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Making a Business Case for Geographic Information System (GIS) Technologies
Case Studies of Select Transportation Agencies

July 2015

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Making a Business Case for Geographic Information Systems (GIS) Technologies
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Kate Macfarlane, Ben Cotton, Alisa Fine
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John A Volpe National Transportation Systems Center
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To explore how transportation agencies are making a business case for GIS investments, the Federal Highway Administration and Volpe National Transportation Systems Center interviewed five State DOTs that have made business cases for GIS investments:

  • North Carolina Department of Transportation
  • Vermont Agency of Transportation
  • Utah Department of Transportation
  • Florida Department of Transportation
  • Oklahoma Department of Transportation

Volpe developed case studies for each agency. As a follow-up to the case studies, FHWA sponsored a peer exchange in Oklahoma City, Oklahoma on March 24-25, 2015. This allowed case study participants to discuss their experiences in greater detail.

This report supports GIS practitioners and decision-makers in identifying examples of noteworthy practices, considers the advantages and disadvantages of different approaches in making a business case for GIS, and determines how both quantitative and qualitative analyses of the costs and benefits of GIS investments can best support agency business practices.

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Geographic information systems (GIS), GIS investments, return on investment (ROI), business case, cost-benefit analysis, GIS projects.
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Acknowledgments

The U.S. Department of Transportation John A. Volpe National Transportation Systems Center (Volpe) in Cambridge, Massachusetts prepared this report for the Federal Highway Administration's (FHWA) Office of Planning. The project team included Kate Macfarlane and Alisa Fine of Volpe's Organizational Performance Division and Ben Cotton of Volpe's Transportation Planning Division. The Volpe project team wishes to thank staff members from several organizations nationwide, listed in Appendix A, for providing their experiences, insights, and editorial review. The time they kindly provided was vital to preparing the case studies and reviewing this final report.


Table of Contents


List of Figures


List of Tables


Executive Summary

In an era of fiscal constraint and declining transportation revenues,1 geographic information systems (GIS) business units at State departments of transportation (DOTs) and other transportation agencies are increasingly asked to make a business case for GIS investments by demonstrating how benefits outweigh costs. While GIS practitioners at transportation agencies generally recognize the merits of preparing a business case for GIS investments, it can be difficult to develop an appropriate methodology that comprehensively captures the benefits and costs.

To explore how transportation agencies are making a business case for GIS investments, the Federal Highway Administration (FHWA) and United States Department of Transportation Volpe National Transportation Systems Center (Volpe) interviewed five State DOTs that have made business cases for GIS investments:

Volpe developed case studies for each agency. As a follow-up to the case studies, FHWA sponsored a peer exchange in Oklahoma City, Oklahoma on March 24-25, 2015. This allowed case study participants to discuss their experiences in greater detail.

This supports GIS practitioners and decision-makers in identifying examples of noteworthy practices, considers the advantages and disadvantages of different approaches in making a business case for GIS, and determines how both quantitative and qualitative analyses of the costs and benefits of GIS investments can best support agency business practices. Highlights of the findings presented here include:

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1. Introduction

1.1 Purpose and Methodology

The Federal Highway Administration (FHWA) promotes geographic information systems (GIS) as a technology that can help transportation agencies save time, improve transportation decision-making, and improve outcomes related to safety, congestion, and sustainability. GIS investments can also lead to cost savings by reducing transportation project delivery timelines which result in dollar savings for transportation agencies. GIS applications help agencies monitor and address congestion, resulting in increased economic productivity for the general public.

This effort was part of FHWA's GIS in Transportation program.2 Through technical support, resources, and capacity-building opportunities, the program aims to assist transportation agencies by effectively using GIS and geospatial applications.

Previous peer exchanges sponsored by FHWA's GIS in Transportation program focused on various applications of GIS to transportation. For example, participants examined geospatial data-sharing or uses of cloud-based GIS applications. Throughout these peer exchanges, many participants noted challenges in quantifying, cataloging, and monetizing the benefits of GIS projects, even when an agency can easily recognize these benefits on an anecdotal basis.

Additionally, declining transportation revenues pressures GIS practitioners at transportation agencies to make a business case for GIS investments by demonstrating how benefits outweigh costs.3 While GIS practitioners at State departments of transportation (DOTs) and other transportation agencies generally recognize the merits of preparing a business case for GIS investments, it can be difficult to develop an appropriate methodology that comprehensively captures the benefits and costs.

To explore how State DOTs are assessing the costs and benefits of GIS projects, particularly from a quantitative perspective, the FHWA and United States DOT (U.S. DOT) Volpe National Transportation Systems Center (Volpe) interviewed specific State DOTs and developed a series of case studies focusing on their experiences. As a follow-up to the case studies, FHWA sponsored a peer exchange in Oklahoma City, Oklahoma, on March 24-25, 2015, which convened case study participants to discuss their experiences in greater detail. The case studies were then refined based on discussions held during the peer exchange and feedback received from participants. The case studies and peer exchange gave transportation agencies the opportunity to:

FHWA and Volpe selected transportation agencies for participation based on a review of online materials and responses to an email solicitation on the American Association of State Highway and Transportation Officials' (AASHTO) GIS in Transportation Yahoo! Forum. Participating agencies included North Carolina Department of Transportation (NCDOT), Vermont Agency of Transportation (VTrans), Utah Department of Transportation (UDOT), Florida Department of Transportation (FDOT), and Oklahoma Department of Transportation (ODOT). Appendix A includes a complete list of participants. An interview guide, included as Appendix B, provides a framework for the telephone discussions, which lasted 60 to 90 minutes. Case studies were drafted based on participant responses during these discussions.

ODOT hosted the peer exchange at its offices in Oklahoma City. During the peer exchange, participating agencies demonstrated how they have made business cases for GIS projects using return on investment (ROI) analyses or other quantitative methods. Three roundtable discussions provided opportunities for dialogue. Appendix C provides a peer exchange agenda and the questions discussed during the roundtables. Findings from the roundtable discussions and the case studies are included in the Observations section of this report.

1.2 Components of a Business Case

A business case justifies a proposed project based on an evaluation of its benefits and costs. It typically includes a quantitative analysis of how a project will impact the bottom line and a quantitative description that summarizes why a project should move forward. For the purposes of this report, the term business case is used to refer broadly to an evaluation of a project's benefits and costs, regardless of whether the evaluation is forward-looking or backward-looking.

Quantitative Analysis

A business case evaluates a project's costs and benefits by using one or more types of quantitative economic analysis.4 Two analyses that can be used to justify the economic benefits of a project include:

ROI is a specific financial and quantitative metric used to compare the costs of an investment with its anticipated gains. ROI is calculated using the equation:

ROI = Gains from investment — Cost of investment
Cost of investment

A positive ROI indicates that a project will generate more benefits than costs (i.e., profit), while a negative ROI shows that a project will lose money. For example, a ROI of 1.0 indicates that a project's benefits are estimated to be twice as high as its costs over the specified time period. Although ROI is most frequently used by investors to compare their expected financial gain from potential investments, public transportation agencies use the ROI equation to estimate anticipated savings from a project.

BCA (also sometimes called cost-benefit analysis) is similar to ROI in that it also compares a project's costs to its expected benefits. However, BCA includes a wider scope of benefits than ROI because BCA summarizes net cost or benefit to society, while ROI typically only includes financial costs and benefits within an organization.

To illustrate the distinctions between BCA and ROI, consider the theoretical case of a transportation agency thinking of developing a mobile application with geospatial information about road closures and weather alerts.

It is entirely possible for the ROI to show a negative return, while BCA indicates a net positive benefit to society. This means the application's benefit to the general public exceeds its costs, but the transportation agency would lose money by developing the application. In the business world, a company would not likely pursue a project with a negative ROI even if the project had a high net benefit to society. Most transportation projects, however, fall into this category. Transportation agencies improve roads and build bridges because of the net benefit to society, not because of any financial gains for the agency.

The case studies in this report feature agencies that used business cases to evaluate the benefits of GIS tools or projects and communicate those benefits to decision-makers. In most instances, agencies used ROI analysis as part of their business cases. Although several agencies incorporated quantitative or qualitative information about benefits external to the agency, no agencies included in this report conducted a formal BCA to make a business case for a GIS application (however; information about BCA is included below to help illustrate the distinction between ROI and BCA).

Qualitative Analysis

In addition to a quantitative analysis of the benefits of different types of investments, a business case typically includes qualitative information that describes a particular project's potential or observed impacts. This qualitative information can include a narrative overview of the project's context or outcomes, descriptions of specific process changes, anecdotes, quotes from the project's end users, or other descriptions of benefits.

All of the peer agencies in this report included qualitative information in their business cases.

1.3 Motivations for Making a Business Case for GIS Investments

Like any organization, transportation agencies can use a business case to understand if a particular project will be (or has been) a good investment. Several recent trends have driven interest at transportation agencies in making business cases for GIS:

As GIS capabilities at transportation agencies mature and GIS continues to play an important, core role in supporting agencies' day-to-day business, the questions that agency leadership pose to GIS practitioners have changed. For example, in the 1990s and early 2000s, when GIS was a relatively new industry and technology, some transportation agencies wrote businesses cases justifying why widespread adoption of GIS would benefit the agency.5 Today, few State transportation agencies appear to question the general benefits of GIS, but are still likely to question the merits of specific GIS investments. As a result, most recent business cases focus on the merits of specific projects, rather than the merits of a GIS program as a whole.

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2. Observations

The methods used by the case study agencies to develop their business cases varied based on audience, data availability, and context (see Table 1). Some agencies used a business case to evaluate a potential GIS project before investing (i.e., forward-looking), while others prepared a business case to evaluate the results of a GIS project (i.e., backward-looking). While most peer agencies included a ROI estimate as part of their business case, ODOT used non-monetary quantitative measures to evaluate the success of a GIS project.

Table 1. Summary of Case Study Agencies' Business Cases

Agency Topic of featured
business case(s)
Forward-looking or backward-looking? Type of Quantitative Analysis Type of Qualitative Assessment Motivation for conducting business case
NCDOT Road Operations and Management Effort (ROME) Forward-looking ROI Description of contributing factors for ROI analysis To gain support for a proposed project; to prioritize future investments
VTrans Statewide right-of-way (ROW) data modernization Forward-looking ROI Overall description of business case; detailed descriptions of benefits to specific user groups To gain support for a proposed project
UDOT Outdoor Advertising Control Map and ROW GIS layer Both ROI Descriptions of benefits to user group, other groups within UDOT, and the general public To prioritize product development; to gain support for a proposed project; to assess outcomes from an investment
FDOT Efficient Transportation Decision-Making (ETDM) Process and Environmental Screening Tool (EST) Backward-looking ROI Description of benefits to specific user groups; quotes from users about outcomes To assess outcomes from an investment
ODOT OkiePROS Oversize/Overweight Permitting Application Backward-looking List of quantitative outcomes (Many metrics were not converted into financial value) Overall description of benefits; anecdotes to illustrate non-quantified benefits To assess outcomes from an investment

2.1 Motivations for Conducting a Business Case

Peer exchange State DOTs shared a common goal—to justify an investment in GIS by demonstrating that benefits exceeded costs. Within that overarching theme, the case study agencies were motived to conduct a business case by one or more of several reasons:

In some cases, GIS practitioners at the case study agencies conducted business cases that fell into several of the areas listed above. For example, NCDOT used business cases to gain support for proposed projects and to prioritize future investments.

2.2 Benefits

Transportation agencies reported a number of benefits related to conducting business cases for GIS projects, particularly in terms of justifying potential projects, building the profile of a GIS program across the agency, understanding project outcomes, and more effective project prioritization.

2.3 Challenges

Agencies noted several challenges associated with developing business cases:

2.4 Lessons Learned

The case study agencies offered the following lessons learned based on their experiences:

2.5 Potential Areas of FHWA Support

Agencies noted several potential areas where FHWA activities could support a transportation agency's efforts to make a business case for GIS:

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3. Case Studies

This section presents in-depth case studies on the transportation agencies that participated in the report interviews. Each case study includes information on how the agency made its GIS business case, the benefits and challenges encountered, and lessons learned during the process.

3.1 NCDOT – Estimating ROI for Major GIS Projects

Background

NCDOT's GIS unit conducted several ROI analyses. This is primarily due to the fact that the North Carolina Office of State Budget Management (OSBM) requires State agencies to show a positive ROI for all IT investments. In place since 2004, the policy applies to the NCDOT GIS unit.

There are two general ways in which NCDOT initiates geospatial projects. In some cases, a group outside the GIS unit proposes the development of a GIS-based tool that will improve the delivery of a specific NCDOT program. In other cases, the GIS unit proposes enhancements to existing systems (such as software, hardware, and operating procedures) that will result in improved delivery of GIS services to potential customers. Per the OSBM policy, for all GIS projects, a business case must be justified through the submittal of an ROI analysis that shows a positive ROI. For geospatial tools, the NCDOT business unit that proposes the work is responsible for estimating a project's anticipated benefits, but the GIS unit estimates that project's cost.

NCDOT's ROI Policy in Practice

A recent project example originating within the NCDOT GIS unit is the Road Operations and Management Effort (ROME). Launched in April 2013 and currently in the second phase of implementation, the ROME project seeks to integrate a customized version of ESRI's Roads and Highways6 with NCDOT's existing linear referencing system (LRS) and asset management program. The purpose of ROME is to improve the delineation of 80,000 miles of road the State maintains. It will also allow business units across NCDOT to utilize a common enterprise LRS, simplify workflows, and improve efficiency by providing timely and accurate information to consumers of the agency's spatial data (Figure 1).

Figure 1. Diagram Illustrating ROME's Ability to Streamline the Workflow between NCDOT's Many GIS Programs

two NCDOT GIS workflow diagrams showing the current situation and the future state with ROME. The future state workflow with Rome is much more organized and centralized.

An important aspect of ROME is its ability to help NCDOT meet a new FHWA requirement that every State DOT include non-system, non-Federal aid roads in its annual Highway Performance Monitoring System (HPMS) report. NCDOT received a waiver in 2014 but was informed that Federal aid funds may be delayed or withheld in 2015 if it does not report approximately 20,000 miles of non-system, non-Federal aid roads it maintains. The legacy platforms would have required significant staffing increases and upgrades to the software and hardware environments to support the addition of the non-system non-Federal-aid roads.

North Carolina OSBM does not provide a standardized ROI guide or template, leaving it up to each State agency to decide the best way to quantify IT project costs and benefits over time. However, OSBM does require benefits and costs be converted into dollar values—there is no weight given to qualitative benefits. In the case of ROME, NCDOT GIS Manager, John Farley estimated total project costs of approximately $5.68 million, which included project planning, development, deployment, and maintenance over a seven year period. To quantify ROME's benefits, Farley estimated the cost avoidances associated with upgrading and maintaining the agency's legacy LRS platforms in order to comply with the new HPMS requirements. Using this methodology, Farley identified close to $10.5 million in cost avoidances, demonstrating the implementation of ROME would save NCDOT nearly $5 million over seven years (Table 2). Most of the savings accrue from avoiding the required labor to upgrade and maintain an out-of-date LRS.

Table 2. Anticipated Cost Avoidance with Implementation/Operations/Maintenance of ROME

Cost Avoidance # of Resources Hours per Year Avg. Hourly Rate Annual Estimated Cost Time frame Total Estimated Cost
Staff labor required to upgrade legacy platforms to support non-system roads 15 29,700 $80 $2,376,000 2 years $4,752,000
Additional hardware to support legacy platform upgrade N/A N/A N/A $200,000 One-time cost $200,000
Staff labor to maintain non-system roads in legacy platforms 5 9,900 $80 $792,000 7 years (2 during upgrade process plus 5 for operations and maintenance) $5,544,000
TOTAL COST AVOIDANCE $10,496,000
TOTAL ESTIMATED COST $5,683,543
TOTAL ROI $4,812,457

Benefits of Making a Business Case

Challenges of Making a Business Case

Lessons Learned

3.2 VTrans – Using a Formal ROI Study to Make a Business Case for ROW Modernization

Background

Like many States, the Vermont Agency of Transportation (VTrans) lacked a modernized GIS for all State-owned ROW. Information about ROW was located in multiple places and scattered across a variety of data sources, including historic property deeds, hand-drawn paper maps, and computer-aided design (CAD) files. In 2009, the Vermont Center for Geographic Information completed a two-year project to georeference ROW along the U.S. Highway 2 corridor between the cities of St. Johnsbury and Burlington.

The successful project helped motivate VTrans' Ryan Cloutier to find a way to develop a strategy for the agency to modernize its ROW data across the State. Due to the large size and scope of this effort, VTrans' ROW Section needed buy-in from its leadership and members of the Vermont legislature to move the project forward. Based on additional research on a statewide ROW modernization effort the Minnesota DOT undertook, Cloutier knew the project would be costly and time consuming, but he also anticipated the benefits would outweigh the costs. Because identifying and understanding ROW boundaries is an important aspect of every VTrans transportation project, Cloutier believed an effort to modernize ROW data in Vermont would significantly reduce the amount of time and money spent on ROW data collection. He also believed having a comprehensive, georeferenced ROW database could generate additional benefits for other State agencies and the general public. Predicting the full impact of this modernization effort, however, was challenging.

Making a Business Case for ROW Modernization

As a first step toward building the comprehensive ROW database, VTrans contracted with consulting firm Applied Geographics, Inc. (AppGeo) to conduct a one-year pilot project on statewide ROW modernization. AppGeo assessed the state of VTrans' ROW data, developed a GIS-based solution for consolidating that data, and developed a timeline and cost estimate for full statewide implementation. As part of this pilot project, AppGeo conducted a ROI analysis to estimate the costs and benefits of extending the pilot project to include all ROW in the State.

For approximately four months in late 2013, AppGeo conducted interviews with key personnel within VTrans to define use cases in the following areas: Property Management, Environmental Management, Pavement Management, Roadway Design, Structures, Districts, Mapping, Utilities (internal to VTrans), and Utilities (external perspective, i.e., utility companies). These use cases described common workflows and tasks performed by users of existing VTrans' ROW data. Based on information gathered in the interviews and laid out in the use cases, AppGeo determined the quantitative benefits of ROW data modernization, including cost avoidance, increased productivity, higher quality data, and time savings. Combined with the overall costs of ROW data modernization, the team calculated Net Present Value (NPV) and ROI of the statewide ROW data modernization project.8 To reflect the uncertainty in the estimates of the project's benefits, AppGeo prepared “high” and “low” ROI estimates. Table 3 shows estimated NPV and ROI for the statewide ROW data modernization project. According to AppGeo's analysis, statewide ROW data modernization would save VTrans between $9.8 million and $14.3 million over a five-year period, for a total of five to nearly eight times the investment.

Table 3. Estimates of ROI and NPV for VTrans Statewide ROW Modernization Project

Cost-Benefit Analysis – HIGH Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Benefits Summary $0 $4,181,446 $4,181,446 $4,181,446 $4,299,065 $16,843,404
Cost Summary $128,236 $436,100 $159,500 $601,700 $601,700 $1,927,236
Discounted Benefits $0 $4,119,651 $4,058,770 $3,998,788 $4,050,511 $16,227,721
Discounted Costs $128,236 $429,655 $154,821 $575,416 $566,912 $1,855,040
NET PRESENT VALUE – HIGH ($128,236) $3,689,996 $3,903,949 $3,423,372 $3,483,599 $14,372,681
Cumulative Savings – HIGH ($128,236) $3,561,760 $7,465,710 $10,889,082 $14,372,681  

High ROI = [Discounted Benefits – Discounted Costs]/Discounted Costs = 7.75

Cost-Benefit Analysis – LOW Year 1 Year 2 Year 3 Year 4 Year 5 TOTAL
Benefits Summary $0 $3,024,054 $3,024,054 $3,024,054 $3,071,102 $12,143,264
Cost Summary $128,236 $436,100 $159,500 $601,700 $601,700 $1,927,236
Discounted Benefits $0 $2,979,364 $2,935,334 $2,891,954 $2,893,544 $11,700,195
Discounted Costs $128,236 $429,655 $154,821 $575,416 $566,912 $1,855,040
NET PRESENT VALUE – LOW ($128,236) $2,549,709 $2,780,513 $2,316,538 $2,326,631 $9,845,155
Cumulative Savings – LOW ($128,236) $2,421,473 $5,201,986 $7,518,524 $9,845,155  

Low ROI = [Discounted Benefits – Discounted Costs]/Discounted Costs = 5.31

AppGeo presented its findings in a report to VTrans. In addition to the quantitative results of the ROI analysis, the report describes the anticipated qualitative benefits of statewide ROW data modernization in terms of tangible benefits (e.g., income from sale of surplus property) and intangible benefits (e.g., improved customer satisfaction). With this document in hand, Cloutier presented findings to the Vermont legislature and secured funding to expand the ROW data modernization project to include ROW data from across the entire State. To date, VTrans has digitized more than 7,000 ROW plans, accounting for nearly 2,000 miles of newly georeferenced ROW.

Based on the success of using a ROI analysis to make a business case for ROW modernization, Cloutier and his successor Nina Safavi are working with a consultant to conduct a new ROI study for statewide parcel mapping. They are hopeful the results of the ROI analysis will demonstrate the project's benefits across multiple State agencies, which would open new opportunities for funding full implementation of the project.

Benefits of Making a Business Case

Challenges of Making a Business Case

Lessons Learned

3.3 UDOT – Institutionalizing ROI into Requests for New GIS Tools

UDOT's GIS unit supports using GIS tools and applications throughout the agency. The GIS unit does not receive a designated budget for developing GIS tools and applications, and groups within UDOT come to them with funded and unfunded requests to develop GIS tools, data layers, or maps. Past experiences with conducting ROI analyses have prompted UDOT to institutionalize its approach. UDOT now includes these analyses as part of its business process for building new GIS tools and applications.

Background

Two business cases conducted for UDOT GIS projects of different scales helped the agency identify a need for more consistent evaluation methods.

In 2013, two UDOT regional offices began an effort to create an accurate ROW GIS layer from existing CAD files as well as a viewer tool that would allow users to easily access and view the data. Previously, requests for information about ROW required extensive staff time to research the relevant data. In UDOT Region 2, Randy Smith, a champion of the effort to develop a consolidated, accurate ROW GIS layer, quantified the benefits of this project by measuring time to respond to requests with and without the GIS layer and viewer tool. The resulting ROI, completed in 2014, was instrumental in convincing UDOT to expand the use of GIS for ROW parcel tracking and management. UDOT is currently developing a GIS layer to show parcels earmarked for corridor preservation.

Also in 2013, UDOT's GIS unit created an online map for UDOT's Outdoor Advertising Control (OAC) group. The map required relatively little effort on the part of the GIS team but was instrumental in streamlining the work of the OAC group. Becky Hjelm, GIS Manager at UDOT, and others in the GIS unit received feedback that this new map was helping reduce staff time spent responding to requests for permitting records, increasing efficiency in the permit application process, improving quality control, and ensuring UDOT complied with relevant regulations. There had been no formal ROI analysis completed, however, to formally assess these benefits. To address the issue, Hjelm asked the OAC project manager to estimate the ROI from the OAC map. Hjelm worked with the OAC group to develop a business case for the map that included an estimated ROI and qualitative descriptions of the project's benefits.

Based on these separate examples of ROI, UDOT's GIS unit decided to use a ROI template to institutionalize ROI analyses into the unit's business processes. Using the ROW ROI, the OAC ROI, and an ROI template developed at the Utah Department of Natural Resources (DNR), UDOT developed a Microsoft Excel-based template for calculating ROI of GIS projects (see Figure 2). The template includes a quantitative ROI calculation based on time savings from streamlined workflows and provides space to list qualitative benefits for the customer, other groups within UDOT, external stakeholders, and the general public.

UDOT's GIS unit plans to use the Excel template to integrate routine ROI calculations as part of the initiation and conclusion of GIS projects. Beginning in 2015, the GIS unit will ask all proponents of GIS projects that lack dedicated funding and require more than 50 staff hours to demonstrate a positive ROI. The resulting new process for tracking ROI of GIS projects includes both estimation of ROI at the outset of the project and tracking results after the project is completed. When a group within UDOT requests a GIS project, the requesting project manager will be asked to complete the ROI template. UDOT also plans to follow up with project managers after projects are complete to document time savings and other benefits.

UDOT's Excel-based ROI template for GIS projects calculates an ROI based on information about workflow costs with and without the project. The template also includes spaces to list other benefits to the client group, other groups within UDOT, and other external groups or the general public.

Figure 2. UDOT's ROI Template

screenshot of a GIS Project ROI and Benefits Report from UDOT

Benefits of Making a Business Case

Challenges of Making a Business Case

Lessons Learned

Additional Documentation

3.4 FDOT – Estimating the Return from the ETDM Process

Background

In 2000, FDOT launched a major overhaul of its planning and programming processes with the goals of expediting project delivery and improving environmental outcomes. The resulting methodology, called the Efficient Transportation Decision Making (ETDM) Process, implemented significant changes in how FDOT screened transportation projects in order to identify potential environmental impacts. “Screening events” are fundamental to the ETDM Process. During these screening events, which occur early in the transportation planning process, all relevant stakeholder agencies review the potential transportation project and provide input about possible environmental impacts. The Environmental Screening Tool (EST), a web-based GIS mapping application that FDOT built, is another integral component of the ETDM Process. EST allows FDOT, partner agencies, and other stakeholders to view, analyze, and provide input regarding potential impacts of proposed transportation projects on natural, cultural, and community resources.

EST provides a number of important functions for FDOT and its partners:

Making a Business Case for the ETDM Process and EST

During the first 10 years of implementation, FDOT spent approximately $31 million on ETDM, including $18 million to develop and manage the ETDM Process (including development of EST) and $13 million to compensate partner agencies for their expedited reviews. 100 percent of the funds used to support the ETDM Process were Federal reimbursable dollars allocated to FDOT through FHWA's environmental streamlining initiatives established in the Intermodal Surface Transportation Efficiency Act, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, and MAP-21.

Biannual progress reports were prepared between 2001-2012 to document implementation of the ETDM Process and its projected benefits. FDOT decided to use the fifth ETDM Process progress report as an opportunity to project the ROI for the process. ETDM Progress Report No. 5 was published in 2012 and included an ROI analysis and qualitative descriptions of benefits realized from implementation of the ETDM Process and EST. The primary audience for the ROI conducted as part of this progress report was ETDM stakeholders across Florida, State DOT decision-makers, and FHWA.

To create the business case included in ETDM Progress Report No. 5, FDOT used two sources of data:

Figure 3 shows the ROI summary table included in ETDM Progress Report No. 5. It provides that over the seven-year period, the ETDM Process and EST saved FDOT a projected $26,087,344 net in project costs and 805 staff-time-months.

Figure 3. ROI for ETDM Process, conducted by FDOT in 2012

ROI summary table from the ETDM Progress Report No. 5

In addition to the quantitative summary of the ETDM Process' benefits and costs shown in Figure 3, the Progress Report included qualitative information about benefits in an appendix. In the appendix, FDOT organized qualitative descriptions by benefit category (e.g., “Promoted Better Decision Making for Transportation Projects”) and by respondent. For example, FDOT District 4 and District 6 noted that “the ETDM Process expedited the review and production of the I-95 Managed Lanes Pilot Project: 95 Express by narrowing the range of required technical studies, reducing their scope, and achieving an early and clear Class of Action Determination.”

Benefits of Making a Business Case

Challenges of Making a Business Case

Lessons Learned

Additional Documentation

3.5 ODOT – Documenting the Benefits of a GIS-Based Oversize/Overweight Permitting Application

Background

In 2008, the Oklahoma legislature directed the Department of Public Safety (DPS) and ODOT to improve the permitting system for oversize/overweight vehicles.

In a previous system, DPS staff manually developed routing for oversize/overweight vehicles using static maps of bridge clearances, weight limits, and construction zone width clearances. This approach was time consuming and staff-intensive. It also introduced high potential for human error. Long wait times to receive permits resulted in high numbers of customer complaints and increased the frequency of carriers operating without permits.

With assistance from consultants, DPS and ODOT developed and launched the Oklahoma Permitting and Routing Optimization System (OkiePROS) in November 2011, which is a new GIS-based permitting system to respond to the State legislature's directive. OkiePROS contains several major components:

Making a Business Case for OkiePROS

The Oklahoma legislature did not specifically request a ROI study for OkiePROS, but wanted to better understand how the new system was improving DPS and ODOT's business processes. Senior staff at ODOT and DPS charged Jay Adams, ODOT project manager for OkiePROS, and Branford Dodd, Director of Size and Weight Permitting at DPS, with making the case that the legislature's investment in OkiePROS had paid off.

To develop a business case, Adams and Dodd started with the list of project goals established when the OkiePROS project kicked off. With these initial goals in mind, Adams and Dodd selected metrics to compare the performance of the old manual permitting system with that of OkiePROS. They determined metrics based on the initial goals of the project, data availability, and their first-hand knowledge of the project's impacts. Adams and Dodd did not attempt to calculate the monetary value of safety benefits or time savings associated with the use of OkiePROS because they considered those benefits more difficult to quantify.

Table 4 summarizes the metrics that Adams and Dodd included in their analysis.

Table 4. Metrics Used to Assess Business Case for OkiePROS

Category Measure Before OkiePROS After OkiePROS
Safety Number of bridge hits annually 5-10 per year 3 in the last 3 years (all due to driver error, not OkiePROS)
Number of permits issued annually Average: 149,530
Highest ever: 201,000
2011: 251,161
2013: 253,841
Permitting compliance Trucking companies reported they drove without permits when permit office was closed 15% of permits issued outside of permit office business hours
Number of construction zones reroutes that require Highway Patrol coordination 15-20 per year Less than 5 per year
Customer Service Length of time required to get permit Typical: 1-3 days
Max: 7 days
70% of permits are issued within 15 minutes
Max: 1 day – Review by Engineering (not including load excess 500K pounds)
Call center average hold time 3.7 hours 7 minutes between 9:00 A.M. and 11:00 A.M. At other times of the day there is typically no wait.
Number of calls that disconnected while on hold 32,100 per month 24 per month
Public satisfaction Frequent complaints about time and effort required to obtain a permit Reduced time and effort to obtain a permit. A customer satisfaction survey in Year 3 found 91% of customers were satisfied
Government Efficiency Annual revenue generated by permits Average: $30,000,000
Highest ever: $38,152,241
2011: $46,607,938
2013: $53,953,730
Call center hours 7:00 A.M. – 7:00 P.M. M-F 7:30 A.M. – 5:00 P.M. M-F
Call center FTEs 2 shifts 1 shift
Permits auto-approved online 0% ~70%
Call center employee turnover 40% 5%
Employee morale Extremely low due to long hours, complicated workflow, and frustrated and angry customers Improved morale due to simplified workflow with less potential for human error, fewer frustrated customers because of shorter hold times

In lieu of a formal report, Adams presented the business case for OkiePROS to the Oklahoma legislature and ODOT and DPS Executive Staffs as a PowerPoint presentation. The results of the business case analysis were used in news releases about the benefits of OkiePROS.

Benefits of Making a Business Case

Challenges of Making a Business Case

Lessons Learned

Additional Documentation

“Technology Expedites Permit Process at DPS.” DPS News Release, April 2012.
www.dps.state.ok.us/news/2012/120430b.htm

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Appendix A: List of Interview and Peer Exchange Participants9

Agency Name Title Work Phone Email
Oklahoma DOT Jay Adams Formerly: Special Projects Manager   mustang-mayor@att.net
Mark Brown GIS Supervisor 405-522-1036 MBrown@odot.org
Utah DOT Becky Hjelm GIS Manager 801-964-4456 BHjelm@utah.gov
Paul Damron Region 4 GIS Coordinator 435-893-4799 PDamron@utah.gov
Florida DOT Pete McGilvray Project Screening & Technologies Administrator 850-414-5330 Peter.McGilvray@dot.state.fl.us
Mark Welsh GIS Applications Coordinator 850-414-4722 Mark.Welsh@dot.state.fl.us
Marjorie Kirby Environmental Administrator and SWAT Coordinator 850-414-5209 Marjorie.Kirby@dot.state.fl.us
North Carolina DOT John Farley Manager, NCDOT GIS Unit 919-707-2151 JCFarley@ncdot.gov
Vermont Agency of Transportation Nina Safavi Survey and GIS Project Manager, ROW Section 802-279-8686 Nina.Safavi@state.vt.us
Ryan Cloutier Plans & Titles Chief, ROW Section 802-828-2374 Ryan.Cloutier@state.vt.us
Pennsylvania DOT Frank Desendi Manager, Geographic Information Division 717-787-3738 FDesendi@pa.gov
Cross Timbers Consulting Pamela Jurney Consultant 405-749-9905 Pamela.Jurney@crosstimbersconsulting.com
U.S. DOT FHWA Oklahoma Division Elizabeth Romero Planning and Technical Services Team Leader 405-254-3340 Elizabeth.Romero@dot.gov
Richard Jurey Transportations Operations Engineer 405-254-3342 Richard.Jurey@dot.gov
Isaac Akem Community Planner 405-254-3343 Isaac.Akem@dot.gov
U.S. DOT FHWA Headquarters Mark Sarmiento Community Planner 202-366-4828 Mark.Sarmiento@dot.gov
U.S. DOT Volpe Center Ben Cotton Formerly: Community Planner    
Kate Macfarlane Junior Analyst 617-494-2023 Kate.Macfarlane@dot.gov

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Appendix B: Interview Guide

Overview of FHWA Study

Background

Business Case Analysis

Outcomes

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Appendix C: Peer Exchange Agenda

Federal Highway Administration GIS-ROI Peer Exchange
200 NE 21st St., Oklahoma City, OK 73105
Design Conference Room, 2nd Floor
March 24-25, 2015

Tuesday, March 24
8:30 A.M. Van departs from Residence Inn/Bricktown
9:00 – 9:45 Welcome, Introductions, and Background – FHWA and Oklahoma DOT
9:45 – 10:30 Demonstrations/Presentations 1 – Oklahoma DOT
Break
10:45 – 12:00 Roundtable 1: GIS ROI Definitions, Purposes, Approaches – All participants
  • What does ROI mean to you?
  • Why did you decide to conduct an ROI?
  • Who initiated the effort? Who carried out the study?
  • Is your ROI for internal purposes, external purposes, or both?
  • How was your ROI funded? Does it take away from department overhead, or is it project-based?
  • Does agency policy require ROI studies? Is your agency's ROI policy firmly established, or is it new? Is it seen by leadership as an effective policy?
  • Did you involve other areas of State government beyond transportation in your ROI study?
  • What did you get out of completing an ROI? Were there unexpected outcomes?
Lunch Transport by van to group lunch
1:30 – 2:15 Demonstrations/Presentations 2 – Vermont Agency of Transportation (remote)
2:15 – 3:00 Demonstrations/Presentations 3 – North Carolina DOT
Break
3:15 – 3:30 Demonstrations/Presentations 4PennDOT
3:30 – 4:45 Roundtable 2: Conducting an ROI, Tracking Success, Intangibles – All Participants
  • Was your ROI proactive or retroactive?
  • Did/do you conduct business differently in order to meet ROI projections and/or expectations?
  • How important is it to track the success of geospatial investments over time?
  • How did you decide on a methodology? Were there any tools (tutorials, software, trainings, etc.) that were essential to the success of your analysis?
  • What are some of the typical intangible benefits that should be considered with a GIS ROI? How do you quantify intangibles? Is it a requirement?
  • How are GIS professionals most effectively communicating intangibles to those less familiar with the geospatial world?
  • Are intangibles able to be tracked over time? Can this be approached systematically?
  • What are some of the key lessons learned?
4:45 – 5:00 Day 1 Key Points/Wrap-Up – FHWA

Transport by van from ODOT HQ to Residence Inn/Bricktown

Wednesday, March 25
7:45 A.M. Van Departs Residence Inn/Bricktown
8:00 – 8:15 Day 1 Re-Cap – FHWA
8:15 – 9:00 Demonstrations/Presentations 5 – Florida DOT
9:00 – 9:45 Demonstrations/Presentations 6 – Utah DOT
Break
10:00 – 11:45 Roundtable 3: Making the Business Case for GIS – All Participants
  • In your agency, how important is it to make a business case (either internally or externally) for any significant investment?
  • Who is responsible for making the business case for GIS?
  • To what extent should business cases for GIS projects use a standard methodology?
  • Why does an ROI for GIS need to be different than an ROI for any other IT investment?
  • How does agency leadership typically feel about geospatial investments? Are program enhancements difficult to sell, or does leadership already understand opportunities associated with GIS in transportation?
  • Should all GIS projects require an ROI or other quantitative/qualitative business case?
  • Beyond ROI, what other ways do you make a business case for investment in your geospatial program?
  • What resources do agencies need to successfully conduct an ROI and how can FHWA help?
11:45 – 12:00 Day 2 Key Points/Wrap-Up – FHWA
12:00 Adjourn

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Endnotes

1
See Transportation Research Board (TRB) National Cooperative Highway Research Program (NCHRP) Synthesis 479: Forecasting Transportation Revenue Sources Survey of State Practices.
2
See the FHWA GIS in Transportation website: http://gis.fhwa.dot.gov/.
3
For information about the trend of declining transportation revenues, see Transportation Research Board (TRB) National Cooperative Highway Research Program (NCHRP) Synthesis 479: Forecasting Transportation Revenue Sources: Survey of State Practices.
4
See the Federal Geographic Data Committee's Economic Justification: Measuring Return on Investment (ROI) and Cost Benefit Analysis (CBA).
5
For example, see Cost-Benefit Analysis of Geographic Information System Implementation: Illinois Department of Transportation (2000). In 2007, the Geospatial Information & Technology Association (GITA) developed a detailed workbook for making the business case for GIS. The book, “Building a Business Case for Geospatial Information Technology: A Practitioner's Guide to Financial and Strategic Analysis,” is not currently available.
6
ESRI's Roads and Highways is a linear referencing system solution that enables transportation agencies to integrate data from multiple LRS networks to provide a comprehensive view of the entire road system.
7
The report is available at www.ncauditor.net/EpsWeb/Reports/Infosystems/ISA-2014-4660.pdf.
8
NPV is the difference between the present value of benefits and the present value of costs. To calculate NPV, AppGeo discounted the future stream of benefits and costs using the U.S. Office of Management and Budget (OMB) discount rate. NPV is calculated using the following equation:
NPV = ∑ [(Bt - Ct) / (1 + r)t ]
Where: B = Benefits; C = Costs; r = discount rate; t = time period. The summation ∑ in the equation above is from t = 0 (the initial start-up of the program) to t = n (the final year of the program).
9
Those whose names are bolded participated in the interviews. Those whose names are italicized participated in the peer exchange.

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