http://www10.giscafe.com/nbc/articles/view_weekly.php?articleid=208807&page_no=1 Industry News 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." He used the case study of the city of Springfield, Oregon, as an example to describe their ROI analysis approach. "At the city of Springfield, we maintain many GIS inventories--we have address points, tax lot polygons, full planimetrics, DTMS, high resolution orthophotography, as well as several other infrastructure inventories. Of those we have the pipe sewer system, surface waterways, detailed street inventory, public works and public safety computer aided dispatch.

For the city of Springfield the water and electric inventories are maintained by our local water board. They have CAD maps and work order management systems but have not fully integrated the two, nor have they decided to map 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." "For our case, I'll use a recent infrastructure inventory integration project which focuses on piped sewers. Our integration project consisted of integrating all city maintained pipe sewer infrastructure - all of our sanitary and storm sewers --that is about 16,000 segments and about 18,000 nodes --a fairly small system. We faced extensive upfront business system documentation, the arduous task of consolidating all hard copy sewer map sources across the several divisions and the implementation of advanced GI technologies. We anticipated significant time savings across the board, decreased systems administration overhead, enhanced decision support, and significant reduction of the duplication 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. "We were able to build in hooks for most of the enterprise system and in some cases we're even able to build in transactional components with these other systems to provide functionality beyond our original scope. The essence of our approach to ROI analysis was on what's focused and simplicity-Why did we need to replace the old system? How long could we afford to sustain the old system? What were people doing now that took so long? We were moving from wasteful practice to best practice and this is how we would save time and money. It was no longer an issue of should we do this or everyone else is doing it. We moved the discussion to : here's how much it costs to maintain our maps now and here's 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. "As our objectives were above all to consolidate the story of the infrastructure mapping activities we decided to focus on as-built work order processing. That is, as as-construct plans are submitted to the city, mapsets across the city were being updated by many map custodians. Staff in our environmental services division were updating their maps while maintenance staff were updating their versions and engineering surveyors were updating yet another set.

Much duplicate effort was exhausted by maintaining a myriad of similar but by no means identical set of sewer maps. Taking this one common task of as-built work order processing to maintain a commonly understood vital set of documents we 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.