This paper outlines the King County GIS (KCGIS) Center’s three funding methods to provide enterprise services for King County, Washington. Enterprise city or county GIS management usually provides operational efficiency and cost sharing benefits. Maturing local government GIS operations often consolidate core enterprise GIS services in a central organization. Some local governments fund enterprise GIS operations from a single central source. This approach is simple, with low administrative overhead and strong end-user support. Many enterprise GIS operations however are expected to obtain funding from the departments they serve. This approach is not simple. End-users may question the value of GIS services and the fairness of the cost allocation model. KCGIS Center is an internal service fund with three ‘business lines.’ Each business line focuses on the unique value provided and fair cost allocation. KCGIS Center’s core service is Enterprise Operations, including data and application server management, DBA, metadata, enterprise applications, help-desk, and communications. Service levels, costs, and funding allocations are determined annually, based on a GIS benefits calculation. Because these services are ‘fixed-cost,’ existing users are motivated to encourage other departments to become new GIS users. Several county departments have individual GIS units. KCGIS Center staffs the GIS operation for one large department. Staff levels and funding are agreed annually on a ‘negotiated level of service’ basis. Resulting operational efficiency and enhanced professional standards provide customer value. KCGIS Center also provides on-demand GIS Client Services to meet the unique or unanticipated needs of county business units. Services include training, programming, mapping, data development, and short-term staffing. These services are provided on a full cost recovery basis. KCGIS Center staff productivity provides value. Business units control their GIS costs, using as little or as much service needed, without on going staff costs. The KCGIS approach may benefit other city and county enterprise GIS operations when considering options for long-term funding methods.
Text of A Business Line Approach to Enterprise GIS
1. Greg Babinski, Finance & Marketing Manager King County GIS Center 201 South Jackson Street, MS: KSC-NR-0706 Seattle, WA 98104 Voice: 206-263-3753 Fax: 206-263-3145 Email: email@example.com A BUSINESS-LINE APPROACH TO ENTERPRISE GIS FINANCE Abstract: This presentation outlines King County GIS (KCGIS) Centers three funding methods to provide enterprise services for King County, Washington. Enterprise GIS management provides operational efficiency and cost sharing benefits. Some local governments fund enterprise GIS operations from a single central source. However, many enterprise GIS operations are expected to obtain funding directly from the departments they serve. KCGIS Center is an internal service fund, responsible for full operational cost recovery, with three business lines each focused on the unique value provided and fair cost allocation. The KCGIS approach may benefit other city and county enterprise GIS operations when considering options for long-term funding methods. INTRODUCTION
2. Enterprise city or county GIS management usually provides operational efficiency and cost sharing benefits. Maturing local government GIS operations often consolidate core enterprise GIS services in a central organization. Some local governments fund enterprise GIS operations from a single central source. This approach is simple, with low administrative overhead and strong end-user support. Many enterprise GIS operations however are expected to obtain funding from the departments they serve. This approach is not simple. End- users may question the value of GIS services and the fairness of the cost allocation model. This presentation will outline the King County GIS (KCGIS) Centers three funding methods to provide enterprise services for King County, Washington. KCGIS has developed an entrepreneurial, business-line approach to providing GIS services and obtaining funding from client departments. Local government GIS managers, finance/budget managers, and elected officials may benefit by studying and applying the service costing principles adopted by KCGIS. In addition, GIS managers and practitioners may benefit by applying the customer service focus that is a core component of the KCGIS finance approach. THE KING COUNTY GIS CENTER INTERNAL SERVICE FUND The King County, Washington, Metropolitan Council established the Geographic Information System Fund in 2001, effective January 1, 2002. KCGIS was created as a consolidation of GIS resources from a number of County departments, with the majority of staff and resources provided by the Information and Telecommunication Services (ITS) Division. KCGIS, with 31 staff, was placed in the Department of Natural Resources and Parks (DNRP), reporting administratively to the DNRP Director. However, KCGIS is chartered on an entrepreneurial basis to provide GIS services not only to all King County departments and agencies, but also to external customers.
3. As a county internal service fund, KCGIS has a number of responsibilities and advantages that distinguish it from the typical GIS operational unit that might be found in a city or county IT department, assessors office, planning department, or other normal administrative GIS home. Advantages of a county internal service fund for enterprise GIS operations include: The fund develops its own budget proposals, free from departmental interference. The fund manages its own finances. GIS revenue is deposited into the fund where it is available to pay the cost of GIS operations. Money can be saved in the fund from year to year, to cushion a temporary decline in revenues or to build a reserve for major equipment (server) or data (digital orthophoto) replacements. The fund owns its own equipment. The fund has its own dedicated staffing level. The KCGIS internal service fund was established with an initial fund balance of $250,000, transferred from ITS as the calculated portion of that funds reserve attributed to previous GIS operations. As an internal service fund, KCGIS is the organizational peer of County departments and divisions that have budgets in excess of $100 million (Sheriff, Wastewater, Transit, etc.). County internal service funds have a number of responsibilities that the typical local government GIS operational unit is normally free of: Internal service fund budgeting and financial management is an overhead activity that can distract from GIS development and service delivery. County internal service funds are responsible for recovery of all direct and overhead costs including rent, phones, ITS services, County and department overhead, administrative and HR services, etc. County internal service funds are responsible for identifying, budgeting, and collecting revenue for GIS operations and services.
4. The typical GIS manager may perceive this last responsibility, to obtain funding for GIS operations, as very difficult and/or a distraction from the core interest of most GIS professionals. However, it is useful to recall that most GIS development / implementation projects are approved only after a cost/benefits analysis convinces decision-makers that the required initial investment will produce sufficient value for the agency. Once initial GIS development is complete, the ability to convince decision-makers, year after year, that continued GIS operations provide value to those agencies using the services, represents an ongoing cost/benefits analysis. Rather than being a distraction, this process of convincing decision-makers of the ongoing value of GIS should be seen as one of the highest responsibilities of a GIS manager. To facilitate this process, KCGIS has segmented its operations into three business lines, each focussed on common GIS services and resources. Each business line focuses on the unique value of the specific services offered. Each business line also supports a logical cost allocation methodology, to help GIS users understand the basis for individual GIS service cost components. A clear understanding of logical cost components for GIS services allows end user agency managers to make an informed business decision to either use or not use GIS as a tool for their agencys operations. Enterprise GIS Operation Services Business Line KCGIS Centers core business line is built around enterprise GIS infrastructure and operation services. Specific enterprise GIS operation services are defined on an annual basis in coordination with the King County GIS Technical Committee (comprised of a representative from each County agency that has desktop GIS users). For KCGIS proposed 2004 budget, these services will be provided by 10.5 FTEs and include: Countywide GIS coordination
5. Regional GIS contact and coordination Development and monitoring of GIS standards Coordinating department GIS data maintenance and managing data QA/QC Managing the county metadata program GIS Data Warehouse database administration GIS Data Warehouse system administration Back-end (data maintenance) application development & maintenance Front-end (data access) application development & maintenance Countywide GIS contract management Countywide GIS communications User group management GIS help desk Coordination of designated countywide priority GIS initiatives A key characteristic of core services for mature enterprise GIS operations is that they are fixed-cost in nature. Total budget costs can be increased or decreased by adding or removing entire service offerings, but costs are typically not affected by the total number of individual users or by the number of agencies who fund the services. Once enterprise GIS operation services levels for the coming year are developed in cooperation with the Technical Committee, KCGIS develops a proposed budget to cover the cost of the services. This proposed budget is presented to the GIS Oversight Committee, comprised of managers with budget authority for the major departments served by KCGIS. The GIS Oversight Committee works with KCGIS through the budget development process on two major high-level components of the budget: a) total budget amount, and b) cost allocation model. It is at the GIS Oversight Committee level that county agency managers need to be convinced of the business value of each of the core enterprise GIS services
6. being proposed. The KCGIS budget typically includes specific FTE and cost allocation for each service offering, to allow a business analysis of the value of providing the service. Once the GIS Oversight Committee concurs with the proposed budget, they consider the funding allocation model. Typically, KCGIS provides an analysis of funding model alternatives for consideration by the GIS Oversight Committee. The 2004 funding model will be based on a weighted calculation of the benefit and cost of GIS services provided to all county departments that use desktop GIS capability. Specific components that comprise this funding model include: Core GIS data layers used by the agency Core GIS applications used internally by the agency Core GIS applications that support external clients of the agency Geographic extent of GIS data needs (local service area or countywi