quantifying the value of research in indiana tommy nantung indot research and development division...
TRANSCRIPT
![Page 1: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/1.jpg)
Quantifying the Value of Research in Indiana
Tommy NantungINDOT Research and Development Division
AASHTO RAC Annual MeetingJuly 29, 2015
Portland, Oregon
![Page 2: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/2.jpg)
INDOT/JTRP Research Program
Three primary responsibilities: Conduct, oversee, implement and partner in
effective research that benefits our customers (currently 92 active research projects and 185 implementation projects, monitored through SmartSheet).
Conduct and oversee specialized testing programs for INDOT (e.g. Skid Accident Reduction Program, Deflection Program, Accelerated Testing Program).
Assist in technology development, identification and transfer (emerging technology with a 10-year future perspective).
![Page 3: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/3.jpg)
Quantifiable savings Projects selected where costs and
benefits can be reasonably quantified
Individual projects selected represent different research areas
Analysis based on Engineering economic theory
Methodology 3% inflation and 5% discount rates
used
Benefit/Cost Ratio Methodology
3
![Page 4: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/4.jpg)
Calculation of Benefits
![Page 5: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/5.jpg)
Benefits Calculation
![Page 6: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/6.jpg)
Pavement B/C Example Cost of research (Present Value) = $88,942 Yearly use of Reclaimed Asphalt = 3.5 Million Tons Savings = $0.13/ton/1% re-use (based on
contract price) Usage for Asphalt base = 20% Savings per year (Annual) = $9.1M
B/C = $113.4M/88,942 = 1,275 : 1
MMMP 4,113$46221.121.9$)05.01(05.0
1)05.01(1.9$
20
20
![Page 7: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/7.jpg)
In 2003 show benefit-cost (based on projects, ratios ranging from as high as 220 to 3 to 1.
Previous B/C in 1999 and 2001 yielded ratios of 35 to 1 and 53 to 1, respectively.
The B/C is based on either a direct replacement cost that was developed or costs and benefits that are expected during the life of a material, component, or system.
Benefit/Cost Analysis Summary
7
![Page 8: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/8.jpg)
Other Benefits
Improved specifications and testing procedures
Better methods resulting in improved material performance
Cost-effective policy and procedures Safer highways and work zones New technologies and processes that
improve productivity Environmentally-friendly solutions to
Indiana’s waste problems
8
![Page 9: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/9.jpg)
Spreadsheet Program created by INDOT Central Office (no hand calculations)
Calculate the value of return on investment in research and development.
Investment are calculated by the schedule and amount of free cash returned to investor.
Costs to conduct R&D are all inclusive and comprise direct expenditures as well as indirect costs.
Modified Rates-of-Return (MIRR)
![Page 10: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/10.jpg)
Modified Rates-of-Return (MIRR) Benefits can inure to INDOT in the
form of: Improved business practices
Reduce labor, provide savings in costs of material or other supplies and expenses, or reduce the time to develop and construct a project.
Other "soft" benefits can be realized by reducing INDOT's exposure to potential liabilities, improving safety, or complying with new laws and regulations.
Care must be exercised when attempting to place a value on these soft benefits.
![Page 11: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/11.jpg)
Modified Rates-of-Return (MIRR) Methodology
Evaluation period is to begin at the start of the project and extend 10 years from the date of the findings are implemented
INDOT’s Hurdle Rate represents the risk premium it assigns to capital investments
The MIRR represents the internal rate of return for a series of periodic cash flows, considering
The cost of funds used to invest in the project The interest which could be earned on re-investment of
free cash generated. Viable investment is if the MIRR exceeds the
Hurdle Rate
![Page 12: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/12.jpg)
Modified Rates-of-Return (MIRR)
![Page 13: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/13.jpg)
Modified Rates-of-Return (MIRR)
![Page 14: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/14.jpg)
Demonstrating implementation & return on investment is good, but demonstrating IMPACT is even more important
IMPACT can be measured in multiple different ways
Having a diverse portfolio of IMPACT messages is important
It is important to have a variety of traditional and nontraditional media to communicate IMPACT
New Way to Show Benefits
![Page 15: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/15.jpg)
One size does not fit all Metrics include:
Mapping into Executive Staff priorities Saving Dollars Prioritizing Capital Program Safety Outcome Assessment Extending Infrastructure Life Leveraging University Resources Environmental impact National Recognition of Impact
Measuring IMPACT
![Page 16: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/16.jpg)
Technical Reports Electronic repository (e‐Pubs) Print on Demand e‐Books
Posters Pocket Portfolios Electronic Media: Website,
Twitter and Flickr, Newsletters Video Abstracts Conferences, Presentations and
Workshops
Communicating and Dissemination
![Page 17: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/17.jpg)
Communicating and Dissemination
![Page 18: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/18.jpg)
Governor’s Award
![Page 19: Quantifying the Value of Research in Indiana Tommy Nantung INDOT Research and Development Division AASHTO RAC Annual Meeting July 29, 2015 Portland, Oregon](https://reader036.vdocuments.site/reader036/viewer/2022062309/5697bff91a28abf838cbfed6/html5/thumbnails/19.jpg)
Conclusions
Message is very important Show case past efforts Implement new communication
initiatives to support engagement Implement series of case studies
illustrating blended communications tools
Maintain dialog