Despite the central role of geospatial information and technology in public and private organizations, geospatial advocates face ongoing challenges with proving and communicating the value of investing in geospatial solutions. Senior executives often fail to grasp the value that the solution brings because they are not directly connected to it. This article, by PA Consulting’s Ross Smith and Andrew Sheahen, advocates the development of an ROI-based business case that looks beyond the technology and is based upon the business value that will be delivered by the program.
Professionals working with geospatial technology know that public and private organizations can leverage this technology in a meaningful way to help improve business operations and customer service, and meet regulatory or citizens' expectations.
Despite this central role, geospatial advocates face ongoing challenges with proving and communicating the value of investing in geospatial solutions. Senior executives often fail to grasp the value that the solution brings because they are not directly connected to it. For that reason we advocate the development of an ROI-based business case that looks beyond the technology and is based upon the business value that will be delivered by the program. This business case needs to be benefits-driven and have buy-in from across the business. It will help ensure that the program is focused on the areas that will maximize the return on investment and it should be linked to an operational plan that ensures the program will be executed effectively.
The building of such a business case is invaluable in identifying and articulating how the geospatial solution can benefit the business. However, many business cases (or annual budget submissions) are put on the shelf after they have been used to secure budget. In this article, we present various options for using your business case in a more sustainable way. We discuss strategies for putting the right mechanisms in place to capture the real impact of the program and demonstrate that the benefits described in the business case are, in fact, being realized. By simply determining the right metrics to track; defining a process for capturing, validating and reporting on the metrics; and communicating the results to your stakeholders you can prove that the investment in your program is indeed having the expected return.
Modeling the benefits and predicting outcomes is one thing, but tracking and reporting on actual results is clearly more powerful. Multi-year programs often have to re-submit revised budgets annually - and in many cases they need to remind senior executives why the investment was made in the first place and assure them that the expected benefits are, in fact, being delivered. If you put in place tracking metrics that allow you to capture the actual impact your program is having, then you will have irrefutable proof that the investment is delivering the expected return for the business.
Both financial and operational metrics can provide powerful views into the value your program has provided to the business. Financial metrics are those that can be monetized, and which are most commonly linked to capital and operational costs, revenue (or cash flow). Operational metrics are usually closely linked to a business process and may not have a direct link to a monetary unit, although they could have significant impact on business critical issues such as customer satisfaction, regulatory compliance or safety. In building the business case, you will have identified a number of metrics upon which your program is expected to have a positive impact. From this list of metrics, you need to think about the feasibility of tracking and monitoring the metrics for the duration of your program and beyond. When deciding which metrics to track, think about which metrics your organization already emphasizes and tracks regularly. Using metrics that are already in use and well-defined within your organization ensures your organization already finds these metrics valuable indicators of performance. It also suggests that there are mechanisms in place to capture the data, making your job that much easier.
By making use of existing reports, you can focus on ensuring your program delivers the benefits modeled instead of worrying about gathering, analyzing and reporting on data. However, this strategy is not without its issues. In most cases, different departments within the organization will impact the metrics tracked by the business, which means your program isn't the only one that has an impact on any given metric. Because of this, it may not be possible to identify your program's precise contribution to the improvement in the metric. That said, assuming you build a robust benefits model, you should know the expected impact of your program at any given reporting interval and/or program milestone and unless there are other programs with similar benefit expectations, the benefits provided by your program should be clear in the trends evident in the data.
For example, soon after completing an integration between an outage management system and a geospatial physical network inventory platform, organizations should see a drop in their Average Response Times and Mean Time to Repair. Although there are many factors that impact these two metrics, your model should provide an expected improvement in these two metrics against which you can track the actual values your organization reports.
Tracking Benefits Dashboard
The “before” and “after” view of any metric, relative to your program's milestones, provide a compelling view into the value your program has provided. However, just linking your program's benefits to existing reports may not be enough. Providing your own reporting view that shows all the benefits your program provides, not just a few key metrics for the business, shows a more complete picture.
Creating a consolidated, aggregate view of the benefits you're providing can be incredibly powerful. A benefits dashboard is a great way to do this and can be as simple or as robust as is required - from simple Excel-based charts in a single page to robust, business intelligence platform powered online dashboards.
Again, when thinking about what sort of report or dashboard to develop, you should consider what already works for your organization. If the organization uses a simple tool for this type of reporting then consider leveraging it. If people in your organization are already comfortable using more advanced business intelligence tools, perhaps that would be appropriate. However, if Excel charts are how metrics are communicated, stick with them. This ensures you are focusing on your program's delivery and not re-inventing the “reporting wheel” inside your organization.
Understanding your audience members and how they interact with various metrics is critical to ensuring that their time spent reviewing your reports, and making informed decisions as a result, is not wasted. To that end, some visual representations may be more appropriate than others for different metrics and for different audiences. If there are existing representations in use within your organization, then use them (assuming people are comfortable with them). If not, think carefully about both the metric itself and the audience for that metric. While a simple table showing a metric changing over time may be sufficient for those familiar with the measure and its relevance to the business, other audience groups may need more information to understand what the data are telling them.
Many dashboard solutions provide simple, easy-to-understand representations of a metric (e.g. speed gauges and traffic light based widgets); however, keep in mind that for some metrics these may be too simple and not really show the user the information that is needed. Sometimes a simple tabular format may provide far more value to a user than a graphical representation like a speed gauge.
The key with a dashboard is to walk the fine line between too much information and not enough. Overwhelming the user with rows and rows of numbers is typically counter-productive and results in more discussion over what the data mean than what to do about it. On the flip side, showing just a red, yellow or green light may provide some insight into whether or not the program is going well, but doesn't help inform decision making.
Whether you're just linking your milestones to existing reports or developing a complete picture of the value of your program via a benefits dashboard, communicating the availability of the reports/data is critical. After all, a dashboard is only valuable if people know it is available and regularly use it. The business owners that supported the program originally should be the key users. As they see the impact on metrics they understand, their support for your program is likely to increase - facilitating further development and benefits.
In this article we have explored the value of continuing to track and report on metrics that demonstrate the value of your geospatial network infrastructure solution. You must identify the right metrics, both financial and operational, to track throughout the life of your project. Then define a process that will enable you to capture, validate and report the metrics on a regular basis. Finally, you need to communicate your results to your key stakeholders using the reporting mechanisms and approaches that are most appropriate for your organization. This is a powerful way to demonstrate to executives that their investment in your program is having the expected return. It makes your program more credible and your requests for future investment more compelling.
This article is an excerpt from an ROI Handbook published by GE Digital Energy and PA Consulting Group. You can download the complete handbook and associated tools and put the methods and insights into practice in your own organization.
Author Ross Smith and several of his associates will offer a webinar in our e-Learning series on how to use these techniques. A fee of $29 will be charged to attend the webinar.