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Measuring Return on Technology Investments Is Hard Work
9/1/2004
- A shift to decentralized budget management that gives individuals and departments much greater control over their budget management;
- An increase in recruiting yield with more effective targeting of recruiting dollars;
- An increase in admissions productivity with more inquiries and applications processed by fewer staff;
- An increase in financial aid productivity with more financial aid applications processed with fewer staff;
- An optimization of course scheduling that allows more classes and events to be scheduled with a smaller inventory of classrooms;
- A shift to Web-based financial aid systems that allow students to submit applications, view and accept or decline awards, and view transaction balances online;
- A shift to Web-based course registration that allows all course enrollments to be transacted and all course grades to be posted online;
- A shift to self-service human resources systems that allows employees to self-manage their paychecks, benefits, vacation, and sick leave accruals.
While these process improvement benefits are no less real than any “hard” financial savings, the evidence pointing to them is largely anecdotal rather than data-driven. Undoubtedly, there is a financial benefit associated with each, yet administrators will have to undertake deeper analysis before they will be able to assign dollar values to these improvements.
There are, however, two primary instances in which a dollar value or financial benefit can generally be assigned to system-derived improvements:
- Budgetary savings from reductions in paper, print, and mailing costs;
- Staff avoidance achieved by using process redesign to increase transaction volumes while keeping staff levels flat.
Budgetary Avoidance
However real, these financial benefits tend to be modest relative to the total cost of the investment. Occasionally, there can be significant “budgetary avoidance” benefits, as well. For example, Texas Christian University found that it benefited from the efficiency gains resulting from the implementation of a classroom scheduling application from PeopleSoft.
Between 1999 and 2003, TCU’s Registrar’s Office was able to increase by 33 percent the number of classes and special events scheduled, with only a 10 percent increase in classroom space, while staffing levels remained constant. Some of this efficiency gain came from the full utilization of previously unused classrooms, but much of it came from optimizing the number of students per-class, scheduling classes back-to-back, and more effectively locating teachers in their own buildings.
The optimization of classroom scheduling has contributed to higher levels of
faculty and student satisfaction and, according to estimates by the Registrar’s
Office, allowed the university to avoid the need for 16 additional classrooms—the
equivalent of two new classroom buildings—at a projected cost of $40 million.
[See Eduventures’ 2004 study “Measuring Returns: Examining the Financial
and Process Improvement Impact of Student Administration, Human Resources, and
Finance Systems in Higher Education”]
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