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Jonathan Marshall: Beyond RoI – An alternative solution for measuring benefits of GIS
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Jonathan Marshall: Beyond RoI – An alternative solution for measuring benefits of GIS

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  • Full Name Full Name Comment goes here.
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  • This may have solved my problem of measuring intangible benefits in business cases. Can you explain the scoreing? Actual score and weighted score?
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  • What is measurement? - well both are right, its just the first one is very difficult to do and from a business perspective the second is much more practical. The fact some error is unavoidable but that the result is an improvement on previous knowledge is still of benefit. Why measure? Loads of reasons, that I think most know about and accept, there have been many previous presentations over the last few years explaining the importance and need to measure benefits of GI Not just GI industry - Independent survey, 40% fail to measure IT’s contribution to business. This failure is severely impacting the value being derived from their IT infrastructure. It is also noted that few orgs have developed ways to measure the value IT contributes.
  • This issue is highlighted by CIMA (2002) which shows that where factors are difficult to measure the temptation is to avoid them. Myers (2004) also highlighted that a common argument against devoting resources to measuring the financial benefit generated from IT projects was that it is difficult. Everything can be measured in a financial sense it just takes more time, energy and imagination to find the appropriate measure. As Gillespie (2000 p7) noted, “converting from qualitative to quantitative benefits measurement can easily double or triple the cost of a costs/benefits study.”
  • RoI – harder to implement than formula suggests In a paper by Estes (Estes, J. M. (2007) ROI: Measuring the real return [online] ) – it is suggested that most execs say RoI can be measured but admit they don’t know how to actually do it!
  • RoI – harder to implement than formula suggests In a paper by Estes (Estes, J. M. (2007) ROI: Measuring the real return [online] ) – it is suggested that most execs say RoI can be measured but admit they don’t know how to actually do it!
  • Many frameworks and techniques exist – some specifically attempt to address the challenge of measuring or incorporating intangibles into the metrics: Benchmarking, Six Sigma, Value-based mgt, Balanced Scorecard, Performance Prism, Intangible Asset Monitor, etc.
  • Many frameworks and techniques exist – some specifically attempt to address the challenge of measuring or incorporating intangibles into the metrics: Benchmarking, Six Sigma, Value-based mgt, Balanced Scorecard, Performance Prism, Intangible Asset Monitor, etc.

Jonathan Marshall: Beyond RoI – An alternative solution for measuring benefits of GIS Presentation Transcript

  • 1. Beyond RoI – An alternative solution for measuring benefits of GIS Jonathan Marshall When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot express it in numbers, your knowledge is of a meagre and unsatisfactory kind... Lord Kelvin
  • 2. Introduction
    • British Waterways, GIS and our need to measure benefits
    • Measurement and challenge of intangibles
    • Measurement of benefits
        • examples from the GI industry
    • BW’s solution
  • 3. British Waterways
    • UK’s leading navigation authority - managing over 2000 miles of waterway
    • Diverse business - Leisure & Tourism - Property - Water Sales - Telecommunications - Regeneration
    • 200 year old asset infrastructure
    • (bridges, locks, reservoirs, tunnels, aqueducts etc.)
  • 4. GI in British Waterways
    • Enterprise GIS solution since 2001 – desktop, browser & mobile
    • Integrated with SAP since 2003 – now being integrated with document management solution
    • Provides rich source of information about the waterway network, its assets and surrounding environment – the value of location!
    • An invaluable operational and management tool
    © Crown copyright and database right, 2009. All rights reserved. Ordnance Survey Licence number 100019843.
  • 5. BW’s need to measure the value of GI
    • As GIS becomes ever more important and prevalent within the business – need for continued investment and improved measurement of benefit increases
    • Difficulties in gaining authorisation for GI projects
    • Challenges in recognition of importance of location based information and the GIS experts within the business
    • Internal audit report - highlighted lack of any measures
      • - required generation of a “corporate measure of, and desired target value for, business benefit for GIS”
  • 6. Measurement
    • What is measurement?
      • an answer of certainty, an exact quantity or computed value with little or no room for error, or
      • a set of observations that reduce uncertainty where the result is expressed as a quantity (Hubbard, 2007)
    • Why measure?
      • ensure GI is value for money, support directors understanding, contributing to vision/strategy/objectives, help gain continued investment or increases in expenditure, etc.
    • Not just GI industry slow to advance in this area
      • Independent survey - only 40% of enterprises measure IT’s contribution to the business
  • 7. The challenge of intangibles
    • What does intangible mean?
      • “ difficult for the mind to grasp or incapable of being felt by touch” (Collins English Dictionary, 2009)
      • No presumption that something that can not be touched is immeasurable.
    • Many benefits of GI often described as intangible or impossible to measure.
      • innovation, knowledge growth, improved data quality, flexibility, customer/user satisfaction, better decision making, etc.
    • It isn’t that they are impossible to measure, but that they are too difficult to ascertain an actual monetary value for their respective benefit or improvement.
  • 8. Measurement of benefits - examples from the GI industry
    • Predominantly concerned with identification and measurement of quantitative financial benefits or how to create a financial measure for qualitative/intangible benefits
    • Return on Investment is the most common model used
    • RoI – straightforward enough (overall cost compared to amount of money saved or generated by the investment)
    • Although harder to implement than the simple formula suggests.
      • Unisphere Research – just over 25% of companies conduct RoI for significant IT projects. (about 11% never perform RoI studies)
  • 9. Measurement of benefits - examples from the GI industry (cont.)
    • Many find concept of measuring RoI on a GI System as daunting or near impossible, problems cited include,
      • lack of models to follow
      • no theories to link seemingly disparate topics of GIS and RoI
      • lack of published RoI stories
      • measuring/calculating value of intangible benefits
    • In BW – An RoI calculation was undertaken in 2006/07
      • we stopped calculating at 360% RoI, as started to become meaningless…
    • We needed a different approach
  • 10. Options
    • Looked at existing frameworks and techniques
      • particularly those that specifically attempt to include intangibles into the metrics
    • Scorecard type models appeared to offer a solution, (e.g. Balanced Scorecard, Intangible Asset Monitor and Skandia Navigator)
    • All highlighted importance of a range of metrics across a number of key perspectives, financial, customer, internal/process and learning/development
  • 11. Existing frameworks Skandia Navigator Balanced Scorecard
  • 12. BW’s Solution
    • Simple scorecard approach devised
    • Recognised importance of a balance of measures across key areas
    • Identified elements for each objective that can be measured – simply not attempted to relate them all back to a financial value
  • 13. BW’s Solution
  • 14. BW’s Solution All measures are either currently being measured or not onerous to undertake – e.g. user satisfaction easily measured through a user survey Target values are either in BW’s corporate plan or where possible are recognised industry figures.
  • 15. Scorecard approach - advantages
    • Easily tailored to meet current and future requirements
    • Can be expanded, measures changed or targets and relative importance altered as needed
    • Best measurements for each objective chosen – reduced time and effort as not having to perform complex tasks to establish financial value for everything
    • Intangibles no longer a problem – only problem now is establishing what’s important enough to measure and the best way of measuring it
  • 16. Conclusions
    • Current trend is to use RoI to establish benefits
    • Many people/organisations do not attempt to measure benefits at all
      • mainly through dissatisfaction and difficulties in calculating financial value for intangible benefits
    • Financial aspect and RoI still important – but measures for GIS benefit needs to go beyond the basic RoI model
    • Measuring benefits doesn’t need to be difficult
      • if approached from perspective of reducing uncertainty/risk & improving knowledge
      • identify those targets/objectives that are important and best way of measuring them
  • 17. Conclusions
    • Scorecard approach ensures range of pragmatic, detailed and balanced measures can be used – shows at a glance indicators of progress against targets
    • Challenge is to keep the number of measures manageable and ensure they are linked to the overall business vision, strategy and objectives
    • All intangible benefits could be assigned a financial value – however the time and effort involved in doing so is greater than the value to be derived from such an exercise.
  • 18. Questions? Thank you for listening.