Cost-effective GIS

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Cost-effective GIS

  1. 1. Application technical Cost-effective integrated spatial systems for local governments by Nico Elema, GIS Global Image, and Prof. Louis Fourie, University of Stellenbosch Business School In order to assist implementers of integrated spatial systems to develop cost-effective solutions in their organisations, cost factors that influence such systems need to be understood, measured and managed. This article addresses these cost factors, and briefly discusses how costs can be understood and managed for more cost-effective implementations of integrated spatial systems in local government. V arious systems and processes government since the approval of the information, which will provide users are implemented within Constitution of South Africa in 1996 in the organisations with the means to local governments to assist [1], various white papers and Acts update, maintain and report on data. in the day-to-day operation of the were passed, defining the structure It is evident that systems are required organisations, including financial, and purpose of local governments to be integrated, and where spatial human resource, building control in South Africa. Various categories information exists, this information needs and land use management systems. of local government were identified, to be presented to users. Developments in information technology namely category A, B and C. Based In order to present information and specifically geographical information on their functions to society, and the spatially, municipalities implement technologies have enabled the effective requirements of internal and external a GIS. Much like most information implementation of integrated spatial clients to the municipality, certain technology systems, a GIS consists management information systems information needs have evolved in local of different components or building (ISMIS). The ability of these enterprise government. The needs are determined blocks. In essence, it can be derived systems to integrate different systems by a detailed user requirement survey that an information system consists of a into a single data repository, from (URS). collection of people, processes datasets, where information can be updated and software and hardware which collect, disseminated, has enabled users from all Complementing the planning process process, store and communicate data levels in the organisations to access and of an ISMIS, the detailed URS can be as information in support of operational report on GIS data. undertaken with officials within the tasks and decision making [2]. local municipality. Based on studies As costs are inevitably incurred, added undertaken within various local The combination of a GIS – that has benefits are also derived from the governments in South Africa, general the ability to integrate and graphically system. Where systems have been needs have been identified, which represent data, and a management implemented and pressure is mounting include inadequate access to information; information system (MIS) – that has for users to gain access, implementers a need for improved productivity; the ability to integrate and provide need to be aware of the factors that access to more electronic information; predefined information to decision hinder users to gain access, in order fewer duplication and inconsistencies makers in report format [3], provides to open systems up to as many users of information; information needs to be a system where most data that are as possible. The main objective of this disseminated; information needs to be generated, can be integrated and article is to assist in the identification managed and be centralised through a presented in a spatial format. Data from of cost factors in the development information sharing portal; information these data sources can be integrated into and implementation of ISMIS in local needs to be spatially based in a a single database management system government, with the goal of developing geographical information system (GIS); (DBMS). A DBMS permits an organisation cost-effective systems. Cost effectiveness to centralise datasets, manage them information needs to be maintained does not necessarily refer to the project effectively, extract data and provide and the existing systems need to be with the least cost, but the project with integrated. access to the stored data by application the most effective application of cost, software [4]. providing the greatest benefit in relation The electronic systems within to user needs, and where the benefits municipalities are also diverse in function As integrated spatial systems ultimately outweigh the cost. and are often based on requirements by advance from being “nice-to-have” national government for municipalities to applications to necessary applications Local governments in South Africa function effectively. As more information within organisations, the challenges and their GIS needs is being gathered through time, that face an ISMIS increase with the Following the transformation of local systems are required to manage spatial demand for the utilisation for spatial PositionIT - July 2009 73
  2. 2. information and services. These l Data accuracy (the level of accuracy is owned by an individual or business challenges include the managing of can affect the cost of implementing entity but the software is distributed organisational and technological change a system). at no cost as freeware, shareware or related to business processes and l Data availability (by making use of abandonware) and open source software the integration of municipal legacy existing data sources, cost can be (which provides computer users with free systems. Further challenges that are reduced in a project). access to its source code so that they faced by organisations occur where can modify the code to fix errors or to different organisations collect data Cost factor 2: Software make improvements). for different purposes, and where Within the software industry, different contrasting meanings are assigned to Cost factor 3: Customisation licensing models were found, under their data [5]. This highlights the value which software is made available to Closely related to software, is the ability of metadata within the establishment users. Each of the different software of the organisation or service provider of an ISMIS, where information such licensing options has an impact on to customise a software package for as the scale, accuracy and owner of the cost of implementing an ISMIS the organisation. Implementers of datasets are documented. In order and has its respective advantages and ISMIS need to assess user needs, for users to interpret information in disadvantages. and determine where the balance lies the correct context, metadata need to between using purchased software and be documented on the data. If data According to Skidmore and Eva [6] needs are different in exceptional cases customising software. If customisation perceived advantages and disadvantages to the levels of accuracy or currency is required, implementers need to can be found where software is made accommodated within the system, the determine to what level of customisation available as software packages. The users need to interpret data accordingly. in order to successfully address user perceived advantages include reduced needs. cost; the saving of time since the Cost factors which influence the software already exists; quality benefits, Cost factor 4: Hardware development of an ISMIS since the software has been tested; In order to implement an ISMIS cost- Implementers of ISMIS need to be aware documentation and training do exist and effectively, factors that influence cost of the different system requirements of software packages are usually supported need to be identified and understood the various software packages. These by formal maintenance agreements, from the outset of a project. In software packages are not only the GIS which ensure organised maintenance and understanding these cost factors, software, but would also include the enhancement of the software. implementers and service providers need database management systems (DBMS) to relate the cost factors to the needs of Skidmore and Eva [6] further discuss that would be required to store data the organisation and thus consider the the perceived disadvantages of software within the system. In large organisations potential positive and negative impacts packages which includes: with many users and large datasets, these cost factors might have on the these demands will be higher on the l The fact that the ownership of the financial and operational requirements of hardware requirements, which can software lies with the supplier, and the ISMIS implementation. increase the cost. not with the purchaser. O'Brien [3] discusses how costs can l If the supplier is financially unstable, Cost factor 5: Training be tangible (which can be quantified) there might be a risk that the or intangible (where costs are not Where ill co-ordinated training takes supplier can go out of business, quantifiable). In order to identify these place during the implementation phase which could affect the quality of tangible and intangible costs, factors of a system, users could end up being support and development. need to be considered that would retrained, which would add unnecessary l When organisations use software influence costs, in the implementation time and cost to the project, making the packages as supplied by a supplier, of integrated spatial management project less cost-effective. they lose their competitive-edge. information systems for a local Cost factor 6: Maintenance government. These factors include l The purchased software fails to fit requirements data, software, hardware, training, the requirements of the organisation. customisation, maintenance requirement l If a system fails to fulfil the user’s In order for the ISMIS to be effective and time constraints, and can be functional requirements, the over time, maintenance will be required. summarised as follows: customer can seek legal redress to Maintenance will provide the sustainable resolve the failure. If a product was momentum the project requires, after Cost factor 1: Data developed inhouse by an internal the system has been implemented and IS department, this would not be tested. Data is a key element of an ISMIS. Data can be derived from different possible. Cost factor 7: Time constraints sources, which include internal data, l Since user requirements change, external data or personal data. maintenance is required at a Where projects are required to be cost which can be perceived as a completed in a short period of time, Related to data, three factors are disadvantage to the organisation. more hardware and software are identified that impact on the cost of required, thus increasing the cost. implementing an ISMIS within local The different software licensing options government. The three data factors that are available, include licensed Managing the cost of an ISMIS are: software (where the ownership of Different types of users also have l Data currency (which refers to how source code is owned by an individual different needs which are one of the up-to-date data needs to be in the or business entity), proprietary software driving forces for the development of system). (where the ownership of source code applications.
  3. 3. Application technical Three different types of users are within the system – a case where l The first level of users can be identified (see Table 1). The first being “too many options clutter the grouped as the capture users. Due to super users who have access to all mind”. It is thus important that the higher costs associated with the information within the system related the correct set of software tools be capturing of data (through the use of to their respective functions within the provided to a user based on the super users, time associated to clean organisation, and can add, edit, maintain user’s function in the organisation. data and higher software licensing and report on data. The second group l User base: The total number of costs), the costs-per-seat is relatively comprises the basic users who have users who actively access the the highest. Due to the higher costs, extremely limited functionalities available system. If the system is intranet the relative number of users is also from the system, and can view, and based, these users could be from limited to only a few users in the report on data. The last group, the within the organisation, or if the organisation, which leads to the expert users, consists of users who highest cost-per-seat calculation. system is internet based, these cannot add, or edit new data to the users could be from outside the l The second level of users can be system, but do have the ability to view, organisation. categorised as the analysis users. manipulate and report on data. The Training requirements are normally expert functionalities within the system Based on Fig. 1, the relationship between not as extensive as the super users, allow the user to create complicated cost (calculated as cost-per-seat), and since the data have already queries and analysis on the data, which functional functionality and user base been captured and cleaned, the is illustrated. In Fig. 1, users typically time associated to analyse data is would lead the user in creating new also relatively less than the capture layers of data based on the existing data require specific functionality from the users. As mentioned earlier in created by the super users. ISMIS, based on their function in the this study, staff specialists (expert organisation. These functionalities In general super users are typically users) outnumber managers (basic are typically collected during the user users) three to two [7]. Since more the most expensive users and also requirement survey (URS) in the initial users have access to the ISMIS, the fewest number of users in the organisation. On the other hand, it is the least expensive to provide basic users with access to the system, resulting in most users having access to the system. It is important for implementers of ISMIS to understand the relationship between user requirements, the associated functionality requirements from the system, and the impact that these requirements have on the number of users accessing the system. As presented in Fig. 1), this relationship is better understood in discussing the principles of cost-per-seat, functional functionality and user-base. l Cost-per-seat: If the aim of the organisation is to measure its Fig. 1: The relationship between cost (cost per seat), functional functionality and user-base. success in the publishing of spatial related information to as many phases of the project. there is a positive impact on the users as possible at the least The functionality requirements can be cost-per-seat associated with the financial cost, the calculation of categorised into three levels, namely implementation of the project. cost-per-seat would provide an indication of how successful the the requirement to capture data, the l The third level of users can be organisation was. Cost-per-seat is requirement to analyse data or the categorised as the viewer users calculated by calculating the total requirement to view published data. in the publishing platform. Viewer financial cost of the project divided by the number of users actively Type of user Function Functionalities Relative Relative using the system. in the required from cost number of l Functional functionality: Within organisation the system users an organisation, different users Super user Data capture Add, edit, Most Fewest users have different functions. Based maintain and expensive on these functions, a specific user report requires certain functionalities from Expert user Data analysis View, manipulate More than Fewer than super the system, in order to optimally and report data basic user, users, but more perform a function effectively [2]. If but less than than basic users the user has too little functionality super user within the system, the user would Basic user Data publish View and report Least Most users not be able to perform his/her data expensive tasks. The same would be true, if the user had too much functionality Table 1: User profile in the organisation. PositionIT - July 2009 75
  4. 4. Application technical user’s requirements indicate Value Ex Ante In Medias Res Ex Post that they require basic mapping Resource allocation Yes – helps to select If low sunk costs, Not applicable. The functionality to simply view data. decision for the best project or make resources can still be project has been These users might simply want to project “go” versus “no-go” shifted. If high sunk completed. search for and map a property on a decisions, if accurate. costs, continuation is map, and as easily as possible view usually recommended information on the property which could include ownership, land use, Learning about the Poor estimate – there Better – reduced Excellent – although actual value of a is a high uncertainty uncertainty. some errors may zoning or any other information specific project. about future benefits remain. May have to available from the system without and costs. wait for a long period analysing the data. Management of time for the study. reports are also readily available which generate updated reports Contribution to Unlikely to add value Good – contribution Very useful – as required from already updated learning about increases as the although there may data. Training requirements are actual value of a assessment is be some errors and a similar project performed later in need exist to adjust also basic, and due to the easily the project. There is for uniqueness. May accessible data, most users access a need to adjust for have to wait long the ISMIS at this level. Since more uniqueness. for the project to be users access the system relative to completed. the analysis- and capture levels, the lowest cost-per-seat can be Table 2: The value of different types of CBA [10]. expected from this level. Measuring the cost-effectiveness of an ISMIS are undertaken during a project, it is Technology in the Business Enterprise. With a better understanding of the referred to as in medias res. The value Sixth Edition. New York, NY: of the different types of CBA can be seen McGraw-Hill/Irwin, 2004. relationship between cost, (as expressed in cost-per-seat), different functions of in Table 2 [4] K Laudon and J Laudon: Management Information Systems. Managing the users in the organisation, and the impact According to Levin [11], benefits are Digital Firm. Upper Saddle River, New this relationship has on the number calculated as a ratio of costs, in order to Jersey: Prentice Hall, 2002. of users using the system within the complete a basic cost-benefit analysis. [5] M Hattingh: GIS and new mapping for organisation, the relationship between An example of a cost-effective project the City of Johannesburg. PositionIT. cost and benefit can be discussed. would be project with a ratio of 1:1,10 The geo-informatics, surveying, GIS This would indicate that for each cost and location based services journal for As financial reporting by local unit of 1, the returned benefit was 1,10, Southern Africa. September/October government to national government are 2005, 34-38, 2005. and that the project was completed cost required under the Municipal Finance effectively. On the other hand, where a [6] S Skidmore and M Eva: Introducing Act (Act 56/2003) [8], the application Systems Development. New York: project’s CBA ratio is 1:0,41 it can be of cost-benefit analysis (CBA) provides Palgrave MacMillan, 2004. translated as for each 1 cost unit spent municipalities with measurements of [7] E Turban and J Aronson: Decision on the project, the returned benefit economic benefits and costs of projects Support Systems and Intelligent was only 0,41 cost unit, thus less than not only to national government, but Systems. New Jersey: Prentice Hall, the costs incurred. When a cost-benefit 2001. to consumers and society as a whole analysis is undertaken for an ISMIS, [9]. Galt [9] argues that decisions [8] Republic of South Africa. Municipal the various cost factors are used in the Finance Management Act, no 56 of 2003. on investments in projects are often calculations, as discussed in the article. made in a subjective way, and that real [9] V Galt: Cost-benefit analysis in Local The ultimate aim of a CBA is to achieve a Government. In Finlayson, D (reds) costs and potential benefits of some benefit higher than the costs, associated Occasional Papers. Local Government straightforward projects are by no means with the project. Research Unit, Paisley College of evident and that the consequences for Technology, 1973. cost and benefit are extremely wide. References [10] A Boardman, D Greenberg, A Vining, [1] Republic of South Africa. The Constitution and D Weimer: Cost-Benefit Analysis. Boardman, Greenberg, Vining and of South Africa, Act no 108 of 1996. Weimer [10] distinguish two major types Concepts and Practice. Upper Saddle [2] P Van Helden: Die Ontwikkeling River, NJ: Prentice Hall, 2001. of CBA, namely ex ante CBA and ex post en Bestuur van 'n Ge-integreerde [11] HM Levin: Cost-effectiveness: a primer. CBA. Ex ante CBA is conducted while Inligtingstelsel vir Stadsbeplanning in 'n Plaaslike Owerheid. Unpublished California: SAGE Publications, Inc., 1983. the project is under consideration while Ph.D- dissertation. Pretoria: University of ex post CBA, on the other hand, refers Pretoria,1993. Contact Nico Elema, to a cost-benefit analysis undertaken at [3] J O'Brien: Management Information GIS Global Image,Tel 021 880-1891, the end of a project. Where CBA studies Systems: Managing Information nico@globalimage.co.za 76 PositionIT - July 2009

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