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Cost-benefit analysis of geographic information system implementation : Illinois Department of Transportation Hall, James P ; Kim, Tschangho John ; Darter, Michael I

By: Hall, James PContributor(s): Kim, Tschangho John | Darter, Michael IPublication details: Transportation Research Record, 2000Description: nr 1719, s. 219-26Subject(s): USA | Transport authority | GIS | Cost benefit analysis | | Impact study | Economic efficiency | 01 | 02Bibl.nr: VTI P8167:1719Location: Abstract: An in-depth investigation of the costs and benefits of geographic information system (GIS) implementation in the Illinois Department of Transportation (IDOT) is presented. The investigation addresses a critical need to determine the organizational impact and cost-effectiveness of this enterprisewide information technology to achieve the greatest benefit. IDOT conducted an enterprisewide effort to portray GIS capabilities and to identify candidate GIS projects. Fourteen major GIS projects were selected on the basis of management priority, ease of implementation, and user commitment. A comprehensive cost-benefit analysis was developed over fiscal years 1995 through 2004. Costs were reasonably estimated from historical costs of the GIS investigation effort and future costs of GIS technical support and user area resources. The greatest portions of costs, over the 10-year time frame, were for personnel (67%) and consultant services (19%). For the more difficult benefits determination, the research employed two categories of benefits: efficiency and effectiveness. Efficiency benefits would result from the automation of previous manual efforts, such as special-purpose cartographic production, with GIS outputs. Effectiveness benefits arise from traditionally intangible areas, such as increased integration and accessibility of information for improved decision making. Effectiveness benefits were estimated conservatively for two high-priority areas: accident analysis and program development. The result of the cost-benefit analysis of GIS implementation yielded a net present value of $2.9 million and an internal rate of return of 99.8% over the analysis period. This provided IDOT management with knowledge for strategic resource allocation decisions.
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An in-depth investigation of the costs and benefits of geographic information system (GIS) implementation in the Illinois Department of Transportation (IDOT) is presented. The investigation addresses a critical need to determine the organizational impact and cost-effectiveness of this enterprisewide information technology to achieve the greatest benefit. IDOT conducted an enterprisewide effort to portray GIS capabilities and to identify candidate GIS projects. Fourteen major GIS projects were selected on the basis of management priority, ease of implementation, and user commitment. A comprehensive cost-benefit analysis was developed over fiscal years 1995 through 2004. Costs were reasonably estimated from historical costs of the GIS investigation effort and future costs of GIS technical support and user area resources. The greatest portions of costs, over the 10-year time frame, were for personnel (67%) and consultant services (19%). For the more difficult benefits determination, the research employed two categories of benefits: efficiency and effectiveness. Efficiency benefits would result from the automation of previous manual efforts, such as special-purpose cartographic production, with GIS outputs. Effectiveness benefits arise from traditionally intangible areas, such as increased integration and accessibility of information for improved decision making. Effectiveness benefits were estimated conservatively for two high-priority areas: accident analysis and program development. The result of the cost-benefit analysis of GIS implementation yielded a net present value of $2.9 million and an internal rate of return of 99.8% over the analysis period. This provided IDOT management with knowledge for strategic resource allocation decisions.

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