GOS Economic Model (GEM) OverviewGOS Economic Model (GEM) Overview

•Uses the same underlying simulation software (Stella) which was used in developing TNM Economic Model (NB-Sim)

•Provides a comprehensive tool for deriving estimates of GOS Net Benefits (Total Benefits - Total Costs) - for each Alternative

•Captures multiple Benefit Streams, as specified by the Value Proposition:

• Reduces Duplication of Data• Increased Availability or Accessibility of Data• Planned Data Buys (leveraging future data purchases)• Increased Spatial Readiness (still needs some work)

•Provides the ability to control for uncertainty of certain input parameters and estimates

Net Benefit Calculation/Estimation Net Benefit Calculation/Estimation ProcessProcess

•GEM uses a variety of inputs (i.e., quantitative estimates) to determine the Total Annuals Benefits associated with GOS

•The design of the model’s benefit elements is based largely upon the type of GOS benefits documented in the GOS Value Proposition

•The Cost portion of the model is based upon input from the GOS LCC Analysis

•Major runs of the model will coincide with key FY 2004 GOS Milestones - Submission of the BY’06 Exhibit 300 (September 2004)

Measuring Spatial Readiness/Spatial Measuring Spatial Readiness/Spatial IntelligenceIntelligence

•The Value Proposition defines certain key Premises:

- GOS plays a major role in closing the GAP that exists in federal agencies in terms of Spatial Readiness

- Spatial Readiness is the essential prerequisite for having Spatial Intelligence

- Applying Spatial Intelligence leads to better (more informed) decision making and better use of agency resources

•GOS overall benefits cannot be fully realized until the overall Federal Agency GAP has been closed

Therefore, GOS’ role in accelerating GAP Closure is the basis in which the federal enterprise achieves Spatial Readiness

Federal Agency AssessmentFederal Agency Assessment (Measuring Spatial Readiness)(Measuring Spatial Readiness)

• Spatial Readiness is one of several key parameters and estimates which serve as inputs to the overall Exhibit 300 Cost Benefit Analysis Preparation

• The GOS team’s baseline approach to the Life Cycle Cost (LCC) Analysis and CBA is based upon grouping Federal Agencies and Departments into Tiers

• The proposed next step is to follow this initial grouping with a more rigorous approach which takes into account specific criteria for assessing Spatial Readiness

• The proposed approach consists of the following steps:- Form a small inter-agency assessment team- Enable team to score agencies independently based upon a specific

set of criteria- Total team member scores and develop readiness index for each

agency

**Current Readiness - recommend that a small inter-agency team assess and rate each Tier 2 and Tier 3 agency based upon certain GOS specified criteria (i.e., Readiness Matrix)

Top Down Approach Top Down Approach forfor Assessing Spatial ReadinessAssessing Spatial Readiness

Sp

atia

l Rea

din

ess

Inadequate(inability to use spatial data)

Low (Required for GOS Compliance)

High(Uses Spatial Intelligence)

Tier 1 Tier 2 Tier 3

Essential(On-going Use of Spatial Data)

Representative Agencies’Distribution for Tier 3

Agency X

Smaller Readiness Gap

Assumption: Having a large Investment in Geospatial Technology (as a % of an Agency’s IT Infrastructure) means high degree of Spatial Intelligence)

Overall Readiness GAP

Top Down Approach for Measuring Spatial ReadinessTop Down Approach for Measuring Spatial Readiness

Composite Gap Gap Size Historical Present Historical Present Mission CurrentReadiness Index (Diff) (%) Geospatial Geospatial Geospatial Enterprise Reqmts for Geospatial

Investments Infrastruct Data Mgmt Data Mgmt Geospatial Intelligence(Sample Scoring) (all kinds) or Appln Capability Readiness Capacity/

Tier I Federal Agencies/Departments

Dept. of Commerce (NOAA, Census)Department of TransportationCorps of EngineerNGAEPADept. of Homeland Security (incl. FEMA)

Department of Agriculture H H

NASADOI (incl. USGS, BLM, Park Svc, etc.)

Avg. Tier I 2.42 0.58 19%

Tier II Federal Agencies/Departments

Dept. of EnergyDept. of InteriorDept. of JusticeDept. of Health and Human ServicesDept. of Housing and Urban DevelopmentNuclear Regulatory CommissionNational Science Foundation

Avg. Tier II 1.78 1.22 41%

Tier III Federal Agencies/Departments

Dept. of LaborDept. of EducationGeneral Services AdministrationNational Archives and Records AdministrationOffice of Personnel ManagementSocial Security AdministrationSmithsonian InstitutionDept. of Treasury

Avg. Tier III 1.49 1.51 50%

Representative Spatial Readiness Index (varies by Agency and by Tier)

Representative GAP Size (varies by Agency and by Tier)

Assessment and Scoring of individual Agencies/Depts.

Representative Readiness Assessment Criteria

Note: Spatial Readiness Assessment should also distinguish “Early Adopters” from “Late Adopters” (as defined in the Urban Logic Value Proposition Report)

GEM Other Key Input ParametersGEM Other Key Input Parameters

General Input Parameters Value/Basis for Estimate

Gap Size Total Federal Agency Gap Size

GOS Percent Complete The amount (%) that GOS is nearer to completion on an annual basis

Time Horizon Period of Study for Estimation of Benefits (minimum period is ten year). TNM had a period of at least 20 years. A minimum of 14 years was required to reach breakeven.

Federal Agency Tiers 3 Tiers – provide differential estimation of Costs and Benefits (including Spatial Readiness and Spatial Intelligence based upon BRM sub-functions).

Federal Agencies All GOS Partners and Federal agencies (Civil. Non-DoD)

Initial Distribution of Federal Agencies by Tier

See separate sheet for initial distribution. Will be revised based upon a completed Spatial Readiness Assessment.

Key Cost Input Parameters

GOS Direct Annual Program Costs

The annual direct program development cost for GOS specifically (estimated at $5M per year). Included in the LCC Analysis

Total Annual LCC (per Alternative)

Net Present Value Costs for GOS and all federal agencies and departments excluding DoD. Does include NGA and USACE (who are GOS Partners).

Program Development Time Period for full development and implementation of GOS. Currently stated at 7 years.

Annual Maintenance Costs Annual Operation and Maintenance Cost for GOS after the development period.

Key Benefit Input Parameters

Reduced Duplication (Data, etc.) Reduced duplication of data, systems, and other related costs. Estimated to be a certain annual percentage reduction by Tier

Planned Data Buys Estimate of the amount of planned cooperation in planned data buys in across the federal sector (primarily). We are in the process of deriving an estimate of this, in part, by looking at the estimated amount of federal agency spending on geospatial data (i.e., analysis and projections based upon the 1992 FGDC Survey of Federal Agencies). Estimate will be an annual percentage by Tier.

Improved Accessibility (Data) Improvements in access to spatial data (i.e., time savings in data discovery and data acquisition/purchasing). Estimate will be an annual percentage by Tier.

Spatial Readiness (Per Agency) The level of spatial readiness for each agency. Estimated as an index value (see matrix form).

Percent Readiness Gain The gain in spatial readiness caused by GOS/Federal agency investments in the spatial readiness.

Gap Closing The Reduction in Gap Size as a result of the spatial readiness gain caused by the narrowing of the readiness gap (i.e., Gap Closing rate).

GEM Other Key Input Parameters - Cont’dGEM Other Key Input Parameters - Cont’d

Key Benefit Input Parameters (Cont’d)

Value/Estimate

Spatial Intelligence Increase in Spatial Intelligence caused by an increase in spatial readiness

Spatial Intelligence Gain The variable increase in spatial intelligence (as an iterative process) – meaning increased spatial intelligence reinforces (and in turn enhances) spatial readiness. There is a limit to this feedback process. The value or measurement process for spatial intelligence within GEM is still under development.

Key Benefit Input Parameters (Cont’d) – Budget Info

Agency Budget The annual budget of each federal agency.

Annual IT Budget The estimated IT portion of each federal agency’s budget. Estimated at 5% of the total agency budget.

Annual Non-IT Budget Self-explanatory

Annual Spatial IT Budget The estimated spatial portion of each agency’s IT budget. Estimate varies by Tier.

Annual Spatial IT Savings This is a system calculated benefit. It is a function of the efficiency gains and GOS Percent Complete.

Key Benefit Input Parameters – BRM Sub-functions

BRM Sub-functions The average number of agency BRM sub-functions (by Tier)

Spatial IT Agency Sub-functions The average number of agency BRM sub-functions that are spatial related (by Tier)

All Other Agency Sub-functions The average number of agency BRM sub-functions that are Non-spatial (by Tier)

Improved Agency Sub-functions The average number of agency BRM sub-function that are improved as a result of Closing the Gap Size

Annual Value of Improved Agency Sub-functions

The sum of each agency’s sub-function improvement. A nominal dollar value is assigned to a agency sub-function improvement.

GEM Comparison to GEM Comparison to TNM TNM Economic Model (NB-SIM)Economic Model (NB-SIM)

Federal Sector

State and Local Governments

Measures PrimarilyImpact on State and Local

Governments Through increasing GIS

Application Usage (and data access)

Measures DirectImpact on Federal Sector Primarily

Through Improvements in Efficiency (Spatial Readiness)

and Operations (Spatial Intelligence)

GOS Economic Model

TNM Economic Model

GEM Benefit Estimation

Provides Indirect measurement only -

below the Federal Level

Boundary where benefitsshould accrue to both

• GEM provides an estimate of GOS Net Benefits focused Primarily at the Federal Level

• Benefits to State and Local government levels are inherent in the Value Proposition by mapping to the BRM

• NB-SIM provides an estimate of TNM Net Benefits focused Primarily at the State and Local Level (i.e., 3,078 counties)

• Apps Usage at the Federal level can also be measured directly using NB-SIM - but that is not the focus of benefits associated with TNM

Comparison to Comparison to TNM TNM Economic Model - Economic Model - Cont’dCont’d

•Benefit estimates for measuring Spatial Intelligence (i.e., going from theory to practice) requires more analytical work

•GEM is focused on measuring Net Benefits for all Agencies across the Federal Sector. Correspondingly, the model and inputs could be tailored for individual agencies to assess:

- Their internal CBA for geospatial investments-Their contribution to the overall GOS CBA

•GOS Benefits should also accrue directly to States and local governments through their partnership with GOS and improvements in discovery and better access to spatial data

•Apportionment of GOS Benefit Estimates to State and local levels would require a special study (i.e., a tailored run of GEM for a subset of agencies and BRM sub-functions)

Comparison to Comparison to TNM TNM Economic Model - Economic Model - Cont’dCont’d •TNM Economic Model was designed to do the following:

- simulate the number of users (across all US counties)- estimate the extent of [gis] application innovation and diffusion

-estimate the changes in net benefits (NB) of implementing spatial data applications

•TNM Economic Model sought to measure the impact (NB) of there being a National Map versus an environment in which there is no National Map.

Comparison to Comparison to TNM TNM Economic Model - Economic Model - Cont’dCont’d

•TNM Economic Model Benefits:

- Value of TNM Data in helping to reduce the costs to generate, populate, or operate spatial databases

-Value of improving the outcome of projects because of better information

•TNM Economic Model defined 3 Tiers of Applications:

- Tier 1 (5% of all counties) - represents sophisticated GIS applications (e.g., complex geospatial statistics and formal optimization modeling)

- Tier 2 (30% of al counties) - represents applications which use digital spatial data to perform functions such as complex route planning or locational analysis

- Tier 3 (65% of all counties) - represent basic applications, including paper mapping and simple overlay analysis in a GIS

The GEM Visual The GEM Visual RepresentationRepresentation(A Brief Synopsis)(A Brief Synopsis)

The Stella Modeling Tool provides a visual representation of mathematical concepts, formulas, and equations. These equations are used to run the economic simulation that has been developed for GOS. The GEM Visual Representation is a system diagram which shows stocks (where things accumulate, such as benefits and costs). There are also flows into and out of the stocks, which are represented by lines (or pipes). There are also varying rates of flow (or change) through these pipes - such as rates for increasing benefits over time.

GEM Model Visual Components – GEM Model Visual Components – Federal Budget InputFederal Budget Input

This portion of GEM shows how budget information is represented in the model. This information is later tied to the Federal agencies BRM sub-functions.

GEM Model Visual Components - Spatial GEM Model Visual Components - Spatial ReadinessReadiness

This portion of GEM shows the various components of Spatial Readiness and how the Model handles the relationship between increasing Spatial Readiness (and Spatial Intelligence) as the Gap Size is decreased.

GEM Model Visual Components - Benefit GEM Model Visual Components - Benefit EstimationEstimation

This portion of GEM shows the key Benefit components that are based upon improvements in federal agency efficiency and coordination, through GOS. It also provides for increasing benefits based upon improvements to agencies BRM sub-function.

GEM Model Visual Components - Cost GEM Model Visual Components - Cost ElementsElements

This portion of GEM shows the various GOS Cost components and how costs are accumulated on an annual basis. The accumulation of costs leads to increase in GOS Percent Completion. This increased completion is, in turn, tied to the rate at which benefits accumulate on an annual basis.

GEM - The Complete PictureGEM - The Complete Picture

Spatial Readiness Estimation Life Cycle Cost Input

Federal Agency Spatial/Non-Spatial Budgets GOS Benefit Estimation