Why bother studying costs and benefits?

1
Why bother studying costs and benefits?

• To support transition from project to core
  service
• Need to justify expenditure
• Demonstrate accountability, management control

2
Sources of informationCosts

• Technology Costing Methodology (TCM) Handbook
• Western Cooperative for Educational
  Telecommunications, 2001
• http//www.wiche.edu/telecom/projects/tcm/
• The Costs of Networked Learning - Phase 1-2
• Sheffield Hallam University, 1999-2001 (for JISC)
• http//www.shu.ac.uk/schools/cms/research/cnl/
• Management Information for Decision Making
  Costing Guidelines for Higher Education
  Institutions
• KPMG Management Consulting, 1997 (for the Joint
  Funding Councils)
• http//www.shefc.ac.uk/content/library/others/cost
  ing/contents.htm

3
Sources of informationAnalysing costs and
benefits

• Evaluation of the Costs and Benefits of IT Usage
  in a Higher Education Environment
• University of Strathclyde Insight Initiative,
  2001 (for JISC)
• http//www.wiche.edu/telecom/projects/tcm/
• Cost-Benefit Analysis Guide For NIH IT Projects
• National Institute of Health, Maryland, USA, 1998
• http//irm.cit.nih.gov/itmra/cbaguide.html

4
Sources of informationInformation on specific
benefits of MLEs

• Reports, papers, including
• JISC MLE Interoperability studies
• http//www.jisc.ac.uk/mle/interop/interop-reports.
  html
• BECTA MLE Case Studies
• http//ferl.becta.org.uk/features/mle/casestudies.
  htm
• Cost-Effective Uses of Technology in Teaching
  (CEUTT)
• http//www.ceutt.org/
• US literature on academic "enterprise portals"
• Interviews with / Surveys of DMU staff and
  students

5
Conclusions

• No consensus over how to measure costs in HE
• Staff time is a very significant factor, but it
  is difficult to arrive at accurate figures
• Hidden Costs and Costs borne by others
  associated with ICT developments
• Difficult to separate out the costs and benefits
  of MLE from related activities VLE, Intranet
  development, Content Management Systems, etc.
• Many benefits of MLE are intangible rather than
  tangible

6
Choices

• Activity-Based Costing or traditional Top-down
  approach?
• Full costs or marginal costs?
• How to treat hidden costs and costs borne by
  others?
• Use discounting techniques (e.g. NPV)?
• Assign numerical values to intangible benefits?

7
We chose

• Top-down approach
• Full costs
• Broad assessment of hidden costs and costs borne
  by others (but not quantified.)
• Use discounting techniques not used
• Did not assign numerical values to intangible
  benefits
• Choice should reflect the needs and practices of
• the Institution.

8
Categories of benefit

• Direct cost savings
• Print and distribution costs
• Savings in staff time
• easier communication
• reduce time spent on low-level admin activities
• less time correcting errors and their effects
• Qualitative benefits
• more staff time freed up for teaching and support
  
• better information and support for students
• reduction in non-completion rates
• flexibility inter-operability of systems means
  that will be easier to meet new information
  requirements, e.g. requirement for Progress
  Files.

9
Examples (1)

• On-line Student Regulations and Support
  Information
• Direct cost saving c50,000
• Plus improved quality and consistency of
  presentation

10
Example (2)
Effect of reduction in non-completion rates