Let’s Talk About Money

Working with some European countries recently has brought the issue of money – and how it relates to technology – into sharp focus. This article argues that in times of shrinking budgets, there is a strong case to make more, not less investment in ICT.

Should money be spent on ICT in schools at all?

With education budgets under pressure, and often having to cover not only schooling but broader children’s services too, a question that seems to be increasingly raised is whether money should be used for ICT in schooling at all.

To those of us involved in ICT in schooling, the answer seems an obvious “hell yes”. However, to a senior decision maker, ICT is usually just another cost. Of the $2.4trn spent on schooling every year, ICT is just a “drop in the ocean”. To someone looking at budgets at a high level, ICT will be buried amongst many other budget lines, not least staffing (sometimes as much as 80% of whole budget) and physical buildings – the schooling “estate”. Regardless of budgetary conditions, it’s always important to consider how ICT can be used as a strategic asset.

Whether choosing to invest in more staff, the physical environment or ICT, the decision making process should be set in the context of measurable, desired outcomes. Only when the required outcomes are known does it make sense to think about where to make or cut investment.

The key areas where investments in schooling should be expected to have outcomes and impacts are:

  • Academic — qualifications; acquisition of 21st Century skills; test results; and “Value Added”
  • People — high performance; organisational health; staff retention; staff qualifications; stakeholder satisfaction
  • Operational Excellence — efficient and effective processes; fit for purpose environments; spaces that are appropriate for effective learning; demonstrable value for money

ICT can impact deeply in all of these areas, enabling each type of expenditure to have maximum effect. Let’s now take a look at some of these in more detail.

Academic Attainment

A big question is whether – and to what extent – ICT can raise student attainment. Isolating the impact of ICT from all other contributory factors can be problematic. However, positive relationships between ICT use and improvement in subject-related learning have been found in several subject areas.

In 2006, for example, a research project conducted by Becta (the British Educational Communication and Technology Agency) investigated the effects of ICT on educational attainment, based on evidence gathered from 60 schools in England. This research analysed the relationship between the pupils’ performance in National Tests and GCSE’s (secondary school exit examinations) and their reported use of ICT at three age levels (11, 14, 16). The study found evidence of a statistically significant positive association between ICT and higher achievement, particularly in national tests for English, Science and Design & Technology.

The graph below depicts the relative positive impact of ICT on certain subjects.

A second UK project – “Test Bed, 2002 to 2006” – confirms that technology may lead to an improvement in test performance relative to ‘benchmark’ comparators. Test Bed schools showed higher learning performance in English – 4.68% vs 4.09. They showed significant comparative increases in mathematics test scores. Additionally, the number of secondary pupils achieving A to C GCSE grades had significantly improved over the course of the project. The Test Bed project showed that just one year after technology had been implemented, there was improved attainment. From this report, it is possible to quantify the effect of an ICT investment and to show the cost of achieving an improved outcome.

However, sceptics could argue that the UK, which has traditionally spent significant amounts of money on ICT in schools, declined in the PISA international ranking in recent years – hardly demonstrating good evidence of improved attainment associated with significant ICT spend. Perhaps then we should look at a set of countries that lead the world in schooling attainment – the Nordic countries.

E-learning Nordic 2006 shows that ICT has a positive impact on improving the pupils’ learning. A positive impact of ICT on teaching is seen on pupil engagement, differentiation, creativity and less waste of time. The study also shows that the preconditions for using ICT for knowledge sharing, communication and school-home co-operation are beneficial.

Echoing these findings, the 2006 OECD study entitled ‘Are pupils ready for a technology rich world?’ tells us that there is an association between the length of time students had been using computers and their PISA Mathematics scores.

For additional background, look at “The ICT Impact Report – A review of studies of ICT impact on schools in Europe” from European Schoolnet.

Despite these pieces of evidence, the truth is that there is very little hard research clearly demonstrating that ICT directly improves learning outcomes. The direct cause and effect of technology on test scores and exam results is very hard to pin down. Some would even argue that this is no longer even a relevant question – what matters more is that if schools see the value of students acquiring 21st Century Skills then ICT is an undeniably crucial tool.

Whilst it’s fairly clear that ICT makes learning more effective when properly implemented, it’s by no means easy to quantify the degree to which this is the case.

People

Clearly, people are any organisation’s biggest asset, and ICT has a role to play in terms of helping mangers set, manage and evaluate objectives and performance. Dashboards, KPIs and portals all have a role to play in helping staff align to organisational goals, and perform at their best and in ways that best serve the objectives of the organisation. Organisational health can be monitored through ICT systems, helping to reduce staff turnover – which is estimated to cost 1 year’s worth of salary for each person leaving an organisation.

Continuous Professional Development is another area where ICT can play a role. In Maryland, for example, it used to take 18 months for a teacher to receive a certificate after completing training. After the introduction of a CRM system, that time was reduced to a few days.

Finding out if stakeholders are satisfied with a system is made much easier with online tools such as e-forms and surveys. Analysing the data and discovering areas of dissatisfaction is again made easier through the use of ICT.

Operational Excellence

A concept worth exploring is the use of analytic systems to precisely target investments to where they needed, and then understand the return on that investment. Imagine a schooling system that has extremely low Science scores. One approach could be to throw resources across the entire system in a National Science programme aimed at raising Science standards generally. A better approach is to use analytics to deeply understand the causes of the problem and then to use this information to remediate it. Out of the thousands of potential contributory factors, analytics could help identify those factors that have the biggest impact on the results, and enable much more precisely targeted resourcing to address those issues. The net is raised standards at a fraction of the cost of the “scatter gun” approach.

A lot of money can also be wasted where future conditions are inaccurately forecast and planned for. Predictive analytics has role in:

  • Predicting the needs of students, teachers and stakeholders.
  • Modelling possible local, regional, state, or national trends that will affect schooling and the  programmes offered
  • Forecast workforce, resource and budgetary requirements

Finally, energy savings can be made easier with “smart environments”. ICT enabled security services can also help reduce costs.

Saving Money With ICT

So let us now go deeper into the operational side of schooling and further explore where ICT can directly save money. After all, the implementation of ICT in other sectors has mainly been in the pursuit of driving out costs. Schooling is different to other sectors, but there is no reason why the rules of high performance in other sectors can’t be applied here.

Administration

Administrative costs can be enormous; particularly where schooling is managed centrally and detailed reports and strong compliance is required. Technology can save time and money by making processes such as reporting, timetabling, student record keeping, examination, attendance, HR, and financial management faster and more efficient.

At each step of the administration process – Monitoring → Analysis → Planning – ICT can cut costs through decision support and decision automation enabled by automated workflows.

Areas for both cost savings and increased efficiencies include moving from paper reports to KPIs and dashboards.

Technology also has fantastic potential for easing the teacher workloads. For example, assessing students is a labour intensive process for teachers everywhere, but technology can play a role in helping teachers and stakeholders understand students’ knowledge capabilities and skills. In a Virtual Learning Environment, for example, students can undertake learning tasks which can be assessed and reported on automatically.

Effective resource management can lead to greater efficiencies especially where a Resource Management or Enterprise Resource Planning (ERP) system is used. ERP systems includes financial, supply chain and human resource management sub-systems, together with analytical and programme management tools.

Enterprise Resource Planning can be used for:

  • Financial management
  • Supply chain management
  • Business intelligence
  • Performance management
  • Project management
  • Human resource management
  • IT management

Shared Resourcing

Many services consumed by schools can be aggregated, and Cloud services are accelerating this. Managing content, data, interventions, HR, IT support, specialist learning services, procurement and many other services are often better managed by consortia. Clearly, areas such as leveraging aggregated purchasing power can have an immediate financial impact. ICT – particularly communication and collaboration technologies – can enable consortia to be easily formed and flexibly managed.

Imagine the savings that could be derived from an aggregated set of Cloud services that enable a large number of schools to purchase goods and services through a simple mechanism for procurement, billing, supply-chain, and accounting.

Inspection

Sending inspectors to schools is an expensive method of quality assurance that involves checking work after the event, identifying sources of non-conformance, and taking corrective action.

This is a comparatively inefficient method for achieving a basic level of quality. It requires the employment of people to check on operations, and inspection doesn’t add value to the service – it merely adds to the cost. ICT can be used to enable schools to self-inspect, and address quality and performance issues. This enables a smaller face-to-face inspection team to ensure that schools are aligned, complying with reporting guidelines, and dealing with the exceptions.

Examination and Assessment

Public examinations are a huge industry. In England, for instance, PricewaterhouseCoopers estimated that the cost of running the examination system in 2003-04 was $915 million. (QCDA, 2005).

ICT can open up new ways for students to demonstrate and authenticate their understanding, skills and abilities, at comparatively low cost. E-portfolios, distance peer assessment, electronic testing, assessments and video presentations are all readily accessible to many students. ICT can be used to go beyond “rear view mirror” assessments, as it makes it possible to access and analyse student achievement data on an on-going basis, and take corrective action before high stakes examinations.

Risk Management

The hidden cost of ineffective learning

Most of the rioters in the recent English riots had low education achievement. Across the world, the hidden costs of disengagement and poor academic performance are enormous, and have a range of impacts such as:

  • Crime, drug use, teenage pregnancy etc
  • Poverty related health issues
  • Future tax revenues
  • Low participation in e-citizenship

A recent European Commission study puts the lifetime cost of dropping out of school early at between 1.1 and 1.8 million Euros per person. In Finland the cost is estimated at 27,500 Euros a year. In Spain, for example, dropout rates are running at 30%, so making even a small impact on this number can make a big difference. ICT solutions such as SIGMA – an early warning and intelligent intervention system in the United States – have potential for significant positive economic impact by anticipating which students are most at risk, then intervening before problems become serious.

Whilst ICT is just one of many factors affecting academic performance, it’s reasonable to assert that an investment in engaging children and supporting their learning with ICT should have a payback. Decision makers seeking both quick wins and longer term benefits can use ICT mediated intelligent intervention techniques to address a range of schooling related issues – academic and social.

For a deeper analysis of how risks can be managed through intelligent intervention, see “Managing Student Relationships” article.

Saving ICT Costs

ICT itself can be made more cost effective in a number of ways, and through virtualization and Cloud services in particular. Software licensing is an easy target for cuts, but the reality is that it accounts only for 14% of ICT spend at the most and in some cases as little as 5%.

The key is to use software to drive down ICT costs, and virtualisation and Cloud technologies offer a range of ways to reduce utility, facility (e.g. electricity and property), hardware, maintenance, and support costs.

Other approaches include using systems such as Windows Multipoint Server to “breathe new life” into old hardware, and re-using older, refurbished computers through, for example, the digital pipeline initiative.

Understanding ROI

Return on Investment is a highly contentious issue in schooling because there are just so many factors and variables to take into account. However, understanding ROI is crucial – without it, concrete plans are much harder to make manage.

At a very simple level you could argue that ROI can be stated as the number of units of learning completed divided by the cost. Schooling systems are ecosystems, so we need to consider a range of other factors too.

According to Cranfield University School of Management, all benefits can be measured to one degree or another, and the main categories of benefit are:

  • Financial—can it be converted to money?
  • Observable—can you see it, or find evidence of it?
  • Quantifiable—do you have the figures available now, somewhere?

ROI can be thought of in value terms too. For example, economic value, which needs to be understood at the level of contributing human capital to local, regional and national economic development plans.

Social value—clearly the domain of schooling—is more complex, but the Harvard Business School offers some useful insights:

“… Social Value is ‘about inclusion and access.…’ Value creation in this arena can be measured using a social return on investment metric (SROI), social earnings calculations and other evolving metrics. SROI analysis attempts to identify direct, demonstrable cost savings or revenue contributions that result from… interventions. (Jed Emerson, Jay Wachowicz, Suzi Chun, 2001)

One clear example would be to connect citizenship programmes with reductions in crime, or healthy eating programmes with reductions in healthcare costs.

Steps to Establishing ROI

The London Borough of Hillingdon produced an excellent model for understanding ROI across a range of public services. The following is based on this work (Simon Willis [Editor], 2005).

The first step is to list all the benefits that come from an initiative across all stakeholders. The second step is to categorise those benefits into three groups:

Financial Benefits

Those that will (when delivered) realise hard tangible cost savings, e.g.

  • Reduced property and utility costs
  • Reduced facilities management costs
  • Reduced recruitment costs
  • Cheaper, faster procurement—enabled by online procurement
  • •Reduced postage costs—swapping from manual post to email.
Efficiency Benefits

These are productivity improvements – e.g. employee time saved from web-enabled self-service. They can either be banked as financial savings or alternatively counted as ‘free’ resources to be reallocated elsewhere.

E.g.

  • Greater productivity—increased staff motivation from flexible working
  • Reduced staff turnover—improved work-life-balance
  • Better use of specialists—focus on value-added tasks via job redesign
  • Greater efficiency in data handling from access to electronic information
  • Reducing resource duplication
  • Reduced admin from standardisation of responses—e.g. communication to parents
  • Parent and student self-service using online forms/transactions
  • Enhanced performance-monitoring through tracking/data
  • Simplified supply chains.
Human Capital Benefits

Those benefits that cannot be converted with any degree of reliability into cash or productivity gains, but are the core operation of schooling—i.e. the number of units learned:

  • Academic Qualifications
  • Vocational Qualifications
  • 21st Century Skills

An example of how this can be brought together for an investment in a schooling system is as follows:

In this example, for a total investment of $1.5m, during Year 1 of the modernisation project an additional 500 units of learning has been outputted and other benefits to the equivalent amount have accrued. Using this example, you’d expect to see increased ROI over time as capital expenditure decreases while the benefits persist.

Setting out the ROI in this way clearly illustrates where investments need to be made, where costs can be reduced, and impacts best gained.

According to ICT Nordic report, “return on investment from ICT investments requires a commitment to organisational implementation on the part of the school management. They must be visionary enough to initiate and continuously support the use of ICT as a strategic tool for developing the general ambitions of the school.

In conclusion, in times of budget constraints, there is a strong argument to make more, not less ICT investment. ICT can be a strong strategic asset to increase academic and people performance and drive operational efficiencies. It can be used to save money in areas such as administration, inspection, examinations and assessment, and managing risks. For ICT to have financial impact it needs to be deployed with accuracy and in pursuit of clear goals. It also needs to be managed in an environment in which ROI is understood.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s