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

Part II. Preparing the Business Case for Institutional, Organization, and Procedural Changes

Preparing a Business Case

A business case for mainstreaming Transportation Systems Management and Operations (TSMO), structured to advocate for essential Institutional, Organizational, and Procedural (IOP) changes, is a well-formed argument that is based on compelling qualitative and anecdotal information as well as technical analysis. The compelling logic, or persuasive argument, is generally supported by the positive payoffs from improvements in system operational performance, safety, and customer service compared to the modest level-of-effort associated with making the well-understood modifications to IOP arrangements—a clear "win-win."

The business case should be tailored to key audiences in terms of their expected TSMO-related interests, technical background, and media orientation (this issue is discussed in further detail in part IV). It should clearly and concisely articulate the business case and address the payoffs and level-of-effort required.

Business Case Organization

Making the business case involves combining a sequence of evidence-based "arguments" that rationalize and justify the need for the IOP changes. The sequence consists of: identifying the transportation problem to be addressed; relating the problem to effective TSMO; showing how effective TSMO requires certain IOP changes; and illustrating the payoffs verses the costs. The guidance below sets forth a structured framework for the business case in terms of a logical sequence of arguments, which are organized as seven "sections" in the framework. Each section represents one part of a sequence of logical argument that together make up a complete business case.

The term "section" does not imply that the business case needs to be an onerous and lengthy technical report. Depending on the audience and circumstances, an effective business case may be made in any one of several formats: a detailed technical study, brief memo, presentation, a series of illustrative infographics, or an "elevator speech" (a short and complete verbal statement of the business case presented in person). Therefore, each section of a business case, as detailed below, may be a paragraph, a page, a single PowerPoint slide, or any format that works for the writer. Regardless of length or level of detail, the most effective case will address the key issues in each of the sections.

The material below sets forth the suggested issues to address for each section and it relates to the sections preceding and following to make the most compelling business case. The seven sections, consistent with the characteristics of a successful business case presented in part I, are:

• Section 1—Describe the jurisdiction's current system performance and TSMO activities as a baseline for change.
• Section 2—Describe how current problems or events suggest that an effective TSMO response requires IOP changes that integrate TSMO into agency activities on a more formal (rather than ad hoc) basis.
• Section 3—Specify the recommended or required IOP actions.
• Section 4—Identify the external and internal benefits and payoffs from the proposed IOP changes.
• Section 5—Identify/quantify IOP improvement costs and resource requirements.
• Section 6—Discuss the overall balance between rate of return and risks.
• Section 7—Identify the responsibilities for change management at the unit and agency level.

Within each section, the discussion is organized by:

• Purpose. Describing the role and position of the section to orient the preparer to how the section fits into the logical sequence of business case argument.
• General Content. Outlining the substantive coverage of the section.
• Persuasive Arguments/Approach. Presenting the key arguments/points to be made in short bullet form, allowing for further tailoring to the preparers' context.
• References and Examples. Providing additional background on key evidentiary points.

Seven Sections in an Effective Business Case

Section 1. Describe the Jurisdiction's Current System Performance and Transportation Systems Management and Operations Activities as a Baseline for Change

The Purpose of This Section of the Business Case:

The purpose of this section is to orient the intended audience through a description of the seriousness of the system operational disruptions and challenges facing the agency. It can refer to the progress made with the agency's TSMO activities to date, and what is needed to improve TSMO on a continuous basis. This section allows the audience to fully understand how responding to the jurisdiction's transportation needs requires a change and/or improvement in the overall approach to TSMO through IOP changes.

General Content to Consider for This Section of the Business Case:

• Current system performance and how that matches desired performance goals.
• Current TSMO-related challenges.
• Existing TSMO activities and historical context, as needed.
• Indicators of the need for new or improved strategies.
• Major advantages of TSMO in a financially constrained context.
• How TSMO can complement, or address the constraints to, major capacity additions.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Describe how congestion, delay, crashes, and unreliability are growing transportation and economic challenges in the region as reflected in trends and events related to congestion, delay, and safety.
  • Cite local statistics regarding congestion and incidents.
  • Use national average statistics from resources such as the Urban Mobility Scorecard⁴ for metro areas or statewide values.
  • Cite statistics on how congestion and unreliability can affect business productivity and corporate decisions.
• Note that nonrecurring congestion, which generally causes a significant portion of total delay and most of travel unreliability in most urban areas and greatly impacts rural areas, is a significant concern to travel in the region.
• Highlight that nonrecurring congestion for commuters and shipping are not addressed by conventional capacity additions.
• Characterize the jurisdiction's current TSMO activities in terms of strategy applications being applied and identify/illustrate their impacts to date.
• Emphasize that these applications to date have been proven as low cost, quick-to-implement, and an effective means of addressing the principal causes of congestion (nonrecurring congestion).
• Call out how TSMO supports or links to the overall agency mission, vision, and objectives.
• Identify current trends or recent visible events that indicate the need to consider additional TSMO improvements—including TSMO as a response to major disruptions (crashes, weather, and special events).

Helpful References and Examples for Topics in This Section:

• 2015 Urban Mobility Scorecard Published jointly by The Texas A&M Transportation Institute and INRIX (https://static.tti.tamu.edu/tti.tamu.edu/documents/mobility-scorecard-2015.pdf) August 2015.
• Developing and Sustaining a Transportation Systems Management and Operations Mission for Your Organization: A Primer for Program Planning (FHWA-HOP-17-017).
• National Cooperative Highway Research Program (NCHRP) 20-07 Task 365 Transportation Systems Management and Operations Program Planning—Experiences from the Second Strategic Highway Research Program (SHRP 2) Implementation Assistance Program (August 2016).
• Transportation Systems Management and Operations in Action (FHWA-HOP-17-025).
• Improving Business Processes for More Effective Transportation Systems Management and Operations (FHWA-HOP-16-018).
• Making the Business Case for Traffic Incident Management (FHWA-HOP-16-084).

Section 2. Describe how Current Experiences or Events Suggest that an Effective Transportation Systems Management and Operations Response Requires Institutional, Organizational, and Procedural Changes

The Purpose of This Section of the Business Case:

The purpose of this section is to describe how further improvements in the agency's TSMO effectiveness will require improvements in current business and technical procedures, organization and staffing, and institutional structures tailored to TSMO—all essential to supporting improved TSMO effectiveness and especially essential to advanced strategy applications.

General Content to Consider for This Section of the Business Case:

• Recognition of systems management and operations of the transportation network as consistent with agency mission.
• Opportunities for improving agency effectiveness through implementing TSMO strategies.
• Constraints of legacy IOP arrangements to advancing TSMO strategies.
• Dependence of TSMO program improvement on supportive IOP context.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Cite/refer to the agency's current commitment to TSMO (as embodied in agency materials).
• Describe desired next steps for the evolution and improvement in the jurisdiction's TSMO applications (existing and new) to increase effectiveness.
• Indicate that TSMO effectiveness is often "plateaued" in that it is constrained by an agency's current legacy IOP structure that was established for capacity oriented improvements, including:
  • Perceived limited understanding of TSMO at the executive management level and among key decisionmakers.
  • TSMO treated as an activity or disparate projects rather than as a formal program.
  • A lack of planned and sustainable funding for TSMO advancement.
  • In some cases, fragmented TSMO units may be uncoordinated, inefficient, and/or redundant.
  • Absence of TSMO-oriented training for staff.
  • Minimal alignments with other key partners essential to effective TSMO such as public safety community and the private sector.
• Refer to the concept of "continuous improvement" in terms of establishing an IOP framework that will establish the mechanisms and staff capability to capitalize on evaluation of current practices to identify logical incremental improvements on a regular basis.
• Cite the ample body of Federal-level research that demonstrates that improved TSMO effectiveness is dependent on overcoming the above constraints. Improved TSMO advancement requires changes in the agency's business and technical processes in order to effectively conduct the full range of TSMO strategies and applications; and, that these processes in turn depend on capable staff and an efficient organizational structure. These are at the core of IOP improvements.
• Structure the needed IOP changes to support transitioning from a set of ad hoc activities to a more systematic, integrated, cooperative, strategic approach capable of continuous improvement.
• Highlight that the development of these processes in turn depends on capable staff and an efficient organizational structure to carry them out. The creation of the appropriate organization and staffing will depend on key changes in institutional arrangements that integrate TSMO into the agency's mission and policies as a formal program.
• Note that improving the capabilities in each of the IOP areas must be done on an incremental basis and requires a managed stepwise approach.

Helpful References and Examples for Topics in This Section:

• SHRP 2 L17 (6) Business Case Primer: Communicating the Value of Transportation System Management and Operations.

Section 3. Specify the Institutional, Organizational, and Procedural Actions Needed to Advance Transportation Systems Management and Operations

The Purpose of This Section of the Business Case:

The purpose of this section of the business case is to identify and document the specific IOP actions that are proposed to support evolution from the current state of "TSMO as a set of ad hoc activities" to the desired status of "mainstreamed TSMO."

General Content to Consider for This Section of the Business Case:

Results from a TSMO Capability Maturity Model (CMM) self-assessment will indicate the key IOP dimensions needing attention. Research provides evidence that the lowest CMM dimensions should be the focus for improvement.

• Actions identified for advancing in the IOP categories needing attention in the region.
• Discussion of the appropriate level of detail needed in describing the recommended IOP actions (e.g., do the recommendations need to detail resource needs, timelines to accomplish, staff leads, etc.?).

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Explain that while the agency has made some important first steps, advancing TSMO for maximum effectiveness requires key changes relating to each IOP dimension in order of current capability, and includes proposed actions to address the needed improvements.
• Use the agency's own CMM self-assessment, or the CMM literature, to identify the current state of play and needed strategic management actions to advance TSMO. The CMM literature can be used as a basic reference regarding the types of actions that have proven to be most important across a wide range of agencies. Consider the most often identified actions in agency self-evaluations and adjust as appropriate for jurisdiction. The most often identified actions include:
  1. Adjust key business and technical process, including:
     • Integrating TSMO into the legacy business and technical processes, such as planning, programming, and budgeting.
     • Accommodating TSMO in the project development process.
     • Providing predictable resources for a sustainable TSMO program.
     • Institutionalizing systems engineering including effective concepts of operations.
     • Establishing a TSMO performance measurement and management framework.
  2. Build staff capabilities (hire or train), including:
     • Supporting education and familiarity regarding "what TSMO is" and its unique payoff potential in supporting the agency's mission.
     • Developing training to improve staff capabilities.
  3. Target key organizational and institutional changes, including:
     • Adjusting agency policy and objectives to incorporate TSMO commitments.
     • Aggressive top management authorization and support for making the key IOP changes that transition TSMO into a formal top-level agency program.
     • Consolidating fragmented TSMO-related business units, or creating better mechanisms for coordination among those units and identifying a lead point of contact for TSMO overall.
     • Elevating TSMO to an organizational status on par with other major functions such as design, construction, and maintenance.
• Enhance alignment with collaborators, stakeholders, and partners.
• Note that the actions are at the "program" level—designed to support improving the effectiveness of the complete array of TSMO strategies, both current and future—and structured to support improvement on a continuous basis.
• Highlight that where TSMO is not well-understood and accepted and part of the agency culture, improvements in TSMO effectiveness are unlikely.
• Provide well-formed arguments that are based on compelling qualitative and anecdotal information as well as technical analysis.

Key Actions Identified by State DOTs to Date

Based on over 40 State DOT TSMO self-assessment workshops sponsored by FHWA, a core set of common actions have emerged from the individual State assessments. While every State context is different, this set of actions constitutes a useful point of departure and reference tool. Tables 1 through 6 below present these common actions for the six dimensions of TSMO capability. In the table, the action items are presented along with the responsible party for the action in reference to an agency's program staff or top management as to who might "own" the action. Further exploration of the specific role of top management is addressed in section 4.

Table 1. Business processes priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management Involvement
Analyze recurring and nonrecurring delay problems for TSMO applicability.	Yes	No
Create regional/statewide TSMO plan/program/TSMO Program Plan.	Yes	No
Insert TSMO into Transportation Improvement Program (TIP)/Long-Range Transportation Plan (LRTP)/and other statewide/regional plans.	Yes	Yes
Develop a formal TSMO budget line item and Integrate TSMO into the programming processes.	Yes	Yes
Integrate TSMO into the standard project development process.	Yes	No
Develop TSMO business case for various key stakeholders.	Yes	No
Establish methods to evaluate TSMO vs. capacity options, including B/C.	Yes	No
Identify institutional mechanism to shorten planning horizons to facilitate TSMO solutions.	Yes	No
Pilot FHWA INVEST model for operations and maintenance sustainability assessment.	Yes	No
Include consideration of advanced, proactive TSMO strategies (Integrated Corridor Management, Active Transportation and Demand Management, etc.).	Yes	No

Table 2. Systems and technology priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management Involvement
Require Systems Engineering utilization to develop and manage TSMO applications.	Yes	Yes
Assess/update regional/statewide ITS architecture/deployment plan.	Yes	No
Encourage use of emerging technologies.	Yes	Yes
Improve Information Technology (IT)/ITS procurement (including applying best practice).	Yes	No
Develop coordination between DOT IT and State IT entities.	Yes	No
Review/develop data sharing practices/policies (Traffic Incident Management (TIM), Computed-Aided Design (CAD), traffic control, etc.).	Yes	No
Investigate standard communications protocol to facilitate interoperability.	Yes	No
Develop TSMO asset management system/performance guidelines.	Yes	No
Increase participation in TMC and software systems discussions/decisionmaking.	Yes	No

Table 3. Performance measurement priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management
Modify performance objectives and measures to accommodate TSMO.	Yes	Yes
Update TSMO performance measurement plan/program/policy/data business plan.	Yes	No
Agree upon and leverage performance measures for TSMO deployments—include before and after.	Yes	No
Identify performance measures and data development/analysis procedures.	Yes	No
Incorporate TSMO into performance-based planning documents and guidance.	Yes	No
Share/disseminate performance data/info with partners.	Yes	No
Evaluate sources of data (internal vs. third party).	Yes	No
Identify/develop performance measures (PMs) for dashboard (freeway and arterial).	Yes	No
Create modeling plan and tools for supporting TSMO analysis.	Yes	No

Table 4. Culture priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management
Develop top manager and staff TSMO familiarization/justification program.	Yes	Yes
Adjust agency policy to place TSMO in the top tier of policy program and related objectives.	Yes	Yes
Introduce executive policy/directives in support of TSMO/ITS/total system management.	Yes	Yes
Use personal influence and contacts to persuade key players both internally and externally of value.	Yes	Yes
Direct TSMO staff capability development.	Yes	Yes
Prepare TSMO outreach/communications material; document lessons learned/success stories.	Yes	No
Develop TSMO business case/marketing plan/campaign.	Yes	No
Institute TSMO knowledge sharing (e.g., though identified experts and peer exchanges).	Yes	No
Establish TSMO executive steering committee to set vision and strategic priorities.	Yes	Yes
Identify team of TSMO champions at senior management, division and district level levels.	Yes	Yes

Table 5. Organization and staffing priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management
Review/define organizational structure for TSMO.	Yes	No
Reorganize to elevate TSMO activities to appropriate and effective chain of command and organizational level.	Yes	Yes
Identify and support a TSMO change manager champion.	Yes	Yes
Develop business case for TSMO unit.	Yes	No
Identify core management and technical positions needed.	Yes	Yes
Design succession plans.	Yes	No
Create career maps/paths and position descriptions.	Yes	No
Provide technical training, mentoring, encourage staff participation in national forums.	Yes	No
Provide TSMO point of contact for each region to advance development of TSMO concepts and projects.	Yes	No
At management level, focus on performance management plans and accountability to optimize staff utilization and efficiency.	Yes	Yes

Table 6. Collaboration priority actions.

Actions Items	Responsibility—Program	Responsibility—Top Management
Negotiate objectives realignment with other agencies (public safety, local government.).	Yes	Yes
Develop new relationships with private service and technology providers.	Yes	Yes
Participate in/advance traffic incident management (TIM) training.	Yes	No
Establish a forum to build better interagency relationships and improve TIM practices.	Yes	No
Institute corridor platforms/forums for improved collaboration/ops strategies/TIM.	Yes	No
Execute Memorandums of Understanding (MOU) with first responders for TIM practices.	Yes	No
Perform overall assessment of stakeholder groups' ability to advance TSMO.	Yes	No
Conduct outreach to partners for improved transportation management procedures.	Yes	No
Disseminate Incident Management best practice to local jurisdictions.	Yes	No
Leverage university relationships.	Yes	No

Helpful References and Examples for Topics in this Section:

FHWA has published six reports based on the findings of the initial 27 State DOT CMM self-assessment reports that include typical actions identified by the States, https://ops.fhwa.dot.gov/docs/cmmexesum/cmmexsum.pdf

Texas Department of Transportation. Transportation Systems Management and Operations Statewide Strategic Plan (August 15, 2017) Version 1.1: http://ftp.dot.state.tx.us/pub/txdot-info/trf/tsmo/statewide-strategic-plan.pdf.

Washington State Guide to TSMO: http://fratis.trac.washington.edu/TSMO/.

Section 4. Identify the Benefits and Payoffs from the Advancement Supported by Proposed Institutional, Organizational, and Procedural Changes

The Purpose of This Section of the Business Case:

The purpose of this section is to identify the benefits and payoffs that may be expected as TSMO activities move from an ad hoc approach to a mainstreamed program. As there are a wide range of positive impacts anticipated on areas such as customer mobility, investment options, and agency efficiency, it is important to identify the full range of potential benefits. Anticipated payoffs from the proposed IOP improvement actions should be documented including both those with external payoffs (to customers and stakeholders) and internal payoffs (agency efficiency and effectiveness).

General Content to Consider for This Section of the Business Case:

Categories of payoffs and benefits in two categories—internal (agency efficiency/effectiveness) and external (benefits to customers in mobility and safety).

• TSMO approaches as a complement or an alternative to more expensive new capacity projects.
• Tailored examples of internal and external payoffs from pilot programs or peer experiences.
• Recognition of which payoffs/benefits are quantifiable versus descriptive.
• Table 7 below categorizes some of the external and internal payoffs that may be gained from making IOP changes to advance and mainstream TSMO.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Identify the categories of benefits and payoffs that result from actions, such as those presented in section 3. Include both those that can only be described as well as those with quantifiable measures.
• Highlight the fact that the actions described in section 3 leverage IOP improvements supporting a range of future TSMO strategies.
• Detail how many benefits and payoffs expected from improved TSMO in the future cannot easily be quantified, absent a specific implementation plan and relevant precedents.
• Identify external benefits—in particular, those directly impacting customers from improved and broadened TSMO strategy applications that flow from:
  • More precise matching of TSMO strategy applications that address causes of nonrecurring congestion (by type and location).
  • More aggressive implementation of each TSMO strategy to capitalize on its full potential.
  • Ability to capitalize on new data and analytics for interagency cooperative actions and decision support systems.
• Note that the research shows improving the effectiveness of TSMO strategy applications will help address more than half of an average region's delay - that associated with nonrecurring congestion - while at the same time uniquely targeting improvement of travel time reliability. Many conventional capacity improvements (adding lanes) may have little or a modest impact on the causes of nonrecurring congestion such as weather or major crashes.
• Highlight the relatively low cost, quick to implement nature of TSMO improvements as a demonstration of customer focus and improved agency credibility.
• Provide examples of expected benefits as illustrated by best practice examples of peers and/or from comparison with previous practices, including those associated with a more rapid clearance of incidents, improved signal timing, better coordination of freeway and arterial traffic, more accurate and timely customer information regarding traffic and weather conditions, and the use of new technology.
• Identify internal benefits that support the improved efficient and effective use of scarce financial and staff resources, including:
  • The ability of the agency to support and target improved service at low costs and in short timeframes.
  • Making the most cost effective use of agency financial and staff resources.
  • Describing the opportunities to capitalize on new technologies, systems, and service delivery concepts, such as active traffic management; integrated corridor management; and automated driving systems.
• Describe improved potential to use TSMO to enhance or substitute for capital investment in terms of the increased effectiveness of TSMO applications that can reduce the demand for, and public perception of the need for, new capacity.

Table 7 below illustrates the range of payoffs—external and internal—related to the capabilities within procedural, organizational, and institutional arrangements.

Table 7. External and internal payoffs of advancing institutional, organizational, and procedural capabilities.

IOP	Capability Improved	Payoffs—External (Customers)	Payoffs—Internal (Agency)
Processes	TSMO integrated into agency planning and programming. TSMO part of agency project development process. TSMO-oriented performance measures specified. Measures used for real-time operational management. Systems engineering utilized. Best available technology standardized.	Better targeting on causes. Focus on more complex settings. Improved response time and strategy effectiveness. Providing continuous improvement. Effective detection and solution arrangements. Decision-support systems incorporated.	Cost effective use of limited funds. Ability to use best available technology for efficiency. Assurance that funds are being used cost effectively. Public accountability. Improved detection and response to disruption, and real time management of the system.
Organization	Stove piping reduced. Staff capabilities improved. Improved coordination.	More accurate and timely responses to nonrecurring events.	Improved staff efficiency. Ability to capitalize on new concepts.
Institutional	TSMO embedded in formal agency mission and policy. Improved partner collaboration. Visible agency TSMO leadership and support.	Clarifies expectations. Quicker/more effective response. Public accountability.	Includes TSMO considerations in project prioritization. Reliable support for TSMO units. Efficient integration.

Helpful References and Examples for Topics in This Section:

• Federal Highway Administration. Transportation Systems Management and Operations Benefit-Cost Analysis Compendium (FHWA-HOP-14-032), July 2015.
• As an example of an estimation of the benefits of IOP changes to advance TSMO—the Colorado DOT TSMO website estimates that advancing its TSMO program (which has included IOP changes such as reorganization for TSMO and procedural improvements in additional to application-specific advancements) has enabled the DOT to pursue high return-on-investment projects with benefit-cost ratios that typically fall around 10:1 and go as high as 40:1. These changes have also resulted in quantifiable reductions in delay and improvements in travel time reliability and safety⁵.
• Similarly, the Tennessee Department of Transportation (TDOT) made organizational changes to better support TSMO in 2013 and has documented the following benefits associated with this IOP change⁶:
  • Prior to reorganizing to create the Traffic Operations Division, TDOT has cited the following issues and challenges in its former TSMO capabilities:
    • Fragmented legacy organization with TSMO-related responsibilities spread across multiple TDOT divisions and work units.
    • TSMO initiatives led by champions who were working outside of their traditional job responsibilities.
    • A collection of disparate TSMO-focused programs separated by geographic TDOT regions with no standard guidelines or procedures.
    • Lack of strategic direction for TSMO deployments and practices.
  • After reorganizing to create the Traffic Operations Division, TDOT has observed the following advantages:
    • Commitment to develop a TSMO program plan.
    • IT Division engagement in TSMO.
    • Standardized TMC and TIM guidelines adopted.
    • Pathway established for the incorporating of TSMO performance measures into overall agency objectives.
• Figure 2 below provides a helpful jumping off point for thinking about the differences in benefit-to-cost ratios between TSMO projects (i.e., every investment shown in figure 2 except for "Traditional" road capacity) and traditional solutions. It should be noted, however, that TSMO projects can often be combined with traditional solutions to enhance effectiveness.

Section 5. Identify/Quantify Institutional, Organizational, and Procedural Improvement Costs and Resource Requirements

The Purpose of This Section of the Business Case:

The purpose of this section is to identify and describe the staff and other resource commitments associated with implementing the IOP actions described in section 3.

Many of the IOP actions identified in section 3 associated with making the IOP changes to support advancing TSMO require staff resources related to changes in procedures and supporting organizational adjustments—and the key challenges involve the costs in management and staff time associated with actions required to overcome the natural inertia with regard to making changes in legacy processes or organization. Overcoming these obstacles must be weighed against the payoffs as described in section 4. In developing the business case for the IOP changes, compelling arguments must be made for the management and leadership decisions required to support the necessary level-of-effort and related costs as well as the related organization and institutional adjustments.

General Content to Consider for This Section of the Business Case:

• Identification of the full range of change management activities requiring resources, both quantifiable and non-quantifiable.
• Quantifiable costs where specified initiatives or projects can be distinctly identified.
• Non-quantifiable costs and related resource requirements.
• Do not neglect including descriptions of impacts perceived as negative by specific managers or staff related to disruptions regarding staff roles and responsibilities, uncertainty, and change in access to resources.
• Table 8 below illustrates potential types of resources and how the level-of-effort may be measured.

Table 8. Needed resources.

Level-of-Effort Type	Measured
Staff effort in development of new processes, arrangements, and collaborations.	Percent of an agency's full time equivalent (FTE) staff resource multiplied by the time period needed for that staff person (and/or costs to hire consultant).
Staff effort on public and stakeholder outreach, education, and information exchanges.	Percent of an agency's full time equivalent (FTE) staff resource multiplied by the time period needed for that staff person (and/or costs to hire consultant).
Agency champion's efforts to overcome staff skepticism.	Included in day-to-day position responsibilities.
Leadership time and attention to support IOP changes and actions.	Leader's expenditure of leadership and peer capital and the leader's perception of importance of accomplishing the objective.
Acceptance of organization and staff disruption.	Described and highly dependent on leadership support, sponsorship, clarity, and engagement.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Categorize the resources and potential payoffs associated with the IOP actions set forth in section 3.
• Highlight that most of the benefits can be captured without substantial increase in staff or financial resources and rather through adjusting existing priorities, processes, and organizational structure to accommodate the specific requirements of TSMO. In doing this, TSMO accomplishments are converted from a set of ad hoc activities to an integrated and accepted agency program.
• Recognize that costs are generally of two types: the level-of-effort of key TSMO managers and staff in developing the needed business and technical processes; and, the time, attention, and costs of persuasion that top management expends in authorizing and supporting key IOP changes to other agency unit leaders.
• Include the potential need for new technical activities, planning, and systems engineering with estimated costs and explain how such costs insure cost effective use of resources.
• Acknowledge that some IOP changes may be viewed as disruptive, such as modifications to the existing organizational structure or realignment of certain key reporting and responsibility relationships, but present that with the longer term success that result from IOP changes.

Helpful References and Examples for Topics in This Section:

• Federal Highway Administration. Transportation Systems Management and Operations Benefit-Cost Analysis Compendium (FHWA-HOP-14-032), July 2015.
• FHWA Operation Benefit/Cost Analysis Desk Reference (2012): https://ops.fhwa.dot.gov/publications/fhwahop12028/fhwahop12028.pdf.

Section 6. Discuss the Overall Balance between Rate of Return and Risks

The Purpose of This Section of the Business Case:

The purpose of this section is to present potential payoffs and benefits in comparison to the level-of-effort and other resource expenditures required to capture them—as well as the risk of action versus no action to make the IOP improvements.

General Content to Consider for This Section of the Business Case:

• Contrast between the potential broad ranges of benefits and payoffs as set forth in section 4 with the potential levels-of-effort (costs) of section 5.
• Acknowledge that many payoffs are anecdotal in nature without hard costs values and returns on investments.
• TSMO costs and related efforts compared with other mobility improvement options.
• Risks and opportunity costs associated with the choice to not mainstream TSMO.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Present research and empirical experience, learned through observation of differences in the effectiveness of conventional ad hoc TSMO applications versus best practice in IOP actions that mainstream TSMO.
• Highlight that the risk of failure of TSMO investments in providing improved service is relatively low and largely reversible as service is directly related to the level of operational management.
• Note that the new and more complex TSMO strategies such as Integrated Corridor Management (ICM), Active Transportation Management (ATM), and Automated Driving Systems (ADS) must be supported by key IOP changes.
• Point out that compared to improving customer service through construction of new capacity improvements, TSMO provides important customer benefits in the short term at low cost.
• Outline the opportunity cost associated with lack of a TSMO supportive IOP framework that would enable capitalizing on new technology-driven strategies related to data management, performance management, and corridor-wide systems management.

Address Risks and Opportunity Costs:

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 IOP improvements that involve any measurable costs such as increase in staffing to support the new approaches, or additional outsourced technical support in areas such as planning and systems engineering. 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. For example, a commitment to performance management can support improvements across a broad range of TSMO strategies. This underlines the substantial benefits versus cost leverage of 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 ramp metering to improve freeway throughput. In many cases, the effectiveness of certain TSMO strategies reaches a "plateau, where further improvements in effectiveness are not possible without specific changes in IOP arrangements—such as improving staff coordination, or upgrades to decision-support systems and other processes.

Helpful References and Examples for Topics in This Section:

As a key component of TSMO, Intelligent Transportation Systems (ITS) can be used as a model for evaluating the balance between costs/risks and benefits of IOP changes to advance TSMO. For example, ITS benefits typically include costs of delay and fuel savings. Costs of improvements in reliability are measurable—but difficult to monetize. Benefits may be allocated by network component and/or strategy. Figure 5 below illustrates the cost to benefit relationships typical of ITS investments, which is a relationship that is similarly important to understand for IOP changes. There are range of techniques to display cost versus benefits, as suggested below in the two graphics.

Literature on change management in organizations (in general, not limited to the transportation sector) also offers insight in understanding the relationship between the costs, risks of doing nothing, and benefits of IOP changes for TSMO. The old adage that change is the only constant in life is particularly true in today's transportation sector with the emergence of new technologies such as connected and automated vehicles and with the applications of big data. The social science of change management acknowledges that change is always difficult and provides a number of models for approaching institutional change to help make these transitions easier. A recent model from McKinsey recommends "four building blocks of change" that help companies adapt to new situations and with the benefits of more successfully achieving the objectives that are the driving force behind their change. For transportation agencies advancing TSMO, the overall goal would be to adapt to new transportation landscapes, constraints, and technologies with the objectives of improving mobility, reliability, and safety. To do this, McKinsey's four building blocks essentially recommend IOP changes, as shown in figure 7 below. For example, changes in training, formalization/institutionalization, and communications/awareness are large features of this model to improve the effectiveness of an organization's adaptation.

Section 7. Identify the Responsibilities for Change Management at the Unit and Agency Level

The Purpose of This Section of the Business Case:

The purpose of this section is to identify the responsibilities for the IOP changes needed to advance TSMO in order to understand what management and leadership efforts are needed. Many of the needed organizational, policy, and funding changes require converting TSMO concepts into mainstreamed program components. These components will cut across agency procedures and organizational structure and require support and cooperation from other parts of the agency, including top management.

IOP changes don't just "happen." As they are likely to involve modifications or additions to policies and/or procedures or changes in reporting relationships, established conventions may be affected along with those involved. Therefore, IOP changes need to be managed. This includes: obtaining authorization, securing necessary resources (if needed), establishing a cooperative framework for actions with key players, defining actions, communicating why changes are needed, and tracking progress. In most cases, the business case will be needed to persuade key decisionmakers or unit managers to support, authorize, or direct the necessary changes needed to improve TSMO effectiveness.

Some IOP change actions are typically the responsibility of TSMO unit managers, while others may be beyond their span-of-control. These types of IOP changes will require the commitment, time, and attention of senior managers (e.g., Chief Executive Officers (CEOs), chief engineers, division heads) which, in itself, represents a form of "cost". These costs can be categories as time and attention which represent a scarce resource of these managers in the face of competing claims for attention. This cost and the need for attention may initially be better understood than the arguments for IOP changes.

In addition, to manage the change initiatives, a tracking process will be necessary to ensure that key actions, responsibilities, time frames, and desired outcomes are widely understood.

General Content to Consider for This Section of the Business Case:

• Focus on the roles and responsibilities for key IOP improvement actions needed to mainstream TSMO.
• Recognition that certain needed changes, especially as related to organization and institutional commitment, are outside the span of control of TSMO managers and require actions on the part of top management.

Persuasive Arguments/Approaches to Consider for This Section of the Business Case:

• Identify the logical sponsor and manager of key IOP changes. Tables 1 through 6 in section 3 provide some visibility to the potential responsibilities by various roles in an agency.
• Identify the critical changes that require support and authorization, or cross-cutting initiatives on the part of top management in the agency (including other division managers, agency leadership, or policymakers).
• Explain that agency culture that supports TSMO requires investments of time, attention, and authority on the part of executive leadership including:
  • Legitimizing through visible communication that TSMO aligns with the agency's mission and objectives.
  • Elevating TSMO as a formal top level program.
  • Identifying and committing to sustainable funding sources for TSMO.
  • Authorizing appropriate organization structure changes and identifying staff leadership as necessary.
  • Describing the level of commitment needed from executive leadership in the form of time, attention, and persuasion efforts across agency top management to direct and support the needed changes.

Helpful References and Examples for Topics in This Section:

Improving Transportation Systems Management and Operations—Capability Maturity Model Workshop White Paper—Culture, (FHWA, 2015) https://ops.fhwa.dot.gov/docs/cmmwhitepapers/culture/index.htm.

Michigan Department of Transportation TSMO Strategic Plan. Appendix D. www.michigan.gov/tsmo

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