1. Business Processes Analysis & Exchange Network Return on Investment Exchange Network Users Meeting Hilton San Francisco Hotel, Continental Ballroom April 18-19, 2006

2. ROI for Exchange Network Purposes  EPA needs cost saving data to justify future EN funding  States need cost data to show benefits prior to EN projects ROI Project Results  Investigate 5 data flows  Develop a model to systematically quantify ROI values Monetary values Qualitative improvements  Develop an Excel program that: Calculates ROI values for five data flows Extensible to accommodate different state IT project environments Screening tool for developing plans for EN projects

3. We Need Quantifiable Answers to These Questions …. “What are either the benefits of, or compelling reasons for, electronic reporting (i.e., EN technologies)?” “What percent of your target audience is using it?” “Do you think you’ll see a return on your application development investment?”

4. ROI Project Objectives 1. analyze environmental business processes, 2. develop a reusable tool to model the return on investment from implementing EN technologies, 3. develop a final report & guide describing the ROI model and its application for facility, state, & EPA applications, and 4. publicize economic benefits of implementing EN technologies

5. Data Flows AQS - The Air Quality System DMR - Discharge Monitoring Reports RCRA - Resource Conservation and Recovery Act SDWIS - Safe Drinking Water Information System TRI - Toxics Release Inventory

6. Surveyed States Michigan New Jersey Washington Pennsylvania

7. Site Visit Accomplishments Gather state information to verify the initial Model’s  Business Processes for the data flows (before & after EN)  Operational scenario differences among different states  Actual state values for ROI calcuations  Improve the ROI model Collect quantitative information regarding the cost of maintaining data flows Use information gathered to assess the Return on Investment associated with the implementation of EN technology Document qualitative improvements

8. ROI Model – Technical Procedures

9. ROI Model – Business Process Analysis eDMR Dataflow

10. ROI Model – ROI Factors & Input Parameters

11. ROI Model – State Survey State Survey is divided into 3 sections  Business Process Analysis – Verify the business processes associated with each data flow (including all potential cost factors and various operational scenarios for every state)  Assessment of State Costs – Determine cost estimates for each ROI factor (step in the business process)  Qualitative Factors Survey – Determine what qualitative benefits are associated with the project

12. ROI Model – ROI Calculations (eDMR Dataflow) Facility-to-State Cost Factors Cost Factors Input Parameters Parameter Pre - ImplementationPost - Implementation Value Unit Value Unit (1) Enter permit limits into PCS Not Zero (a) Hourly rate of state staff$28.50$/hour$28.50$/hour (b) Time spent to enter permit limits 900.00hours/year900.00hours/year SUBTOTAL COST$25,650.00/year$25,650.00/year (2) Sending blank DMR forms (from the state to the facility) Zero (a) Hourly rate of state staff$28.50$/hour$0.00$/hour (b) Time spent preparing mailings 640.00hours/year0.00hours/year (c) Cost of mailing$1.00$/submission$0.00$/submission (d) Number of mailings sent to facilities 24000submissions/year0 (e) Average amount of lost mail 0.00% lost0.0% lost (f) Extra mailing10% of total mailing0% of total mailing SUBTOTAL COST$46,464.00/year$0.00/year

13. Cost Factors Input Parameters Parameter Pre - ImplementationPost - Implementation Value Unit Value Unit (3) Processing of paper submissions Zero (a) Hourly rate of state staff$47,840.00$/year$0.00$/hour (b) Total Processing Time 200.00hours/year0.00hours/year SUBTOTAL COST$4,600.00/year$0.00/year (4a.1) Data entry cost (by state) Zero (a) Hourly rate of state staff$30.00$/hour$0.00$/hour (b) Number of DMRs/year24000DMRs/year0 (c) Time spent - enter each DMR1.5hours/DMR0 (d) Accuracy of data entry98% entered correct0.0% entered correct SUBTOTAL COST$1,101,600.00/year$0.00/year (5) Data usage cost to respond to inquiries and additional data analyses Zero (a) Hourly rate of state staff$35.00$/hour$0.00$/hour (b) Time to enter data16hours/permit0 (c) # of permits data entered80permits/year0 SUBTOTAL COST $44,800.00/year$0.00/year Facility to State Total $1,223,114.00/year$25,650.00/year ROI Model – ROI Calculations (eDMR Dataflow) Facility-to-State Cost Factors

14. Cost Factors Input Parameters Parameter Pre - ImplementationPost - Implementation Value Unit Value Unit (4a.2) Submission to EPA Zero (a) Hourly rate of state staff $30.00$/hour$0.00$/hour (b) Average time spent preparing submission 96.00hours/year0.00hours/year SUBTOTAL COST $2,880.00/year$0.00/year (4b.2) Submission to EPA Not Zero (a) Hourly rate of state staff$25.00$/hour$25.00$/hour (b) Number of DMRs entered0DMRs/year0 (c) Time to enter each DMR into PCS 0.00hours/DMR0 (d) Accuracy of data entry0% entered correctly0.0% entered correctly SUBTOTAL COST $0.00/year$0.00/year Total cost - State to EPA $2,880.00/year$0.00/year Total Cost Pre-EN:$1,225,994/year$25,650/year ROI Model – ROI Calculations (eDMR Dataflow) State-to-EPA Cost Factors

15. Project Implementation Cost Factors Input Parameters Parameter Value State to EPA (Node) PlatformJava DatabaseOracle Server Hardware $30,000 SoftwareOperating System $0 Database Software $25,000 Node Software $45,000 Node Implementation $100,000 (a) TOTAL NODE COST $200,000 (b) How many data flows will be sharing this node by the end of the next three years? 15 (c) What was the eDMR specific implementation cost (to plug in the eDMR data flow)? $130,000 SUBTOTAL COST $143,333 Total EN Implementation Cost:$143,333 ROI Model – ROI Calculations (eDMR Dataflow) Implementation Cost Factors

16. Table 1 Payback Period (years after project completion, data flow is in production) A1 Project development duration2 B1 Year with first positive balance4 C1 Cumulative balance of the previous year ($)-228,904 D1 Cumulative balance of this year ($)90,372 Payback Period (years): C1/(D1 - C1) + (B1-A1-1) =1.72 ROI Model – ROI Calculations (eDMR Dataflow) Financial Model

17. ROI Model Overview – Step 1, 2, 3

18. ROI Model Overview – Step 4, 5, 6, 7

19. Qualified Benefits to Facilities & Labs “Saves my compliance administration costs…streamlines the reporting process” “…provides immediate feedback of compliance status for proper actions” “…will increase the amount of data accessible for trend analysis” “…data entry errors are reduced…” “Time saver…more traceable than paper…immediate confirmation of receipt” “…at least half a million dollars [savings] for all community and non-community facilities and labs…”

20. Qualified Benefits to State & EPA Eliminates data entry operators and other staff resources Improves facility to state data quality by elimination of data entry errors Improves the program effectiveness/efficiency Improves response to public health concerns Allows staff to better utilize precious resources Eliminates backlog of paper reports

21. Deliverables 1. Analytical ROI model and guidance documentation capable of incorporating facility, state and EPA business process variables. 2. Business process analysis of 5 data flows at four states, survey of facility and state representatives with data collection of ROI variables and quotes. 3. Final report. 4. Marketing materials highlighting project purpose, process, analysis and model development results.

22. Final Report/Guide Report Content: Explain the ROI modeling tool Summarize findings in each state Draw conclusions about EN impacts to business process efficiencies The report benefits: Aid state agencies with annual budgets, IT project strategies and priority deliberations; Assist state project managers in making EN investment proposals to management; and Assist ongoing state, Network & CDX performance measures projects.

23. More Info? Michael BeaulacTony Jeng Executive DivisionenfoTech & Consulting, Inc. MI Department of Environmental QualityLawrenceville, NJ 08648 Lansing, MI 48867609-896-9777, ext. #107 517-241-7808 tony_jeng@enfotech.comtony_jeng@enfotech.com beaulacm@michigan.gov Kurt RakouskasMolly O’NeillECOSWashington, D.C. 20001 202-624-3684 202-624-3507 kurtr@sso.orgmoneill@sso.org