GIS Return on Investment

April 11, 2010  - By 0 Comments
Foreign Concept or Life Ring for GIS

by Art Kalinski, GISP

With the 2010 Census upon us and the economy still showing weakness, I was reminded of my early experience in GIS when success depended on explaining and justifying the expenditures for a GIS. Today most organizations take their GIS operation for granted, but in lean times you may find yourself in a dog fight for meat on the table. The concept of return on investment (ROI) is common practice in the business world where expenditures have to be justified and shown to contribute to the bottom line. However, ROI is not a common topic in most government agencies. As budgets shrink, justifying your project or pending purchase will take on greater importance. The concept is very simple — what monetary or other benefit can you show that justifies your GIS expenditures? Being prepared to answer that question could give you a leg up over departments that come to the table unprepared.

Unfortunately, there are no simple formulas or procedures that I can suggest to develop your ROI plan. The best that I can do is cite some examples, and then you’ll have to develop your own specifics that fit your organization. For many organizations there may be a direct cost savings in dollars or man-hours that will be realized through your GIS efforts.  For others, the savings may be non-monetary such as saving lives. Here are a few examples that helped me put my head in the right place to develop my own ROI justification.

My first contact with GIS was back in the mid-80s when I was responsible for developing the Navy’s base closure recommendations, now called BRAC. The most challenging part of developing the closure list was our nationwide collection of 326 reserve centers that had to be reduced by 10-20%. The difficult aspects of closing reserve centers was that almost every center was in a different congressional district, and closing a center could result in increased not decreased costs. Why? Closing a reserve center could result in reservists being required to drive more than 50 miles to an alternate site, which obligated the Navy to pay travel and per diem. In many cases the effect of closing a reserve center could result in a cost increase.

With 326 reserve centers and 102,000 potential Naval Reserve commuters, the logistical anagram I had to analyze would have been a nightmare without GIS. After researching several software packages I settled on a package from a New York firm, National Planning Data Corp. ESRI was still a new company and not well known in the demographic mapping business as were Claritas, Donnelly, and NPDC. The founder of NPDC was a well know demographics guru, Peter Francese. Peter’s early success was something that seems simple today but was a big leap in the ’70s. He assembled census data and published the data sets on microfiche. He then started a magazine that everyone said would never succeed, American Demographics. The magazine proved to be wildly successful and was eventually bought by Dow Jones.

His work logically led to computer mapping of the demographic data. NPDC had the only software that could efficiently geo-code personnel address locations and a do a ring study of various closure options. Using the software I was able to geo-code all 102,000 reservists and do multiple “what-if” studies to determine the best centers to close. We take this kind of work for granted today but it was pure magic in the mid-80s. I earned significant kudos for doing a seemingly impossible task in an impossibly short period of time, and became enough of an advocate to pursue GIS as a second career after retiring from the Navy.

On occasions you get a chance to meet a true visionary. Peter was one of those great minds blessed with a rare insight that brings clarity to complex situations. He saw trends long before the rest of the world even sensed movement, and talking to him was always interesting, enlightening, and like drinking from a fire hose. In one of my discussions with Peter he explained his view of how technology was shaping our world. His example was so simple and profound that it’s stuck with me to this day. His example is one that should guide all of us as we struggle to justify our projects and show their worth. He said that what modern society has been doing is substituting information for resources. He said that in the old days information was expensive and resources cheap, but that equation has reversed.

An example he cited was the telephone. In the 1940s, telephones were big, heavy, not very capable devices that used a lot of resources. For those you that haven’t handled old phones, they weighed about six pounds, being made from Bakelite resin, brass, and steel. The only thing you could do was dial and talk. However, by the mid-80s the weight had dropped to ounces as new plastics and microchips gave the phones memory, redial, and some phones were even cordless. We had substituted our growing knowledge of plastics and microchips for significantly fewer resources. And of course the phone example has gown exponentially with cell phones that now approach the capabilities of small PCs.

phone

GIS is one of the most dramatic examples of information substituting for resources. Most GIS operations save countless hours of resources cataloging, viewing and analyzing all manner of people, places, and things. Think back to my early example of demographics and reserve centers. The task could have only been accomplished by a team of people using paper maps plotting each address, drawing circles and manually counting individuals. The work would have taken months and would have cost far more than the original $6,000 software cost. Today we save countless gallons of gas and man hours with simple computer maps and GPS. Video conferencing and, eventually, virtual reality may take those savings to an even higher level.

Justifying or showing a return on investment is easy for a busines. It’s a little bit tougher for government agencies but it is doable. My favorite example deals with tax assessors. A tax assessor I knew in the Atlanta region started using high-resolution oblique imagery with the parcel-level GIS data. One day an indignant rural area citizen came in irate that his @*#& chicken coop had been assessed at $70,000. He wanted to know what my assessor friend was going to do about it. My friend said that in the old days he would have to schedule a visit to the property, meet with the owner, and determine if his complaint had merit. Many times because of work loads and schedule conflicts the field visit never happened, so taxpayers who complained frequently avoided the higher tax by default.

Imagine the owner’s surprise when the tax assessor said “Well let’s look at that chicken coop right now.” He immediately took the owner to a workstation and in three minutes brought up the GIS parcel layer, zoomed to the property, and the turned on high-resolution oblique imagery of the chicken coop. The clear 4-inch-wide pixel imagery showed a very nice garage with a shingle roof and even a central air conditioner to keep the workshop cool. The tax assessor looked at the imagery, measured the building on screen, and then turned to the owner saying “You’re right! That chicken coop is not worth $70,000, it’s really worth $90,000,” and he reassessed it on the spot as the owner left absolutely speechless.

chick coop

While I was at the Atlanta Regional Commission we also had many examples where first responders used GIS to save lives and property. We all have experienced or heard about these kinds of anecdotal stories related to GIS operations. The hard part is organizing and prioritizing the benefit verses the cost. ESRI and other GIS vendors have numerous white papers that can help you with the effort.
One method that I especially liked was a simple technique used in time management, a graph that plotted cost versus benefit. The Y axis was cost ranging from zero to the maximum. The X axis was benefit, ranging from none to maximum such as saving lives. Using this graphic tool you can focus on low-cost, high-benefit tasks and not waste time on efforts that are higher cost with little benefit. I found that keeping in mind the example Peter cited, “substituting information for resources,“ helped me build the strongest case for my GIS program.

RIO graph

Peter is still the eternal optimist, doing speaking engagements for major corporations and large conferences. You can contact him at www.francese.com if you’re looking for an interesting visionary and optimist as a speaker. Like many of you, I worry about our economy, the deficit, etc., and I worry about the path we’re on. Peter, however, believes that our people, and physical and virtual infrastructure such as the Internet, are so well established and so powerful that this country is unstoppable in the long term. Good news to end on as you ponder your budget fights and your ROI.

 

This article is tagged with and posted in GeoIntelligence Insider, Opinions
Art Kalinski

About the Author:

A career Naval Officer, Art Kalinski established the Navy’s first geographic information system (GIS) in the mid-1980s. Completing a post-graduate degree in GIS at the University of North Carolina, he was the Atlanta Regional Commission GIS Manager from 1993 to 2007. He pioneered the use of oblique imagery for public safety and participated in numerous disaster-response actions including GIS/imagery support of the National Guard during Hurricane Katrina; the Urban Area Security Initiative; a NIMS-based field exercise in Atlanta; and a fully manned hardware-equipped joint disaster response exercise in New York City. Kalinski retired early from ARC to join Pictometry International to direct military projects using oblique imagery, which led to him joining SPGlobal Inc. He has written articles for numerous geospatial publications, and authors a monthly column for the GeoIntelligence Insider e-newsletter aimed at federal GIS users.

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