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Public Return on Investment (ROI)

Public Return on Investment (ROI). “The Impact of eGovernment in Europe” Conference 13 September 2006 Helsinki, Finland Ian Swann, Vice President SAP Public Sector. Financial ROI. Public ROI. Political ROI. Social ROI. Defining Public ROI. Pain of Measurement.

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Public Return on Investment (ROI)

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  1. Public Return on Investment (ROI) “The Impact of eGovernment in Europe” Conference 13 September 2006 Helsinki, Finland Ian Swann, Vice President SAP Public Sector

  2. Financial ROI Public ROI Political ROI Social ROI Defining Public ROI

  3. Pain of Measurement • ROI isn’t a cultural standard and not mandated • Limited resources (people, data, time, funding) • Measurement usually done when it’s too late • IT projects have a checkered history, and a credibility gap • Yet…better service and measurable outcomes expected

  4. "If governments do not accurately measure the full value of their IT investments, they risk a serious political backlash. Governments must connect IT investments to expected and actual improvements, not only in their organisational performance, but in the state of the nation as a whole." - Andrea Di Maio, Research Vice President So Why Measure? “[in a survey of 776 government executives]…69% expect to measure both financial and social ROI in the coming five years – and to make that ROI transparent to citizens and stakeholders.” - Business 2010: The public sector

  5. Public ROI Initiative • In 2004, SAP assessed the need for greater measurement in the public sector • Vetted the Public ROI concept with industry experts, analysts, and global public sector colleagues • Formed a partnership with the Center for Technology in Government (CTG) • In 2005 workshop, determined first milestone was to assess measurement techniques via 5 case studies and define a non-proprietary measurement framework in a white paper

  6. Case Study Analysis • CTG concluded that two key sources of public returns are: • The value to the public that results from improving the government itself • The value that results from delivering specific benefits directly to persons or groups • Public value creation extends beyond financial savings and service evaluation data to actually increasing the integrity and transparency of government • This expanded scope of value includes a wide range of stakeholders, each with special interests and expectations from government

  7. Building On Existing Models • Many existing models focus on quantitative, financial ROI, and are too narrow in scope • Geographic limitations • Overly complex and not IT-investment specific • Reviewed and considered wherever possible • EU eGovernment Economics Project (eGEP) • UK Local Government Business Value Performance Indicators • Etc.

  8. White Paper Findings • The framework presented in the White Paper is broad in scope to have wide applicability • The framework approach starts with a high-level view of the IT investment and then drills down to the specifics of the situation • The framework provides a comprehensive and universal method to helping government measure public value

  9. Traditional View Ends Here Public ROI View, Step 1 Value & Risk Propositions

  10. Public ROI Framework 5 6 1 4 2 3

  11. Public ROI Framework Investment Goals Risk Analysis Reporting & Risk Mitigation Strategy Business Processes Measurement Value Mechanisms Stakeholder Impacts Stakeholder Interests Value Types

  12. Case Study Quotes • "This white paper furthers our understanding of public investments in improved government service and the value they generate.Without the concept of "public value" as a return on investment, it would be very difficult to gauge how much benefit a decision to invest in an IT initiative can have." • - Darrell Fowler, Director, Project Delivery, Service New Brunswick

  13. Case Study Quotes • “Our participation in this project has clarified our vision and our commitment to focusing on the political and social aspects of ROI. The case study report and the white paper have given us some excellent ideas on how we can continue to make the public ROI case to each of our stakeholders and ensure the delivery of value to them through the Digital Archives. The findings from this project will help all governments move beyond focusing on just the fiscal impact when considering government IT investment and to consider the greater societal value the investment creates.” • - Adam Jansen - Digital Archivist, Washington State Digital Archives

  14. Case Study Findings

  15. Next Steps & Contacts • Revisiting the 5 case studies with the Public ROI framework for application and refinement • Apply the framework to other governments • For details on the Public ROI Initiative: http://www.sap.com/industries/publicsector/roi.epx http://www.ctg.albany.edu/about/press_proi_20051205

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