The surge of pandemic-era funding enabled schools to implement a wide variety of new technology tools to supplement curriculum and meet student needs. Now, as budgets tighten and federal funding shrinks, schools must justify every dollar.
To help quantify products鈥 effectiveness, some schools have begun to look at return on investment (ROI).
In education, ROI evaluates the product鈥檚 cost in relation to student outcomes to determine its value. This approach helps schools calculate how much learning happens per dollar spent.
To find a value, schools may be tempted to leverage the ROI metrics shared by edtech companies. Unfortunately, many of these ROI studies are conducted by marketing firms and lack third-party validation, which means metrics could be inflated, misleading or not representative of all students using the product.
A formula to measure edtech ROI
A reliable ROI formula can help districts evaluate the success of their efforts to improve student outcomes, including financial ROI. With a credible ROI methodology, districts can identify which products are effective, where they may need to invest in different products, and even where they might keep an existing product and implement it more effectively to realize a greater return.
An ROI calculation specific to the education sector needs to help districts understand the contribution of edtech products to student success separately from the impact of classroom teachers and other relevant factors. To accurately evaluate a product鈥檚 value without overestimating or exaggerating its impact, a formula must minimize the benefits and maximize the outcomes of the technology鈥檚 impact on student achievement.
External validation from an objective group ensures any given ROI analysis is conducted appropriately by isolating program effects from other influences, resulting in credible metrics.
To calculate ROI, the formula is simple: ((benefits 鈥 costs) / costs) 脳 100.
To apply this formula to education, districts should consider the total cost of owning and implementing an edtech product, including:
- Product cost (invoice)
- Professional learning costs
- Number of students
- School sites
- Teacher time
- Teacher salary
- Teacher benefits
- Internet costs
- Full-time equivalent for the district
- Product usage
- Student growth
- Expected student growth
For example, published in the International Journal of Educational Leadership Preparation utilized a process outlined by the ROI Institute to analyze program effects in a district using the eduCLIMBER MTSS platform.
The evaluation involved more than 3,000 educators鈥攊ncluding teachers, administrators, academic coaches, interventionists, psychologists, counselors, support staff and paraprofessionals. For every $1 spent operating eduCLIMBER, the district saved $2.54 in educator work time and other costs.
Theoretically, a perfect implementation that considers staff salaries and benefits, professional development, internet access, subscription price, user implementation and more could yield an ROI as high as 1800%. In reviewing the actual implementation with these same considerations, the study found a 154% ROI for this district鈥檚 investment in eduCLIMBER.
Once schools identify each product鈥檚 ROI through a credible methodology, they can compare the results between products to determine and prioritize those that provide the greatest return.
ROI can also identify opportunities to improve product implementation fidelity to increase ROI, as the above example makes clear. If a school is underperforming against benchmark ROI or against the returns most other schools see, leaders may revisit whether teachers understand how to access the product, what its capabilities are and how to use it effectively.
Analyses have revealed that even modest amounts of professional development can significantly improve product implementation, resulting in enhanced student outcomes and increased ROI.
A research-backed approach to improving student learning
Both schools and their providers have an obligation to ensure funds are spent wisely. Rather than operating on a social track record or anecdotal input, ROI supports schools with measurable evidence that investments are driving results.
ROI analyses represent the next generation of efficacy research in education. They offer a more comprehensive and nuanced approach for districts to understand the exact value products bring to their schools.
A credible methodology for calculating ROI without overinflating product value helps districts accurately assess the value of components contributing to student growth. Supported by reliable ROI metrics, district leaders can be confident that their decisions are a wise use of limited funds and positively impact student learning.
