Annualized costs related to current statistical and selected infrastructure activities are shown by function in Table 3.
Table 3. Current Activity and Infrastructure Cost
Overall the annualized costs are estimated at almost 10 million ECU.
The proposed solutions will have a significant effect on the way current functions are performed. Data editing and data conversions will be most significantly effected, in terms of changes in the labor required. Analysis activities will also be affected in a positive direction since professional staff time can be reallocated to other, more productive areas. Table 4 summarizes the estimated impact of the method and technology changes in the same functional groups as shown in Table 3.
Table 4. Estimated Impact of Proposed Solutions by Function
The direct benefits amount to 4.7 million ECU a year. This is based on substantial cost reductions in professional staff time committed to data editing and in data conversion. IT infrastructure costs are projected to increase, almost doubling. The latter reduces the direct benefit by 954 thousand ECU a year but still yields a net annualized cost benefit of 4.7 million ECU.
The investment in IT infrastructure is expected to produce a highly significant productivity benefit. The level of productivity that was achieved in similar organizations in other countries was assumed would be realized in SIS. With this rationale, it was estimated that to achieve the same results without the methodology and IT improvements, the additional costs would amount to an annualized value of 7,240 thousand ECU as summarized under the "Productivity" column of Table 5. Here, professional staff time freed by changing the editing methods is treated as a positive benefit, contributing to the direct benefits.
Table 5. Summary of Direct and Productivity Benefits
Revenues from sale of information products and services are also expected to increase rapidly, as a function of the development of new information products by the liberated professional staff, the introduction of international data acquired from outside sources, and the promotion activities initiated by SIS. Table 6 projects a part of these revenues specifically related to electronic sales up to the year 2005.
If the revenues begin the year following the development phase and run through the year 2005, about 1 million ECU in revenues will be generated. This figure is considered to be extremely low, because it does not reflect improvements in quality and type of information products that are expected to occur from the investment. As a point of comparison, information product sales in the US Bureau of Census which produces only a fraction of statistical data for the US are $3.5 million (2.8 million ECU) for 1994 for bulk electronic data products - i.e., CD-ROM, tapes, cassettes, etc. The revenues of on-line services are projected to be $30 million (24 million ECU) by the year 2000. Figures from Statistics Canada are more relevant, since their statistical programs are more comparable to SIS. Their 1994 revenue for the sale of information products and services amount to $26 million (20 million ECU) - 26 percent from the sale of bulk data products, three percent from on-line services, and 71 percent from custom statistical services. Their on-line services are based on old systems and policies which have not yet been redesigned to take advantage of the potential. It would not be unreasonable for SIS to expect to achieve a level of revenue from information products and services even greater than Statistics Canada, over time.
Table 6. Revenues From Electronic Copy Sales