A MODEL FOR THE ECONOMIC EVALUATION AND MANAGEMENT OF REMOTE SENSING OPERATIONS. 
Andrew Finegan, Nicholas Rollings and Greg Ellis 
RMIT Centre for Remote Sensing 
Dept. of Land Information 
RMIT 
GPO Box 2476V 
Melbourne 3001. 
Australia 
Commission VI 
Abstract: 
This paper presents a model for the economic evaluation of remote sensing operations. The principles of 
project management are used to provide a practical and efficient structure to this process. 
The model is an outcome of an Australian study of the commercialisation of remote sensing technology. The 
study identified that an important facet of the operational success of new technologies is the use of 
cost-benefit analysis for project monitoring and control. 
The paper concludes that the use of project management practice is a viable tool in establishing standards 
for the operational planning of remote sensing applications. 
Key Words: Business Management, Economic, Remote Sensing, Remote Sensing Applications, Standards. 
INTRODUCTION 
This paper presents a model that has been developed 
to assist in the economic evaluation of remote 
sensing operations. The established principles of 
project management provide a practical and 
efficient framework for this modelling process. 
The model has been developed as part of an 
Australian study of the commercialisation of remote 
sensing technology. The study identified that one 
of the important factors that lead to the 
operational success of new technologies is the use 
of cost-benefit analysis for project monitoring and 
control (Finegan and Ellis: 1991, 1992). 
THE BACKGROUND TO THE PROBLEM 
An increasing number of remote sensing 
applications, undertaken by Australian agencies, 
are now operational projects. This transition from 
the research and development phase must be 
accompanied by the development and use of 
appropriate technology management standards. The 
"real world fact of life" is that a new technology 
will only be adopted into an operational project if 
it can be shown to be cost effective. Not only must 
the technology be cost effective in fact, it must 
be shown to be cost effective. Failure on the part 
of remote sensing technologists to monitor and 
control both the costs and benefits associated with 
a "start-up" operational project can lead to 
management resistance to undertaking future 
projects using that technology. 
A number of studies have been undertaken concerning 
the economic factors associated with remote sensing 
technology transfer. The opportunity costs of 
remote sensing is discussed by Paul and Wigton 
(1984), and the economic effectiveness and 
performance of 10 remote sensing projects is 
analysed by Epp and Whiting (1989). The benefits to 
society of industry use of remotely sensed data is 
presented by Aronoff (1985) and Morain (1985) 
discusses small business expectations regarding the 
performance, duration and returns of projects that 
use remotely sensed data. These studies all 
recognise the need for economic analysis, but they 
do not provide or suggest a framework model that 
would assist a project manager in developing a cost 
benefit analysis of an operational project that 
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uses remotely sensed data. 
There is now a real need to quantify the 
operational capability of remote sensing technology 
to provide more comprehensive, timely, and less 
costly information and analysis than through the 
use of traditional methods. The high direct capital 
cost of remote sensing equipment, data and training 
make it imperative that operational projects are 
shown to produce both direct and indirect benefits 
that are cost effective. Project success must be 
measurable. 
METHODOLOGY USED 
The success of a project may be measured by the 
application of proven project management practice. 
In this study, the project management activities 
for the development of management information 
systems (Murdick and Munson, 1986: 550-557) are 
used as guide-lines. A successful project is 
defined as one which produces specified results in 
a prescribed time. Effective project planning and 
control is achieved by: 
Making sure that objectives are established. 
Making sure that key tasks are identified. 
Providing a basis for control of time, cost, 
and performance. 
Establishing precedence relationships among 
tasks. 
Establishing costs and preparing budgets 
related to time and performance of tasks. 
Organising and assigning personnel to ensure 
that tasks will be performed. 
The two detailed processes of project planning and 
project control are critical to the success of a 
project. 
The key steps in these processes are: 
Project Planning: 
1) Establish the project objectives. 
2) Define the project tasks. 
3) Plan the logical development of sequential and 
concurrent tasks and task activities. 
4) Schedule the work as required by management- 
established end dates and activity-network 
constraints (from 3). 
5) Estimate labour, equipment, and other costs for