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From page 26... ... 26 This chapter describes the purpose and context of the case studies developed by the research team. The case studies were performed to illustrate the realized benefits of TAM improvements and demonstrate applications of the ROI estimation framework detailed in Chapter 2. Read the entire page →
From page 27... ... Case Studies 27 In the early 2000s, the agency began to tailor its business processes to better incorporate consideration of asset management and better leverage the data and analyses produced by its management systems. Also, the agency began implementation of SAP for supporting a wide range of business processes, including financial management and work order management. Read the entire page →
From page 28... ... 28 Return on Investment in Transportation Asset Management Systems and Practices Step 3: Estimating the agency and user cost savings that resulted from improved conditions by estimating agency cost savings using the agency's cost data and user cost savings using models extracted from HERS-ST. PMS Implementation Costs Table 3-1 summarizes the agency's costs by year in current and constant 2012 dollars. Read the entire page →
From page 29... ... Case Studies 29 policy change to establish minimum funding levels for preventive maintenance further solidified this change in direction. Note that this change impacted projects performed by contractors: before and after the change, the agency performed additional pavement maintenance work that was not specifically simulated in the PMS but was presumably reflected in the system's deterioration models. Read the entire page →
From page 30... ... 30 Return on Investment in Transportation Asset Management Systems and Practices 0 2 4 6 8 10 12 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 1 2 3 4 5 6 7 8 9 RS L in Y ea rs 0 2 4 6 8 10 12 RS L in Y ea rs Co st ($ ) Year Expenditures and RSL: Actual Practice 0 20,000,000 40,000,000 60,000,000 80,000,000 100,000,000 120,000,000 140,000,000 160,000,000 180,000,000 1 2 3 4 5 6 7 8 9 Co st ($ ) Read the entire page →
From page 31... ... Case Studies 31 40.00 45.00 50.00 55.00 60.00 65.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 Pe rc en t in G oo d/ Fa ir C on di ti on Low Budget High Budget Actual Figure 3-3. Percentage of pavements in good or fair condition for different scenarios. Read the entire page →
From page 32... ... 32 Return on Investment in Transportation Asset Management Systems and Practices In addition to the agency benefit described above, road users were anticipated to have experienced additional benefits from driving on roads in better condition than they would have been otherwise. To calculate this user benefit, 2012 data was used to calculate the average difference in the International Roughness Index (IRI) Read the entire page →
From page 33... ... Case Studies 33 This analysis is subject to a number of assumptions and qualifications, including the following: • The benefits of implementing the PMS largely stem from the agency's policy-driven shift to an increased emphasis on preservation treatments as opposed to more expensive rehabilitation and reconstruction treatments. The analysis assumes that implementation of the PMS implies adoption of new programming policies in support of the PMS. Read the entire page →
From page 34... ... 34 Return on Investment in Transportation Asset Management Systems and Practices immediately useful for helping make the case for increased funding for bridge preservation. Historically, the agency used its capital funds for bridges primarily to replace bridges classified as structurally deficient (SD) Read the entire page →
From page 35... ... Case Studies 35 estimations based on an assumed number of support hours across multiple systems, and may be overstated for BMS. Staff costs are not included, but they are expected to be low given that the system is an analysis tool used primarily by the state's central office staff on a part-time basis. Read the entire page →
From page 36... ... 36 Return on Investment in Transportation Asset Management Systems and Practices Preservation and functional improvement projects both yield a mix of agency and user benefits; however, the preservation work predominantly yields agency benefits, whereas the functional improvement projects tend to yield greater user benefits. Version 4.1 of the NBIAS does not allow for budgets by type of work, but adjusting the weight on user costs approximates this functionality. Read the entire page →
From page 37... ... Case Studies 37 the increased residual value is calculated as $283.9 million in constant 2012 dollars. The NPV of this total, normalized to 2012 using a discount rate of 4%, is $273.0 million. Read the entire page →
From page 38... ... 38 Return on Investment in Transportation Asset Management Systems and Practices It is significant that the user benefits predicted by NBIAS are 1-year benefits, the benefits of performing recommended work in a given year relative to deferring work for a year. To obtain total user benefits obtained over time, it is important to sum the benefits over the life of a project. Read the entire page →
From page 39... ... Case Studies 39 costs) followed by an annualized net benefit of $2.75 million, then the investment in BMS would be deemed to have an annual return of 92%, calculated by dividing the annualized net benefit of $2.75 million by the NPV of costs of $3.0 million. Read the entire page →
From page 40... ... 40 Return on Investment in Transportation Asset Management Systems and Practices The LOS approach and the new system were implemented to support a variety of performancerelated tasks that included the following: • Tracking system condition and performance to develop needs-based estimates; • Prioritizing maintenance needs; • Providing an improved basis to support budget requests and allocate resources among activities and districts; • Showing the relationships between LOS and costs; and • Supporting communication and reporting. Using LOS ratings, the costs and budget can be allocated according to current LOS conditions and LOS targets, helping provide the agency an improved basis for allocating resources. Read the entire page →

From page 26...

... 26 This chapter describes the purpose and context of the case studies developed by the research team. The case studies were performed to illustrate the realized benefits of TAM improvements and demonstrate applications of the ROI estimation framework detailed in Chapter 2.