A Brief Examination of the Strategic Plan

for the U.S. Integrated Earth Observation System

(IEOS)

Earth & Ocean Observing Business Model

Capitol Hill

Oceans Week 2006

From Vision to Venture: The Business Case for Ocean Observation

June 14th, 2006

Scott J. McFarland, P.E.

Business Development

The Boeing Company

•Oceans•Ice•Land•Atmosphere•Solid Earth•Biosphere

Earth System Models

•Remotely-sensed•In-Situ

Earth Observation Systems

High Performance Computing.Communication & Visualization

Predictions

Decision Support

Ongoing Feedback to Optimize Value and Reduce Gaps

Standards & Interoperability

DATA

Observations

Assessments

Decision Support Systems

Business-Model / Operational-Model from the U.S. Strategic Plan for IEOS

U.S. Strategic Plan - ModelExisting

McFarland 060501A

ManagementDecisions

Societal Benefits

PolicyDecisions

Start Here

From the: Strategic Plan for the U.S. Integrated Earth Observation System, (IEOS), Page 15 (25 of 84), by the Inter-Agency Working Group

on Earth Observations (IWGEO), 2004

ManagementDecisions

•Oceans•Ice•Land•Atmosphere•Solid Earth•Biosphere

Earth System Models

•Remotely-sensed•In-Situ

EarthObservation Systems

High Performance Computing.Communication & Visualization

Predictions

Decision Support

Ongoing Feedback to Optimize Value and Reduce Gaps

Standards & Interoperability

DATA

Observations

Societal Benefits

PolicyDecisions

Assessments

Decision Support Systems

Suggested Business-Model for the U.S. Integrated Earth Observing System (IEOS)McFarland 060501A

Private Sector End-Users

Private Sector Businesses that Generate Profit & Taxable Revenues

Raw Data &Value-AddedInformation

• Ingest & Use of Valuable Knowledge & Information

• Actionable, Wealth Creating & Revenue Generating Data

• U.S. GDP Increased

• Tax Revenues Increased

• American Competitiveness Enhancement

• Impactual Solution for US Gov't Economic Priorities

Private Sector moves Requirements/Needs Data to optimize Earth Observing Systems and Models, to enhance output value and taxable revenues

Increased U.S. Tax Revenues as Consequence of Accelerated Value-Added RevenuesUST & OMB

$ $

Rigorous & Tangible Financial "Valuation" of System Performance, From Private Sector Integration

U.S. Strategic Plan - ModelSuggested

Start Here

ManagementDecisions

•Oceans

Earth System Models

EarthObservation Systems

Predictions

Decision Support

DATA

Observations

Societal Benefits

PolicyDecisions

Critical Model Areas To AddressMcFarland 060501A

Private Sector End-Users

Private Sector Businesses that Generate Profit & Taxable Revenues

Raw Data &Value-AddedInformation

Private Sector uses outputs to generate U.S. GNP Growth & U.S. Taxable revenuesUST & OMB

$ $

U.S. Strategic Plan - ModelAreas to Address

Private Sector"Needs" to Drive

Ocean Observations That Create Wealth

(Demand-Pull)

Grand Canyon between Gov't

& Industry

Bridge

Existing Economic Valuation Tools Fail.Replace with New,

Effective Metrics Tools

Use Public-Private Partnership Architecture to Integrate Ocean

Observing in Gov't & Private Sectors. Integration enables financial valuation

determination

Gov't Industry

?

Back-Up Slides

1. Research

2. Research -to- Operations

3. Research -to- Operations -to- Value

$MM Spent

Time$ 0

$MM Gained

Breakeven ROI

$MM Spent

Time$ 0

$MM Gained

Breakeven ROI

$MM Spent

Time$ 0

$MM Gained

Breakeven ROI

$ Valuatable?

No $ Outcome ?

Possible$ Outcome ?

$ ValuatableOutcome

Ocean Observing Systems - Value Chain Outcome Variations

McFarland 060501A

NOAA - Business Model (Current)

LEADERSHIPStrategic Plan

1. Ecosystem Management2. Climate3. Weather & Water4. Commerce & Transportation

Resources1. People2. $$$3. Infrastructure

ServePublicNeeds Congress

OMB/DOC

WorkforceManagement

Open Forum

Stakeholders

Products & Services

Strong Corporate Culture(breaking down stovepipes)

1. Proven Track Record2. Public Benefits3. Comprehensive Plan

Customer Satisfaction

LA/PAStrategy

Requirements

1. Interdisciplinary Teams2. Research Breakthroughs3. Transition to Operations4. Operations

1. Requirements Process2. Matrix Management3. Improved Research Management4. PPBES5. Project Management

-Private Sector-Value Creation GDP Impacting

Products & Services

Private Sector & Industry

Customers & Users

NGO Stakeholders& Users

Customer Satisfaction

Congress(Voting Body)

U.S.Treasury

Advocacy

Votes

Lobbying

Preferences

InterestsInitiatives

White Papers

Hearings &Issues

$$

NOAA Products& Services (P&S)

To Nation

OriginalNeeds

Products & ServicesOutcomes & Results

Value Differential

+ / -

Influence

Senators & Congressmen

Executive Branch

Bills

Laws

Directives &Mandates

LossAvoidanceProducts & Services

Valuable or Not Valuable?

ComparisonMetrics

P&S

P&S

Delta + / -

Redefine Products & Services to Meet

Requirements

Budget Cycles

Gov’t Agencies

AcademicStakeholders &

Users

P&S

P&S

Value-AddedProfitable Sales

Non-ProfitSales

Regulationof Public &

Private Sectors

OMB

$$

OSTP

NEC

CEA

CEQ

CENR

House

Senate

Committees

FiscalReqmt’s

Annual Cycles’07, ’08, ‘09Schedules

DOE

DOI

DOC

State Dept

EPA

USDA

CalculateROI

NOAA’s Product End-Users

Wealth Maintenance & Wealth Creation

Federal GovernmentNational NeedsNationPublic*

Compare Outcomes & Performance to Original

Requirements

Performance Assessment

National Assessment ofNOAA Product & Service

Performance & Value

U.S EconomicWealth Created

Using NOAAProducts & Services

Wealth Creation

Wealth Creation

U.S. EconomicLosses Prevented

Using NOAAProducts & Services Loss

Avoidance

Loss Avoidance

Percentage of $12 T

Percentage of $3 T

Maintains U.S.GNP Growth

Maintains U.S.Tax Revenues

Creates New& Additional

Tax Revenues

Creates NewU.S. Economic

Growth

Requirements

Product & Service Changes

NeedsNeedsNeeds

Products Service to Internal NOAA

Products Service to Other Agencies

Products Services to

Academia and NGOs

Products Services to

Private Sector

Limit Value-Add to Outputs

Create High Value-Added Outputs

Data Low/Mixed Value-Add

HighValue-Add

Low/MixedValue Add

NOAA Operational System Outputs

Internal NOAA Data & Products

Low/No Value-AddData To

Industry/Users

Low/NoValue-AddData Sets

For Research

High Value-Add Inter-Agency

Products

Products Services Direct

to Nation

“Baseline”(Only)

Products & Services

RestrictedValue-Add

NOAA’s Product Outputs

Academia Private SectorGovernment

Requirements

Needs

NGO

Programs & Benefit Areas

ConstantMaintained

TaxRevenues

IncreasedTax

Revenues

ConstantMaintained

TaxRevenues

Cross-Cutting Priorities

Nine-Societal Benefit Areas

Area Attributes

Natural Disasters

EcoSystems

AgricultureHealth Weather Climate OceansWater

ResourcesEnergy

Resources

Protect, Restore, Manage Coastal & Ocean Resources

Understand Climate Variability

Support Safe Transportation

Commerce

Provide Weather&

Water Information

NOAA – Societal Benefit Areas (9)NOAA Goals & Priorities (4)

Goals, Priorities, Mission Areas

Synchronize Priorities &

Benefit Areas

PriorityHierarchies

McFarland 060509A-Rev.A

NOAA’s Societal Benefit Areas NOAA’s Cross-Cutting Priorities

Execution of Operations

CompositeFacilities

CompositeResources

Facilities & Assets

Resources

ImprovementSpecifications

World Class Workforce

State of the Art Research

Global Environmental Observations

Promote Environmental

Literacy

Exercise International Leadership

NOAA Core Capabilities (5)

Missions & Schedules

$$PPI & Finance

$ Reqmts

$ Amts

$ Controls

Adm

NWS

OAR

NCDC

Climate

Fishery

NOAADivisions

NOAA Infrastructure

Operations

Research for Public Use & IP

IncreasedTax

Revenues

Infrastructure

Infrastructure

Original Requirements

ValuationData

Start Here

NOAA - Business Model - (In-Process)