1. 6/1/2015Andrew Frank1 HOW TO PREPARE A FEASIBILITY STUDY FOR A PROJECT FOR NEW USE OF GEOGRAPHIC INFORMATION Ljubljana, training course, 31.1-3.2.2000 Andrew U. Frank Geoinformation TU Vienna frank@geoinfo.tuwien.ac.at

2. 6/1/2015Andrew Frank2 Overview of the Program January 31 st – Lecture (Andrew U. Frank) concept and goals of the feasibility study for the project selection of your own project

3. 6/1/2015Andrew Frank3 Basic content of the lectures: –Introduction, standard approaches, analysis of failures –The decision situation and the Geoinformation product centred approach –Aims, goals, and the structure of the feasibility study –Identification of Geoinformation product and format to support the user’s decisions –Project selection

4. 6/1/2015Andrew Frank4 February 1 st - Lecture (Andrew U. Frank) Basic content of the lectures: –Organization of the project –Resources needed for the project –Technical solution –Fundamentals of information market economy –Estimation of the costs and evaluation of benefits –Cost-benefit analysis

5. 6/1/2015Andrew Frank5 February 2 nd and 3 rd – Workshop/Lecture (Andrew U. Frank, Massimo Rumor, Kurt Fedra) participants are divided according to their interest into three groups: real estate management, physical planning, and environmental planning

6. 6/1/2015Andrew Frank6 February 2 nd -Lecture (Andrew U. Frank) 15.00-15.40 - Presentation skills – for all participants together

7. 6/1/2015Andrew Frank7 February 3 rd –Presenting the Projects (Andrew U. Frank) 13:50 – 16:50 - Presentation of selected projects (10 min. each)

8. 6/1/2015Andrew Frank8 Introduction Goal to foster the use of the information collected and maintained within the organization Motivation to create economically beneficial new uses of the data

9. 6/1/2015Andrew Frank9 New Technology There are a large number of new uses for Geographic Information possible with new technology: –With GPS we know where –With GSM we can communicate –The WWW gives access to data independent of the location of storage –Open GIS interfaces build bridges –Hard- and Software is inexpensive and ubiquous

10. 6/1/2015Andrew Frank10 New Uses Information for travellers: tourists, public transportation users, Logistics, Transportation, Dispatch: Emergency services Navigation: Taxi drivers

11. 6/1/2015Andrew Frank11 New Business Model: Big GIS: a public administration builds and maintains a GIS for its own use. Small GI: a company maintains GI and distributes it against a fee to many others. Pay-per-use GI utility Private enterprises

12. 6/1/2015Andrew Frank12 Methodology The Methodology is USER CENTERED. We start with the user and its use of the information. We do not start with the GIS or the data.

13. 6/1/2015Andrew Frank13 Two Steps in a Feasibility Study for Geoinformation Products Part 1: User oriented What Information for what decision? Written in the user’s language Part 2: Technology driven How to produce the information? Written in a technical language

14. 6/1/2015Andrew Frank14 Feasibility study contents The feasibility study consists of the following parts: Part 1: Description of the problem, identification of the decision to be made, identification of the user Design of the Geoinformation product that optimally supports the decision Include pictures, examples; must be very specific.

15. 6/1/2015Andrew Frank15 Feasibility study contents Part 2: Resources required, especially data Technical solution Time and Personnel plan Estimation of the costs and benefits Cost-benefit analysis

16. 6/1/2015Andrew Frank16 Project oriented teaching How to make a good feasibility studies requires to know how to apply a methodology. This requires knowledge and skills. The lectures will present the knowledge. The skills you will acquire during the project work. The two form a unit!

17. 6/1/2015Andrew Frank17 Project In parallel to the lectures, you should prepare a feasibility study of some GI use. The lectures show the theory, the project fills it with reality. The lectures are abstract and general. Each project is concrete and specific. VERY concrete and VERY specific.

18. 6/1/2015Andrew Frank18 Project selection (1 st ) Select a process and a decision which requires GI. Select a VERY specific process and decision. Not urban planning, but ‘decisions about building applications. Select something simple (the less complexity, the more you learn) Select something you know about (less time is spent in investigation; more concrete example)

19. 6/1/2015Andrew Frank19 Project selection (2 nd ) Selected a different application from other participants. Learning is not dependent on the project coming out as feasible. Select soon – application is not crucial (but starting soon is crucial) Selection must be agreed with me by today 15:00

20. 6/1/2015Andrew Frank20 Examples of projects: Dispatch of Taxi’s Information to drivers about traffic congestion Scheduling in out-patient care in correspondence with schedule of public transportation. Tourist information Management of nature reserve

21. 6/1/2015Andrew Frank21 Decision about GIS The decision about a GIS should be based on a cost-benefit analysis Only GIS which are producing valuable data are maintained in the long run. Only data which is used is maintained and remains useful. Successful GIS support very specific tasks. Avoid the ‘eierlegende Wollmilchsau’!

22. 6/1/2015Andrew Frank22 Geographic Information A GIS is an information system, producing information for a user. A successful GIS provides useful information to a user. Useful information is contributing to decisions by the user. Information can be understood only within the context of the organization and the user.

23. 6/1/2015Andrew Frank23 Analyse Information Needs The only use of information is in decisions. Information needs depend on the processes and the decisions made in them. Identify the most important processes in an organization. Many organizations require spatial information to achieve their goals. If their important processes require decisions which are influenced by space.

24. 6/1/2015Andrew Frank24 Start with Use of Information not the GIS A car company designs first a new car, Then it builds the factory. Do the same for GI! In GIS, we seem often to start with the factory and look later for buyers of the product.

25. 6/1/2015Andrew Frank25 Analysing the Situation in Your Organisation What are the main processes of the organization (municipality)? What are the tasks performed within the organization, what is the logical sequence of the tasks? What are the decisions which must be made? –How do they contribute to the organisations goals

26. 6/1/2015Andrew Frank26 Decisions require information: Which information is needed? What is geographic information?

27. 6/1/2015Andrew Frank27 Information must be delivered to the decision process: Who is taking the decision? Where is the decision taken? How can the information be communicated? In which form?

28. 6/1/2015Andrew Frank28 Identification of the Decision-Making Process Select a decision making process which; Is performed in your organization You know well Needs geographic information for the accomplishment

29. 6/1/2015Andrew Frank29 Steps Needed to Undertake in the Process Draw a simple diagram of the decision making process showing the steps needed to be undertaken for the completion of the task. Identify the steps and the information required at a singular step. Which data are geographic, which not? The separation of GI from other information is not useful here!

30. 6/1/2015Andrew Frank30 Identification of the Geographic Information At which step is the geographic information required? Which information is needed? Is this information easily available for the decision maker? What quality of information is required? In which form can it be used?

31. 6/1/2015Andrew Frank31 Model of Decision Process What is the problem we would like to solve? The way the problem is defined determines the approaches used to solve it. How well can we model the process with the decision in it? If we have a model of the decision process, we can identify the information needs.

32. 6/1/2015Andrew Frank32 Project: Identify the Decision-Making Process Select a decision-making process you want to improve with the use of geographic information. Which processes in your organization need geographic information? Which geographic information is needed? Which tasks in the work process do we want to support and improve with the help of the geographic information?

33. 6/1/2015Andrew Frank33 Identify information needs What information is affecting the decision? What effect would different quality of the information have on the decision? What are the effects of errors?

34. 6/1/2015Andrew Frank34 Documentation Describe the decision process and its environment. Describe the decision process in detail. (model) What are information inputs? (list) How are they used? Describe the situation specifically. Select a concrete example.

35. 6/1/2015Andrew Frank35 A decision process is personalized and localized Who takes the decision? Where is the decision taken? How can the information be communicated? How can it be delivered?

36. 6/1/2015Andrew Frank36 Communication of Geographic Information Usually in form of a map or schematic map. But consider also verbal instruction (oral or written) Table Yes/No Describe the information for the concrete example decision you selected. Typically draw a small map (or similar).

37. 6/1/2015Andrew Frank37 Delivery How could the Geographic Information be brought to the decision maker? In what form can it be used? Paper? Voice? This describes the most important parts of the geoinformation product. Document it!

38. 6/1/2015Andrew Frank38 Transfer: From origin: The data which is used to produce the Geographic Information Product is often centrally stored and maintained. Importance is SHARING of data, not physical centralization Sharing reduces cost of maintenance of data. To Destination: Where is the data used?

39. 6/1/2015Andrew Frank39 How to transfer to the point of use. Example: Distribute as printed map. Send as SMS to a GSM cellular phone. Document communication channel selected.

40. 6/1/2015Andrew Frank40 Communication channel characteristics: Bandwidth, Speed, Latency, Privacy Does this work with the characteristics of the decision process? How much time is available per decision? Can the internet be accessed at the location of the decision?

41. 6/1/2015Andrew Frank41 Definition of the Geographic Information Product: A coordinated set of information (at least some of it are geographic), Prepared to support a specific decision. In a form to communicate optimally with the decision maker Delivered by a channel which fits the decision situation.

42. 6/1/2015Andrew Frank42 Documentation for geographic information product The geographic information product can be documented easily and concretely. Give an example! Describe what can be seen and how it related to the decision situation. Describe how it is delivered. No description of technology – all in the language of the user.

43. 6/1/2015Andrew Frank43 How is the GIP selected? The decision maker must inform the production system which particular GI the GIP should contain. What are the particulars which describe the decision situation? Make a list! How can they be input into the system to get the appropriate GIP? Design the dialog (with screens)

44. 6/1/2015Andrew Frank44 Mock up of the user view At a higher level of detail, it is useful to create a model of what the user will see and how he will interact with the system before the system is actually programmed. Users can easily detect when shown an example what will not work. They can typically not identify problems in abstract descriptions. (A property of human cognition).

45. 6/1/2015Andrew Frank45 A Project A project is a one–time job that has definite starting and ending points, clearly defined objectives, scope, and (usually) budget. A project for creation of the Geoinformation product. The project starts with the idea. It ends when the new system is introduced into practice. Projects are very different from recurring administrative tasks.

46. 6/1/2015Andrew Frank46 Choose Your Role in the Project Select a situation very specific and concrete and choose your role in the project (manager, owner of the company, consultant, etc.) This may be different from your actual occupation in your organization.

47. 6/1/2015Andrew Frank47 Decision Process in a Project A project can be stopped. An organized project progresses in steps, which each come to a decision point. The decision is go/stop for the next step.

48. 6/1/2015Andrew Frank48 Cyclic model of project decisions Projects may involve major investments. To prepare the decision is then also a substantial investment. Rule of thumb: Preparing a decision should cost less than 10% of the project investment. To make the decision about the preparation of the decision requires a preparation…

49. 6/1/2015Andrew Frank49 Cyclic model A cyclic model of decision making: we make a decision to go to the next round of improved and more detailed project planning. Each round collects more detail. The same decision is made repeated (go to the next round of detail). Each time estimate the cost and the benefits. The precision of knowledge required is very low initially.

50. 6/1/2015Andrew Frank50 Level one: Back of the envelope guestimate: Somebody has an idea for a GIP. Can we show in 5 minutes that it cannot be cost effective? If a project passes this, we may spend a one to two days in evaluation to make a better cost-benefit comparison.

51. 6/1/2015Andrew Frank51 The Concept of Geoinformation Product A Geoinformation product is a specific piece of information packaged as a product, which serves a particular information need in a specific situation. We discuss here the design of the GIP before we discuss how it is produced: The product is designed before we build the factory!

52. 6/1/2015Andrew Frank52 Cost-Benefit Comparison A product should not be produced if the cost is larger than the benefit. Cost: the total use of resources to produce a product Benefit: the contribution the product makes to the economy Comparison in economic (money) terms.

53. 6/1/2015Andrew Frank53 Cost The monetary value of all inputs necessary for the production of the GIP. In order of importance: Labor for maintenance of system Labor for data maintenance Cost of distribution and accounting (30%) Technical system (20%?)

54. 6/1/2015Andrew Frank54 Benefits What is the value of the decision? What is the improvement of the decision by the information contributed? -> value of the GIP (a single one) How often is the decision taken? How many will buy the GIP (market penetration)

55. 6/1/2015Andrew Frank55 A simple example Decision: where to go for lunch Who: employees of the TU Vienna Cost of lunch: ATS 120 Choice of restaurants is large. Information desired: menu today for the restaurants.

56. 6/1/2015Andrew Frank56 IP : Restaurant Info TU Vienna A small database with today’s menus for the participating restaurants. Can be searched by price, type of food etc. Delivered as Web page.

57. 6/1/2015Andrew Frank57 Cost Maintenance of database: input of menus, per restaurant 20 S (3 min @ 400 ATS/hour) Input from 25 restaurants: 500 ATS/day System design, administration etc. 50% Total cost per day 750 ATS

58. 6/1/2015Andrew Frank58 Benefits Value to the user: 10% of price of meal -> 10 ATS Number of users: 500 employees 50% of which eat -> 250 persons Market penetration: 10% would use system -> 25 person Total income: 250 ATS/day How to collect the fee?

59. 6/1/2015Andrew Frank59 Cost-Benefit comparison 1: Cost = 750 ATS Benefits = 250 ATS Idea is not viable

60. 6/1/2015Andrew Frank60 Additional Benefits: Restaurants sell more meals. Value to restaurant: Sell 4 meals more (marginal benefit 50 ATS each) ATS 200/day

61. 6/1/2015Andrew Frank61 Restaurants pay fee Fee to participate: 100 ATS/day No fees from users. Market penetration: 70% = 17 restaurants

62. 6/1/2015Andrew Frank62 Cost benefit 2: Costs = 700 ATS Benefits = 1700 ATS The system is viable and the fees are easy to collect. ATS 2000/month for a restaurant seems high?

63. 6/1/2015Andrew Frank63 Improvement: Offer restaurant a reduced fee if they put the data in a web page themselves. Cost for operation of system: close to zero

64. 6/1/2015Andrew Frank64 Discussion: Much has been discovered in this first round of cost-benefit analysis. The cost and benefit estimates are not very accurate, but sufficient to discover the principles of the business model. Another example – participant suggested.

65. 6/1/2015Andrew Frank65 Participants project: This is what you will do in your project. A first round if possible today. The second round with more precision will be presented on Tuesday.