Risk-Based Benefit–Cost Analysis of Information Technology Tools for Program Management

Abstract

A risk-based benefit–cost approach was used to evaluate the impact of nine information technology (IT) tools on a $1.3 billion bridge repair and replacement program. The IT tools included four tools based on geographic information systems, two document control systems, and three reporting and database systems. The risk-based approach allowed users to deal with the uncertainties around staff time savings and other factors that are imprecise and subject to variation. Taken as a whole, the IT tools had a positive benefit–cost ratio, although four of the tools taken individually did not generate enough benefits to cover their costs. The tangible benefit of these systems was the time saved by agency staff and contractors. The study concluded that organizational structure, contractual and legal requirements, timing, and coordination with existing IT systems were critical factors affecting the benefits of IT systems in support of major transportation programs. The major contribution of this study is to demonstrate the application of risk-based benefit–cost analysis to programs and to take account of the uncertainties in benefits and costs.