Road Map to Cost Savings16 Jun, 2009 By: Marcia Carrillo
Calculate ROI to determine the real financial benefits of switching from AutoCAD to Map 3D.
Most CAD managers and engineers are painfully aware of current economic trends: workforce reductions, diminishing project backlogs, and doubt about the future. Or is the outlook improving? Historically, the upside is always better than the downside in a recession; therefore if we drop 10%, we could rebound anywhere from 15% to 40%. It doesn't happen overnight, so what can we do in these slow times to prepare for the upside? The answer is to invest in technology that will support future growth. And the best way to decide which technology deserves investment is to consider its return on investment (ROI).
I'll look at productivity issues and ROI associated with moving from a pure CAD platform to a data-management and interoperability platform -- namely, I will compare the productivity and ROI benefits of moving from AutoCAD to AutoCAD Map 3D.
ROI calculations determine the rate of payoff compared with the original amount invested. ROI does not indicate actual dollars gained or lost. For instance, a $1,000 investment that earns $50 in interest generates more cash than a $100 investment that earns $20 in interest, but the $100 investment has a higher ROI.
$50/$1,000 = 5% ROI
$20/$100 = 20% ROI
When someone asks about ROI, they're really asking:
- What do I get back for the money (the return)?
- What am I being asked to spend (the investment)?
- What is it really worth (the ROI)?
Analyze the Costs
With that basic understanding of ROI, let's cut to the chase: Is cross-grading from AutoCAD to Map 3D a good business decision?
Any software purchase must be based on a sound business investment. The best way to determine soundness is through ROI analysis. You can't analyze ROI in a vacuum, so you also need to understand the workflow in which the new software will be used. To bring this back to AutoCAD and Map 3D, you will need to know how much time will be spent doing various tasks in AutoCAD and compare the time that would be spent doing these tasks in Map 3D. Because ROI is based on cost and benefit comparisons over time, you also will need to know the cost of the current task and compare it with the benefits of Map 3D.
Costs to consider include:
- Cost of training to learn Map 3D -- typically $800 per person
- Total software cost of Map 3D cross-grade -- typically $1,500 per seat
- Cost per labor hour for each person using Map 3D -- the average hourly wage times the number of employees working on Map 3D
- Total labor hours per person per month who will use Map 3D
- Training time required -- the average time from starting to use Map 3D until the time that a user is proficient (typically two months)
- Productivity loss during training -- the estimated loss of user productivity until the user is proficient, taking into account the learning curve for a new user (typically 30%)
After determining the costs, you need to understand the current AutoCAD task that would benefit from Map 3D features. You can evaluate this in terms of percentage of time spent on a given task. The top AutoCAD workflow tasks that can be improved using Map 3D are:
- Working with coordinate systems
- Working with vector and raster data such as ESRI, digital orthophoto quarter-quadrangle (DOQQ), digital raster graphics (DRG), Web Map Service (WMS), and Web Feature Service (WFS)
- Drawing cleanups such as duplicates, undershoots, and overshoots
- Creating thematic maps
- Managing databases or linking to databases
- 3D rendering of survey data
- Multiple users accessing or editing one DWG file at the same time
- Publishing data and maps to the Internet or creating map books
To evaluate the amount of time currently spent on a given task using AutoCAD and the amount of time that could be saved using Map 3D, you need to evaluate your AutoCAD workflow. Most workflows fall into the following steps: data input, data management, data analysis, and deliverables publication.
|The workflow breakdown for ROI analysis.|
To determine the potential ROI for Map 3D adoption, you need to break down each workflow step and determine how much time is spent currently and estimate the productivity gains following Map 3D implementation.
How much time to you spend importing and exporting data into AutoCAD? Do you need to connect to external databases such as SQL Server or Oracle? Do you need to bring in raster data such as DRG, DOQQ, survey, or digital orthophoto data? Are you using third-party software to perform these functions?
Other questions may occur, but the main idea is to figure out how much time you are spending on inputting data into AutoCAD. After you have this figure, you need to estimate the Map 3D productivity gains. The graph below shows estimated productivity gains using Map 3D over AutoCAD for data-input tasks.
|Productivity gains for data-input tasks for Year 1 to Year 5.|
Data-management tasks include data cleanup and editing, data-file conversions, coordinate conversions, data sharing, linking to external databases or spreadsheets, and data ownership. First you need to evaluate the percentage of time you currently spend on each task and estimate the percentage gains when using Map 3D; for example, if you receive data as an Excel spreadsheet and need to input and maintain a drawing file, then you have the task of transferring that data into a DWG file as annotated text. With AutoCAD, this task involves a lot of typing. With Map 3D, you can link to the table and automatically update annotated text.
The bar graph below shows a typical comparison and estimated productivity gains in terms of labor hours for common data-management tasks.
|Labor savings for typical data-management tasks for Year 1 to Year 5.|
Data analysis can be as simple as calculating the length of a pipe or as complex as determining how many 18" cement pipes need maintenance. Typical data analysis task include creating contours, estimating areas, 3D rendering, and performing slope, aspect, and tabular calculations. A typical example is the creation of contours from LIDAR data. LIDAR data is becoming more common as a source of elevation data. With AutoCAD, you would need to bring in the points (perhaps by typing) and then calculate the contour data. This task might not be hard for a few points, but LIDAR has 100,000 to millions of data points to process. Map 3D has built-in functionality that allows the creation of contour data in a few simple clicks. The graph below shows the cumulative gain for data analysis.
|The typical comparison and estimated productivity gains in terms of labor hours for common analysis task for one seat of Map 3D for Year 1 to Year 5.|
When the project is finished or reaches the point at which deliverables are sent to the team or client, hard-copy plots aren't always the most efficient option. Clients are expecting delivery beyond the DWG electronic forms. They want to be able to view data in formats such as KML (Keyhole Markup Language, or Google Earth), Internet-based systems, intelligent PDFs, and GIS. Traditional AutoCAD doesn't allow simple delivery in these forms; if a client wants KML, you'll need to use a third-party software or a consultant to translate the data. Map 3D allows for quick and easy delivery in multiple formats -- KML, DGN, GIS (ESRI), and Autodesk's MapGuide Internet-based mapping system. The bar graph below compares estimated productivity gains in terms of labor hours for these common delivery formats.
|Estimated productivity gains in terms of labor hours for these common delivery formats for one seat of Map 3D for Year 1 to Year 5.|
So far I've looked at the individual effects of productivity on ROI. Typically multiple tasks are occurring on a given workflow, and it's more realistic to look at the sum of all the task ROIs. The graph below shows the total ROI per year for each of the above tasks: data input, data management, data analysis, and deliverables publication. With a modest gain of 5-10% on each task performed in Map 3D, you will realize a little bit more than two person-years (3,800 hours) at the end of a five-year period. If the average cost is $70 per hour, you will save $266,000 over five years if you move from AutoCAD to Map 3D. This savings is for only one seat. To calculate total ROI for your department or organization, multiply $266,000 by the number of replaced AutoCAD seats.
|Cumulative savings for all tasks combined for Year 1 to Year 5. This data applies to one seat of Map 3D.|
Know Your ROI
In this article, I looked at ROI when switching from AutoCAD to Map 3D. With modest productivity improvements of 5-10% on simple tasks such as data input, data management, data analysis, and deliverables publication, you can achieve some very significant savings in both time and dollars.
Remember, it's a good idea when considering software upgrades or purchases to know the ROI. A simple approach is to look at the productivity the product brings to the most time-consuming task and ask the question, "Do I gain productivity (time)"?