Points on the ground are first projected to a closed surface representing the earth. This surface is an ellipsoid that is a mathematical model of the earth's geoid or mean sea level. Because we generally live in areas that are above sea level, horizontal ground distances will usually be reduced by a small amount when projected to the ellipsoid. The ratio of distances on the ellipsoid to the horizontal distances at ground level is called the elevation factor. There are various methods of determining the elevation factor at a point that can be found in surveying books. Some methods are more rigorous than others.

The ellipsoid is the most important part of the definition of the coordinate system’s datum and sometimes has the same name as the datum. Some common examples in North America are: