Longhorn cba indicators

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Cost & Benefits indicarots of Spatial Data Infrastructures by Roger Longhorn

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Longhorn cba indicators

  1. 1. Cost-Benefit Indicators to Assess SDI Impact Roger Longhorn Director, Info-Dynamics Research Associates Ltd. co-Chair, GSDI Assoc. Legal & Economic W.G. CBA Work Package Leader, INSPIRE Project MOTIIVE ral@alum.mit.edu24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  2. 2. Presentation Before you do a Cost-Benefit study. Cost-Benefit metrics. Cost-Benefit Methodologies. Cost-Benefit issues. Cost-Benefit metrics as assessment Indicators. Alternatives to CBA. The ANSWER!24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  3. 3. Before the Cost-Benefit Analysis (CBA) Define your SDI. Define your goal for the CBA. Define your target audience. Define your (preferred) CBA Methodology. Define your time frame.24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  4. 4. Before the Cost-Benefit Analysis (CBA) Agree on value propositions to be used in the analysis (tangible, intangible benefits). Agree on assumptions made (including weighting factors, etc.). Agree on your experts and level of stakeholder engagement.24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  5. 5. Cost-Benefit Metrics What type of CBA & metric? − Return on Investment (ROI) − Net Present Value (NPV) − Economic Value (EV) - value to the economy in X years, in Y years (economic value = ?) Other metrics? Payback period to recover the investment We can now do A (or better than before)24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  6. 6. Cost-Benefit Methodology What type of methodology? − CBA (traditional, financial / monetary) − Cost Effectiveness Analysis (CEA) − Value Measuring Methodology (VMM) − GeoVMM (variant of VMM – NASA ROI work) − Social Cost Benefit Analysis (SCBA) − Multi-Criteria Analysis (MCA) − Social Multi-Criteria Analysis (SMCA)24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  7. 7. CBA Issues CBAs are riddled with assumptions. − More complexity = More assumptions. − More assumptions = Less believable. − Less believable = Less valuable to do. Depends upon quality of experts. Depends upon resources available to conduct the study & analysis - and on stakeholders. Please separate “GI/SDI benefit” from that of generic “information infrastructure” benefit.24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  8. 8. Value of C-B metrics as SDI assessment indicators What is a metric such as “ROI = 112%” actually measuring – if the final metric is presented to decision-makers with inadequate metadata (who, how, why...). What valuable assessment information is lost when the message “NPV = €1.2 billion” is conveyed to SDI developers - in regard to all the other benefits of an SDI.24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  9. 9. Alternatives to (traditional) CBAs Multi-Criteria Analysis (MCA). − Multi-objective decision making, Multi-objective decision support system (MODSS), and Multi-criteria decision aid Collection(s) of specific Case Studies. Business cases. Impact analyses & Risk assessments. Computational simulation models. (NB-Sim) Combinations of any or all of the above. But these dont lead to easily identified indicators.24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  10. 10. INSPIRE CBA/ROI Workshop, Jan. 2006 “It is (probably) not possible to use a(standard) CBA methodology, with a singlesuccess criteria/metric, to assess the cost- benefit for an entire information infrastructure.”24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  11. 11. Value of C-B metrics as Indicators “The answer is 42.” - Douglas Adams Hitch-hikers Guide to the Universe Life, the Universe and Everything24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  12. 12. 24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen
  13. 13. Thank you for your attention. Roger Longhorn ral@alum.mit.edu24 May 2007 Multi-view Framework to Assess NSDIs, WUR workshop Wageningen

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