Advancing TSMO: Making the Business Case for Institutional, Organizational, and Procedural Changes

Part I. Getting Started on Making the Business Case

Why Make the Business Case?

Most agencies or jurisdictions have developed a set of Transportation Systems Management and Operations (TSMO) strategies and solutions that are providing important benefits to their transportation systems users in terms of reduced congestion and delay and improved reliability and safety. However, continued improvement is often hampered by reliance on legacy Institutional, Organizational, and Procedural (IOP) arrangements that were developed for traditional highway "build and maintain" program approaches. Continuous improvement in TSMO requires IOP arrangements that are suitable for the distinct characteristics of TSMO strategies, including their high-tech systems engineering and decision-support systems, 24/7 situational awareness, and performance-driven real-time collaborative management. Often legacy technical and business processes associated with highway capital project development are not well suited to the characteristics of such TSMO strategies.

Research indicated that traditional IOP arrangements are not oriented to real time operations or supportive of continuous improvement. Since many of the needed IOP changes are beyond the span of control of TSMO managers on their own, this situation has often led to a "plateauing" of TSMO effectiveness—highlighting the need to make the business case to senior managers and agency leadership for a greater commitment to continuous advancement.

There are many events—both positive and negative—that have been associated with triggering a focus on the need for improving TSMO including:

• A major disruptive traffic incident or event (such as a major weather disruption, crash with considerable backup, or planned special event) highlighting the importance of effective system operations and suggesting the need for improving TSMO.
• Recognition of the need for specific improvement actions resulting from a TSMO self-assessment.
• A change in top-level policy priorities to include advancing TSMO as a formal strategic management and agency activity.
• Public concern about increased traffic congestion, especially nonrecurring congestion.
• The implications of more effective utilization of new technologies, such as advanced Intelligent Transportation Systems (ITS) or automated driving systems.
• Anticipation of major construction or maintenance projects that may cause major traffic disruptions.
• A shortfall in agency resources, making it more challenging to pursue expensive new capacity projects.

Both negative events and positive opportunities can highlight the need to formalize an agency's direction for TSMO-related IOP changes in terms of making the business case.

Business Case Formats

The range of motivations for making the business case is paralleled by a range of approaches to making the case. In some cases, an extensive technical report may be appropriate for full documentation. In other cases, a concise technical memo to senior management or decisionmakers may be more effective. However, a business case need not be confined to technical documents. The need for immediate responses to events and opportunities suggests the utility of other formats that use varying lengths, styles, and media including:

• Informal conversations with agency colleagues.
• Interactive media presentations to either internal audiences or external stakeholders.
• Visual aids such as infographics that can quickly communicate key points to a variety of audiences.
• A Web page or document posted on the agency's website.

The material in this guide is designed to support all these contexts and approaches. Further, it should be noted that making the TSMO business case is not a one-time activity nor is it confined to preparing a technical document. The availability and willingness to employ a wide range of strategies to foster a greater understanding of the IOP aspects needed to advance TSMO is a continual process. Experience suggests that several reinforcing and continual communication strategies are essential, with multiple audiences, in order to generate continuing support for the IOP changes essential to more effective TSMO.

Who Should Make the Business Case?

The ambition to improve TSMO effectiveness through IOP changes may be found in a range of agencies, from those with only an emerging interest in TSMO (e.g., a few ad hoc TSMO strategy applications) to those with a significant TSMO orientation and interest in upgrading and transforming TSMO activities into a formal part of the agency's programs.

Regardless of the context and initiative, the business case should be prepared by staff (internal or external) with a good understanding of the agency's TSMO activities and IOP challenges as well as a reasonable knowledge of the state-of-the-practice of IOP arrangements for TSMO. The individuals driving this change may be TSMO "champions" within the agency staff, agency leadership (both veteran leaders and new leaders), staff involved with implementing TSMO who have struggled with specific IOP barriers, part of a government-wide performance initiative, or any combination of these. In all cases, extensive experience indicates that improving TSMO effectiveness requires a deliberate managed change approach if it is to address key IOP dimensions. Champions should be willing to advocate for TSMO in-person or on paper—even when the cultural and institutional setting may offer some level of push-back. Key tenets of effective TSMO advocacy include good communication and the ability to generate confidence, understanding, and excitement towards the benefits that improved TSMO offers the agency. Experience indicates that these champions play a key role in promoting TSMO and raising the profile of TSMO in an agency.

Characteristics of an Effective Business Case

Achieving the most effective and efficient TSMO program is the key objective of making the business case. Ultimately, TSMO effectiveness will depend on the degree to which it becomes an integral part of agency culture and a formal program, like capacity development or maintenance. The essential characteristics of making an effective business case include:

1. Tailoring the IOP business case to local priorities.
2. Illustrating how current experience and events indicate how TSMO can augment the effectiveness and benefits of the full range of current agency programs.
3. Specifying the strategic IOP changes needed, including the specific actions that need to be made and the desired outcomes, and relating the changes to the appropriate decisionmaking level accounting for individual and unit's span-of-control and responsibilities.
4. Including both external and internal benefits and payoffs at the program level.
5. Describing the required levels of effort and resources associated with the needed changes.
6. Identifying relationships between costs, benefits, and risks.
7. Targeting the IOP business case to specific audiences.

These characteristics are discussed in greater detail below.

A. Tailoring the Institutional, Organizational, and Procedural Business Case to Local Priorities

The IOP business case should be tailored to the local transportation context with a consideration of improvements needed in the existing TSMO program or activities. Tailoring the IOP business case to local priorities in terms of local challenges, needs, and appropriateness to the jurisdiction's current system performance and TSMO applications ensure the relevance of IOP changes and help build support for these changes from key stakeholders. Disruptive events, new TSMO applications and technology, resource issues, or new leadership may suggest the need for a systematic review of current agency challenges related to TSMO IOP arrangements and the need for making improvements. Agency experiences to date indicate that typical IOP challenges include:

• Specific congestion issue with a potential TSMO strategy not in place (for example incidents not detected by ITS or other systems currently in place).
• Transportation and public safety incident management responsibilities not well coordinated.
• Agency protocols or decision support systems for ramp metering or other real-time responses lacking.
• ITS technologies under maintained.
• Agency TSMO performance is unknown and not tracked/measured.
• No forward plan or program for TSMO improvement in place leading to potential future staffing or budget shortfalls.
• Lack of specific staff technical capability to conduct key activities such as systems engineering or ITS architecture updates.
• ITS system development unit uncoordinated with Traffic Management Center (TMC)-based operational issues.
• Absence of clear responsibility or authority to improve some aspects of TSMO programs.

B. Illustrating How Transportation Systems Management and Operations Can Augment the Effectiveness and Benefits of Agency Programs

TSMO does not compete with, or displace, the important agency functions regarding the development and maintenance of roadway capacity. TSMO can improve the potential benefits from those programs. For example, TSMO components and strategies applied to existing and new capacity can improve its throughput, with only a marginal increase in cost, and in some cases will heighten the justification for capacity improvement though the use of ramp meters, variable message signs, and other advisory systems that increase the benefits of the new capacity. TSMO also can minimize delay related to maintenance and reconstruction by ensuring safe and smooth traffic flow in work zones. Therefore, the business case can frame TSMO improvements as a cost effective way to complement more traditional transportation agency activities, such as roadway expansion and pavement condition maintenance, and highlight that adding TSMO projects to such transportation improvement projects enhances the impacts and cost effectiveness of both.

C. Specifying Strategic Institutional, Organizational, and Procedural Changes Needed and Relating Actions to the Appropriate Decisionmaking Level

The challenges noted above are interrelated. Effective deployment and operation of TSMO strategies and solutions requires updating legacy business and technical processes to accommodate the special characteristics of TSMO project development and implementation. The development and execution of these important processes depends on the development of appropriate staff capabilities and an organizational structure capable of executing the needed IOP adjustments. Finally, the creation of an appropriate organizational structure and securing needed staff resources may be dependent on new institutional arrangements that elevate TSMO to the program level alongside legacy programs related to planning, design, construction, maintenance, and safety.

Evolution from "TSMO as a set of ad hoc activities" to "mainstreamed TSMO" has been shown to be dependent on agency commitment to a set of related significant IOP changes, including:

• Identifying TSMO applications that are providing effective response to disruptions, events, and mobility challenges.
• Developing TSMO application-specific plans, programs, and processes.
• Providing predictable resources for a sustainable TSMO program.
• Increasing utilization of systems engineering processes and updated technologies.
• Incorporating operational performance measurement in agency-wide processes.
• Clarifying leadership commitment regarding TSMO mission and resources.
• Improving agency TSMO effectiveness through reorganization or reassignments.
• Improving staff capabilities and organizational efficiency.
• Increasing training on TSMO systems, processes, and partnerships.
• Enhancing alignment with collaborators, stakeholders, and partners.

For agencies that have at least a few TSMO strategies in place, the benefits and payoffs of these program level changes have been shown to be significant in terms of the impact on agency effectiveness in dealing with transportation challenges and, at the same time, on agency efficiency. The TSMO business case is designed to present the arguments for the importance of these changes. However, agencies will first have to identify and prioritize the needed IOP changes for their unique context. There are various approaches for identifying a range of appropriate IOP changes for a given agency, including: CMM workshops/self-assessments, specialized Capability Maturity Framework (CMF) workshops/self-assessments that focus on particular TSMO applications such as work zone management, process reviews, peer exchanges, or benchmarking the agency's IOP arrangements against the arrangements of a peer State that has been advancing TSMO. Once a range of potential IOP changes are identified, agencies have a similar range of approaches or strategies for prioritizing these changes, such as prioritizing actions based on which actions are seen as "low hanging fruit," more likely to garner leadership support, or well-timed with other initiatives such as ITS architecture updates, long range plan updates, or major events. In identifying and prioritizing these changes, there are a set of additional considerations, detailed below, that agencies should bear in mind.

The authority and capacity within an agency to make key IOP changes varies with the type of change. Changes in technical and business process may be within the span of control of a TSMO unit manager or may require coordination with other units/functions. Authority for staffing and certain organizational changes may reside at the division level of which TSMO is a part of.

Improvements related to institutional commitment, reorganization, staffing, or processes are often outside the span of control of staff managing TSMO functions. Such changes typically require support and authorization on the part of top management in the agency, such as other division managers, agency leadership, or policymakers. Understanding the structure, support, and authorization needed to advance IOP actions within the control of various levels of management is often needed to make the IOP changes. Given the many demands on agency leadership, the arguments for including TSMO as a high priority must be carefully structured in terms of the logic of the relationship between specific IOP changes and the presumed benefits to the agency overall mission and vision.

D. Including Both External and Internal Benefits/Payoffs at the Program Level

The types of IOP changes described above can provide two types of payoffs, external and internal. External payoffs to customers flow from the enhanced ability of an organized program. However it is often difficult to trace a one-to-one relationship between a specific action and the payoff in terms of its specific impact on improving the effectiveness of a given TSMO strategy application. The payoffs from IOP changes typically leverage improvements in the entire range of TSMO strategies at any given point in the future, such as:

• More precise matching of strategy applications to causes of nonrecurring congestion by type and location.
• Aggressive application of each strategy to capitalize on its full potential.
• New strategies which capitalize on new data and procedures that respond to more complex problems.
• Direct impacts on improving mobility and safety.
• Lower costs and quicker implementation.

Estimating internal payoffs from these benefits maybe approached in several ways. One payoff relates to "staff efficiency". This may be estimated in terms of increases in the quantities of ITS devices, route miles of coverage, and incidents responded to, as compared to staff levels. Improvements in TSMO strategy application performance, as impacted by improved applications deployment and management, may be measured on a year-to-year basis (such as incident clearance times, number of information messages, significant work zone delay, intersection delay, etc.). In addition, incorporation (and in some cases funding) of ITS devices in construction or maintenance project budgets may represent a cost saving reflecting a payoff from of integrated planning and project development.

Other internal benefits may include:

• Use of a single set of agency objective related performance measures to manage and improve TSMO strategy applications on an incremental basis.
• Integrated TSMO planning to assure that priority TSMO-responsive service targets are being addressed.
• Sustainable funding for TSMO permitting logical multi-year deployment sequences.
• Improved inter-unit coordination to minimize staff activity overlap or gaps and to clarify responsibilities.
• Measurement supported by top management commitment and leadership.
• Identification of key staff capabilities needed and associated training needs.
• Formalization of partnership arrangements to support aligned objectives, roles, and procedures.
• Positive customer perception feedback regarding improved service (as in the case of service patrol mail-back postcards).
• Increased staff retention in response to experiencing a challenging and rewarding work place that helps make a difference.

E. Describing the Required Levels of Effort and Resources Associated with the Needed Changes

The IOP business case should include a description of the type of IOP changes proposed as well as the potential levels of effort and/or resources required. The "costs" of needed IOP changes include efforts involved to bring them about. Costs are not necessarily related to financial expenditure; indeed few IOP changes involve significant investment. However, all changes involve the expenditure of some type of resources, though they may be more intangible. The range of costs may include:

• Dollar costs—where staffing is involved or consultant studies employed for products such as a plan or systems engineering.
• Levels of effort—the proportion of staff or unit time needed to develop new business and technical processes; develop new procedures; plan, program, and budget; make adjustments in accountability and reporting relationship; and conduct communications activities to gain buy-in and support from agency leadership.
• Top management initiatives—making the key decisions to authorize and support the necessary changes that are unquantifiable but have extremely high value and can be described in qualitative terms.

Even where costs or levels of effort are not quantifiable, a description of the proposed action and its intended outcome that highlights cause and effect relationships, in terms of the logical relationships between specific IOP changes and the expected benefits, may be effective.

F. Identifying Relationships between Costs, Benefits, and Risks

Fundamental to the business case is a positive relationship between benefits and costs. However, making the business case for IOP changes is not a conventional cost-benefit exercise. Characteristics of important TSMO improvements are changes in procedures and protocols where "costs" are difficult to measure or express. Furthermore, important benefits across a range of TSMO strategies and applications are often achieved by a set of interrelated, mutually reinforcing arrangements in programming, staffing, and organization that support improvements. Associating specific benefits with a specific change may not be possible.

Often the relationships between costs and benefits may be self-evident, especially where costs are minimal against obvious and logical (if unmeasurable) benefits such as in reduced clearance time for incidents. In some cases either or both costs and benefits may be quantifiable or even monetizable, especially in instances where performance is being tracked. In other cases, data may be available from current performance tracking. References to peer experiences or case studies may also be relevant.

Risk issues are associated both with investments made and not made. The need for the most quantified benefits is likely to be in association with improvements that involve any measurable costs such as increase in staffing, or additional outsourced technical support. However, by definition, most IOP improvements do not involve significant investments or budget impacts. Yet, at the same time, they may support improved effectiveness across one or several TSMO strategies. This underlines the substantial benefits versus cost of leveraging IOP changes. There are also risks associated with actions not taken, the opportunity costs associated with failing to address a problem, such as improving or extending a well-understood strategy such as traveler information or ramp metering.

G. Targeting the Institutional, Organizational, and Procedural Business Case to Specific Audiences

Cross-cutting all of the above essential characteristics is the need to make the business case for the target audience Key audiences for the TSMO business case include:

• Agency TSMO staff and management.
• Other agency units and divisions whose involvement is essential.
• Agency top management and leadership.
• Local transportation partners.
• The general public.

Each audience may have different levels of background knowledge, stakes, and varying levels of interest and attention span. While these audiences have common concerns regarding improvement in agency programs, they have different interests and "stakes" with regard to their interest in specific internal and external issues such as agency efficiency versus customer impact. Therefore, the business case should be organized, articulated, and communicated considering the issues and concerns of the specific key audiences and their interests and stakes which may be relevant to their roles in authorizing, implementing, cooperating and maintaining the proposed IOP changes and actions.

Business case arguments should be tailored to the specific characteristics of each audience in terms of the key issues and effective arguments, the mode of business case presentation (in person, memos, or examples) as well as the use of technical jargon, document length, and style of presentation. In some cases, audiences will be most responsive to a business case made with respect to an event (disruption) or opportunity (generate visibility/credibility).