6/1/2015Andrew Frank1 HOW TO PREPARE A FEASIBILITY STUDY FOR A PROJECT FOR NEW USE OF GEOGRAPHIC...

04/18/23Andrew Frank 1

HOW TO PREPARE A FEASIBILITY STUDY FOR A PROJECT FOR NEW USE OF GEOGRAPHIC INFORMATIONLjubljana, training course, 31.1-3.2.2000

Andrew U. FrankGeoinformationTU [email protected]


Overview of the Program

January 31st – Lecture (Andrew U. Frank)

• concept and goals of the feasibility study for the project

• selection of your own project


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


February 1st - 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


February 2nd and 3rd – 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


February 2nd -Lecture (Andrew U. Frank)15.00-15.40 - Presentation skills – for all

participants together


February 3rd –Presenting the Projects (Andrew U. Frank)13:50 – 16:50 - Presentation of selected

projects (10 min. each)


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


•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


New Uses

Information for travellers: tourists, public transportation users,

Logistics, Transportation, Dispatch: Emergency servicesNavigation: Taxi drivers


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-useGI utilityPrivate enterprises


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.


Two Steps in a Feasibility Study for Geoinformation ProductsPart 1: User oriented

What Information for what decision?Written in the user’s language

Part 2: Technology drivenHow to produce the information?Written in a technical language


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.


Feasibility study contents

Part 2:• Resources required, especially data• Technical solution• Time and Personnel plan• Estimation of the costs and benefits• Cost-benefit analysis


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!


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.


Project selection (1st)

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)


Project selection (2nd)

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


Examples of projects:

Dispatch of Taxi’sInformation to drivers about traffic

congestionScheduling in out-patient care in

correspondence with schedule of public transportation.

Tourist informationManagement of nature reserve


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’!


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.


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.


Start with Use of Information not the GISA 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.


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


Decisions require information:

• Which information is needed?• What is geographic information?


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?


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


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!


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?


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.


Project: Identify the Decision-Making ProcessSelect 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?


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?


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.


A decision process is personalized and localizedWho takes the decision?Where is the decision taken?

How can the information be communicated?

How can it be delivered?


Communication of Geographic InformationUsually in form of a map or schematic

map.But consider also verbal instruction (oral

or written)TableYes/No

Describe the information for the concrete example decision you selected.

Typically draw a small map (or similar).


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!


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?


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.


Communication channel characteristics:

Bandwidth, Speed, Latency, PrivacyDoes 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?


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 makerDelivered by a channel which fits the

decision situation.


Documentation for geographic information productThe 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.


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)


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).


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.


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.


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.


Cyclic model of project decisionsProjects 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…


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.


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.


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!


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.


Cost

The monetary value of all inputs necessary for the production of the GIP.

In order of importance:Labor for maintenance of systemLabor for data maintenanceCost of distribution and accounting (30%)Technical system (20%?)


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)


A simple example

Decision: where to go for lunch Who: employees of the TU ViennaCost of lunch: ATS 120Choice of restaurants is large. Information desired: menu today for the restaurants.


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.


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


Benefits

Value to the user: 10% of price of meal -> 10 ATS

Number of users: 500 employees 50% of which eat -> 250 personsMarket penetration: 10% would use

system -> 25 person

Total income: 250 ATS/dayHow to collect the fee?


Cost-Benefit comparison 1:

Cost = 750 ATSBenefits = 250 ATSIdea is not viable


Additional Benefits:

Restaurants sell more meals.Value to restaurant:

Sell 4 meals more (marginal benefit 50 ATS each)

ATS 200/day


Restaurants pay fee

Fee to participate: 100 ATS/dayNo fees from users.Market penetration: 70% = 17 restaurants


Cost benefit 2:

Costs = 700 ATSBenefits = 1700 ATS

The system is viable and the fees are easy to collect.

ATS 2000/month for a restaurant seems high?


Improvement:

Offer restaurant a reduced fee if they put the data in a web page themselves.

Cost for operation of system: close to zero


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.


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.

6/1/2015Andrew Frank1 HOW TO PREPARE A FEASIBILITY STUDY FOR A PROJECT FOR NEW USE OF GEOGRAPHIC...

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