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