Return on Investment Study

A project team led by the Environmental Council of the States convened to estimate the potential for returns on investments (ROI) in Exchange Network technologies. The team visited environmental agencies in Michigan, New Jersey, Pennsylvania, and Washington to analyze their business processes for exchanging data on air quality (AQS), water quality (eDMR and SDWIS), and hazardous materials (RCRAInfo and TRI).The analysis estimated each agency’s cost of doing business before and after the adoption of Network technologies. Taking into consideration new development and subsequent maintenance expenses, the project team found that investments in the Exchange Network can deliver a strong financial return along with a number of qualitative benefits.
  • ROI Model – Download a copy of the model used in the study to calculate the return on each agency’s investment. This reusable tool is customizable and available for use by other organizations that are considering the Exchange Network as a more efficient
    way of doing business.
  • ROI Model Users Guide – This guide offers instructions on how to use and customize the ROI Model for use in your organization.

Summary of Quantitative Benefits

In most cases, the project’s ROI model predicted a positive return from investing in Exchange Network technologies for a particular data exchange. When the results from all of the data exchanges were considered together, all four State agencies realized a positive financial return. For three of the four agencies, the model predicted annual operational savings of well over $500,000 and payback periods of less than two years.

Each State reported an ability to leverage their initial investment to implement additional exchanges beyond the scope of this study. This allows Network Partners to standardize their enterprise operations for either reporting or sharing data across all program areas while still managing to save money. The results also demonstrated that the implementation of Exchange Network technologies can produce particularly impressive savings when coupled with other business process improvements. For example, process reengineering and e-government technologies can be integrated with the Exchange Network to significantly reduce the cost of regulatory compliance requirements as was experienced with the discharge monitoring reporting flow.

Summary of Qualitative Benefits

The States also reported that the Exchange Network delivers far more than just financial returns. Automating the exchange of data allows Partners to dramatically improve the quality, timeliness, and availability of environmental information.

  • Improved Data Completeness and Validity –
    Manual data entry is replaced by automated exchanges, and typically with on-line, built in data validation. This reduces keying errors and significantly improves data completeness and validity.
  • Broader Data Access
    Data can be securely shared with Partners from the environmental, health, or security communities. Increased access to better quality information allows policy makers to make better decisions.
  • More Timely Data
    Data becomes available in an electronic format earlier in the business process, so it can be put to use much sooner.
  • Standardized Data
    Each data exchange shares a common, understandable data format, enabling many different partners to share and receive information.
  • A “Green” Solution
    In general, Network technologies reduce or eliminate the need for paper in sharing information.