The acquisition of right-of-way for a transportation project is a critical path element to successfully letting the construction phase of a transportation project on-time. Public sector real estate professionals are continuously being challenged to manage this process more efficiently and effectively. The development of an electronic right-of-way management system is one potential strategy for assisting state departments of transportation (state DOTs) with improving the overall efficiency and effectiveness of the right-of-way management process. While the implementation of a modern electronic data record-keeping system has the potential to provide a number of benefits for a state DOT, implementation of an electronic system can be costly and time consuming. In addition, it requires an ongoing investment to operate and maintain the new system.
Recognizing that implementing an electronic right-of-way management system can be potentially costly and complex, the Federal Highway Administration Office of Real Estate Services (FHWA HEPR) retained Parsons Brinckerhoff to develop tangible, easily understandable documentation for transportation professionals in public agencies to use in supporting the potential implementation of an electronic right-of-way information management system. The goal of this research project is to compare and contrast the relative strengths and challenges associated with using both an electronic system and a "paper" system and then to identify and document the business case associated with the implementation of an electronic system.
For the purpose of this research project, an integrated right-of-way management system is assumed to include a system which supports the full lifecycle of the acquisition process including tracking right-of-way phase project information; identification of parcels which are candidates for acquisition; appraisal; negotiation; condemnation processes if required; business relocation services; and residential relocation services. A right-of-way management system, as envisioned under this research project, also supports tracking of required utility relocation activities on a project and various property management activities that may be performed by an agency.
Likewise, a right-of-way management system will include integrated workflows which automatically route or move a task to be completed from one step or user to another within the system based on predefined business rules. The system also provides the capability to generate various required forms and letters within the system based on business rules. In addition, the right-of-way system is also integrated with an agency's financial management system to reduce the need for redundant data entry and potentially with other agency systems such as a document management system.
This report represents a synthesis of findings from the various tasks performed during the project. A brief summary of the major tasks/activities performed during the project is provided below:
An initial literature review of various agencies' practices revealed that the level of automation and the use of systems varies widely from largely paper-based systems to systems in which both internal and external users can access and show information on a map. The technologies used for the systems also vary from in-house systems to commercially available systems. Agencies generally do not have a well-documented feasibility analysis and have not documented actual benefits. Costs for some of the implementations are easily available, but most were not available through the review of existing literature.
Agencies tend to move from paper-based systems to stand-alone tools or ad-hoc solutions, and then later to a web-based system. One of the focus areas is converting existing paper-based right-of-way plans to electronic plans and storing them in a robust document management system. Such systems allow for easy access to plans that can otherwise be difficult to catalog, maintain and retrieve. Another area of recent focus is integrating right-of-way information with an agency's GIS.
The research team sent an initial survey to 114 individuals across 62 agencies, which included 50 state DOTs and 12 LPAs that was designed to identify agencies that are either using electronic right-of-way management systems or paper-based systems on a daily basis. The team received responses from a total of 29 individuals spanning across 24 agencies. Twenty-one of the responses were received from state DOTs while the other three were from LPAs.
It is important to note that many agencies had difficulty reporting these types of numbers, as cost data either has not been documented or is not readily available.
Nine agencies were selected to conduct follow-up interviews with; these agencies were asked to provide basic information about their system, including the business functions and processes supported by the system, and details about the implementation process. Detailed case study write-ups for each agency are included in Appendix C.
The information gathered from the literature search and case studies, combined with the research team's prior experience with implementing major information systems in state departments of transportation was used to develop a potential business case for establishing a case for implementing a new right-of-way management system for a prototypical medium-sized agency for two development alternatives:
The initial cost to implement the COTS solution defined as the project cost and the first year of operations is estimated to be $4.3 million. The seven-year total cost of ownership is estimated to be $6.78 million.
The initial cost to build and implement a custom solution is estimated to be $4.6 million. The seven-year total cost of ownership is $5.9 million. The total cost of ownership is very similar to the total cost of ownership of the COTS alternative since while it costs more to develop the custom solution there are no reoccurring software licensing costs.
The research team identified potential tangible benefits of approximately $3 million per year from an electronic right-of-way-management system when fully implemented for the prototypical medium-sized transportation agency. Potential tangible benefits included reinvestment opportunities associated with the timely letting of transportation projects which allow projects to be let within the original planned construction budget; reduced parcel acquisition costs; reduced relocation program costs; reduced administrative costs to deliver the right-of-way program; and savings in the cost to perform property management activities.
Based on these anticipated benefit streams, the research team prepared a return on investment analysis which assumed the potential benefits from the new system were achieved in a staged manner, with full benefits achieved beginning in Year Six after implementation. For a system developed under the COTS alternative, there is a cumulative net benefit of $1.58 million with a payback early in Year 7 or four years after the initial system implementation is complete. For the custom development alternative, there is a total cumulative net benefit of $2.5 million with a payback in Year 7 or four years after the initial system implementation is complete.
In addition to the quantified business case, the research team also identified a number of intangible benefits of a new right-of-way management system. Examples of these intangible benefits include streamlining of business processes through automated workflows; reducing or eliminating redundant entry into data systems; providing improved access to information for management decision-making; implementation of a solution which utilizes current state of the practice technologies and as a result is easier to maintain and enhance; and facilitating knowledge transfer and training of new employees or consultants through a more intuitive and user-friendly system.
The Parsons Brinckerhoff research team established a list of potential barriers that could affect a state DOT's ability to implement or attempt to implement an electronic right-of-way management system and proposed approaches for addressing and overcoming these barriers. Examples of some of the potential risks/barriers related to the implementation of a new right of way management system include difficulty in achieving and maintaining executive sponsorship; changes in agency management or shifting agency priorities; organizational resistance to implementing a new system; limitations in the overall usability and adaptability of the new system; inability to control/manage project scope; and technical complexities related to interfacing with other agency systems or changes required to these other systems.
Implementation of an electronic right-of-way management system can clearly assist a state DOT or other public sector real estate organization to improve the overall efficiency and effectiveness of their operations. A state DOT right-of-way business unit which is currently not utilizing an electronic right-of-way system should seriously consider investing in a modern electronic system.
Implementation of a new electronic right-of-way management system represents a significant investment for a public sector real estate organization. However, in spite of the significant upfront investment required to implement a new system, the research team's analysis showed for a hypothetical medium sized state DOT that an electronic right-of-way management system has a positive return on investment. In addition, implementation of an electronic right-of-way management system can provide numerous intangible benefits which contribute to improved efficiency and effectiveness of right-of-way operations, enhanced transparency and significantly improved access to information.
