Value of Investment (VOI) is a methodology to
better understand the costs and benefits of
proposed projects.
A VOI assessment helps:
Evaluate projects competing for funding
Sell projects
Articulate the benefits or reasons for a project
Sustain a project over time
Financially
Justified?
Estimate Project Costs (Project TCO)
To properly implement and support the technology project,
all initial and ongoing costs need to be budgeted. The CoSN
Project Cost Estimator workbook annualizes budgeted initial
costs which are added to ongoing annual costs, and indirect
costs (non-budgeted user time) to calculate the project TCO.
Estimate Project Costs (Project TCO)
To properly implement and support the technology
project, all initial and ongoing direct costs need to be
budgeted. The Project Cost Estimator workbook
provided by CoSN will amortize these costs for you.
For ROI, determining anticipated indirect
(non-budgeted user time) costs is not necessary, but
useful if you want to understand the project TCO.
Calculate Anticipated Savings and Revenues:
Most projects, even those focused on qualitative
benefits have some cost savings including lower
out-of-pocket costs, user productivity or future
cost avoidance. There may also be some anticipated
increase of revenues based on higher attendance,
grants or state/federal aid. The VOI Project Benefits
Worksheet will help you to identify other dollar
savings and user productivity enhancements and
apply them as benefits.
Measure Qualitative Benefits
For these to be considered benefits they must directly
or indirectly affect the school or district mission, goals or
mandates. CoSN has provided a VOI Project Benefits
worksheet to help you to identify and apply these qualitative
benefits.
The approach to calculating these anticipated benefits is:
1. Determine school or district mission, goals and mandates
2. State the anticipated project benefits in measurable terms
Can you come back later and measure benefit achievement?
3. Align anticipated project benefits with the appropriate
school goal
Calculate Anticipated Savings and Revenues
Determine all anticipated savings, such as lower
out-of-pocket costs, better efficiencies, user
productivity or future cost avoidance. There may
also be some anticipated increase of revenues
based on higher attendance, grants or state/federal
aid. The ROI sheet in the Project Cost Estimator
allows you to apply these savings in a time-phased
approach, so that break-even in months can also be
determined.
The ROI sheet in the Project Cost Estimator will
calculate ROI and tell you if this project has a
strong projected Return on Investment (ROI >.8).
Negative ROI means that this project can't be
justified on savings alone, and ROI between 0 and
.8 may also need qualitative benefits to fully justify.
2 or more projects competing for funding?
(i.e. are you evaluating which of 2 or more
projects to pursue?)
If so, extra steps are required to score the
benefits of one project vs. another
Probability of success (%) needs to be
estimated via consensus.
For ROI, probability of success can be
applied against projected $ savings.
In any case, evaluating risk helps to avoid
potential project failure
Evaluate proposed projects competing for funding:
Scoring model is used in the Project Benefits Worksheet.
1. Assign relative importance to each school/district goal
2. On a scale of -10 to 10, obtain consensus on impact
of each measurable benefit on its respective district
goal(s). Negative impact is rare, 0 is no impact and
10 completely achieves the goal
3. The workbook will calculate a score for each benefit
and total project benefits score
4. Risk, determined by consensus, is probability of success
(%) for each project, which modifies the project score
5. Divide the score of each proposed project by its project
TCO to compare "bang for the buck."
Was it worth it? - Evaluate Results
Once your wildly successful project has been implemented,
you have an opportunity to objectively review actual costs
and benefits vs. the projected costs and benefits. This will
allow you to concisely respond to the project skeptics. Since
the anticipated costs and benefits were stated in measurable
terms, the actual results can be measured:
Actual costs versus anticipated costs
Actual savings or revenues vs. anticipated savings revenue
Actual measurable benefits versus anticipated benefits
Since the business of schools is education
and schools operate for the public good,
many of the benefits of implementing
technology can not be measured in terms
of dollars. We call these qualitative benefits:
This project is being evaluatedbased on
enhancing student achievement or achieving
other non-monatary benefits
This project is being evaluated primarily for financial
payback. The Project Cost Estimator contains worksheete
for evaluating costs and one for savings ($, time, future
cost avoidance and increased revenue) projections. ROI
and break-even pay-back period are calculated.
Yes
Yes
No
No
Eight comprehensive TCO case studies have been conducted at schools that represent a mix of district size, urban/suburban/ rural locations, and varied socio-economic communities. The original four studies conducted by Gartner were used to prove the concept and did not include a user survey to collect indirect labor information.
The four studies conducted by CoSN did include a user survey to collect indirect labor. The high-low values from these case studies for each result metric are displayed in the CoSN-Gartner TCO tool for comparison to the TCO tool user assessment results.
Gartner TCO Case Studies
CoSN TCO Case Studies
One-to-One Student Computing Initiative Case Studies
CoSN also conducted case studies of three districts that were in the first or second year of their one-to-one student computing initiative. These studies evaluated the costs of the one-to-one laptop programs and attempted to understand the expected benefits.
