Working with the Center for Technology in Government (CTG), SAP is spearheading an initiative to develop "Public ROI" – a method for defining, measuring, and communicating the economic, social, and political returns of government IT programs.

Public-sector ROI measurements traditionally involve cost avoidance or cost-benefit analysis. But governments are nonprofit organizations, and financial ROI measurements don't present a full picture of the value of government programs and services. What's needed is an ROI approach that includes the social and political value of IT investments. SAP refers to this combination of financial, social, and political measurements as Public ROI.

According to a recent study by The Economist, more than two-thirds of public-sector executives worldwide will measure and report on social ROI during the next five years. This confirms a global trend for governments to show effectiveness across multiple dimensions of ROI, including how IT affects the social and political aspects of government programs.

Social and political ROI includes the qualitative, intangible benefits of IT expenditures. For example, the Western Australia Police service used new IT solutions to reduce administrative inefficiencies and paperwork. As a result, police officers could spend more time fulfilling their core mission to protect citizens. Thus, IT solutions not only had a financial impact but also helped reallocate resources in a way that had social and political value.

Improving ROI Measurements

SAP's Public ROI initiative brings together SAP customers, partners, and public-sector experts such as CTG and the John F. Kennedy School of Government. The ongoing effort will develop a universally accepted, nonproprietary method of public-sector ROI analysis that incorporates financial, social, and political outcomes of government programs. It will include process analysis and data-driven assessments of how IT solutions add overall value to government organizations. After the Public ROI methodology is defined, CTG will publish a white paper on its findings, along with case studies in which real-world Public ROI benefits have been achieved.

For more about SAP's Public ROI initiative, check out the following information:

• "Adaptability and Relevance of 'Public ROI'" PDF, 958 KB) – Examine this cross section of SAP's government client success stories highlighting how citizens, businesses, employees, and elected officials are benefiting from SAP solutions and services – reflecting public ROI benefits that resonate worldwide.
• SAP Spearheads "Public ROI" Initiative to Define Value of IT for Public Sector Organizations (May 18, 2005)
• CTG Public ROI project overview, press release and press coverage
• "Business 2010: The Public Sector" (PDF, 151 KB) – This report from The Economist discusses the convergence of forces that will spur reform in public-sector organizations during the next five years. Log-in required.