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					Exchange Network Return on Investment Study
2006 ECOS Annual Meeting Data Management Work Group Portland, OR

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Purpose of the Exchange Network

• State/EPA Information Management Work Group created the Exchange Network to: • Support automated exchange of data • Improve data quality • Increase access to data • Enable timelier and more accurate exchanges of data • Reduce effort involved in reporting and exchanging data • Can we also save money with the Network?
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ROI Project Goals

• Identify opportunities for cost savings through business process improvements • Estimate return from investing in Exchange Network technologies • Develop a reusable and customizable tool to help states model their business processes for exchanging data and predict their ROI from investing in the Network

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Project Methodology

• Conducted interviews and site visits with four state agencies
• MI DEQ, NJ DEP, PA DEP, WA DoE

• Modeled data exchange business processes both before and after implementing Exchange Network technologies • Identified cost factors and assigned dollar values
• e.g. staff time to collect and enter data, mailing costs, equipment costs, O&M, etc…
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Areas of Study

• Modeled up to four data exchanges at each agency including:
• Air Quality (AQS) - air data from states to EPA’s AQS database • Hazardous waste (RCRAInfo) - data from states to EPA’s RCRAInfo System • Toxic Release Inventory (TRI) – data from EPA to states to reduce dual reporting/processing • Drinking water (SDWIS) – data from states to EPA’s SDWIS-Fed system • Electronic Discharge Monitoring Reports – DMR data from facilities to state data capture systems
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Raw Cumulative Results
Michigan New Jersey Pennsylvania Washington

Data Exchanges Examined

AQS eDMR SDWIS TRI
$1,509,620 $758,933 $1,095,940 $107,983 $642,704

AQS RCRA SDWIS
$1,266,519 $672,789 $845,233 $75,831 $535,192

AQS eDMR RCRA SDWIS
$1,352,807 $710,181 $1,002,390 $105,609 $537,017

AQS RCRA TRI
$311,560 $272,294 $139,422 $19,014 $20,252

Annual Operational Cost Pre-EN Total Annual Operational Cost Post-EN Initial Capital Investment ($) Post-EN Annual Maintenance Cost ($/yr) Post-EN Annual State Savings ($/year) ROI Summary

Average ROI (5 year basis) Payback period (years)

59% 1.7

61% 1.6

54% 1.9

15% 6.9 6

Summary of Key Findings

• In general, the cumulative ROI was very high with payback periods of less than two years. • Savings varied by data exchange and were highly dependent on business processes in place prior to Exchange Network implementation • Model predicted that all agencies could significantly reduce annual operating budgets by implementing the Exchange Network • 3 of 4 agencies had annual cumulative savings of >$500,000

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Conclusions

• States reported an ability to quickly and inexpensively leverage investments to implement new data exchanges
• More opportunities for cost savings and improved data quality, timeliness, and access to data

• Data exchanges with higher financial returns (SDWIS, eDMR, TRI) help offset investments in exchanges with lower financial returns (AQS, RCRA)
• This allows states to establish a single way of doing business and take advantage of qualitative benefits like improved data quality, timeliness, and access to data.
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Conclusions (cont)

• Common methods of data exchange enable interagency sharing with health and security communities • States reported better data access, quality, and timeliness have contributed to an ability to make better more informed decisions

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Finished Products

• ROI Report with detailed results from 4 state agencies • ROI Model with Users Guide
• Reusable and customizable Excel file to help states predict their own ROI and make decisions about where to invest resources

• Full ROI report and ROI model available soon at http://www.exchangenetwork.net • Working with EPA to combine state results with their study which evaluated savings to EPA
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