Describe GIS cost components.
In this article, return on investment (ROI) calculations are applied to analyzing the current costs and financial benefits of geographic information systems (GIS) as a GIS management tool. How to develop GIS ROI methodologies to document the current financial value of GIS operations, as well as an outline of a ROI research design without and without GIS, are also included. Before the development and widespread use of GIS by government agencies and private enterprises, maps provided benefits and value to society. Early attempts to catalog the societal and financial benefits from mapping include examples related to geological mapping. An ROI analysis calculates the financial values of all the inputs into a system and all the outputs from the system, and then calculates the differences in value of the inputs and outputs. A key challenge to the growth of the emerging geospatial technology industry was to convince agencies and companies that GIS provided both societal and financial benefits. Companies and agencies often used benefit-cost analysis as a decision support tool when deciding to invest in GIS. But usually there was no effort or requirement by agencies to prove the ROI achieved after a project was completed and put into operation.