Page 1 of 3 Next  Robert M. Samborski Executive Director Geospatial Information & Technology Association Introduction Geospatial Information Technology (GIT) is a complicated investment. The initial costs can be high, and the tangible benefits can take several years to materialize. The technical intricacies of relative positional accuracy, feature content, and spatial data processing can be overwhelming. Often, elected and appointed officials do not have time to delve into the finer points of the technology before being asked to make an investment decision. Armed with only a basic understanding of GIT, they must weigh the project against countless other opportunities and choose where and how their organization will spend its money. Their best tools for making these decisions are bottom line cumulative costs and cumulative benefits for determining payback period, break-even point, and return on their investment.  For GIT project managers, this poses a tricky problem. The costs of a proposed system are not terribly difficult to research, but the potential benefits are much harder to document. Somehow, an organization must identify these benefits and then predict their financial impact. This task is usually left to the GIT project manager or other staff members who are promoting the investment. Because the early costs of the system are typically high, officials are understandably sensitive to the benefit estimates. They want to be sure the financial analysis is sound. Justification for investments comes from business applications, but GIT benefits are difficult to predict. Geospatial applications are complex investments, are expensive and can require significant upfront investment. In most organizations and government agencies, geospatial applications compete with scarce funds and managers often must make decisions without a complete understanding of the technology involved. Why ROI? It should be a given that competent investment analysis is a fiduciary responsibility and public duty. It enables responsible managers to understand financial impact of projects and ideally helps them to select the best alternative from a variety of options. Ultimately, an ROI analysis serves to protect the vested interests of citizens or investors. A financial analysis quantifies investment value by asking key questions. Do benefits outweigh costs? If so, by how much? How long before the organization will see a return on its investment? The financial analysis process should instill in management confidence in financial projections and suggest better alternatives for use of the funds in question. Given the large amounts of money typically involved with geospatial implementations and internal competition with other investment opportunities, an ROI analysis serves to ensure full validation of a project prior to its initiation. Once the project is initiated, ROI analysis can be used to identify opportunities to structure the project to better achieve interim benefits more quickly. Finally, detailed documentation resulting from the analysis will improve milestone and post implementation review. When Should You Do ROI? Ideally, a thorough ROI process begins in application strategy development. As the project proceeds past initiation, ROI assessments should be accomplished once the detailed project design is finished, then again at final project completion. But, application of ROI analysis should not end there. Many organizations have found significant value in using ROI assessments when the application has been in operation for some time and again when the time comes to assess its eventual replacement. Generally speaking, the ‘ROI landscape’ has been shifting. Traditional ROI models were based on the labor savings afforded by implementing new technology. These days, most organizations are much leaner and often have existing systems that result in less available incremental benefits. The focus of ROI should now be on the drivers of corporate and organizational financial statements and strategies. In undertaking this research project, the GITA ROI Project Team discovered that the current organizational ROI “hot buttons” are: making operations leaner (for example, eliminating waste or shortening cycle times), use in compliance tracking, enhancing reliability centered maintenance (where assets are removed or repaired before they fail), overall asset management, and material optimization.
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