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Gis Roi Methodology Overview
 

Gis Roi Methodology Overview

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GeoSpatial Information ROI

GeoSpatial Information ROI

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    Gis Roi Methodology Overview Gis Roi Methodology Overview Presentation Transcript

    • End-to-End Process Win Hearts and Minds Business Led The Business Benefits of GIS: An ROI Approach Robust Benefits Driven Participatory Pragmatic Scalable
      • Treat the return on investment (ROI) study as a project:
        • Defined group of stakeholders who will contribute
        • Project plan with start and end dates and well-defined activities
        • Active stakeholder management
        • Deliverables
      • Define your ROI project timeline.
      • Build strengths, weaknesses, opportunities, threads (SWOT) analysis of your existing geographic information system (GIS) implementation or past attempts.
      • Identify key stakeholders and socialize ROI project, preparing for step 2.
      ROI Study Project Timeline SWOT Analysis Step 3: Prioritize Business Benefits Step 1: Prepare for ROI Project
      • Practically determine what will need to be done to deliver the benefits.
      • Distill the program into component parts (hardware, software, data, etc.).
      • Seek to combine like projects together, not 1:1 to each benefit opportunity.
      • Take an enterprise view, not an application view.
      • Be pragmatic and technology neutral.
      • Use practical approaches to deal with complexity.
      Project Description Template Program Pyramid Step 4: Construct GIS Program 1 2
      • Identify business opportunities for GIS by interviewing your executives.
      • The objective is to link GIS opportunities to organizational strategy and objectives.
      • Utilize structured interview techniques and scripts.
      • Focus on perceived challenges or problem areas in the organization.
      • Take time to involve and educate executives, but don’t “sell” GIS to them.
      Interview Template Step 2: Identify Business Opportunities 3 4 5 6 7 8 9 10
      • Use the information gathered from your executives during interviews and follow-up meetings with their direct reports.
      • Collate it in the template provided.
      • Identify metrics that relate to each opportunity.
      • Avoid sensitive benefits (e.g., cost reduction via headcount).
      • Use the template to help prioritize the benefits identified based on
        • Value to the organization
        • Ease of implementation (delivery)
      • The template will generate a quadrant diagram.
      • At this stage, value is subjective but is guided by executives.
      Benefits Template Quadrant Diagram © ESRI and PA Consulting Group, Inc. Step 5: Define Project Control Program Governance Delivery Team Structure
      • Inadequate governance is a leading cause of program failure.
      • Ensure you have robust controls in place to be successful.
      • Use the Project Governance Capability Maturity Model (CMM) to assess your team’s abilities.
      • Expose your strengths and weaknesses.
      • Shore up any weak spots, and be realistic.
      • Define your delivery team structure (in-house versus external).
      Step 6: Calculate Costs Budget Model
      • Assemble your GIS program budget forecast (capital expenditures [CapEx] and operational expenditures [OpEx]).
      • Team with your finance department.
      • Build your budget from the bottom up in a robust, defensible manner.
      • Use the Budget Template to guide you through the budgeting process.
      • Guidance is provided about capital versus operational expenditure, depreciation, and internal capitalization of labor.
      • The output is used to populate the cost side of the ROI calculation.
      Step 7: Quantify Benefits Benefits Model
      • Quantify all business benefits in tangible terms.
      • This is one of the most challenging aspects of any ROI calculation.
      • It requires you to model the impacts of GIS on workflow as an enabling technology (base case versus GIS case).
      • Use the Value Driver Tree concept (benefits that enable other benefits).
      • Tap a subject expert — get to the numbers.
      • Study the Sensitivity Analysis and Benefits Realization Curve.
      Step 8: Build Benefits Road Map Benefits Road Map
      • This is built from the discrete projects defined in step 4.
      • It visually communicates the program activity on a quarterly basis.
      • It focuses on benefits delivered, not project milestones.
      • It provides a clear road map for the program.
      • It must be realistic and achievable and have broad commitment from the business to succeed.
      Step 9: Calculate Financials ROI Financial Calculations Model
      • Team with the finance department.
      • Use previous budget (cost) and benefits to calculate ROI, NPV, IRR, etc.
      • The template provides fill-in-the-blank entry and automatically calculates financial metrics.
      • The template also provides guidance on interpreting the results (e.g., creates value or destroys value).
      • It’s not just about a positive NPV; it is about successfully delivering on the promised benefit.
      Step 10: Draft and Deliver Report Final Report (Word)
      • The final stage simply summarizes the results of the study, pulling it all together.
      • At this stage, it should be for comprehensiveness, not to win a budget.
      • Hearts and minds should have been won long ago, well before executives read the report.
      • Normally, a Word-based report, plus an executive presentation or summary, is produced.
      The information in this document is derived in whole or in part, under license, from the ROI Methodology of PA Consulting Group, Inc. http://gis.esri.com/roi