May 2012: Post Conference Musings and « The Number »
Measuring Broadband’s Impacts and ROI
What Does Broadband Do and Don’t Make Me Think About It
by Doug Adams
It was one of those conversations you can only have at a conference, when you are exhausted after a long day, and your edit buttons are turned off. Michael Curri and I were dining with a community broadband consultant from Georgia who wanted to know, specifically, how to sell SNG’s services, designed to drive utilization and economic advancement, into her communities.
Now she wasn’t asking because she doesn’t get « it. » She understands the power of utilization and not just the power of availability. She gets what SNG does with regards to helping communities drive said utilization. What she didn’t get after a long day of sessions and networking… is how to make it simple for communities to understand. More specifically, mayors, governors, chambers of commerce, etc.
So I was reminded of a book I read when looking into building « usable » websites called « Don’t Make Me Think. » What does website usability have to do with this situation? Everything. After all, when designing a website – we often design it for ourselves… it makes sense to us, so it must make sense to everyone else.
It is the same with broadband. The benefits of broadband and everything that come with it are typically at our core – it is second nature. We understand the benefits that this platform for innovation provides, both economic and social. But to make it tangible, understandable, usable to most people – including most people in government – let’s answer one question. It’s a business question. What is my ROI?
So how do we make broadband’s benefits tangible? We show a track record of results. By specifically looking at the initiatives we have with Virginia, we’re able to uncover that…
The economic benefits and return on investment from driving the implementation and utilization of e-solutions are clear and compelling. The impacts vary by sector, but to examine just one – Professional and Technical Services (i.e. engineers, architects, consultants) with less than 20 employees. Within this sector, SNG sees the economic development impact of utilization to be over 26 times return to GDP. And so, Mr. Mayor… for every dollar you spend with SNG’s programs to drive utilization, you receive $2.80 in tax revenues times return to taxes. Learn More>>
Even for one sector and a sizeable investment, the economic impact ratios are very compelling and well worth the investment. The actual numbers will vary, but the economic case for making such investments is clear.
So while there is not « one number, » there is definitely a significant ROI multiplier – drop me an email and we’d be happy to run some scenarios for your community/region.
Consider a New Model
Broadband Program Management… What’s the Best Way?
by Michael Curri
When administering a new program to deploy broadband and stimulate adoption, governments traditionally ramp-up their internal resources or hire consultants.
But there’s an alternative – a model that leverages existing local resources and links with local stakeholders who have a vested interest in the project outcome of economic development through broadband.
The downsides for the traditional models are apparent. Ramping-up internal staff requires hiring and getting everyone up to speed on how to administer the program. And once the program ends, the staff you worked so hard to find and train will leave. Bad enough that you lose good people you’ve invested in, but staff may be looking for a job during their time with you, looking for a better deal to move on to a permanent position. If this happens, you’re left to restart – and you lose ‘history’ before projects have been completed before they take-on their new job.
For governments that use consulting support, the hiring process can be much shorter. But there is still the getting ‘up-to-speed’ time required – and it can be extensive when junior consultants are being used. Although the cost of hiring such ongoing consulting support can be high, there are opportunities to negotiate a better rate with the consulting firm as they are acquiring broadband program administration skills and experience that can be redeployed in other jurisdictions.
A third way – the way we would advocate – involves a model where government delegates certain elements of administration to stakeholders that are local to a local broadband project. Local economic development agencies are prime candidates as they:
- Are aligned with the economic development goals of broadband projects – this could have the ancillary benefit of transforming how economic development agencies approach economic development from traditional ‘smoke stack chasing’ to economic development through broadband
- Have existing local knowledge and relationships that can be leveraged – especially where they can identify and broker new partnerships that are mutually beneficial, increasing the sustainability of the broadband project
- Can be more cost-effective in overseeing projects as they are local and as they already have some administrative capacity – more regular and spot visits are possible because they’re local, plus purchases that don’t align with the needs of the community / region are more likely to be identified right away
This type of model enables the government focus on strategic and key administrative issues, while leveraging an existing network of resources that is aligned with the sustainability of the broadband projects they would administer. And when the government programming sunsets, those local economic development agencies remain as a support system to broadband projects as needed.
Post Conference Thoughts
After spending a few days in both Dallas and Washington DC over the past month, it is apparent that the biggest challenge facing broadband projects in every U.S. region is sustainability, and key to that of course is utilization.
As projects are finishing building their broadband infrastructure, now more than ever is the time for SNG to help meet the challenges of going from build to use.
Unfortunately, we have heard from way too many regions who tell us their adoption rates are low and the networks are not – and will not be – sustainable without major uptake.
Low adoption rates (i.e. 20%) cannot sustain the ongoing operations of a broadband network where the business case requires 40-50% uptake.
As your needs increase to drive uptake, please make sure you reach out to SNG as we have introduced some So they’re now beginning to focus on how to increase adoption rates and they’re realizing that they need to drive utilization with end-users – our focus and strength as we’ve again demonstrated with the new DEi Calculator.
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Over the last five years, job creation enabled by the Internet has doubled.