A balanced scorecard approach incorporating intangible benefits helps articulate the benefits of SCADA and other automation projects.
Dave Kubel, PE, Vice President of Technical Services for Tesco Controls, authored an article for the August 2019 issue of Water Finance & Management magazine titled Justifying SCADA Projects. Here’s a summary, click on the link above for the full text.
Most utility project evaluations focus first on an economic return on investment (ROI) analysis for justification. Unfortunately, according to Kubel, many SCADA and other automation projects may not make financial sense without including non-economic benefits in the evaluation.
Most water/wastewater utility executives are quite familiar with calculating savings due to tangible benefits such as labor savings, energy savings, chemical costs, reduction in fines and other quantifiable factors. But difficulties often arise when trying to quantify intangible benefits such as increased reliability, emergency response capabilities, avoided cost due to enhanced maintenance, improved operations, business process improvement and better regulatory compliance.
Kubel addresses the concept of using a “Balanced Scorecard” as a tool for balancing financial and non-financial elements when evaluating projects. This approach considers:
- Financial impacts
- Customer impacts
- Business process impacts
- Learning and growth
The Balanced Scorecard approach was not created specifically for SCADA projects, but can be tailored for them by addressing organizational and project-specific considerations. For example, the financial portion of a representative scorecard may indicate minor staff and energy savings, but a significant need to accommodate anticipated growth in the service area.
Kubel says a Balanced Scorecard developed to consider the four noted areas provides a better method for understanding and weighting the tangible and intangible benefits to the organization and enables a more holistic execution of traditional life-cycle cost/benefit analysis.
VP Technical Services
Dave Kubel, P.E., is VP of Technical Services for Tesco Controls, Inc,. Mr. Kubel has over 30 years’ of engineering, management, and sales experience in plant automation and controls for the water industry.