ROI Calculator Aids in Better Efficiencies Reporting and Decision Making
Item #: 20230018
CONTACTS
Implementing Organization: Research and Innovation
Implementation Lead: Quinten Klingonsmith
Development Team: Winston Inoway, Quinten Klingonsmith
Article Written By: Quinten Klingonsmith
Innovation Council Liaison: Quinten Klingonsmith
Innovation Team Coordinator: Quinten Klingonsmith
STATUS
Implementation Date: March 17, 2023
Adoption Status: Implemented (further adoption advisable)
Adoptability Note: Determining ROI is important for making most any decision, not just capturing the value of an innovation. We welcome any assistant in creating additional "benefit" formulas that could be included in this calculator and used in other areas.
What decisions do you make that could benefit from better cost/benefit evaluations?
APPLIES TO
Topic: Management Practices
Organization(s): UDOT (all), Aeronautics, Amusement Ride Safety, Asset Management, Board/Commission, Central Admin/Senior Leaders, Central Construction, Central Maintenance/Facilities Management, Central Materials, Central Preconstruction, Communication, Data Technology & Analytics, Emergency Management, Employee Development, Environmental Division, Equipment Operations, Fiber Optics, Finance/Comptroller, GIS, Human Resources/DHRM, Incident Management, Internal Audit, ITS, Motor Carrier Division, Performance Management, Planning, Policy, Program Financing, Railroad, Region 1, Region 2, Region 3, Region 4, Research and Innovation, Right of Way, Risk Management, Road Usage Charge, Stormwater/Environmental, Strategic Investment, Structures, Traffic & Safety, Traffic Management Division, Transit/Rural Public Transit
Job Role(s): Administrative Staff / Commissions, Business Analyst, Construction Engineer, Executive Leadership, Finance / Accounting, Information Specialist, Materials Engineer, Mechanics / Equipment, Motor Carrier Employee, Program Director, Program Manager, Program Specialist, Roadway Operations / IMT, ROW / Permits, Transportation Technician
Tags: active transportation, air transportation, highway transportation, public transit, railroad transportation, water transportation, capital costs, capital productivity, debt, infrastructure preservation, fees, labor costs, labor productivity, use charges, revenues, valuation, employee empowerment, economic benefits, expenses, expenditures, value of life, value of time, ( process improvement ), ( simplification ), standardization, accounting > billing, budgeting, payment, ( comptroller ), communications > public relations ( PR ), contract administration > bids, contracting, solicitations, contracts, ( RFP, FRQ ), education and training ( employee development ), finance > appraisals, investments, asset management, cost recovery, cost sharing, fees, loans, revenues, sales, taxes, usage charges, governance > auditing, policy making, procedures, compliance, law, ( legal ), human resources > personnel management > compensation, relations, personnel performance, retention, recruiting, hiring, supervision, turnover, retirement, information technology >> software, networks, leadership, logistics > inventory, distribution, purchasing, procurement, warehousing, supply chain management, marketing > advertising, risk management, insurance, economics, aeronautics, asset management, construction, contracting, design, equipment, facilities, highway operations, ( traffic operations ), inspection, investigation, law enforcement > port of entry ( POE ), ( motor carrier ), maintenance, planning, program management, project management, research, right of way, structures, testing > samples, sampling, quality of life, user benefits
PROBLEM
The benefits of an implemented innovation are often difficult to calculate. For example, what is the value of a life saved, taking less time on a work task, reducing freeway congestion, less wastewater flowing into the environment, etc.
Without accurate, agreed-upon and documentable estimates it is difficult to make decisions about the viability, priority and efficacy of any proposed change. It also makes it difficult to communicate to stakeholders the great work we are doing at UDOT.
Because accurate estimates are so hard to generate, most benefits are not reported, which leaves the innovation undervalued and we fail to capture accurate numbers for our annual efficiency report.
CHANGE
The Innovation Team created the Innovation Efficiencies Worksheet, AKA ROI Calculator to help document and calculate the net benefit over the innovation’s lifespan. The tool takes into consideration the initial and ongoing expenses, lifespan of benefits, and annual monetary value of the provided benefits.
RESULT
The ROI Calculator provides a systematic, consistent and reliable approach to determining the benefits of an innovation.
This approach promises to provide a more complete annual efficiencies report, which helps to showcase the great work we do at UDOT, garner greater support from our stakeholders, and provide the information we need to manage our investments of time and money.
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New Innovation Catalog Built In-house with Google Looker Studio (20230023)
New Annual Innovation and Efficiencies Report Offers Up-to-date Information and Cost Savings (20230026)
New UDOT Employee Innovation Station Puts Innovation Resources at Employees Fingertips (20230027)
IMPACT
BETTER MOBILITY
This innovation has potential to impact mobility. No impact score will be given until the innovation is used in this area.
GOOD HEALTH
This innovation has potential to impact health and safety. No impact score will be given until the innovation is used in this area.
CONNECTED COMMUNITIES
This innovation has potential to impact connected communities. No impact score will be given until the innovation is used in this area.
STRONG ECONOMY
The department, including the Innovation Program, can more effectively allocate limited resources when it has better cost/benefit information
Better ROI calculations increase the trust in impact of UDOT's annual Innovation & Efficiencies Report
Cost avoidance efficiency realized because it is part of a larger innovation system that did not need to be purchased because we built the system in-house for less money
EFFICIENCIES*
Cost Avoidance: $41,644 over 20 years (March 17, 2023 - March 17, 2043)
Benefit/Cost Ratio: 18:1
*Benefits are estimated net of initial and ongoing expenses. Savings are averaged over the expected benefit life of the innovation. See details.