitality, strategically manage growth, comply with government regulations, and enhance citizen services and confidence.
Proposed projects include completing a fire hydrant inventory to help the city meet regulatory mandates and ensure correct hydrant operation. The argument is that, compared with a manual approach, more inspections can be completed and costs reduced. This project meets business goals of the organization by generating significant savings, and the combined benefits of the program return twice the initial capital investment to the public works department. The true value to citizens is that in an emergency, working hydrants save lives and minimize damage to property.
— Victoria Kouyoumjian is an IT strategy architect for ESRI in Redlands, Calif., and co-wrote The Business Benefits of GIS: An ROI Approach. Based on methodology developed by PA Consulting Group and written in collaboration with the firm, the ES-RI Press book helps users create a budget, determine business benefits, and calculate quantifiable financial measures that confirm whether benefits outweigh costs. Each chapter includes objectives, tasks, and expected outcomes, and readers can access templates, digital models, and other resources online.Using GIS to sustain funding levels
Golden, Colo., uses GIS software to manage pavement and sign inventories, snow removal, cleaning and inspecting storm inlets, and special com munity days. “Our strategy is to be efficient, do more with less, and do it well,” says GIS Coordinator Quint Pertzsch.
He uses the software to track how much time the operation spends on each activity. For example, when sign inspections were paper-based, the total cost per sign, including labor and equipment, was $5.27. After mobile GIS was introduced, the figure dropped to $1.21.
In the first six months the department saved $13,000 — not including the secondary benefits of using less paper and fuel and spending less time entering data — while doubling the number of signs inspected. The department reallocated the unspent monies to other areas.
GIS is also used for long-range budget planning. If a major storm occurs, the department knows how much it will cost to replace all signs. If there are plans for a new subdivision, it can quickly calculate additional service-delivery expenses.
When the city manager asked all departments to report where overtime dollars were being spent, Pertzsch conducted a return-on-investment analysis of the department's GIS program.
“In less than five minutes, we could show him how public works spends,” Pertzsch says. He found that 95% of overtime is spent on snow removal, spring cleanup days, and a summer festival. City leaders felt residents would protest if these services were reduced, so public works retained its overtime funding.
A department that wasn't using GIS lost funding because it needed six months to perform the analysis. Because of its success, public works is teaming up with other departments to integrate GIS more fully into city systems.