The value of an innovation business case at Rijkswaterstaat (2023)

The main roads in the Netherlands are managed by Rijkswaterstaat (on behalf of the Ministry of Infrastructure and Water Management). Together with specialized service providers, Rijkswaterstaat conducts inspections and outsources maintenance work to various contractors. Historically, it has been found that the asphalt on some sections of roads wears out faster than others, even though it was constructed at the same time. To plan road maintenance as efficiently as possible, Rijkswaterstaat has been exploring solutions to better predict asphalt wear.

One idea is to install gravel sensors in the top layer of asphalt, allowing measurements of the asphalt's load and condition. Initial brainstorming sessions with market participants have yielded several potential applications for these gravel sensors: for example, the sensors could be used to (1) monitor the asphalt mixture that has been laid, (2) track the road's load (due to weather or vehicles), (3) track the current road condition (e.g., the degree of raveling), or (4) track the current quality of the binder (bitumen) in the asphalt. However, none of these applications are currently available on the market, and each requires a (different) innovation.

Rijkswaterstaat and the parties involved are therefore interested in which application is the most valuable, so that they can jointly shape innovation in the coming years.

Rijkswaterstaat's question to SD&Co:

“In what ways can pebble sensors in the asphalt surface layer be of value and how much value can potentially be achieved with this?”

To answer this question, SD&Co, together with a core team from Rijkswaterstaat and their partners, developed an innovation business case. This was divided into three distinct steps:

1. Understanding the world of asphalt and the processes involved

2. Inventorying ideas about how pebble sensors can be valuable in this world

3. Qualitatively and quantitatively test which ideas are really valuable

4. Qualitative: How does the mechanism work and how plausible is it?

5. Quantitative: calculating the value and costs

During this project we learned a number of general lessons that can be useful for other companies that are going to create an innovation business case with multiple possible applications .

1. Especially when you don't yet know exactly how the innovation will work, it is smart to first think about its possible value

In many cases, when a business case is being developed, the innovation is already quite far along. At that point, the primary focus is on determining whether implementing the innovation would be worthwhile. In this project, the technology was still in a much earlier stage: actual development had yet to begin, and several directions were possible. Therefore, it was wise to thoroughly understand, upfront with stakeholders, which directions were potentially the most valuable.

After the innovation business case, it became clear that for Rijkswaterstaat, only accurate tracking of each asphalt recipe would be of net value. This was just one of 13 ideas. The better they know what's where, the more efficiently it can be reused. Other ideas, such as predicting the moment a road is no longer sufficiently safe (due to fraying) or predicting the moment fraying begins, were also valuable, but both proved very expensive to implement.

By developing the innovation business case, stakeholders have begun to consider alternative ways to power and read the pebble sensors, potentially making these applications cost-efficient.

Conclusion:

If there are multiple possible paths in the development of an innovation, it can be very useful to create an innovation business case at an early stage .

2. Start by understanding the context

The value of sensors lies in the additional information they provide. But information itself isn't valuable. Only if this information can improve processes and decisions does it have added value.

In the first deep dives, we only discussed the current situation. How does the world of asphalt work? In some cases, we were even bored with it: "When are we going to talk about sensors?"

To understand the value of pebble sensors, it was first important to gain a good understanding of the current processes. How are decisions made now? What data is available for this? When are these decisions made? Then, you can brainstorm together about what information is still missing to further improve these decisions.

This step is necessary to prevent tunnel vision focused on a single solution. For Rijkswaterstaat, this step made it clear that the data provided by pebble sensors cannot improve all decisions. In the case of roads, for example, pebble sensors do not help to better utilize the lifespan of roads being replaced due to legislation (noise standards). Pebble sensors also allegedly cannot better predict certain failure modes (cracks often develop in the sub-base, while pebble sensors are located in the top-base).

Conclusion:

By taking the time to truly understand the current situation and processes (even if you think you have them well mapped out), you can ensure you don't overlook any important sources of value. This prevents the expected value of a solution from being overestimated.

3. Work with the right people at the right time: a core team, supported by specialists

With large projects like this, involving a completely new technology, a wide range of disciplines quickly become involved. While this is beneficial, it ensures that no important variables are overlooked, a large project team can also lead to delays in progress or even a lack of decision-making.

Before starting the project with SD&Co, Rijkswaterstaat conducted a preliminary study with 80 relevant specialists from both Rijkswaterstaat and other partners. Subsequently, we opted to work with a small core team for this project. This core team had a guiding role and consisted of enough disciplines to form a comprehensive overview. After the main guidelines were established with the core team, specialists were brought in for deep-dive sessions to delve into the processes and figures. The results of these deep dives were then discussed with the core team to ensure they were correct and complete.

Conclusion:

A core team ensures that neither too many nor too few people are involved. Use the core team as the foundation of the project to form an overarching picture and make important decisions. Specialists can then be brought in as needed to provide the right data.

4. Often only a few variables are really important in a business case

Even in this project, where it was still unknown how the technology (gravel sensors) would be further developed, it appears that only a few variables are truly decisive. In this case, these are the potential lifespan extension, the percentage of the asphalt that can be reused at high quality, and the annual costs of managing the readout systems.

We discovered this during the project. To ensure we didn't miss any important sources of value, we initially tried to understand how the mechanism worked for each of the 13 ideas: how does this generate value? It quickly became clear that many of these ideas, due to existing processes and information provision, were unlikely to add much value.

We then quantified the three truly promising ideas: what is the expected annual value (both financial and emissions-related) and what are the expected one-time costs (for development) and annual costs? This revealed that just a handful of variables accounted for more than 90% of the value and costs.

Conclusion:

In practice, every business case has only a small number of truly decisive factors, both on the value and cost side. However, you often don't know this in advance. Therefore, start broadly and try to determine together which variables are truly decisive.

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Did you find this interesting or do you have any questions about the case study or lessons learned? Let us know at roland@sdco.nl