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Table 3. Estimated cost and benefit data from 8 state-level e-government initiatives
state
costs
Beneits
B/cr
roI%
nPV
Breakeven
roa
KY
$138,332
$24,740,000
179:1
17,785%
$21,283,919
0 Mos.
$24,632,267
fL
$211,200
$23,299,995
110:1
10,932%
$19,964,157
1 Mos.
$23,135,514
nc
$640,000
$20,000,000
31:1
3,025%
$16,677,907
2 Mos.
$19,501,956
WI
$400,000
$7,500,000
19:1
1,775%
$6,094,215
4 Mos.
$7,189,456
Dc
$1,000,000
$9,000,000
9:1
800%
$6,793,058
9 Mos.
$8,234,368
nm
$167,550
$1,182,200
7:1
606%
$856,111
12 Mos.
$1,055,276
Ia
$277,000
$1,320,000
5:1
377%
$865,982
19 Mos.
$1,116,054
ID
$1,770,000
$2,560,000
1:1
45%
$446,692
238 Mos.
$1,533,423
average
$575,510
$11,200,274
45:1
4,418%
$9,122,755
36 Mos.
$10,799,789
The return on investment data in Table 3 were
normalized and illustrated graphically in Figure
2. Return on investment is the simple ratio of
benefits, less the costs of course, to the costs
themselves. That is, benefits less the costs are the
numerator and costs are the denominator. Return
on investment is large if there were more benefits
than costs. As shown in Figure 2, Kentucky had
very low costs, high benefits, and thus very high
return on investment. Idaho, on the other hand,
had very high costs, low benefits, and little return
on investment. This is seen by the increasing costs
and decreasing return on investment from left to
right. Some will assert that net present value is a
conservative, smaller, and more realistic estimate
of return on investment. However, Table 3 shows
that measures such as real options improve the
outlook substantially.
The benefit equation in Figure 3 was derived
from actual cost and benefit data from 16 state-
Figure 2. Estimated costs and return on investment of 8 state-level e-government initiatives
1.00
0.80
0.60
Costs
ROI%
0.40
0.20
0.00
KY
FL
NC
WI
DC
NM
IA
ID
Figure 3. Log-linear benefit model derived from 16 state-level e-government initiatives
Costs
Benefits
=
5853559
.
75792164
×
1
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