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Sole Source Letter and backup documents
SOLE SOURCE LETTER Qesri- Environmental Systems Research Institute, Inc. (Esri) 380 New York Street Redlands, CA 92373 E-mail: jricks@esri.com DATE: October 26, 2016 TO: To Whom It May Concern FROM: Jackie Ricks, Esri Contract Coordinator/Contracts & Legal Department RE: Esri Sole Source Justification for Geographic Information System Software This letter confirms that Esri, as owner and manufacturer, is the sole -source provider of software maintenance (technical support plus Esri software updates/upgrades) for Esri products in the United States. Esri is the sole -source provider of the following Esri products in the U.S. commercial, state, and local government marketplace: • AppStudio for ArcGIS • ArcGIS for Desktop & Extensions Subscription (Basic, Advanced, Standard) • ArcGIS for Aviation Bundle • ArcGIS for Desktop Advanced • ArcGIS for Desktop Standard • ArcGIS for Maritime Bundle • ArcGIS for Server and extensions • ArcGIS Online (excluding data owned by 3' party providers) • ArcGIS Runtime and Extensions • Drone2Map for ArcGIS • Esri Business Analyst Online • Esri Business Analyst Server • Esri Community Analyst • Esri Defense Mapping Bundle • Esri Developer Network (EDN) subscriptions • Esri MapStudio • Esri Maps Products • Esri Roads and Highways • Esri Services Packages • Navigator for ArcGIS • Portal & Hosted Portal for ArcGIS • Training Courses In an effort to support diversity in federal contracting, Esri has authorized certain businesses (see GSA Advantage! for details) as resellers of perpetual licenses for the following Esri products to eligible entities purchasing under a GSA Schedule. Esri GSA resellers cannot sell Esri software to state or local entities: • ArcGIS for Desktop Advanced • ArcGIS for Desktop Standard • ArcGIS for Server and extensions • Esri Business Analyst Server Esri also authorizes open -market value-added resellers and OEMs to distribute certain software licenses in combination with non-Esri software or services. If you have further questions, please contact me at 909-793-2853, extension 1-1990. � 4 F �d ie Ricks r J-8933 Page 1 of 1 10/26/2016 ACbRb® CERTIFICATE OF LIABILITY INSURANCE DATE (MMIODNYYY) 12f1912016 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT; If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). PRODUCER Marsh Risk & Insurance Services 17901 Von Korman Avenue, Suite 1100 CONTACT NAME: PHONE ACC No);1 EMAIL ADDRESS: (949) 399 5B00; License #0437153 Irvine, CA 92614 INSURER(S) AFFORDING COVERAGE NAIC p INSURER A: Travelers Property Casualty Co. of America 25674 J17700-SSRI-GAWUE-18-17 INSURED Environmental Systems INSURER B: I NIA CLAIMS -MADE OCCUR Research Institute, Inc. INSURER C INSURER D 380 New York Street Redlands, CA 92373 DAMAGE TO RENTED PREMISES J .occurrence) $ 1;000,000 INSURER E: INSURER F X BLANKET CONTRACTUAL LIAB COVERAGES CERTIFICATE NUMBER: LOS-DO1780093-27 REVISION NUMBEIM THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR LTR TYPE OF INSURANCE ADDL SUERPOLICYWVD EFF IYYYY MMIDDNYYY LIMITS A X COMMERCIAL GENERAL LIABILITY M13OR85A 12115016 12M 512017 EACH OCCURRENCE $ 1,000,000 CLAIMS -MADE OCCUR DAMAGE TO RENTED PREMISES J .occurrence) $ 1;000,000 MED EXP (Any one person) $ 10,000 X BLANKET CONTRACTUAL LIAB X OWNERS/CONTRACTORS PERSONAL & AOV INJURY $ 1,000,000 GEN'L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 2,000,000 X POLICY ❑ PROJECT ❑ LOC PRODUCTS - COMPIOP AGG $ 2.001 $ OTHER: A AUTOMOBILE LIABILITY BA3167P651 12/1512016 12/1512017 COMBINED SINGLE LIMIT $ 1.00000 Ea accident BODILY INJURY (Per person) $ X ANY AUTO ALL OWNED SCHEDULED AUTOS AUTOS BODILY INJURY (Per accident) $ PROPERTY DAMAGE $ Per a ciden X NON -OWNED X HIRED AUTOS AUTOS COMPICOLL DEDS: $ 1,000 UMBRELLA LIABOCCUR EACH OCCURRENCE $ AGGREGATE $ EXCESS LIAB CLAIMS -MADE DED RETENTION $ $ A WORKERS COMPENSATION AND EMPLOYERS' LIABILITY YIN ANY PROPRIETORfPARTNER7EXECUnVE OFFICE RIMEMBER EXCLUDED? N (M:andatory in NH) N 1 A UB8AB432B7 1211512016 1211512017X PER OTH- STATUTE ER E.L. EACH ACCIDENT $ 1000,000 E.L. DISEASE - EA EMPLOYEd $ 1,000;000 If yes, describe under DESCRIPTION OF OPERATIONS below E.L. DISEASE - POLICY LIMIT $ 1,000,000 A Technology Errors & Omissions ZPL14T59262 1211512016 1211512017 Each Claim & Aggregate 1,000,000 incl Network Sec. & Privacy Claims Made Form;Retro Date 7116187 Deductible 100,000 DESCRIPTION OF OPERATIONS I LOCATIONS I VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space Is required) Evidence of Insurance, Subject to policy terms, conditions, limitations and exclusions. C:ER I IFIC:A I t HULDtR L;ANL;hLLATIC7N Environmental Systems Research Inslilute, Inc. 380 New York Slreel Redlands, CA 92373 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS, AUTHORIZED REPRESENTATIVE of Marsh Risk & Insurance Services John Graef. ©1988-2014 ACORD CORPORATION. All rights reserved. ACORD 25 (2014101) The ACORD name and logo are registered marks of ACORD About this Report This report is intended to assist buyers of geographic information systems (GIS) software. GIS software allows users to view data, such as population trends and demographics, based on geographic location. This software ranges in complexity, and more complex programs have powerful analytical capabilities that allow there to run advanced statistical analyses of the data of varying regions. Open -source GIS software, which is provided to users free of charge via the internet, is excluded from this report. Table of Contents 2 At a Glance 10 Total Cost of Ownership 19 Switching Cost _ 5 11 Product Specialization 6 Input Cost Drivers 3 Executive Summary 11- Related Goods _— 21 Purchasing Process 9 10 12 Substitute Goods 21 Buying Basics 4 Price Environment 13 Regulation - �21. Buying Lead Time 4 Price Fundamentals 14 Quality Control21 Selection Process 15 Supply Chain & Vendors 15 Supply Chain Dynamics 15 Supply Chain frisk _ 16 Geographic Locations -� 16 Imparts __...____... 17 Competitive Environment 17 Market Share Concentration 17 Vendor Company Types 19 Market Profitability _ 22 Buying -Decision Scorecard 23 Key RFP Elements 24 Negotiation Questions 25 Buyer Power Score Components 26 Jargon & Glossary wwwJbisworld.com 1 1-800-330-3772 1 procureinfo@ibisworld.com 4 Benchmark Price _ 5 Pricing Model _ 5 Price Drivers 6 Input Cost Drivers 7 External Demand Drivers 8 Recent Price Trend 9 10 Price Forecast Product Characteristics 10 Product life Cvcle 15 Supply Chain & Vendors 15 Supply Chain Dynamics 15 Supply Chain frisk _ 16 Geographic Locations -� 16 Imparts __...____... 17 Competitive Environment 17 Market Share Concentration 17 Vendor Company Types 19 Market Profitability _ 22 Buying -Decision Scorecard 23 Key RFP Elements 24 Negotiation Questions 25 Buyer Power Score Components 26 Jargon & Glossary wwwJbisworld.com 1 1-800-330-3772 1 procureinfo@ibisworld.com At a Glance Recent Price Increased operational efficiency, which has helped suppliers cut costs, and market • competition have pressured suppliers to • deflate their prices; however, rising demand has somewhat offset these trends and kept prices relatively stagnant. 2013-2016 Forecast Price While competition from open -source software and falling operational costs will encourage • suppliers to keep prices low, rising investment from state and local government agencies will boost demand and, thus, prevent noticeable price declines. 2016-2019 Growth percentages represant annualized data. Buyer Power Score 43 See p. 25 for details. Benchmark $320 per user I Market Characteristics Availability of Market Share Substitutes Concentration I R 10 Product 5vri�rkrg Speciat'vation Costs gra, Market. Risk Reoent Demand Recent Price Vendor Supply Driver Voli Volatility Financial Risk Chain Risk Vendor Cost Benchmarks 24.9%t 42.1% 2.0% 31.0%.t Profit Wages Purchases overhead Arrow indicates trend during past year and next year. Executive Summary Buyer Power Scare Executive Summary Supplier Power I The IB1SWorld Buyer Power Score is a weighted score based on a number of quantitative and qualitative criteria associated with buying a product or service. The score is calculated between 1 and 5, with 1 V Geographic information systems (GIS) software has a buyer power score of 4.3 out of 5, indicating highly favorable negotiation conditions for buyers. GIS software is increasingly being offered via open -source channels free of charge, which has benefited buyers by contributing to the high availability of substitute products. While these programs are not as complex as closed - source software, they pose a competitive threat to GIS software vendors. Meanwhile, increased operational efficiency reduces suppliers' need for labor, marketing, and research and development (R&D). Consequently, operating costs as a percentage of revenue are falling on average, allowing profit to grow, As a result of the competitive threat from substitutes and suppliers' falling costs, suppliers have strong incentive to negotiate with buyers. However, there are factors that hinder buyer power. High upfront R&D needs impose barriers to entry on potential new suppliers, and existing companies are rapidly consolidating to further their market positions. This has Buyer Power 5 ♦ IZ Price Trend C' Market Structure V j Market Risk signifying low buyer power and 5 meaning high buyer power. The more power a buyer has the greater leverage they have to get lower prices and better contract terms. For more information see page 25. yielded high market share concentration, indicating that buyers have fewer suppliers to choose from, Meanwhile, demand for GIS software has risen in the past three years and is projected to continue to do so through 2019, limiting suppliers' dependence on particular buyers and, thus, their willingness to negotiate on price. High market share concentration and rising demand have reduced competition in the GIS market and tempered buyer power. Buyer power varies considerably depending on the size of the supplier's market share. Top -tier suppliers control more of the market and, as such, face less competitive pressure than smaller players. Therefore, buyers have less leverage when sourcing from top -tier suppliers. However, their proven experience means these vendors are more likely to deliver quality product, and their higher profit margins reduce the risk of product discontinuity, making them a safer choice for buyers considering long-term contracts, Buyers should carefully weigh these benefits against the added cost of working with top -tier suppliers. Price Environment Price Drivers Confinue,c) Price Driver Statistics costs have also been largely predictable in the three years to 2016, further reducing overall price driver volatility. As such, moderate price driver volatility within the GIS software market has had a minimal effect on prices. Input Cost Drivers Average wages - business analytics and enterprise software publishing: Wages represent an estimated 42.1°%0 of . the average vendor's total revenue. High demand for software publishing professionals has caused the average wage for these workers to rise at an estimated annualized rate of 1.0% in the past three years. However, emerging technologies have increased the productivity of the average software publishing professional, allowing more revenue to be generated per employee. As such, wage costs as a percentage of revenue have remained stable and have Average Wages - Business Analytics & Enterprise Software Publishing 8 08 10 12 14 16 18 20 SOURCE: IRISWorld had marginal impact on buyer power. This trend is projected to continue during the next three years, during which the average wage is forecast to continue to rise at a decelerated annualized rate of 0.4% due to emerging technologies that are expected to mitigate the impact of Local & State Government Change Investment (%) ($b) 8.50 8.90 2.50 -4.50 4.40 4.10 5.70 3.50 5.10 5.50 2.20 4.00 5.30 2.90 2.90 358.23 362.10 365.18 363.05 351.00 330.27 309.85 297,95 299.00 306.70 310.99 313.17 312.80 316.45 319.39 Change 1.70 1.10 0.80 -0..60 -3.30 -5.90 -6.20 -3.80 0.40 2.60 1,40 0.70 -0.10 1.20 0.90 SOURCE:161SWorld Average Wages - Business Analytics & Federal Private Enterprise Overhead Funding for Investment in Software Costs Homeland Computers & Publishing Change -Advertising Change Security Change Software M (%) (Index) (°fo) ($b) (°Jo) ($b) 2006 129,434.09 4,08 104,10 2.70 69.03 78.40 481.20 2007 139,369.96 7.67 105.00 0.90 39.16 -43,30 524.10 2008 134,364.67 -3.59 106.00 1.00 40.68 3.90 537.20 2009 132,146,13 -1.65 105.10 -0,80 51.72 27.10 512,90 2010 142,155.02 7.57 105.10 0.00 44.46 -14,00 535.60 2011 143,486.69 0.93 105.90 0.80 45.74 2.90 557.70 2012 142,783.08 -0.49 107.40 1.40 47.42 3.70 589.70 2013 142,035.44 -0.52 109,10 1.60 57.22 20.70 610.20 2014 143,914.06 1.32 111.40 2.10 43.26 -24.40 641.40 2015 147,501.94 2.49 112.80 1.30 42.57 -1.60 676.40 2016 146,426.08 -0.72 113.70 0.80 51.77 21,60 691.28 2017 147,289.47 0.58 115.80 1.80 47.75 -7.80 718.59 2018 147,794.79 0.34 117.60 1.60 44.15 -7.50 756.67 2019 148,392.57 0.40 118.20 0.50 44.21 0.10 778.61 2020 148, 943.81 0.37 119.70 1.30 42.83 -3.10 801,19 Local & State Government Change Investment (%) ($b) 8.50 8.90 2.50 -4.50 4.40 4.10 5.70 3.50 5.10 5.50 2.20 4.00 5.30 2.90 2.90 358.23 362.10 365.18 363.05 351.00 330.27 309.85 297,95 299.00 306.70 310.99 313.17 312.80 316.45 319.39 Change 1.70 1.10 0.80 -0..60 -3.30 -5.90 -6.20 -3.80 0.40 2.60 1,40 0.70 -0.10 1.20 0.90 SOURCE:161SWorld Price Environment Price Drivers cOrltinLled wage growth on suppliers' cast structures. Because wages as a share of revenue will remain stagnant, average wage growth is expected to have minimal impact on market prices, Overhead costs — advertising: GIS software publishers have had to invest heavily in marketing and advertising in the past three years to convey the value of their products and encourage adoption. As such, marketing and advertising accounts for an estimated 9.6% of the average vendor's total revenue. During the past three years, the price of advertising has been rising at an estimated annualized rate of 1.4%. However, the return on investment (ROI) for advertising expenditure within this market has grown faster than the price of advertising, driving down the percentage of supplier revenue that advertising consumes, and leaving more room for growth in profit. In turn, total overhead costs have been reduced, providing suppliers with more price flexibility. In the three years to 2019, the price of advertising is forecast to rise at an average annual rate of 1.3%. However, marketing as a percentage of revenue is projected to continue to fall as the ROI for advertising grows and an increase in adoption reduces the need for additional advertising expenditure. Falling advertising costs have given suppliers more price flexibility, which has contributed to price declines and therefore benefited buyers. Overhead costs ` depreciation: GIS software publishers must invest heavily in computing hardware and software for their software engineers to use in the development of GIS software; as such, depreciation accounts for about 5.6% of supplier revenue. These investments represent depreciable assets because they are not used up in the production of the software. Though significant, the costs of SOURCE: 181SWorid both hardware and software are falling. Computing hardware is falling in price due to ever -improving manufacturing methods, and software is falling in price due to constantly growing competition within major markets. The falling cost of asset depreciation places downward pressure on the price of GIS software, boosting buyer power. External Demand Drivers Federal funding for homeland security: The National Security Agency (NSA), which oversees US homeland security, makes frequent use of GIS software to target areas in the country that are particularly vulnerable to outside threats, As such, a considerable. portion of federal demand for GIS software is derived from investments in homeland security. During the past three years, investment in homeland security has been falling at an estimated annualized rate of 3.3%; although, this decrease masks a dramatic rise in 2013, followed by a significant drop in 2014 before returning to growth in 2015. During the three years to 2o19, federal investment in homeland security is projected to continue falling at 5.1% due to public scrutiny of the NSA and the federal budget deficit continuing to limit funding growth. As a result, government demand for GIS software Proportion of Vendor Average Revenue Cost Structure N Profit 24.9 Wages 42.1 Purchases 2.0 Overhead 31.0 Marketing & 9.6 Advertising Depreciation 5.6 Rent & Utilities 4.6 Other 11.2 Total 100.0 SOURCE: 181SWorid both hardware and software are falling. Computing hardware is falling in price due to ever -improving manufacturing methods, and software is falling in price due to constantly growing competition within major markets. The falling cost of asset depreciation places downward pressure on the price of GIS software, boosting buyer power. External Demand Drivers Federal funding for homeland security: The National Security Agency (NSA), which oversees US homeland security, makes frequent use of GIS software to target areas in the country that are particularly vulnerable to outside threats, As such, a considerable. portion of federal demand for GIS software is derived from investments in homeland security. During the past three years, investment in homeland security has been falling at an estimated annualized rate of 3.3%; although, this decrease masks a dramatic rise in 2013, followed by a significant drop in 2014 before returning to growth in 2015. During the three years to 2o19, federal investment in homeland security is projected to continue falling at 5.1% due to public scrutiny of the NSA and the federal budget deficit continuing to limit funding growth. As a result, government demand for GIS software Product Characteristics P roof u ct Sales have grown rapidly in the past Life Cycle Stage: Growth Cycle three years as more buyers realize the Life C y C I e benefits of GIS software and more readily adopt the technology. This sales growth is indicative of a market in the growth stage of its product life cycle. During this stage, it is especially important that suppliers differentiate themselves within the market, which generally favors buyer power. a� cco Time Life Cycle Factor Geographic Information Systems Software Characteristics Price Trend Prices have fallen in the past three years and are forecast to continue to fall through 2019 as substitute goods increase the competitive pressures within the market. However, increased state and local government spending is projected to drive up demand while increased consolidation within the market offsets competitive pressures, thereby slowing future price decline, Product Change Innovation is rapid within the GIS software market as competitors attempt to keep pace with ever- changing technologies while incorporating additional features to add value to their products. A large portion of product change within the market is centered on building up software databases and increasing the breadth of analyses that software provides. Distribution Scope The distribution scope within the GIS software market is broad because software is available through online distribution. The speed, efficiency and cost effectiveness of online channels eliminates most geographic barriers and provides virtually limitless distribution scope, thereby leaving little room for broadening it further. As such, distribution scope has largely stabilized over the past three years and is anticipated to demonstrate minimal expansion in the near future. Marketing Trends Brand name is a leading differentiating factor within the GIS software market, warranting the need for publishers to invest substantially in marketing. However, as online marketing channels improve, suppliers are able to more effectively target and reach larger numbers of potential customers, thereby allowing them to reduce their marketing expenditures. As adoption increases, marketing expenditures will further subside. Marketing efforts are centered on targeting trade associations and magazines of key buying industries, the publication of white papers and providing trial subscriptions to potential customers. To t a I Cost of The total cost of ownership for GIS software is moderate, warranting some Ownership need for buyers to consider costs beyond the price of the software. Additional costs Total Cost of stem primarily from learning to use the hardware software, any additional or Ownership peripheral equipment required to effectively operate it and ongoing software maintenance fees. As licensing restrictions prohibit the resale of GIS software, buyers will not be able to recover any of their total costs. As such, buyers should plan to absorb the full brunt of the total costs associated with GIS software and budget accordingly. Depending on the software and the breadth of analysis it provides, GIS software can impose substantial learning costs. Often, buyers will require training services to learn how to gain the Product Characteristics Total Cost Of Ownership maximum benefits from their investment. Costs associated with training vary depending on the duration of training and the complexity of the material. For example, Esri.offers a variety of training services associated with various aspects of its products, ranging from $32 per person to $1,515 per person in price. However, buyers should look to use their leverage to negotiate lower training fees with their software purchases. Buyers may also be required to invest in additional computer hardware or peripheral equipment to effectively integrate the GIS software into their networks and operate it. Costs associated with this equipment will vary depending on what equipment the buyer already owns and their preexisting network infrastructure. Buyers with equipment that is either outdated or limited in processing capacity can P ro d u et GIS software is a moderately specialized good, somewhat tailored to the buyer's Specialization needs. Although vendors do not create customized solutions for buyers, each Product ' vendor's products are unique and w 4� designed for specific uses and industries. Specialization' ' Further, GIS software requires a �F substantial amount of technical skill to design. 'These factors hinder a buyer's ability to switch to new a new factor, Related Goods The availability of related products and services will range depending on the size of the supplier. Most vendors within the GIS software market are small, niche players, such as Caliper and Blue Marble Geographics, which specialize solely in designing GIS software. Meanwhile, medium-size companies, such as Esri, will generally offer additional goods and services to complement their products. Large multidisciplinary conglomerates, expect to invest substantially in hardware required to process the sizable amount of information that these programs provide. Buyers will also be required to pay maintenance fees to ensure the data their software provides remains accurate. As the data incorporated into GIS software databases is based on very dynamic environments, it is constantly changing. As such, GIS software can quickly become obsolete, To maintain the data's accuracy, suppliers generally offer to update buyers' software on an ongoing basis in exchange for a maintenance fee. Forgoing these services can drastically compromise the accuracy of the information and, as such, are largely nondiscretionary. On average, buyers will be expected to pay i5.o% of the purchasing price annually to have their software maintained. which limits their power in negotiations somewhat. However, once designed, GIS software can easily be mass distributed and made readily available to buyers, which boosts price competition among vendors. Together, these characteristics produce a moderate level of specialization within the market that is expected to have minimal impact on buyer power. such as Hexagon AB, will offer a wide assortment of related goods and services. Suppliers typically provide related goods and services to acquire additional revenue, secure brand loyalty, and increase the switching costs imposed on the buyer. However, producing additional products and services imposes additional costs on the supplier, causing many smaller vendors to shy away from broadening their product portfolios. Product characteristics Related Goods Related goods and services generally CO fl t I n L!d offered with GIS software include surveying and mapping equipment, global position system devices and GIS software Related Goons Description training services. To reduce the total cost of ownership buyers should look for ways in which they can bundle these goods and services with their GIS software. Surveying & Mapping targe GIS software publishers will often leverage their expertise in programming and topographical Equipment mapping to design their own line of surveying and mapping equipment. Bundling these products is particularly beneficial if the buyer wishes to upload their own geographical and topographical information to the program, as doing so ensures more seamless integration. Global Positioning GIS software suppliers heavily utilize global positioning system (GPS) devices in their software System Devices design and often leverage their understanding of these devices to develop their own GPS equipment. Buyers will generally reduce their learning costs by procuring their GPS device through the same vendor. Further, bundling these products better ensures compatibility when these devices are used in conjunction with one another. As such, bundling these products is recommended. GIS Software Many GIS software suppliers will offer training services for their products. White most vendors charge Training Services additional fees for these services, buyers should look for ways to procure these services at reduced costs or at no additional charge when making their initial GIS software order. S u b s t 1 t U t e There are a variety of substitutes that can provide a considerable portion of the Goods information that GIS software offers. In particular, there is a growing number of open -source GTS software programs Availability of provided via the internet free of charge Substitutes that pose substantial competitive threat to GIS software vendors. Further, buyers can often use general business analytics software to make many of the comparisons that GIS software produces while using basic mapping software to ascertain the spatial relationships that GIS software provides. particularly, when used in conjunction with one another, business analytics and mapping software can produce many of the same conclusions that can be drawn from the use of GIS software. Because of the high availability of substitute products, buyers have alternative solutions should they not be able to get a good deal from GIS software suppliers. These alternatives add external competitive pressure to the market, which helps boost buyer power. Product Characteristics Substitute Goods continued Substitutes Description Open -Source A variety of nonprofit organizations are developing their own databases and software to provide to the GIS Software public free of charge. A leading provider of these programs is the Geographic Resources Analysis Support System (GRASS), As these programs are offered free to the public, they are a far more cost effective option than closed -source GIS software. Further, these programs allow buyers more flexibility to customize the programs to their particular needs, However, the databases and breadth of analyses that open -source software offers are typically less extensive than those that closed -source programs offer and, as such, may not provide the level of information and analysis that buyers require. Nonetheless, these programs pose a substantial competitive threat to GIS software vendors and will increase the competitive pressures within the GIS market as they are further developed. As such, they are a driving force behind the recent price decreases and are projected to continue to stimulate future price deflation. Business Analytics Business analytics software can incorporate information concerning location, demographics and sales Software to make statistical comparisons. As such, they can be used to target potential customers much like GIS software can, However, these programs do not contain preprogrammed databases of information, thereby limiting the comparisons that can be made to only the information that the buyers collect themselves. Further, business analytics software does not map data on to topographical maps to produce rich spatial comparisons and strong visual representations, making it more difficult to uncover trends. Therefore, business analytics software, by itself, is often not as useful a tool as GIS software. Mapping Software Much like GIS software, mapping software provides visual representations of spatial and topographical relationships. However, mapping software does not afford buyers the ability to incorporate large databases of information into the maps they produce. As such, these programs do not allow buyers to make socioeconomic comparisons between different regions. However, mapping software often incorporates enough information to make them a viable substitute to GIS software for many buyers, particularly when they are used in conjunction with their own databases and business analytics software. R e g u I a t o n Suppliers face few regulations that employees to ensure GIS software directly impact their operations or meets these mounting regulations. costs. Nonetheless, vendors providing However, the overall additional cost products that allow buyers to upload that regulatory change imposes is not: Regulatory their own data into the program must anticipated to be substantial and, as Change provide security safeguards that comply such, the resulting impact on buyer with the buyer's industry -specific power will be minimal. standards. In particular, GIS software Buyers should also be cognizant of marketed to the healthcare and how regulatory change across all sectors financial industries must ensure any may affect future demand for GIS data that is uploaded to their program software. GIS software is heavily used is encrypted to prevent unauthorized to track business operations and the third -parties access to confidential effects of new regulations. As information. The regulatory regulations in any sector tighten, environment concerning data security businesses will require GIS software to is becoming increasingly strict as prove compliance with associated software programs are further adapted bylaws while public administration for mobile use. As such, buyers and agencies will increasingly invest in GIS suppliers may both require additional software to track the success of their Product Characteristics Regulation continued Quality Control directives. Therefore, any time that regulations are tightened, strong demand for GIS software is likely to be Key Quality Factors Accuracy Usability Breadth of analysis Relevance of analysis There are several factors that distinguish GIS software quality. Foremost is the accuracy of the data. While no software program is perfect and the statistical models used to draw comparisons accommodate some error, buyers will want to ensure that data inaccuracies will not substantially compromise the effectiveness of their product. As such, buyers should carefully assess the safeguards suppliers have put in place to ensure data accuracy. Additionally, buyers should give preference to suppliers that adhere to standards developed by the Internal Organization of Standardization (ISO). In addition to being accurate, GIS software should also be as easy as possible to use. While GIS software is generally complex, usability will vary substantially between programs. Buyers should seek programs that will impose minimal learning costs. Suppliers will generally offer a trial version of their product to buyers at no additional cost to allow buyers to test out the usability of the program. Buyers are strongly advised to seek out suppliers that offer these trial subscriptions. When assessing the overall quality of a GIS software program, buyers should stimulated, thereby alleviating competitive pressures within the market and weakening buyer power. also study the features that each program offers. GIS software affording a wider breadth of analysis will generally be able to provide a clearer picture of existing trends. As such, buyers should look for programs that allow for a wide range of demographic comparisons through use of a variety of statistical analysis. However, in addition to breadth of analysis offered, buyers should ensure the demographics and statistical comparisons are relevant to their particular needs. Buyers should carefully review the specifications of potential software programs to ensure the analysis offered are appropriate for the questions they wish to answer. Buyers should note that obtaining higher -quality products will likely come at a cost to their buyer power. Considering only those suppliers that meet high quality standards will reduce the number of potential suppliers, thereby decreasing the buyer's ability to source multiple bids for a better deal. Further, higher quality GIS software programs will generally be in higher demand, reducing supplier incentive to negotiate. As such, buyers should carefully weigh the costs of obtaining higher quality GIS software programs against the benefits. Supply Chain & Vendors Supply Chain Supply Chain Risk The supply chain for GIS software poses Dynamics minimal risk to buyers. Strong growth in the IT sector has stimulated strong demand for GTS software publishers' Supply upstream suppliers, thereby ensuring the Chain Risk continuity of these suppliers. Meanwhile, high competition among upstream suppliers mitigates the risk of price Average shocks because these suppliers are likely Vendor Disk to absorb any price volatility in their supply chain rather than compromise their market share. What little risk upstream suppliers impose on GIS software publishers is derived from a shortage of qualified IT personnel, and concentration in the computer manufacturing market. With a limited supply of qualified IT personnel available, wage costs in the IT sector are expected to rise in line with growing demand for computers and computer- related services. This growth may apply upward pressure on prices throughout the GIS software supply chain that could force GIS systems suppliers to pass on their added costs to buyers. In addition, consolidation in the computer manufacturing market is forecast to reduce competition among upstream computer suppliers, leaving them with substantial pricing power over GIS systems suppliers. Nonetheless, these factors have not posed a substantial threat to the overall supply chain in the past three years. Buyers can further reduce their supply chain risk by ensuring their GIS software vendors have long-term contracts with multiple vendors. GIS software publishers also face minimal risk on the demand side of the supply chain. A variety of federal, state and local public administration agencies require GIS software to help them plan and benchmark their initiatives. Public administration agencies have low risk of discontinuity, and the benefits that GIS ,•...- _.'.,: nia.'IR+w'V3T4Ci. =I �..•,�ear�:rtA�3sebf5.NbMVMw.me[.� a: ea.�ti�:^..rR9NkA33tAti YpWi4aY1'.iAtiL'�t+K;f.'3C!'.9lIY.^G."'!S'IiY�'^�'a.'lYx:rY.'�:T&:1^Nyil'SY4t'fWuiiJ:t:`n;..s�1.YN'!"F '::^�-.n 2nd Tier Suppliers 1 st Tier Suppliers Vendor Key Buyers e YAsk C: . N High risk Mediurn risk Low risk SOURCE: MISWORID Negotiation Questions Issue Innovation; Rapid innovation in the IT sector may compromise the lasting effectiveness of GIS software. Buyers should ensure that measures are taken to prevent their product from becoming obsolete. Questions • How much of your revenue is set aside for ongoing R&D? Has this investment grown or decreased in recent years? What is your process for recruiting and maintaining your skilled software developers? Is there ongoing training for employees? • How many products or services do you have in your development pipeline? How will this affect the resources you have to devote to innovating your current products? • How often do you provide updates for your software? What do you charge for these software updates? Market Consolidation: The GIS software • Is the heavy concentration of the market a positive factor for your operations market is rapidly consolidating. Buyers or a risk? How so? should be aware of how this consolidation • Has your company made any major acquisitions in the past three years? Are may influence future prices and the any planned in the future? availability of support services. • How do acquisitions affect your prices and the resources available for support services? • If you have made acquisitions, how does this affect your financial stability? Vendor Cost Structure: Buyers should be • Have your profit margins grown or shrunk in the past three years? Are they aware of their vendor's cost structure and expected to grow or shrink during the next three years? its effects on supplier financial health. • What measures have you taken to reduce your operating costs? What measures do you plan to take? • How have your profit margins affected your prices and willingness to negotiate in the past three years? How do you expect they will affect your prices and willingness to negotiate over the next three years? • What are your strategies for managing financial risk? Data Accuracy: If the software's data is • How closely do you adhere to ISG standards? Have you received any inaccurate, the program will uncover certifications from the ISO? misleading trends, rendering it ineffective. • What additional safeguards have you established to ensure data accuracy? Buyers should ensure that vendors are • What actions do you take to correct or compensate for any inaccuracies taking measures to ensure data accuracy. found in your databases? When was the last time you received a complaint about the accuracy of your data? What did you do to resolve this dispute? Pricing : Buyers with an understanding of • What is the reasoning behind the pricing model you plan to apply to my pricing factors will be better able to software? Would you consider applying any other pricing models to my negotiate a pricing model that is most cost software? effective based on their requirements. • How much network growth does your pricing model accommodate 'before the initial price is raised? • Are there any additional charges I should be aware of outside the cost of the software? • What factors coudd potentially increase the i0ial price quote? What steps can be taken to ensure that the price does not increase? Integration: Buyers should ensure that P What operating systems are compatible with your software? their network can support the GiS software ' What hardware will be required to run the software with optimal efficiency? program. • What other software programs are compatible with your software? a What difficulties have you had integrating your software with existing IT setups in the past? How have you overcome these challenges? Support Services: GIS software can be • Do you offer any training services free of charge? difficult to operate. Buyers should ensure • Are any training services available at a cost? How much do you charge for that suppliers provide support services to these services? help reduce learning costs. • Aside from training, what additional support services do you offer and how much do they cost? • How available is your staff to answer questions regarding your software? Buyer Power Score Components Price Trend Factor Definition Weight Score Recent Price 40% 5 Very Favorable Compound annual growth rate in benchmark price over the past three years was less than/equal to 0.0% Forecast Price 60% 5 Very Favorable Compound annual growth rate in benchmark price in the next three years will be less than/equal to 0.0% Weighted Score 50% 5.0 Market Structure Factor Definition Weight Scare Availability of Substitutes 35% 5 High There are many viable substitutes for this product/service Market Share Concentration 25% 1 High The top four suppliers of this product/service have equal tolgreater than 50% market share Product Specialization 25% 3 Medium The product/service is assessed as having a medium level of specialization Switching Costs 15% 3 Medium The cost of switching from this product and/or supplier is assessed as medium Weighted Score 20% 3.2 Market Risk Factor Definition Weight Scare ' Price [river Volatility 25% 1 High Average absolute difference in percentage change of external drivers > 4.5% Recent Price Volatility 25% 5 Low Average absolute difference in % change in price over last 3 years c 1.0% Vendor Financial Risk 25% 5 Low The average level of financial risk for product/service vendors is assessed as low Supply Chain Risk 25% 5 Low The average level of product/service supply chain risk is assessed as low Weighted Score 30% 4.0 Overall Buyer Power Score 4.3 IBISWorld's Buyer Power Score is a calculation based on weighted quantitative and qualitative factors that measure a buyers' ability to negotiate lower prices and favorable contract terms. The higher the Buyer Power Score, the greater the average buyer's negotiating strength for this produc(. The overall score is composed of three components: 1) Price Trend: compares this product's average recent and forecast price change to the economy -wide inflation rate 2) Market Structure: assesses the availability of alternatives and ease of purchasing in this product's marketplace 3) Market Risk: measures elements of volatility and risk impacting a buyer's conlidence #n making long -terms deals with suppliers of this product.. Jargon & Glossary Software -as -a -Service A program developed and Jargon hosted online, Buyers do not own the software, but they are licensed to use it as a service on demand Cloud Computing The practice of storing, managing and processing data through hosted remote servers as opposed to local servers. Glossary HS The Harmonized Commodity Description and Coding System is maintained by the World Customs Organization as a standardized system of names and numbers for classifying traded products. Life Cycle All products and services go through periods of growth, maturity and decline. IBISWorld determines a life cycle by considering factors such as pricing trends, the level and speed of product or service change, the extent of a product's distribution and the maturity of marketing trends. Market Share Concentration Determined by the market share of the top four vendors for a given product or service: high is when the top four vendors account for more than 50.0% of the product or service market share, medium is from 30.0% to 50.0%, and low is less than 30,0%, NAICS The North American Industry Classifications System is the standard by which industries (not products) in the United States, Canada and Mexico are classified. Price Driver Volatility Level Determined by the average absolute difference in the percentage change of input cost items and external demand drivers over the past three years: high is 3.5% or greater for all drivers, medium is from 2.0% to 3.4% for all drivers, and low is 1.9% or less for al€ drivers. Price Range The difference between the upper and lower price bounds divided by the benchmark price: wide is greater than 50.0%, medium is from 25.0% to 50.0%, and narrow is less than 25.0%. Price Volatility Level Determined by the average absolute difference in the percentage change of the benchmark price over the past three years: high is 3.5% or greater, medium is from 2.0% to 3.4%, and low is 1.9% or cess. License A permit or contract to access a supplier's software. Network Group of two or more computers linked together through a common server. Producer Price Index (PPI) This index represents the change in the amount that producers receive for their products or services, as opposed to the prices that consumers pay for them. Profit IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company's profitability. It is calculated as revenue minus expenses, excluding interest and tax. Profit Level Determined by the average profitability of the industry in which a product or service vendor operates, compared to the average profit margin for all industries in the US. There are around 700 industries in the US classified using the NAICS taxonomy (see NAICS), 'total Cost of Ownership Level Determined by the total cost of ownership as a percentage of the benchmark purchase price per year: high is when the total cost of ownership is greater than 100.0% of the benchmark purchase price per year, medium is from 50.0% to 100.0%, and low is less than 50.0%. UNSPSC Coding for each report title is based primarily on the United Nations Standard Products & Services Code. The code is a hierarchical classification codeset of expenditure items. Wages The gross total wages and salaries of all employees in the industry. The cost of benefits is also included in this figure. Z -Score The Altman Z-score formula is used to help predict a company's chances of going bankrupt within the next two years. The Z-score uses multiple corporate income and balance sheet values to measure the financial health of a company. Z-scores above 2.9 are defined as having a low financial risk level; scores between 1.23-2.9 are at a medium risk level and scores below 1.23 are a high financial risk level. Disclaimer This product has been supplied by IBISWorld Inc. CIBISWorld') solely for use the use of, or reliance upon, the data or information contained herein. by its authorized licensees strictly in accordance with their license agreements with IBISWorld. IBISWorld makes no representation to any other person with regard to the completeness or accuracy of the data or information contained herein, and it accepts no responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage whatsoever suffered or incurred by any other person resulting from Copyright In this publicatlon is owned by IBISWorld Inc. The publication is sold on the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own purposes. In the event that the purchaser uses or quotes from the material in this publication — in papers, reports, or opinions prepared for any other person — it is agreed that it will be sourced to: IBISWorld Inc. Copyright 2016 IBISWorld Inc DEVELOPING A RESILIENT, SMART CITY Fort Lauderdale, Florida Noa Gutterman, Assistant Project Manager, ICMA lay What Is a Smart Community? COMMUNITY PROFILE: Fort Lauderdale, Florida Population Size: 176,013 (2014 US Census estimate) GIS Program: Centralized Number of Departments Using GIS: 11 Total FTEs: 6 Core GIS Budget: $800,000 Local governments are looking for ways to build safe, healthy, resilient communities for their constituents. Citizens are calling on governments to be more transparent, efficient, collaborative, and productive. A government that meets these chaifenges is a Smart Community How will you strive to meet these needs? Technology is the defining factor for a smart community. It is modem technology that enables departments to increase communication, effectiveness, and openness. Technology gives governments and their citizens access to powerful information that they can leverage to make more informed decisions. Smart Communities promote efficiency. Time no longer has to be wasted in duplication of efforts by different staff. Departments can now share relevant and timely information throughout the organization, helping staff across all departments collaborate and deliver a higher level of service. With a common information system like GIS, staff have access to the tools they need to create, manage, and share authoritative information and applications. It doesn't matter how big or small your community is, where you are located, or how unique your needs may be, any community can be a Smart Community, 2 Esri Smart Communities Case Study Series DEVELOPING A RESILIENT, SMART CITY For[ Lauderdale, Florida ke many cities facing both natural and man-made events, Fort Lauderdale continually works to be prepared to deal with both. In its many programs to promote community resiliency, it often uses GIS as a ve- hicle to explore past disasters, react to ongoing events, and make predictions about the future. Given that tourism is one of the city's top economic drivers, maintaining Fort Lauderdale's infrastructure and beaches is a chief concern for local officials. Thus, with community resiliency as a primary factor spurring many of its advancements, the city has worked to expand GBS beyond its original application as a traditional mapping tool. As a coastal city, Fort Lauderdale uses GIS technol- ogy to analyze and respond to issues such as flooding, hurricanes, and coastal erosion. Applications have been and continue to be developed to plan for contingencies when disasters and emergencies strike. With a vision for integrating GIS technology in all aspects of local government, Fort Lauderdale hired its first GIS coordinator in 1998. In 1999, city officials set the wheels in motion for the citywide adoption of GIS technology. The power of this technology would enable Fort Lauderdale to proactively address the demands of its citizens and its environment. City officials saw the benefits of using GIS to inventory and manage utility infrastructure, especially utilities such as pipes that were first installed in the 1960s. They worked with Florida Atlantic University's Planning De- partment to launch the city's GIS program, thereby allowing local students to participate in the program's creation and learn about the application of GIS in their community. Since its inception, the GIS program has grown to a staff of six full-time equivalents (FTEs) forming a division within the Information Technology (IT) Services Department. under the leadership of City Manager Lee Feldman, Chief Technology Esri Smart Communities Case Study Series Officer Mike Maier, and GIS Manager Ian Wint, members of Fort Lauderdale's GIS staff have developed GIS applications to inventory utility assets and manage these assets in a digital format. "We're looking to integrate GIS to the extent we can in our day-to-day operations. in today's technology world, platforms like GIS make ourjobs easier; says Maier. GIS for Community Resiliency Specifically, the city has worked to develop GIS tools to predict and map potential environmental disasters; it also works to incorporate GIS technology into its permitting processes, land issues, flooding issues, and storm issues, among others. "If we break out into emergency mode, GIS is one of our most important tools" says Maier. 3111CRM Systems. GIS is used in the management of a centralized customer service system, also known as a 311/Customer Relationship Management (CRM) system. Having a 31 WCRM system in place helps local govern- ments offload nonemergency calls from citizens during a disaster so that public safety personnel can focus on life-threatening concerns. By facilitating open communi- cations between a city or county and its citizens, a 311! CRM system enables citizens to share pertinent informa- tion with their local governments, which can, in turn, share instructions on how to safely deal with nonemergency situations. Although Fort Lauderdale falls within Broward County's re- gional 311 /CRM system, the city has developed its own 311 f CRM system, QAleffo. Through this system, citizens can alert the city about problems such as damage from hurricanes or floods, and the city can manage the entire citizen request process, from notification to completion, entirely online. Stormwater Master Plan Project. Fort Lauderdale also promotes community resiliency through its Stormwater Master Plan Project. To ensure that the city meets the stormwater reporting benchmarks required by the Envi- ronmental Protection Agency's National Pollutant Dis- charge Flimination System (NPDES) program, Fort Lauder- dale has developed the Stormwater Operations Program (SWOPS), which integrates GIS technology to save time and money. As part of this program, teams investigate and catalog each stormwater asset within the city twice a year. Before the GIS -based system was implemented, field inspections information was handwritten in the field on paper maps; clerks had to be borrowed from other departments to complete data entry, a process that took two clerks over four months a year. Now, with the use of ArcGIS for Collector on iPads to catalog and manage as- sets, each stormwater asset inspector inspects his or her designated assets to determine whether they are operable or require any repairs. The elimination of data entry from the workload of the borrowed clerks has allowed these individuals to return to their core activities and focus ad- ditional energy on the development and management of Fort Lauderdale's purchase card program to ensure that all purchases made on behalf of the city are accounted for and billed correctly. FEMA National Flood Insurance Program. In a similar effort to streamline processes and increase savings, Fort Lauderdale participates in FEMA's National Flood Insurance Program. Local governments can apply to this program to lower their "Community Rating" scores and thereby save their constituents money on their flood insurance premiums. Fort Lauderdale uses GIS to analyze flood -zone areas and create an interactive web -based application that allows constituents to access flood designation zones for all areas of the city. The rating Fort Lauderdale received has saved constituents millions of dollars since the city joined the program. Esri Smart Communities Case Study Series Mapping flood zones helps the city determine where resources should be targeted during storms. Evacuation Routes. Using GIS, Fort Lauderdale has created maps that identify and highlight all possible evacuation routes in case of flooding so that citizens can be prepared for emergency situations. The maps also provide decision makers, first responders, and emergency crews with a bet- ter understanding of where they should concentrate their efforts in an emergency situation and how they can ensure the safety of citizens in every part of the city. Coastal Erosion. As has been noted, tourism is a major industry in Fort Lauderdale, and most tourists come to enjoy the city's many beaches. As a result, city officVs need to stay on top of any and all beach erosion. The city has used GIS to take aerial photographs of the coastline to track erosion on a year-to-year basis. Staff then use GIS to analyze the data and convey patterns and trends in erosion to decision makers and policy makers. The visual data obtained from the yearly analy- ses of the aerial photographs provide concrete evidence of the increasing erosion and help the city undertake measures to safeguard its beachfront and, in turn, its tourism industry. Demand for Data With the integration of GIS technology into a diverse range of software programs, GIS touches nearly all city depart- ments and staff, Departments such as Public Works and Utilities, which have successfully integrated the technolo- gy into their programs since 2001, are making significant developments in their practice and application of GIS. For example, the Public Works Department recently used GIS to complete a sidewalk survey mapping all cracked or damaged sidewalks in the city. The increasing number of GIS -proficient staff in all departments helps to open the process of GIS application creation and design to almost every city staff member. As a coastal community, Fort Lauderdale places a high priority on the protection of its waterfront and beaches. Several of the city's GIS applications were built from Esri templates—most notably, ArcGJS for Local Government Maps and Apps (http://arcg.is/1 Xdt1 WI) and Web AppBuilder (http://arcg.is/lTiGbPM). Many of these templates can be modified with little or no programming effort to fulfill a city need; for example, Fort Lauderdale used the ArcGIS for Local Government Park Locator app template (http://arcg.is/1Yu2aV7) for Park and Recreation Finder to create a new and improved version of its Park Finder application. The city was able to adapt these templates to fit its needs by adding an additional search feature that allows users to specify their unique search locations. By making such modifications rather than building a completely new application, the city estimates a savings of over 200 hours for the Park Finder app alone. Neighborhood Engagement Since Fort Lauderdale first implemented GIS technology, city officials have tried to get the technology into as many hands as possible in order to answer constituents" ques- tions before they are even asked. Although the city does not use a formal citizen assessment committee when developing GIS applications, the GIS Department staffs Esri Smart Communities Case Study Series ' 1 gls4ei �I The city's Property Reported app captures data for analysis. a booth at the city's annual open house, where citizens can offer suggestions and improvements for existing and future GIS applications. Having a strong presence at the event increases the visibility of GIS programs and applica- tions in the community, It also serves to garner consistent feedback from constituents and to promote new technofo- gies to a wide and diverse audience. The city of Fort Lauderdale hosts an annual event called Neighbor Support Night, This event allows city depart- ments and officials to strengthen ties with their constitu- ents and build public awareness of relevant issues. This siorm SBUILT.SWOM 3T4i nw 68 ,..._ ci M � ♦u.n• � 3iS1 atW 68 GI e Sl TO 11ti: 3)e4.13Y.!nV JSM• )AV 31)l IIV 141 ' ll�ie 1163 SIE. 1111 !YS 1191Yft —T $17G 31, -IE!' tl Rn 75Y1 S18F �3 A� Jlti• `i W6 -- Catch aasrn need cleating hos Imes ?11y'!tn� :Yt1 '.1V II!:S 914- 1191 TIJ, I'tvi:n: 0702-STW I W6 Fort Lauderdale's SWOPS application, which is used to carry out the NPDES stormwater activity mandated by the State Department of Environmental Protection, saves numerous labor hours. is especially important for building relationships among individuals, as citizens generally need to be prepared to take care of themselves and their neighbors for up to seventy-two hours during an emergency or crisis. The IT Services Department, which houses the GIS division, has played a major role in this event by showcasing new GIS applications each year. Attendees of the event are able to explore past, present, and future GIS applications on computers, tablets, and mobile phones, and GIS staff are available to help demonstrate these applications and answer any relevant questions. The city of Fort Lauderdale uses maps to engage neighborhoods in planning for community resilience. Esri Smart Communities Case Study Series "We're in an area that's susceptible to tropical storms and sea level rise. From a geography standpoint, understanding and promoting community resiliency is one of our main objectives." Plans for the Future All these achievements notwithstanding, the city contin- ues to look ahead. Enterprise resource planning (ERP) systems allow cities to use their resources more effec- tively by streamlining processes, consolidating various components of each department, and allocating budgets. Fort Lauderdale officials are planning to develop an ERP system that meets the city's needs—specifically, one that can interface with existing and future GIS technology and applications. Several new GIS applications are in development as well, such as a road closure application that will allow users to identify all road closures and traffic flow in real time, The city plans to release a GIS -based tool for citizens to reap crimes within their neighborhoods. Another new initiative on the horizon is called Geodesign, which will explore the use of Esri's products, mainly City Engine, to visualize the —Lee Feldman, city manager effects of planning policies on the urban environment. The tool will address requests such as "show me a 3D rendering of the downtown area if we changed the zoning code to allow buildings of over 700 feet in height" It will then show vistas from different areas in the city with the requested potential zoning code change. These upcoming GIS applications and initiatives only scratch the surface of what city officials have planned for Fort Lauderdale. "GIS seems to consistently grow as we put more applications out there and demand continues to grow" says Maier. Study Participants Lee Feldman, City Manager Mike Maier, Chief Technology Officer Ian Wint, GIS Manager Acknowledgment. ICMA would like to thank Fort Lauderdale, Florida, for its contribution of photographs and other graphics used in this case study. Esri Smart Communities Case Study Series About Esri Esri inspires and enables people to positively impact the future through a deeper, geographic understanding of the changing world around them. Our technology enables organizations to create responsible and sustainable solutions to problems at local and global scales. At Esri, we believe that geography is at the heart of a more resilient and sustainable future. Governments, industry leaders, academics, and nongovernmental organizations (NGOs) trust us to connect them with the analytic knowledge they need to make these critical decisions that shape the planet. esri.com/smartcommunities About ICMA ICMA, the International City/County Management Association, advances professional local government worldwide. The organization's mission is to create excellence in local governance by developing and fostering professional management to build better communities. ICMA identifies leading practices to address the needs of local governments and professionals serving communities globally. We provide services, research, publications, data and information, peer and results -oriented assistance, and training and professional development to thousands of city, town, and county leaders and other individuals and organizations throughout the world. The management decisions made by ICMA's members affect millions of people living in thousands of communities, ranging in size from small towns to large metropolitan areas. www.icma.org/iocalgovtechalliance Ah ICE MA 152333 Esri SMART COMMUNITIES CASE STUDY SERIES COMMUNITY PROFILE; Carver County, Minnesota What Is a Smart Community? Local governments are looking for ways to build safe, healthy, resilient communities for their constituents. Citizens are calling on governments to be more transparent, efficient, collaborative, and productive. A government that meets these challenges is a Smart Community. How will you strive to meet these needs? Technology is the defining factor for a smart community. It is modern technology that enables departments to increase Communication, effectiveness, and openness. Technology gives governments and their citizens access to powerful information that they can leverage to make more informed decisions. Smart Communities promote efficiency. Time no longer has to be wasted in duplication of efforts by different staff. Departments can now share relevant and timely information throughout the organization, helping staff across all departments collaborate and deliver a higher level of service. With a common information system like GIS, staff have access to the tools they need to create, manage, and share authoritative information and applications. It doesn't matter how big or small your community is, where you are located, or how unique your needs may be, any community can be a Smart Community. Esri Smart Communities Case Study Series THE BENEFITS OF GIS FOR ALL Carver County, Minnesota arver County was an early adopter of GIS technol- ogy, first implementing a system in the mid -1990x. Initially, there were a small number of users; these were in departments that focused on land use. Overtime, however, the use of GIS spread throughout the county. GIS was presented as a service that provided an enter- prise -wide platform with access to centralized data for all departments. In 2000, Carver County's Information Technology De- partment began a push to expand GIS technology to all departments. A few county departments had changes in leadership that opened up new opportunities to invest in GIS technology, resulting in more top-down support for the technology in those departments. The need to collect data on county assets and public infrastructure mainte- nance led to new work assignments. The introduction of Esri's ArcGIS Online — a collaborative web GIS that allows users to create and share maps, scenes, apps, layers, ana- lytics, and data ---- in 2009 greatly enhanced the expansion effort. One of the first tasks undertaken at this stage was to take existing county technology, processes, and procedures and make them mobile. This enabled county field crews to use new applications on smartphones and tablets, No longer were data collected in the field on paper forms and later loaded into a spreadsheet for analysis; now they were collected directly into a database, and new data layers were created. Data were automatically synced in the system, eliminating most paperwork and achieving a higher degree of accuracy. The Growth of New Users The growth in county personnel using GIS has been extremely rapid: from 15 desktop users before the intro- duction of ArcGIS Online to 175 active accounts after implementation. Several county departments — Land Man- agement, Planning and Water Management, Environmental Services, Emergency Management, Public Works, Sheriff, Property and Financial Services, Information Technology, The county has benefited from up-to-date locational data for county assets and infrastructure. Health and Human Services, Facilities, and Employee Relations —depend on maps for their work, for example; Public Works uses maps for establishing infrastructure maintenance plans. Among these departments are about thirty people who are classified as power users and serve as resident GIS experts within their own departments. Why has this interest and growth in GIS occurred? County staff made a conscious effort to assess the business needs of departments and brainstorm how GIS applications could help meet those needs. As employees saw how others were using GIS, they began coming up with their own ideas for using GIS in their departments. Esri Smart Communities Case Study Series County Applications A high demand for data collection existed among several county departments. As personnel recognized the value of GIS technology for managing workloads, they advocated for access to that technology for their departments. The Assessor's Office was among the first departments to embrace GIS. The manual processes that the department had been using to store property photos, taxation data, and evaluation data were quite lengthy and time-consum- ing. The new automated business processes enabled staff to upload data into GIS while they were in the field, thus improving their efficiency and freeing up time for other activities, $113,203 Pictured is a dashboard for right-of-way acquisition projects. Water management data collection was another priori- ty area. The county's Planning and Water Management Department has implemented six applications, all collector driven, for improved water management. Having locational data on such items as septic systems, sewer lines, and soil borings has been especially helpful from an environmental management perspective. Knowing what is underground helps the county stay compliant with state regulations; it also speeds up the permitting process for homeowners and developers. Waving the GIS database helps protect the county in case issues ever go to court. It is also helpful for simply looking up data — for example, a recent water quality analysis. Public Works has become one of the heaviest users of GIS technology. Significant organizational changes in the department have created an environment where GIS use has expanded rapidly. First, a progressive director who was visually oriented and interested in using maps to communicate county plans took over department leadership, Then, staffing changes in 2010 dramatically changed the culture of Public Works: remaining staff had a vested interest in technology to improve business processes and overall efficiency. This was followed by a reorganization that created two dedicated GIS positions within the department. Since then, Public Works has leveraged GIS technology to better maintain the county's existing infrastructure, using it to accomplish tradition- al asset management tasks, document the location of publicly owned assets around the county, and establish a maintenance program for those assets. Some of the GIS projects undertaken by Public Works help manage work. The department uses Web AppBuilder, Collector, and Operations Dashboard to plan, schedule, and manage traffic counts, Public Lana Survey System monument maintenance, and MS4 (storm sewer) com- pliance inspections. Mobile GIS also supported a curve study focused on sign placement; after the study identi- fied unnecessary curve signs, many signs were removed and a significant savings was realized. When the county needed to replace 1,200 signs that were widely dispersed, it contracted with a sign installer and used maps and apps to efficiently track the installer's work progress, inspect the installer's work, and ensure that postinstallation data main- tenance was completed. The Right -of -Way Department implemented an Opera- tions Dashboard solution as a way to track and report the status of acquisition projects to upper management and showcase staff performance. Highway prioritization has been another important area of GIS. The county has used GIS to capture roadway charac- teristics, which, coupled with performance measures such as safety, congestion, geometric deficiencies, and project readiness, help to establish priorities forfuture roadway projects and secure sufficient funding. Field crews can enter locational data directly into the county's GIs system while in the field rather than having to wait until they return to the office. Esri Smart Communities Case study Series The Sheriff's Office is increasingly turning to GIS technol- ogy for its work. For example, staff wanted an application that would provide them with easy access to crime maps and a dashboard to track what crimes were taking place across the county. The Sheriff's Office is finding new ways to use GIs in analyzing crime data in dashboards. Data sharing among county departments has also been growing over time; for example, the Sheriffs Office has accessed data on licenses for day care providers and matched those data with the location of sex offenders. Another county software system that has been integrated with GIS is a customer relationship management (CRM) system maintained by the departments of Land Manage- ment, Environmental Services, and Planning and Water Management. The CRM system is used to track progress with permits issued in the county. The Assessor's Office links GIS parcel data layers with assessment data for calculating property values. And once again, people are always thinking of different applications that could be developed. A new dashboard enables the county to share taxation impacts on proper- ties with elected officials and other community leaders. Public Works is working on building dashboards to share performance metrics with management staff. Regional Collaboration Since geographic data do not end at governmental boundaries, GIS technology lends itself well to regional collaboration. The more geospatial data that are collected and available for analysis, the greater the understanding of how decisions can affect a region. In 2009, county leaders decided to invest in a small government enterprise agreement (EA) to expand GIS further across departments without the annual budget constraints. Shortly after the EA went into effect, Esri introduced ArcGIS Online as a complimentary service to small local governments with an EA. The EA enabled the county to expand access to GIS without having to manage more desktop licenses. The county received 250 accounts for ArcGIS Online, more than enough to provide county personnel as well as city staff with access to the software. One outcome of more widely available GIS technology is the opportunity for the county to offer ArcGIS Online to the cities. Six cities — Chaska (population 25,000), Chanhassen (population 24,000), Waconia (population 11,500), Victoria (population 8,500), Watertown (popu- lation 4,200), and Norwood Young America (population 3,700) — took advantage of the opportunity and invested in the new technology. Without any major limitations on who could or couldn't have a user license, the county was able to make GIS technology available to nearly everyone who needed or wanted the software, This arrangement was especially beneficial for the cities, which had limited access to desktop and web -based GIS and could not have otherwise taken advantage of the technology. City Applications The collaborative environment that exists between the county and the cities has benefited all the jurfsdictions involved. As already noted, it has provided cities with GIS expertise and other resources they couldn't afford on their own. Allison Kampbell, a GIS specialist whose position is shared between the county and the cities, notes, "It's just a matter of identifying the right person in each city who can help others understand the benefits of GIS." Utility data proved to be a driving force in the expansion of GIS technology to cities. Data updates were done once a year, but field crews wanted more up-to-date data. GPS units can capture utility data with one- to three-foot accu- racy. Moreover, engineers and consultants are not needed to maintain city data at this stage as city staff have been trained to do so. Having easy access to and the ability to maintain these data on their own is a huge asset for cities. The ability to collect housing data has simplified process- es for the city of Waconia. Waconia has rental housing it must manage. Converting the workflow to an in-house digital system has enabled the city to more efficiently maintain its housing data. In Norwood Young America, snow -plowing records that used to be kept in a spread- sheet are now kept in GIS. Esri Smart Communities Case Study 5eries The county has the server capacity and space available to function as a data repository for its cities. When the county installed a new fiber line in 2013, it enabled the cities to directly access their data as well as whatever live county data they might need.The intention is to move away from static maps by maintaining live data. While paper maps serve a purpose, the county has become much more dependent on technological applications. Training and Peer -to -Peer Sharing Despite the large growth in GIS users, the need for for- mal training has been minimal. Most training is handled internally within departments and is primarily focused on teaching staff how to collect data for the technology. For this purpose, the county and cities have taken advantage of both online courses offered by Esri and classroom training available locally. The county holds a GIS users'group meeting every quarter. The cities hold their own separate quarterly meetings as well. During these meetings, power users demonstrate new apps they have developed and distribute help sheets for users to reference later on if they need additional information. For ex- ample, a power user in Water Management built a story map that other departments can adapt for their own purposes. During monthly GIs team meetings, staff share the apps they've developed for their work. Public Applications Development and GIS Supervisor Peter Henschel estimates that 80 percent of the GIs applications developed are for internal use, with the remaining 20 percent available for external or public purposes. The most popular external- ly facing app is the county's public property map, which receives 13,000 visits a month. Story maps are another recent innovation; along with maps, citizens can access "The sky is the limit with what GIS can offer," says GIS Analyst Nate Christ. text, images, and multimedia content to tell a story. The Planning and Water Management Department has used this tool to convey information on water quality in county lakes and rivers, while the county is exploring new ways of making water quality data available to the public. There are increasingly more applications being developed for the public. An open data portal, for instance, enables citizens to access county property and recreation data. The cities especially like to have "live" applications for zon- ing, trails, shopping, and electric service providers. Benefits The day-to-day use of GIS applications can be seen in nearly every department. While the county has not con- ducted any formal return -on -investment assessment, the Assessor's Office reports that, despite a doubling in the number of land parcels in the county as well as an increase in the number of inspections that must be per- formed, it has not created any new staff positions in the past ten years. Essentially, every system that was paper based is now handled digitally. To recap, the county has identified the following benefits as a result of its widespread adoption of GIS: • There is a greater sharing of data between the county and the cities. ILI i *� �- �' Residents in Carver County have easy access to maps of recreational trails throughout the county. Esri Smart Communities Case Study Series The water Management and Planning Department was among the first to use mobfle apps For collecting water quality data while in the field. • The cities have the benefit of an enterprise architec- ture that they would not be able to afford on their own. • The cities pay a portion of the GIs system costs based on their population size, which amounts to sig- nificantly less than paying for a desktop system. • New applications that can be used with a tablet or smartphone provide crews with instant access to data while they are working in the field. Challenges While there are benefits to being at the forefront of using new technology, early adoption of any new technology comes with challenges — gaps and limitations that require troubleshooting to resolve. In that sense, there have been challenges to opening up GIS technology to the whole county organization. Developing the system architecture in order to integrate different software solutions with GES took time. This challenge occurs every time an application is upgraded. "We've generated support up and down the line for US," says Peter Henschel. One of the primary challenges has been managing the rate of expansion. The growth and demand for services can outpace available staff time, budget, and the ability to delivery services and provide necessary system secu- rity. Moreover, not all GIs users have technical know-how. Thus, with limited technical staff, there can be challenges in both managing and maintaining the system. Advice Support from top leadership is crucial, In Carver County, leaders have been shown the value of GIS for manage- ment and administrative purposes. The GIS Department has made every effort to help county personnel under- stand that the technology is not just for making maps. In fact, only 5 percent of what it does is making maps. Methodology The author conducted individual interviews with person- nel from Carver County, Minnesota. A standardize set of interview questions guided the discussions. The author used a conversational interviewing technique to more fully explore the participants'experiences and perceptions of the GIS program. The interview was tape recorded and reviewed in compiling notes for this report. The author sought written permission prior to attributing quotes to the individuals interviewed. The author wishes to thank the Carver County for taking the time to discuss its GIS program. Its contribution to the study was invaluable. Study Participants Peter Henschel, Development & GIs Supervisor Perry Clark, Asset Manager – Public Works Nate Christ, GIs Analyst Charlie Sawdey, Water Resources Program Specialist, Planning & Water Management Nate Kabat, Planner, Planning and Water Management Allison Kampbeli, GIS Specialist Acknowledgment: ICMA would like to thank Carver County, Minnesota, for its contribution of photographs and other graphics used in this case study. Esri Smart Communities Case Study Series About Esri Esri inspires and enables people to make a positive impact on the future through a deeper geographic understanding of the changing world around them. Our technology enables organizations to create responsible and sustainable solutions to problems at local and global scales. At Esri, we believe that geography is at the heart of a more resilient and sustainable future. Governments, industry leaders, academics, and nongovernmental organizations trust us to connect them with the analytic knowledge they need to make the critical decisions that shape the planet. esri.com/smartcommunities About ICMA ICMA, the International City/County Management Association, advances professional local government worldwide. The organization's mission is to create excellence in local governance by developing and fostering professional management to build better communities. ICMA identifies leading practices to address the needs of local governments and professionals serving communities globally. We provide services, research, publications, data and information, peer and results -oriented assistance, and training and professional development to thousands of city, town, and county leaders and other individuals and organizations throughout the world. The management decisions made by ICMA`s members affect millions of people living in thousands of communities, ranging in size from small towns to large metropolitan areas. www.icma.org/localgovtechalliance 151750