determining business value of geospatial capabilities
TRANSCRIPT
Estimating the Business Value of Geospatial
Technology
David SonnenESRI Business Summit
June 28, 2004
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Objective• Describe a practical framework for identifying
and measuring the value of geospatial technology within enterprise information systems.
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Problem• Today, technology decisions and
program support are increasingly based on direct, measurable business value of technology.
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Problem• IT enables business processes rather
than producing direct business results.• ROI measures must accurately show
the effect of IT on business processes.
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Approach• Develop a framework that will:
– Identify and quantify geospatial technology’s direct contribution to performance metrics.
– Produce accurate and continuous ROI data as part of corporate management processes.
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Why Bother?• Align IT capabilities with corporate strategy• Understand strategic, operational, and
economic value of IT investments• Make good choices between technology
options• Improve efficiencies of business processes
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Fundamentals of Business Value
• Customers define value• Value is opaque• Value is multidimensional • Information technology is an enabler• Performance metrics reflect the tangible
value of information technology
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GVM Flow
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Step 0: Adapt GVM framework to Existing IT Design and Management Methods
• GVM must supplement existing design and management methods within the organization.
• GVM is easy to misuse if treated as stand-alone method.
• GVM is best implemented as an iterative and participative process.
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Step 1: Identify Business Process and People Involved
• E.g.: Activate telephone service
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Who’s Involved?
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Step 2: Process Diagram
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Step 3:Set Performance Metrics
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Performance Metrics
• Financial• Productivity• Customer Value
• E.g. Average time to activate account, customer churn rate, cost of activation process
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Step 4: Identify Geospatial Functionality/Data
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Step 5: Identify Additional Uses (optional)
Geocoding
Location determination
Routing
Spatial query
Desire line modeling
Thematic mapping
Geospatial Functionality
Operational/ Analytic Applications
XX X X XX X X
X
X X X X
X X X XX X X
X
X X X X
X X
Other Operations/ Production
Analytic Applications
X X X X
Demand Planning Analytics
Pricing Analytics
X
Procurement Analytics
Risk Management
Analytics
Inventory Tracking
Workforce Analytics
Materials Management And Logistics
Analytics
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Step 6 Determine Geospatial Specifications
• Data: Accuracy, resolution, immediacy, coverage, …
• Functions: Inputs, storage, edits, queries, topology, outputs, …
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Identify Geospatial Performance Contribution
Improve warehouse inventory throughput times by 80%
Produce on-demand inventory status for dispatch center
Decrease load/unload mistakes to 1 per 150 trailers dispatched
Generate 100% accurate State permits for all routes.
X
Geospatial Function
Integrate all location data
into transaction database
Incorporate location data into reporting and analysis applications
Determine asset location
Automate asset
location data entry
Track asset location
continuously
X X X X X
Generate pallet load orders in near real
time
Generate optimum
routes
XX X X
X X X
X
Performance Metric
X X
X
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Assess Alternatives
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Step 8: Design and Implement
• Use geospatial specifications as input to design– Data modeling– Data architecture– System specification and selection
• Use geospatial specifications in management parameters– Balanced Scorecard– Portfolio Management– Client’s corporate management process
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Step 9: Measure Performance
• Measure baseline performance.• Measure performance after new
information system is implemented on on-going basis.
• See “ROI Worksheet”.
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Step 10: Adjust/ Act
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Issues and Constraints• Metrics v. causation• Easy to overestimate value• GVM does not capture intangible value• Valuation methods often distorted by
political realities
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Conclusions• The business value of geospatial technology
can be identified and assessed.• Measurement requires that the role of
geospatial technology be considered throughout the design and implementation of business processes and the information systems that support them.
• Effective valuation has to be continuous with real feedback to decision makers
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Contact Information
• David Sonnen, 360-332-7546• [email protected]
• GVM paper: Available through British Ordnance Survey, Cambridge Conference 2003 Proceedings
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