Every year WhiteStar hosts one-hour breakfast sessions in six cities in Colorado, Texas, and Oklahoma. This year’s theme was, “Building a Business Case for GIS Data Investments.”
Commonly, customers must show the financial impacts of a contemplated asset purchase to upper management, taking ROI and Internal Rates of Return into consideration as well as other specific business benefits.
Customers customarily evaluate the total cost of software and business services, but seldom give any thought to evaluating data in the same way. These costs can easily amount to several hundred thousand dollars per year for a relatively small area and ultimately represents 80% or more of the cost of your GIS implementation. Why have data expenses been ignored?
It’s likely that a land software vendor is your first point of contact deploying GIS in your organization. Since they want all of your budget, they often obscure or minimize the cost of data. It’s a bit of a shell game, they hope you won’t notice, and further hope you can build your critical projects with some scrapings from the Internet. We think customers will come to distrust vendors in the long term as they purposefully concealed a major cost center.
We find it best to address all costs and processes in an upfront manner. WhiteStar provides a variety of tools to help you do this on the data side, particularly if you are contemplating downloading and maintaining “free” data. The costs for even a state area can exceed several hundred thousand dollars per year in an organization not geared towards creating and maintaining GIS efforts.
If you are purchasing competitive data from another vendor, then it makes sense to truly compare quality and not just prices as is the naive approach. We would say that more than 25% of the time, customers expend large amounts of time and resources before returning to WhiteStar to obtain curated, updated, accurate, and maintained data staffed by knowledgeable professionals who are willing to answer the phone and research your questions.
Our website has a variety of spreadsheets to help you build business cases for data such as ROI - Return on Investment. The WhiteStar Grid Spreadsheet example is a project spreadsheet showing the costs for building high quality data from raw BLM data. (Some software vendors will suggest you use the raw BLM data for projects, but we strongly suggest otherwise.) You will want to plug in your own numbers, to show your own internal scenarios which are available from in-house cost accountants or your own experience.
We suggest using these tools to build a solid case for investing in data licenses with a schedule for establishing a projected Internal Rate of Return for presentation to management of an overall business case.