Steve Calder: Business Benefits of GIS: An ROI Approach
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The document outlines an approach for building an ROI case to secure funding for geospatial technology investments. It involves a 10-step process to 1) identify business opportunities, 2) prioritize opportunities based on value and ease of implementation, 3) construct a GIS program to deliver benefits, 4) define project controls, 5) calculate costs, 6) estimate quantifiable benefits, 7) calculate financial metrics like ROI, 8) create a benefits roadmap, 9) present the case in a final report, and 10) obtain support and commitment across the organization. The approach aims to link GIS initiatives to strategic objectives and prove value in quantifiable terms.
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Steve Calder: Business Benefits of GIS: An ROI Approach
- 1. Business Benefits of GIS: An ROI Approach Steve Calder PA Consulting
- 8. Overview of the Approach Construct GIS Program Calculate Costs Estimate Benefits Financial Calculations Define Project Control Prepare for the ROI Project Build & Present Report 2 1 3 5 4 6 7 10 9 Identify Business Opportunity Prioritise Business Opportunities 8 Benefits Roadmap Develop Quantitative Business Case Toolkits used: Budget Model Template, Benefits Modeling Toolkit, Financial Analysis Toolkit (NPV, IRR, ROI) Develop Strategy Toolkits used: Interview Templates Business Opportunities, Prioritisation Model Program Planning Pyramid Overview of the Methodology…
- 9. Step 1 : Prepare for the ROI Project Construct GIS Program Calculate Costs Estimate Benefits Financial Calculations Define Project Control Build & Present Report 2 1 3 5 4 6 7 10 9 Identify Business Opportunity Prioritise Business Opportunities 8 Benefits Roadmap Prepare for the ROI Project
- 15. Step 5: Define Project Control Construct GIS Program Calculate Costs Estimate Benefits Financial Calculations Define Project Control Build & Present Report 2 1 3 5 4 6 7 10 9 Prioritise Business Opportunities 8 Benefits Roadmap Prepare for the ROI Project Identify Business Opportunities
- 17. Step 6: Calculate Costs Construct GIS Program Calculate Costs Estimate Benefits Financial Calculations Define Project Control Build & Present Report 2 1 3 5 4 6 7 10 9 Prioritise Business Opportunities 8 Benefits Roadmap Prepare for the ROI Project Identify Business Opportunities
- 22. Step 10: Build and Present final Report Construct GIS Program Calculate Costs Estimate Benefits Financial Calculations Define Project Control Build & Present Report 2 1 3 5 4 6 7 10 9 Prioritise Business Opportunities 8 Benefits Roadmap Prepare for the ROI Project Identify Business Opportunities
Editor's Notes
- Objectives are: Provide an overview of the ROI driven strategy such that you understand why it’s important and how it can be delivered Recognize need for top down approach, executives will strongly buy-in if they understand how GIS will support the business goals Once you’ve identified individual goals and benefits, it’s important to tie them altogether and represent back across the many groups in a way that all can understand “ How to” want you to leave feeling empowered that you can deliver what is required, and understand the rationale, process and tools Lot’s of different definitions as to what is strategy and what is business case, we will explain how ROI driven strategy covers both these parts Would anybody like to add to the list that they don’t see here?
- These are all the needs that we see clients having in their organisations Hopefully this connects with your own situation and the needs of your organisation or customers? The methodology was developed to show in a compelling way how IT can create business value and how that value can be delivered.
- Methodology seeks to answer: How can GIS help achieve strategic goals What will it cost – project – ongoing operating costs How do we quantify benefits from investment What resources are required to deliver the program What will the NPV look like How do we structure the program for success As you can see the objective of this methodology is to help resolve these issues and challenges faced The key to success is being able to translate GIS capability into meaningful business value that executives can understand The approach has been developed to provide answers to all of these questions in a logical progression, gaining executive buy in along the way
- The methodology takes us through nine steps < click thro’ 9 steps in order > Step 1 setting the ROI project up for success Step 2- 4 we build the program blueprint, understanding executives challenges and opportunities and capturing in an organized framework with project definitions Step 5 we identify the org structure, governance and resources to manage the program but also consider what support organization will be needed to manage post implementation In steps 6-8 we perform the business analysis, identifying costs, quantifying benefits and calculating overall project values Finally in step 9 we pull it altogether in a final report LHS is focused on developing the strategy, understanding the as-is and to-be situations and the initiatives to close the gap, the RHS is focused on developing the practical business case to make this happen Completing an ROI Business Case is iterative – you may not get it right on the first pass. The methodology can be used in whole or in part to meet the needs of your particular situation. With experience we estimate that you can complete the methodology in approximately 4-6 weeks of effort (this may occur over a longer elapsed time). The journey is as important as the destination.
- The methodology takes us through nine steps < click thro’ 9 steps in order > Step 1 setting the ROI project up for success Step 2- 4 we build the program blueprint, understanding executives challenges and opportunities and capturing in an organised framework with project definitions Step 5 we identify the org structure, governance and resources to manage the program but also consider what support organization will be needed to manage post implementation In steps 6-8 we perform the business analysis, identifying costs, quantifying benefits and calculating overall project values Finally in step 9 we pull it altogether in a final report LHS is focused on developing the strategy, understanding the as-is and to-be situations and the initiatives to close the gap, the RHS is focused on developing the practical business case to make this happen Completing an ROI Business Case is iterative – you may not get it right on the first pass. The methodology can be used in whole or in part to meet the needs of your particular situation. With experience we estimate that you can complete the methodology in approximately 4-6 weeks of effort (this may occur over a longer elapsed time). The journey is as important as the destination.
- Mission statements, to get their head wrapped around the purpose of the organization. Org chart, to identify the key stakeholders. Sponsor, or Coach, identified. Can hurdle any hierarchy impedances in the org’n and measure whether it’s good timing (i.e. undergoing a company re-org). Executive briefings drafted to prepare for interviews in step 2 Estimate project timeline. Keep in mind budget cycles, and submission dates.
- Have a grasp of high-level benefits of a GIS – both tangible and intangible. Build interview questions – use (online) digital docs as a guide. Try to glean metrics from the interviews. Do not avoid individuals who historically may have been naysayers or critics. Circumventing them early in this process could serve to impede the success of the ROI project further along. Emphasize that this is not a needs analysis, answering how GIS can be applied in an organization. Instead, this is a formula to address business needs.
- Avoid personnel reduction as a solution. Don’t attempt to shoe-horn GIS into the answer for every situation. There is a risk of losing credibility. Regarding Metrics: Try not to get too hung up on numbers – if you’ve collaborated with the subject matter expert – a 20+ year veteran – than the numbers are corroborated.
- In some cases, opportunities may not fall into the upper right quadrant, but may be perceived by executives to be politically sensitive or high-profile. As a result, the quadrant diagram is a guide to assist you in weighing the value to the organization. The opportunities may afford other less-tangible, but equally important, benefits that should be considered.
- Don’t assume the program will progress as a waterfall model, cascading from project to project. Describe post-it note scenario.
- The methodology takes us through nine steps < click thro’ 9 steps in order > Step 1 setting the ROI project up for success Step 2- 4 we build the program blueprint, understanding executives challenges and opportunities and capturing in an organized framework with project definitions Step 5 we identify the org structure, governance and resources to manage the program but also consider what support organization will be needed to manage post implementation In steps 6-8 we perform the business analysis, identifying costs, quantifying benefits and calculating overall project values Finally in step 9 we pull it altogether in a final report LHS is focused on developing the strategy, understanding the as-is and to-be situations and the initiatives to close the gap, the RHS is focused on developing the practical business case to make this happen Completing an ROI Business Case is iterative – you may not get it right on the first pass. The methodology can be used in whole or in part to meet the needs of your particular situation. With experience we estimate that you can complete the methodology in approximately 4-6 weeks of effort (this may occur over a longer elapsed time). The journey is as important as the destination.
- Measure competencies using the CMM. Very visual. Assemble the ROI team to review, discuss and possibly argue about the current and desired rankings. Must have one individual as the facilitator, use a projector, presenting the each key process area on the CMM, one at a time for discussion and debate. Be honest about how the organization is currently set up for success.
- The methodology takes us through nine steps < click thro’ 9 steps in order > Step 1 setting the ROI project up for success Step 2- 4 we build the program blueprint, understanding executives challenges and opportunities and capturing in an organized framework with project definitions Step 5 we identify the org structure, governance and resources to manage the program but also consider what support organization will be needed to manage post implementation In steps 6-8 we perform the business analysis, identifying costs, quantifying benefits and calculating overall project values Finally in step 9 we pull it altogether in a final report LHS is focused on developing the strategy, understanding the as-is and to-be situations and the initiatives to close the gap, the RHS is focused on developing the practical business case to make this happen Completing an ROI Business Case is iterative – you may not get it right on the first pass. The methodology can be used in whole or in part to meet the needs of your particular situation. With experience we estimate that you can complete the methodology in approximately 4-6 weeks of effort (this may occur over a longer elapsed time). The journey is as important as the destination.
- Might want to discuss cost types: Resource Driven, Fixed Price, Point Purchase. Also, managing cash flow – spreading expenditures equally throught the fiscal year.
- Show the template “live” – zooming in on each section so they can see it in-action.
- Mention themes/categories (i.e. Foundational projects). Collections of projects delivering benefits. Use Familiar and Standard organizational techniques and approaches. Be conscious of the manner in which your executives like to receive and consume informaiton.
- Capital budget planning. As a budget is re-cast year on year, there will be a need to modify the capital expenditure (CapEx) projections to reflect changing business priorities, technologies, environment, etc. Increasing capital expenditure profile over the years should be avoided. The budget must convey a clear sense of when something will finish .
- The methodology takes us through nine steps < click thro’ 9 steps in order > Step 1 setting the ROI project up for success Step 2- 4 we build the program blueprint, understanding executives challenges and opportunities and capturing in an organized framework with project definitions Step 5 we identify the org structure, governance and resources to manage the program but also consider what support organization will be needed to manage post implementation In steps 6-8 we perform the business analysis, identifying costs, quantifying benefits and calculating overall project values Finally in step 9 we pull it altogether in a final report LHS is focused on developing the strategy, understanding the as-is and to-be situations and the initiatives to close the gap, the RHS is focused on developing the practical business case to make this happen Completing an ROI Business Case is iterative – you may not get it right on the first pass. The methodology can be used in whole or in part to meet the needs of your particular situation. With experience we estimate that you can complete the methodology in approximately 4-6 weeks of effort (this may occur over a longer elapsed time). The journey is as important as the destination.
- look across the enterprise and not simply at one business function or department Stakeholder buy-in to what benefits could be realized in the use of geospatial technology