Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
109 The research and methods described in this guidebook present a framework for calculating the ROI of a TAM system or process improvement, such as implementation of a new asset manage- ment system, data collection program, or business process improvement. This framework describes various types of costs that may result from implementing a new system or improved business process; the range of agency, user, and social benefits that may result from the investment; and the basic economic concepts involved in translating these costs and benefits into an overall return. The research also includes a set of case studies profiling agencies that have implemented TAM systems, including a western state that implemented a pavement management system, an eastern state that implemented a bridge management system, and a southern state that implemented a maintenance management system and maintenance levels of service approach. The pilot illustrates a prospective analysis that was performed for a New England state considering the returns of a pro- posed system for storing inventory and inspection data for culverts and closed drainage systems. Based on the information from the case studies and the pilot, implementation costs can vary widely based on system scope, the nature of the assets, and whether the investment is a new system or an upgrade. Together, the case studies illustrate that TAM implementation can yield significant benefits, particularly when implementation triggers increased emphasis on asset pres- ervation and results in a more efficient capital investment strategy. B/C ratios for pavement and bridge management system implementation accompanied by such a shift exceeded a value of 10. For agencies already focused on asset preservation, investing in improved systems may still yield a positive return, as illustrated by the pilot, but the return may be of a lower magnitude. For transportation agencies considering future TAM system or process investments, this report provides step-by-step guidance for calculating the return of a proposed investment, as well as a spreadsheet-based ROI calculation tool (the ROI Tool) that supports the guidance. Worked examples illustrating use of the tool were derived using data from the case studies and the supplemental pilot test of the guidance and tool. Transportation agencies can use the research to show the potential benefits of investing in TAM implementation to agency staff, planning partners, legislators, and the public. Further, agencies can use the guidance and calculation tool to test proposed investments in new or improved TAM systems to determine whether they are justified given investment costs, as well as to determine which TAM investments are projected to yield the greatest return. Though the results of the research are intended to be of immediate value for transportation agencies, several areas have been identified through this effort where additional research may be merited. These areas include: ⢠Developing additional case studies on realized benefits of TAM implementation. The case studies are instructive in illustrating the benefit of TAM implementation. Further research C H A P T E R 6 Conclusions
110 Return on Investment in Transportation Asset Management Systems and Practices may be merited to analyze other cases of TAM implementation to better define the benefits realized and factors most closely associated with success or failure of an implementation effort. The time series analysis approach used for the southern state case study has significant poten- tial; it could be employed in cases where sufficient data are available before and after TAM implementation to support analysis. Also, further research may be merited to better characterize benefits of further improvements in TAM implementation once an agency has made an initial shift to emphasize asset preservation in its investment strategy. ⢠Better defining benefits of TAM implementation for assets other than pavement and bridges. Much of the focus in TAM has been on pavement and bridges, as DOTs spend the great majority of their funds on these assets. Consequently, many agencies have already imple- mented pavement and bridge management systems and are evaluating how best to improve the management of other assets, such as drainage assets, traffic and safety devices, and facilities. The results of this study are fully applicable to these assets, and one of the case studies and the supplemental pilot addressed other assets besides pavement and bridges. Nonetheless, further research may be merited to define specific costs and benefits related to improving management of other asset types. ⢠Application of the ROI framework and guidance to data-related improvements. One chal- lenge DOTs face in managing their assets is determining how much data they require on asset inventories and conditions, how frequently to collect that data, and by what method. This challenge is complicated by the rapid evolution of data collection technologies as new, more cost-efficient collection approaches (e.g., drones) emerge. For example, a transporta- tion agency that seeks to improve management of its signs to improve road safety and shift from reactive to proactive replacement of deteriorated signs might be able to obtain a basic sign inventory through post-processing video data collected in conjunction with pavement data. Alternatively, the agency could send data collection teams into the field to collect more detailed data on signs and supporting structures, and even measure the retroreflectivity of all or a sample of its signs in the field. The agency would need to evaluate which approach to pursue, considering the cost differential between the alternatives and the marginal value of obtaining the more detailed sign data. The ROI guidance and tool have been structured to support such analyses, but DOTs may benefit from further guidance and additional examples of the use of ROI analysis to evaluate such data-related improvements. ⢠Evaluating trade-offs between cost and risk reduction. Certain TAM improvements are intended to help reduce risk, particularly the risk of asset failure. In the first of the worked exam- ples presented in Chapter 5, the benefit of improving data on drainage assets is that this reduces the likelihood a culvert or other drainage asset will fail and result in roadway closure. A type of TAM improvement many transportation agencies are actively pursuing is use of infrastruc- ture health monitoring for key assets (e.g., of bridges in poor condition) to reduce the risk of failure and âbuy timeâ for these assets pending completion of needed rehabilitation or replace- ment work. The ROI guidance and calculation tool will support calculation for such cases, but many further issues relevant in evaluating risk reduction benefits merit further research, such as accounting for how different risks are perceived, assessing risk tolerance, and considering dif- ferent models for optimal decision-making (e.g., maximizing utility versus minimizing regret). ⢠Extending the research to other transportation agency system and process improvements. Although the framework and guidance developed through the research is specific to TAM-related investments, transportation agencies often must evaluate a proposed TAM-related improvement in relation to another system improvement not specific to TAM (e.g., upgrading financial systems or the agencyâs GIS). The literature review yielded few examples of quantitative analysis of the ROI of system and process improvements at transportation agencies, regardless of the improve- mentsâ relationship to TAM. Further research may be merited in extending the framework and guidance to other transportation agency system and process improvements.
