Innovative Funding, Total Cost of Ownership and ROI


Moderator: Bob Feingold, Chief Information Officer, Governor's Office of Innovation and Technology, State of Colorado
Panelists: Craig L. Johnson, Associate Professor of Public Finance and Policy Analysis, School of Public and Environmental Affairs, Indiana University
Pat O'Donnell, Vice President-Sales and Marketing, Anexsys
Richard Varn, Chief Information Officer, State of Iowa

Pat O'Donnell is talking about various ROI models.  She cites the following issues that make calculating ROI in the public sector less straightforward than it might be in the private sector:

  • agencies must serve all constiuents
  • agencies must abide by specific legislation and rules 
  • eGovernment initiative deliver on both tanglible and intangible policy goals

She is talking about the following methods:

Net present value is not appropriate if the answers to these questions is "no":

  • Are benefits and costs predominantly private and social?
  • Are the benefits tangible or intangible?
  • Can intangible benefits be quantified and agreed upon?

Craig Johnson is speaking on public sector finance models.  Net benefit or consumer surplus is the difference between the cost and what someone would pay.  Apparently is a fairly well understood model of public sector finance.  Consumer surplus can be used to set prices, particularly in G2B solutions.  Craig apparently believe pretty strongly that fees are appropriate in many cases. 

Richard Varn of Iowa has strong ROI program.  Rich makes a few interesting points:

  • Technology is about reducing the amount of labor directed at certain activities. 
  • Many people end up in jobs they have little preparation for (i.e. training is important)
  • If you want savings, you have to change behavior.
  • Richard thinks there are eight primary areas of government and seven operational responsibilities (wish I had a link here).