ARCAS (Analysis of return on investment and administrative costs) (ARCAS)

Currently, the increasing demand for expenditure rationalization, more transparency and reduction of the administrative burdens to the citizen, make clear the need to focus government efforts on projects and initiatives that provide greater benefit to society.

To achieve this, it is necessary to have an objective measurement tool to select and prioritize those future projects that give greater savings to citizens and a public web portal to increase transparency showing the benefits from already developed projects, accomplishing this way the crucial requirement of accountability that the Administration has for its taxpayers.

Getting an accurate estimation of the costs and savings associated with the shift from paper-based to computer-based procedures is a great advance, thanks to the evaluation of the profitability of the various processes from the perspective from both citizens and businesses. In addition to this, the calculation of the ROI (Return on Investment) of new projects to develop will help in the decision of whether the investment in information technology is justified or not.

In this context, ARCAS is born as an application that serves as an instrument of transparency to the citizen, optimizes the public budget and generates savings to both citizens and businesses. It makes possible to prioritize projects depending on the benefits they generate and on the improvement of the quality of life.

Arcas: savings,cost and ROI calculation

ARCAS is based on the principles proposed in the Programme of Action of the European Commission to reduce administrative burdens and is part of the SCM model (Standard Cost Model) of the European Union and the Better Regulation initiative.

Policy Context

ARCAS main objectives are:

- Transparency and accountability to citizens, through the measurement and publication of the savings the telematics processing of the various administrative procedures generate to citizens and businesses.

- Generation of savings and benefits for citizens and businesses. In order to improve the quality of life of citizens and the competitiveness of companies ARCAS allows to prioritize the projects to tackle in the Administration, by analysing their Return on Investment. ARCAS generates a complete graphic report before the development of any ICT Project describing.

ARCAS dashboard

In this context, ARCAS is born as an application to serve as an instrument of transparency to the citizen, optimizes the public budget and generates savings to both citizens and businesses. It makes possible to prioritize projects depending on the benefits they generate and on the improvement of the quality of life.

Description of target users and groups

Citizens, enterprises and other Spanish Ministries and organism.

There is a working group to to achieve consensus among Spanish Ministries, in order to create a Spanish version of the Saving Estimation Methodology that would be suitable for all them. Also, an adaptation of ARCAS would be made for adapting it to the new methodology. Thanks to this, it would be possible to provide a tool to the other Ministeries for them to calculate the return on investment of all their projects. This way, Spanish Government would be able to ensure that every euro spent on public projects would result in 6 euro saving for both citizens and businesses.

ARCAS users

The next stept is Extrapolation of the ARCAS and its methodology at European level in a second phase, much more ambitious, it would be necessary to create new working and discussion groups at European level, with the aim of exchanging ideas and agreeing on a common version of the methodology, applicable to all EU countries. This would allow ARCAS philosophy to be extrapolated to other European Governments or even to the EU institutions themselves.

Finally, as a third phase, horizontal to the other two, to spread news about the benefits of ARCAS among citizens and businesses, and to publish the results of savings achieved on different web portals, trying to make governments more transparent and close to the citizen.

Description of the way to implement the initiative

Both the Simplified Method for Measuring and Reducing Administrative Burdens, prepared by the Ministry of Finance and Public Administration, as this methodology Quantification of Internal Costs Administrative Proceedings at the Ministry of Industry , Energy and Tourism, are based on fundamentals and phases step implementation contained in the Standard Cost Model .

The Standard Cost Model (SCM) emerged in the Netherlands in response to the need to analyze the regulatory environment and design methodologies that allowed measurements of administrative burdens and costs. This is a quantitative methodology for determining the administrative burden put on business imposed by the regulations.

The motivation of this model is to ensure that both existing standards as newly minted, not impose unnecessary administrative burdens on businesses. Several national governments have identified as high priority the reduction of administrative burdens on businesses and reduction targets have been set. Specifically, Denmark, the Netherlands and Norway, among others, have set a target of 25% reduction in general administrative burdens imposed on businesses.

The costs and savings methodology has been developed internally jointly by all Departments and Agencies of government in Spain.

The methodology includes the steps to follow to identify the internal administrative activities involved in a process and to measure the costs associated with its implementation. So , are provided for identifying elements of actions and a set of internal costs incurred , in their dual role quantified and telematics .

The calculation of unit costs associated with each action is based on the estimation of the time spent, found by a previous study made with the staff responsible for carrying them out today. These days, face and electronically, then translate to economic value , giving savings from .

The ultimate goal of the methodology is to facilitate the calculation of domestic savings obtained with the implementation of e-Government and enable the road to be able to prioritize or evaluate future projects to develop according to their suitability and cost reductions that occur in the Ministry.

The calculations performed in ARCAS , only based on computational methods of Return on Investment in public / private , should be based on methodologies to justify the savings successfully unit included in the application.

In the case of citizens and enterprises savings, we used the "Simplified Method for Measuring Administrative Burdens and its Reduction", the current Ministry of Finance and Public Administration. It is a method based on the Standard Cost Model (SCM), which introduces a number of clarifications and assistance to adapt to the reality of our administrations and allows objective and uniform data on the total savings achieved through the development of ICT Project, compared to traditional paper alternative.

According to the methodology, administrative burdens are considered administrative in nature those activities to be carried out by citizens to fulfill the obligations arising from the regulations. In the case of companies, are the costs to be borne to fulfill the obligations to facilitate, preserve or generate information on their action or production, for provision and approval, if appropriate, by public authorities or third.

So, ARCAS tables provide cost savings managed by this model. To calculate these reductions, is the difference between the values of the respective costs, for example, if an application had a face (cost 80€) to submit an electronic application (cost 5€) the savings you get is the difference between the two values, ie 75€ . Add to that, cumulatively, consistent savings are achieved in other ways, such as bookkeeping, telematic , information to third parties or the production of documents , properly regulated in the method.

Concerning the calculation of Internal Savings, meanwhile, the fact that there is no official methodology in the field of General Public Administration has demanded recourse to an internal methodology to the Ministry, agreed between all work areas. Such calculations have been configured so that could easily be replaced by common methodologies included in future the Administration.

This methodology is based on the administrative actions that are needed on a paper file and are alleviated or eliminated by computerization of the process. So, calculates the number of administrative actions to be performed, for example in the processing of a case, and multiplied by the average cost and time each.

Technology solution

The technical highlights of ARCAS are:

Using Web Services to ensure technological neutrality and interoperability between applications.
Using graphics provided on the cloud (Cloud Computing) by Google Visualization, reducing the development cost of the project for proprietary options. The use of these graphics libraries reduces costs and speeds development time, to also have a development environment, Google Code Playground, simple and focused for a user with basic computer skills can make use of these APIs.
Application developed in ASP.NET with AJAX (Asynchronous JavaScript And XML).
Adaptation of the display to the most common browsers on the market (Internet Explorer, Mozilla Firefox and Google Chrome) and to different mobile devices and tablets (Apple OS / Android). To do this, we used the following emulators: IPhone and IPad devices IBBDemo V2, Blackbound iPhone Browser Simulator (Safari browser) and IpadPeek (Internet Explorer), and Android JDK for Android devices.

Technology choice: Mainly (or only) open standards

Main results, benefits and impacts

Given that the current economic crisis is significantly affecting Spain, a reduction of over 40% in our Ministry's budget (above all in ICT) has been necessarily carried out, which does not make it possible to invest further in this project. Consequently, future stages will no be achieved without this extra monetary income.

IT projects have a general application, affecting all public entities, it is essential to transmit the know-how already acquired by us to the rest of them, so the benefit to citizens and enterprises would be exponentially multiplied. The more public entities apply ARCAS project selection method, the most benefit will result in society.

ARCAS has acquired special relevance since it is a specially important instrument in the current economic context.

ARCAS has been used to calculate the savings that enterprises have obtained last years thank to the projects developed by Spanish Ministry of Industry. For example, according to the results offered by ARCAS, the Ministry of Industry and Energy has achieved more than 12.5 millions € of savings only in 2012.

ARCAS makes it possible to show citizens that many applications developed by the Ministry turned into more than 2-3 million of annual savings, in other words, the profit is 40 times the cost of development.

Moreover, ARCAS has enabled the Ministry to developed two reports about the IT projects that could be carried out in several units of the Ministry during year 2013, when preparing its budget. Thank to these reports, the Chief Information Officer of the Ministry, has been able to prioritize projects that most benefit citizens, discarding those that do not result in real savings, for example because they affect too small groups of people (provided this does not result in a disadvantage or that it is a key factor to their progress and development), or too expensive and little used procedures for which computerization is not profitable, specially in the current context of efficiency and budget constraint.

One of the projects estimated using ARCAS as described above, that will be implemented next year in the Ministry of Energy, implies an investment of 80,000 euros and results in an equivalent saving of 725,000 euros to citizens, that is, nearly eight times higher.

Track record of sharing

Another innovative element is that ARCAS, when calculating savings, is based on a formal methodology agreed for all public entities in Spain, as well as on established methods for calculating the return on Investment in the public / private sector.

Specifically, the methodology used is the "Simplified Method of Measurement of Administrative Burdens and their Reduction ", developed by the current Ministry of Finance and Public Administration. This is a method based on the Standard Cost Model (SCM), which introduces some clarifications and assistance to adapt to the reality of the public entities, and allows the obtaining of uniform and objective data on the total savings achieved through the development of IT projects, compared to the traditional paper alternative.

In terms of replicability, ARCAS is completely reutilizable and can be extrapolated to other governments and countries, especially in the EU. In fact, it is highly desirable that the methodology on which ARCAS is based was not only implanted in Spain, but also extended to the rest of the EU in order to reach an agreement together, because more and more citizens and businesses need to perform cross-border formalities these days.

Replicability is also apreciated in ARCAS alignment with the main objectives of the Digital Agenda for Europe, specifically: Objective of Agenda "Cross-border public services: by 2015 online availability of all the key cross-border public services"

As explained above, at the moment, ARCAS is still in its first phase. The remaining phases are:

Phase 1 – Extrapolation of the ARCAS and its methodology to other Spanish Ministries. In the first phase, it would be necessary to achieve consensus among Spanish Ministries, in order to create a Spanish version of the Saving Estimation Methodology that would be suitable for all them. Also, an adaptation of ARCAS would be made for adapting it to the new methodology. Thanks to this, it would be possible to provide a tool to the other Ministeries for them to calculate the return on investment of all their projects. This way, Spanish Government would be able to ensure that every euro spent on public projects would result in 6 euro saving for both citizens and businesses.

Phase 2 – Extrapolation of the ARCAS and its methodology at European level. In a second phase, much more ambitious, it would be necessary to create new working and discussion groups at European level, with the aim of exchanging ideas and agreeing on a common version of the methodology, applicable to all EU countries. This would allow ARCAS philosophy to be extrapolated to other European Governments or even to the EU institutions themselves.

Lessons learnt

European programs such as Better Regulation and the Programme of Action for Reducing Administrative Burdens in the European Union show that Europe depends on the success of their companies, and particularly small and medium, to return to a sustainable growth path, being necessary to the absolutely essential limiting administrative burdens imposed on them.

The administration , meanwhile , must undertake internal modernization establish mechanisms for agile and transparent management , and implement measures to control the performance of the proceedings , as well as savings and investment returns generated . ARCAS intended as an aid to measuring these savings as well as a decision tool to the development of new projects. It is designed to present the projects to managers as an important source of cost savings, allowing prioritize projects based on these savings and the return on that investment.

The sharing of technological solutions is another factor savings new technologies make it possible to consume services in areas accessible by all, such as cloud technology. For ARCAS, used libraries and free access APIs, significantly reducing costs and development time.

Scope: Cross-border, National, Pan-European

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