Return on Investment in ICT
What's so academic about computers and networks in developing countries?
An article describing the importance of female contribution to and involvement in the promotion of digital communication technology at African universities.
Introduction:
Though information technology has played and continues to play an instrumental role in the organization and execution of most economic and social activities today, the issue of whether the gains of IT adoption and use out way its costs is still debated. This report presents findings on research done on the return of investments in information technology, looking first at how it plays out in the general economy and then applying it to the education sector with focus more on institutions of higher learning. Finally this report provides links to articles on this issue that could be consulted for further information on the topic.
What is return on Investment?
Return on investment (ROI) basically refers to the relative benefits of an action and is frequently derived by calculating the “return” (incremental gain) from an action divided by the cost of that action. ROI analysis normally associated with financing projects basically means that before embarking on projects, decision makers evaluate the investment potential of such a project by comparing the magnitude and timing of expected gains to the investment costs. In the last few decades, this approach has been extended to decisions relating to the purchase of assets such as computers or information technology systems. http://www.solutionmatrix.com/roigo.html. There are different opinions on the ways in which ROI should be measured and consequently different views on the actual return on investment for various projects.
Return on investment in Information technology generally.
Analyzing the return on an IT investment (ROI) is typically more complex than other projects because of the intangible nature of some of the costs and benefits associated with its use. This difficulty in measurement often leads considerations of ROI in IT to involve issues of the relative effectiveness of ICT decisions for organizations as well as the appropriateness of various ICT projects.
Researchers like Diane Rezendas, 2001, whose studies revealed an absence of positive returns on IT spending by more than half of the IT managers she surveyed are of the opinion that the correlation between success and failure in IT investments have little to do with the overall amount spent and everything to do with how IT dollars are spent? Others like Chris F. Kemerer, the David M. Roderick Chair in Information Systems at the University of Pittsburgh and the editor of Information Technology and Industrial Competitiveness have a very future oriented concept of return on investment in IT. He is of the view that "many IT investments are likely to provide their organizations with significant potential opportunities in addition to their estimated direct benefits. He believes that using real-options modeling (which considers the cost of projects in terms of financial securities which have value in the future) provides a way to quantify these opportunities and may help justify projects in circumstances where vague claims of intangible benefits may not".
Thus these numerous discussions on the return on investments in information technology attempt to identify the ways in which the use of Information technology increases the productivity of workers and minimizes the cost of the organization or firm. Many call for an understanding of the way the use of IT involves the re engineering of activities. It is said that the return on investment (ROI) from information technology investments varies directly with the degree to which the technology transforms core operations of a firm or institution. http://www.oig.lsc.gov/tech/tecroi.htm.
Return on investment in Information technology in Education.
Return on investment in IT in education can be looked at from various angles. One dimension from which it can be considered is the return on investment in IT as a tool for enhancing the learning process (teaching and learning) and another, the return on investment in IT as a tool of administration in educational institutions. However, irrespective of the way in which IT is used, any measure of the return on such investment needs to bear in mind the strategic goals of educational institutions and how effective their use of information technology, and their investments in them will be in meeting their strategic goals?
Milton Glick and Jake Cupiek extend the issue even further stating that even as many institutions of learning are acquiring and experiencing increasing access to multiple technologies, is this affecting the learning experience provided? and even if this answer is positive how wide spread is this effect?
Costs of Incorporating ICT into education
Given the basic roles of ICT in the learning process and administration at institutions of learning, some typical costs incurred in an investment in information and communication technology for education are:
Capital cost of computer and network hardware and software. This includes computers and peripherals such as printers, scanners and projection devices; furniture; and electrical and communications wiring. Most significantly, these are not one-time expenses, but require continuous upgrading.
Installation cost, including classroom and laboratory renovation. In addition to acquisition costs, hardware must be installed, maintained, secured, and managed--ongoing expenses that come out of operating expense line items
Hardware and software upgrades. These can become very expensive as outdated hardware and software are replaced with newer ones which are more sophisticated and thus more expensive.
Skilled personnel for hardware and software installation, repair, and maintenance.
Skilled Personnel and facilities for training and support of users (instructors and students).
Some other costs of IT in education are less obvious One example could be the need for more rooms for computers requiring the building or conversion of classrooms that would otherwise have been available for students. Another is in terms of time, in incorporating ICT into education there is a certain amount of time required by professors to learn and keep up with the technology. They need to adjust their curriculum to allow for the application of these technologies. For the students also, study time is often exchanged for time to learn the technology. One other cost often mentioned is the possible replacement of direct exchange between professors and students. However, incurring this cost and the extent of it depends on the extent to which IT is incorporated into class activity. (Brian Tissue,1996)
Find out more about the costs involved in
setting up and maintaining an IT system
Benefits of IT use in Education
Two very commonly cited categories of benefits for using computers and the Internet in education are the fact that ICTs can improve learning and can also improve the cost effectiveness of education. Some of the roles ICT plays in education are:
ICT as a gateway to vast sources of information for staff and students in academia. This includes the case for ICT as having the great potential to increase access to knowledge. Access to computers and the Internet has increased the ability of professors and students to carry out much more informed research. It has also provided opportunities to establish contact, cooperate, and maintain beneficial relationships with other researchers of similar interests. It has broadened the scope of their analysis and research and can improve the quality of their work with the opportunity for diverse views from other colleagues acquired over increasingly short periods of time.
ICT as a tool for increased productivity and professional effectiveness. This is an impact of ICT felt by all in the education sector extending beyond just professors and students to administrative and management staff as well. Here ICT enables staff in the education sector do what they have been doing only much faster and more effectively. As such, this role of ICT includes administrative software packages which keep student records, figure payroll, generate state reports, and schedule classes to e-mail and word processing for improved communication to specially designed teacher tools like computerized grade books, test/worksheet generators, and curriculum templates.
ICT as a promoter of conducive teaching and learning environments. ICT has been shown to have a positive impact on the learning environment and students generally. Today, students use multimedia to learn interactively and work on class projects. They use the Internet to do research, engage in projects, and to communicate. The new technologies allow students to have more control over their own learning, to think analytically and critically, and to work collaboratively. It also involves the use of ICT as an information processing and productivity tool. The use by students at all grade levels of real-world productivity software like word processors, databases, spreadsheets, presentation programs, multimedia authoring tools, e-mail, video production equipment, digital reference materials, electronic indexes, and network search engines to complete complex, authentic projects is the proper instructional use of technology. On the part of the professors, ICT has proven a very useful tool appearing in various forms such as simulations and education networks.
In developing countries, especially Africa "ICT provides an avenue to improve education outreach and standards across the continent. Affordable ICT could attain these goals in three important ways. Firstly, it could be used to support and expand existing curricula by increasing the accuracy, presentation, user-friendliness and attractiveness of courses. Secondly, it could provide a crucial research resource for both students and teachers. And, thirdly, it could forge strategic linkages between educators in Africa and those in other countries, at one level, and between students and the wider global community on the other. "(Valerie Gilpin, 2000)
When effectively used, ICTs help to ensue that graduates turned into the labor force are equipped with the necessary Information technology skills to be competitive in the job market.
Conclusion
Thus, as institutions of learning trying to figure out their return on investment in ICT, they need to find ways to measure the benefits of ICT use and compare them with the costs of these ICTs. The above mentioned costs and benefits are just some basic guides that institutions of learning may want to consider and develop ways of measuring. Universities and colleges need to look at how ICT contributes to the fulfillment of their goals and it is important that as institutions of learning these be directed at improving the quality of education provided to their students and enhancing the educational process in the bid to produce graduates capable of contributing meaningfully to the overall development of their nation.
As has been mentioned earlier, for there to be any positive return on investment in ICT in education, educational institutions need to have comprehensive IT plans and strategies.. Furthermore the staff and students also have their role; to spend their time wisely and developing adequate study and work skills and habits are necessary to make any investment in ICT yield positive returns.
Enhancing the Impact of Investments in 'Educational' ICT by Peter Twining
http://kn.open.ac.uk/public/document.cfm?documentid=2515
References
INVESTIGATE ALL OPTIONS, By: Kemerer, Chris F., InformationWeek, 87506874, 04/27/98, Issue 679
Returns on Investments in Information Technology: A Research Synthesis. By: Dehning, Bruce; Richardson, Vernon J.. Journal of Information Systems, Spring2002, Vol. 16 Issue 1, p7, 24p, 1 chart, 1 diagram; (AN 6765689
Investigate all options. By: Kemerer, Chris F.. InformationWeek, 04/27/98 Issue 679, p170, 1p, 1c; (AN 552194)
How to bolster the bottom line. (cover story) By: Sherman, Stratford; Sookdeo, Ricardo. Fortune, Autumn93, Vol. 128 Issue 7, p14, 7p, 6c; (AN 9309100024)
(Diane Rezendes Khirallah , 2001. "IT Success Depends On Quality Of Spending, Not Quantity "; Information Week. http://www.informationweek.com/story/IWK20011220S0010
The Costs of Incorporating Information Technology in Education by Brian M. Tissue
Department of Chemistry, Virginia Polytechnic Institute and State University
Blacksburg, VA 24061-0212 tissue@vt.edu
http://www.chem.vt.edu/archive/chemconf97/paper04.html#benefits
Enhancing the Impact of Investments in 'Educational' ICT by Peter Twining
http://kn.open.ac.uk/public/document.cfm?documentid=2515
Investing in Online Learning: Potential Benefits and Limitations by Silvia Bartolic-Zlomislic and A.W. (Tony) Bates The University of British Columbia
http://bates.cstudies.ubc.ca/investing.html
Return on investment in ICT and related articles
Return on Investments: Investing in Online Learning: Potential Benefits and Limitations
by Silvia Bartolic-Zlomislic and A.W. (Tony) Bates The University of British Columbia
Guideline for Sectoral ICT Policy and Planning :
http://cbdd.wsu.edu/networks/africa_dot_edu/Images/PDF/ICT2001-W.pdf
The Costs and Effectiveness of Educational Technology: Proceedings of a Workshop
by Arthur Melmed (editor) November 1995
http://www.ed.gov/Technology/Plan/RAND/Costs/
The Answer Is Still Technology - Strategic Technology
The author of this article asks how effective are colleges and universities in their use of technology, particularly information technology, and are their investments in technology meeting their strategic goals?
http://www.educause.edu/ir/library/pdf/ERM0162.pdf
Student Basic ICT Skills Provision
http://www.iteu.gla.ac.uk/citscapes/products/files/CSGCU.pdf
Virtual Institutions on the African Continent|
www.col.org/virtualed/chapter7.pdf
Why do people use information technology? A critical review of the technology acceptance model
http://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6VD0-44YWRSF-2-G&_cdi=5968&_orig=search&_coverDate=01%2F31%2F2003&_qd=1&_sk=999599996&view=c&wchp=dGLbVzz-lSztb&_acct=C000020939&_version=1&_userid=440026&md5=ab51563a0121fe5fbc4a6dcda9f2d5e5&ie=f.pdf
ICT Investments, productivity growth and Organisational Change:
ICT Investments, productivity growth and Organisational Change:
Background paper on the NewKind-project: New Indicators for the Knowledge Based Economy.
Application of constrained least-squares techniques to IMRT treatment planning
Application of constrained least-squares techniques to IMRT treatment planning*1
by S. M. Crooks Ph.D.a and L. Xing Ph.D.a, , (a Department of Radiation Oncology, Stanford University School of Medicine, Stanford, CA, USA)
International Journal of Radiation Oncology*Biology*Physics Volume 54, Issue 4 , 15 November 2002, Pages 1217-1224
(Contact: Reprint requests to: Lei Xing, Ph.D., Department of Radiation Oncology, Stanford University School of Medicine, 300 Pasteur Drive, , Stanford, CA, , USA 94305-5304. Tel: (650) 498-7896; Fax: (650) 498-4015; email: lei@reyes.stanford.edu)
Computers in secondary schools in developing countries: Costs and other issues.
(Including original data from South Africa and Zimbabwe)
Andy Cawthera
http://62.189.42.51/DFIDstage/Pubs/files/computers_in_sec_schls.pdf
Return on Instructional Technology Investment: Getting the Bang for the Buck by Sylvia Bedwell Brace, Ed.S.
http://www.mtsu.edu/~itconf/proceed97/payback.html#anchor115765
Strategic actions in information technology investment based on real option theory
http://www.sciencedirect.com/science?_ob=MImg&_imagekey=B6V8S-44XCB54-2-5&_cdi=5878&_orig=search&_coverDate=05%2F31%2F2002&_qd=1&_sk=999669998&view=c&wchp=dGLbVlb-lSzBS&_acct=C000020939&_version=1&_userid=440026&md5=e11bf8d7aafcd08a4af8742b0c79fe38&ie=f.pdf
Decision Support Systems
http://www.sciencedirect.com/science?_ob=JournalURL&_cdi=5878&_auth=y&_acct=C000020939&_version=1&_urlVersion=0&_userid=440026&md5=3dea6c0d8aefb88d7d368495c83b4007
Volume 33, Issue 1 , May 2002 , Page 1-11
http://www.sciencedirect.com/science?_ob=IssueURL&_tockey=%23TOC%235878%232002%23999669998%23316035%23FLA%23display%23Volume_33,_Issue_1,_Pages_1-103_(May_2002)%23tagged%23Volume%23first%3D33%23Issue%23first%3D1%23Pages%23first%3D1%23last%3D103%23date%23(May_2002)%23&_auth=y&view=c&_acct=C000020939&_version=1&_urlVersion=0&_userid=440026&md5=bc9e84dd9af3e2497db7dbe90553d01a
Corresponding author. Tel.: +1-716-645-2373; fax: +1-716-645-6117; email: mgtsand@acsu.buffalo.edu
Fourth annual Educause survey identifies current IT issues by Grant Crawford, Julia A Rudy and the Educause Review comittee
http://www.educause.edu/ir/library/pdf/EQM0322.pdf
(contact: educause)
Investing in Online Learning: Potential Benefits and Limitations by Silvia Bartolic-Zlomislic and A.W. (Tony) Bates
The University of British Columbia
http://bates.cstudies.ubc.ca/investing.html
contact silvia.bartolic@ubc.ca, tony.bates@ubc.ca
Measuring organizational IS effectiveness: an overview and update of senior management perspectives
http://delivery.acm.org/10.1145/520000/513270/p11-
seddon.pdf?key1=513270&key2=2630967501&coll=GUIDE&dl=GUIDE&CFID=11205763&CFTOKEN=38236301
Technology in schools by the US department of education
http://nces.ed.gov/pubs2003/2003313.pdf
Teachers tools for the 21st century
http://nces.ed.gov/pubs2000/2000102A.pdf
Measuring Intranet Return On Investment by George McGrath and Anthony Schneider
http://www.intrack.com/intranet/ireturn.shtml
