This document outlines a 10-step process for conducting a return on investment (ROI) study to evaluate the benefits of a geographic information system (GIS) implementation. The steps include: 1) preparing for the ROI project; 2) identifying business opportunities through executive interviews; 3) prioritizing benefits; 4) constructing the GIS program; 5) defining project controls; 6) calculating costs; 7) quantifying benefits; 8) building a benefits roadmap; 9) calculating financial metrics like ROI, NPV, and IRR; and 10) drafting and delivering a final report. The goal is to link GIS opportunities to organizational objectives and quantify both the costs and tangible benefits to evaluate whether the program will create or destroy

1. End-to-End Process Win Hearts and Minds Business Led
The Business Benefits of GIS: An ROI Approach
Benefits Driven
● 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 BenefitsStep 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
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.