98 PART | III ITS business models
Zhicai, Jianping, & McDonald (2006) compared the cost-benefit analysis
with the cost-effectiveness study and other multifactor approaches to evaluate
the correlation or differentiation between the advantages and costs of investing
in ITS over a specific length of time. They concluded that while cost-benefit
analysis remains dominant in the evaluation of apps related to transportation,
cost-effectiveness analysis, and (even more) multicriteria analysis could be use-
ful when it is hard to quantify the benefits and provide quantified results in
monetary terms. They also stressed that existing investment valuation procedure
in ITS are readily suitable for assessing several impacts of ITSs.
Efforts should therefore be made to develop evaluation methods for invest-
ment in ITS that have the same form and level of complexity as that of evalu-
ation of conventional transport infrastructure projects. The research of Hardy,
Gao, & Farooq (2005) on the evaluation of economic impacts from the imple-
mentation of ITS in the area of Michigan area used the method of input-output
models. The researchers tried to quantify the impact that ITS will have on vari-
ous economy domains in the Michigan area with two different software pack-
ages. They also tried to quantify the benefits of saving time and fuel, using
the total cost-reduction factor to calculate multipliers for each economic factor
separately. Their study agreed with the results of several more research stud-
ies (Djordjevic and Krmac, 2016; Yan, Zhang, & Wu, 2012; Fei, 2010), which
concluded that almost all financial and social factors are increasing after the
implementation of ITS solutions. Let it also be noted that methods of estimating
investment in transport often do not focus on ITS, however reading is useful, as
they offer a broader approach to the subject.
8.3 ITS investments planning
The investment in ITS has to be performed in three major stages that go from
the conception to the implementation of the investment. In the first stage, it is
important to define the vision and objectives behind an investment in ITS. The
objectives must be realistic and account for all the factors that affect ITS suc-
cess.
The second stage refers to the development of a suitable framework for the
design, implementation, and adoption of ITS. The framework must define the
overall ITS architecture, the required infrastructure modifications/amendments
or new investments and the list of ITS services that will be delivered. It is im-
portant to take into account the perspectives of the three main stakeholders’ of
ITS which are the system users, the system operators, and all other third par-
ties that participate in the development and exploitation of the ITS. Because of
the different conditions that hold in various regions of a national transportation
network, it is impossible to deploy the exact same ITS services and probably
modifications and customizations are needed in order for an ITS service to be
deployed nationally, for example in the entire national road network. In order
to accelerate the service deployment, it is important to cluster together parts of