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Building the Business Case for Investments in Geospatial Information Technology
New workbook helps project managers capture the benefits of investments in geospatial information technology
When you turn on the tap, you expect water. When you flick a light switch, you expect light. These services—which most of us take for granted—depend on a massive network of utility lines, which must be developed, maintained, repaired, and in many cases, protected.
Keeping Canada’s infrastructure in good repair requires millions of dollars of investment in people, processes, and technology. Because this infrastructure typically involves roads, utility lines, rights of way, service areas, etc., geospatial information technology (GIT) can play a big part in maximizing the value of these investments. Specifically, GIT can help organizations track and manage their assets, operate more efficiently and effectively, and choose from among competing projects.
Sound GIT investments need strong financial analysis
Susan Ancel is General Manager of Water Distribution for EPCOR Water Services Inc. in Edmonton, Alberta. Ms. Ancel manages approximately 200 employees whose roles include distributing water throughout the city, managing piping and hydrants, planning engineering projects, digging trenches, and metering water use.
“In my case, geospatial information technology is a key tool to understanding how the City of Edmonton’s water-distribution infrastructure evolved over the years,” says Ms. Ancel. “Our oldest pipe was built in 1902, so we deal with infrastructure that was built to various standards at various times, making 90 percent of my job detective work.”
Infrastructure managers such as Ms. Ancel have, however, often had difficulty assessing the value of GIT. This difficulty arose for a number of reasons: GIT can be complex and expensive. Often, GIT projects compete with other demands for funds. As well, GIT benefits can be hard to identify at the outset of a project and can take years to realize. Therefore, to get funding, project managers must pinpoint these benefits and then predict the financial impacts—never an easy task.
Building a GIT business case is now straightforward
Fortunately, today geographic information systems (GIS) project managers have a comprehensive tool that makes the job of building GIT business cases a lot simpler—a return-on-investment (ROI) workbook.
GeoConnections, in partnership with the Geospatial Information & Technology Association (GITA), of which Ms. Ancel is past President; the Awwa Research Foundation; and the United States’ Federal Geographic Data Committee, funded a project to develop a GIT ROI workbook entitled Building a Business Case for Geospatial Information Technology: A Practitioner’s Guide to Strategic Financial Analysis.
Created to take organizations in the utility, transportation, and municipal government sectors through all stages of their GIT projects, this comprehensive, 212-page workbook and CD set includes customizable financial templates, real-world case studies, an extensive literature review, and much more.
The literature review involved checking for GIT- and ROI-related information primarily at GITA and AWWA and then categorizing the resulting documents according to one of 16 application areas.
"We developed a literature matrix to allow users to find papers written by businesses, utilities, or government agencies about their GIT experiences,” says Ms. Ancel. “So for instance, if you’re a member of a government entity doing a project in a particular sector, you can easily find papers on that topic. These papers would potentially give you a leg up on building your business case.”
But the ROI workbook’s greatest value may be in its simplifying GIT’s financial landscape.
“GIS people tend to be very good at identifying the strategic value of GIT,” says Ms. Ancel, “but they often shy away from putting dollar values to GIT goals and benefits. By showing how simple it is to add financial analysis, we hope to help infrastructure-related organizations generate solid GIT business cases.”
At the outset of a project, GIS managers can use the workbook to answer such fundamental questions as
- How long before we see a return?
- How confident are we in the financial projections?
- Are there better alternatives for our money?
- Do the benefits outweigh the costs?
- If yes, by how much?
But GIS managers can also use the workbook throughout the lifecycles of their projects.
“You can apply the workbook as a benchmark to make sure you are on track,” says Ms. Ancel. “At project completion, we recommend conducting an analysis to assess whether you reached your objectives. Do you need to do follow-up? The workbook will help tell you.”
Return-on-investment workbook offers real-world applications
The workbook can provide surprising insight. Ms. Ancel describes using the workbook to evaluate the return of a proposed $7 000 GIT investment at EPCOR: “This amount was expected to produce a net present value of $271 000. The workbook showed that because we had a robust GIS system, we could derive huge benefits from a very minimal GIT investment.”
In fact, EPCOR relied on the workbook when recently implementing its third generation of GIS technologies. The company’s overall business case for implementing a third generation was positive, but this major project relied on first completing smaller projects that, on their own, did not offer positive returns.
“Using our business case process, we were able to show that in the long run, these smaller foundation projects would actually contribute to a net return on investment,” says Ms. Ancel. “We demonstrated that the order in which we implemented things could drive benefits out sooner.”
Armed with the workbook, GIS project managers will be better prepared to predict the financial return on their projects. And these predictions may make it easier to get GIT funding. With so many expectations riding on Canada’s various infrastructures, investing in technology that helps develop, maintain, and safeguard these critical assets is money well spent.
For more information, go to www.gita.org/gita-in-action/roi.asp.
Partners include:
- Geospatial Information & Technology Association
- Awwa Research Foundation
- Federal Geographic Data Committee (United States)
GeoConnections helps decision-makers use online location-based (or “geospatial”) information, such as maps and satellite images, to tackle some of Canada's most pressing challenges. The program works with partners in public health, public safety and security, the environment and sustainable development, Aboriginal matters, and geomatics technology development.