The Costs and Effectiveness of Educational Technology - November 1995

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Table 1, taken from Keltner and Ross, shows the cost of technology implementations for pioneering schools like these. In addition to data on these five schools, Table 1 includes data on three school-wide designs sponsored by NASDC.¹¹

Table 1

Comparative Cost Figures

	Corona	E. Bakers field	Eliza beth St.	Taylors ville	Black stock	ALL School	North brook	CC
Total Annual Cost	$169,863	$299,835	$331,542	$227,942	$381,340	$233,018	$348,450	$151,940
Annual Cost per Student	$142	$182	$184	$371	$410	$432	$453	$490
Student Total	1,200	1650	1,800	615	930	540	770	310
Ratio, Students: Computer Unitsa	11:1	7.5:1	9:1	3:1	2:1	3:1	2:1	1.5:1
Hardware Subtotal	$50,343	$133,470	$140,341	$110,619	$ 213,650	$100,258	$232,600	$57,790
Software Subtotal	$16,600	$11,620	$24,700	$23,633	$38,760	$15,300	$14,200	$15,800
Infras tructure	$8,040	$14,905	$19,001	$ 5,000	$22,930	$ 6,900	$24,750	$ 8,300
Staff Dev.	$24,880	$24,840	$26,500	$15,690	$85,000	$13,760	$19,400	$11,050
Per sonnel	$62,000	$105,000	$100,000	$69,000	$12,500	$92,000	$42,500	$50,000
Mat erials	$8,000	$10,000	$21,000	$ 4,000	$8,500	$ 4,800	$15,000	$ 9,000
Percentages
Hardware Subtotal	29.64	44.51	42.33	48.53	56.03	43.03	66.75	38.03
Software Subtotal	9.77	3.88	7.45	10.37	10.16	6.57	4.08	10.40
Infras tructure	4.73	4.97	5.73	2.19	6.01	2.96	7.10	5.46
Staff Dev.	14.65	8.28	7.99	6.88	22.29	5.91	5.57	7.27
Per sonnel	36.50	35.02	30.16	30.27	3.28	39.48	12.20	32.91
Mat erials	4.71	3.34	6.33	1.75	2.23	2.06	4.30	5.92
per Student
Hardware Subtotal	$41.95	$80.89	$77.97	$179.87	$229.73	$185.66	$302.08	$186.42
Software Subtotal	$13.83	$7.04	$13.72	$38.43	$41.68	$28.33	$18.44	$50.97
Infras tructure	$6.70	$9.03	$10.56	$8.13	$24.66	$12.78	$32.14	$26.77
Staff Dev.	$20.73	$15.05	$14.72	$25.51	$91.40	$25.48	$25.19	$35.65
Per sonnel	$51.67	$63.64	$55.56	$112.20	$13.44	$170.37	$55.19	$161.29
Mat erials	$6.67	$6.06	$11.67	$6.50	$9.14	$8.89	$19.48	$29.03

^a This line was added to the table in Keltner and Ross; computer units equals sum of student, teacher and lab computers.

^a This line was added to the table in Keltner and Ross; computer units equals sum of student, teacher and lab computers.

The cost figures shown are not computed from actual historical prices, but rather as the amortized cost of the school configuration based on today's prices. Per Keltner and Ross, the following rules and assumptions were used:

• the current equipment inventory was used;

• current prices for equivalent computers were used for all computer hardware;

• the cost of hardware and software products was amortized over five years;

• the cost of any infrastructure, like special furniture and cabling, was amortized over ten years;

• the cost of any initial professional development for teachers was amortized over five years; and,

• the cost of any new staff, staff development, and materials and supplies was treated as an annual expense.

Three things stand out in these data. First, these schools all have lower student-to-computer ratios than the current national average of 12:1, and in most instances, much lower ratios. Second, the two dominant factors contributing to total cost per student are computer hardware and cost of additional personnel needed to run the technology programs. Third, the cost of software is small by comparison with the cost of hardware, unlike most enterprise computing¹², and small absolutely. Keltner spoke to this at the workshop

The graph below shows the sensitivity of the cost per student to the student-to-computer ratio.

Fig. 1 Student to Computer Ratio

The chart and table suggest a story about annual student cost. When the number of school computers is relatively modest, like one for every seven to eleven students, costs like technology-related staff, staff development, and materials and supplies will tend to dominate total cost; when the number of school computers increases to one for every two or three students, variable costs for hardware, software and infrastructure will tend to dominate.

Software can include system, application, network and reference products; and application software can be further divided into tools, i.e., feature rich and content poor like word processing software; and content software, i.e., content rich and feature poor like common drill-and-practice software.¹³ Keltner and Ross speak to the relatively low level of school expenditures they found for software: Software expenditures account for 10% or less of total technology costs at all eight schools. "Software costs are on average one-quarter to one-fifth of total hardware costs. The school environment is not one that puts sophisticated demands on the software component of a technology program. The number of basic software programs installed on individual students??computers is typically limited. Non of the schools in this survey purchased site licenses for more than 5-6 "tool-based" software products, e.g., Microsoft Word, Clarisworks, Hypertext or Hypercard, and the average was more like three. With a site license for 25 computers costing between $1000-$1500, an expenditure of $3000-$4000 typically proved enough to outfit an entire classroom of computers with basic software applications.

"Another explanation for the low level of software expenditures is the ability of schools to generate economies of scale in the use of expensive software products. The Christopher Columbus, Corona and Elizabeth St. schools each spent $30,000-$40,000 to set up large libraries of CD-ROM and videodisc software products. CD-ROM and videodisc products are an important source of both "content" and "reference" software. Blackstock and Taylorsville spent $43,00 and $70,000 respectively on network and instructional management software. While expensive, these software items do not increase software expenditures per student significantly, because their cost is distributed over a large number of students. CD-ROM and videodisc products are used in the same way as library reference books--they are stored in one place for use by all students. Network and instructional management software are normally used on a school-wide or classroom-based LAN."

An earlier workshop¹⁴ suggested an apparent market failure in content software, especially at the junior high and secondary school levels. The absence of products may be explained by the low level of school expenditures. School expenditures for software in 1994 were less than $750 million, or an average of $7500 per school for the nation's 100,000¹⁵ or so schools. This figure compares with under $400 million in consumer sales for CD-ROMs in the very first year that ???mily??computers came equipped with CD-ROM players.

Whatever the cause, the shortfall in available content application software raises questions about whether students, on average, are realizing the full benefit of the school technology implementations, whatever the school's primary curriculum choice, linear scope and sequence, or many-pathed project-based; and the extent to which fully prepared teachers may be able to compensate for the shortfall in content applications.

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¹¹ As Rand is the principal planning and evaluation contractor for NASDC, these data were conveniently available.

¹² The expectation in enterprise computing is that the cost of software will approach and equal the cost of hardware.

¹³ Drill-and-practice software is the most familiar current example of content software, closely tied to the common scope and sequence curriculum in use by most schools. Content software need not in principle exclude products that aim to support a project-based curriculum. In practice, little content software of either kind exists for junior high and secondary school grades.

¹⁴ James Harvey (ed.), The Market for Educational Software, DRU-1041-CTI, RAND, Santa Monica, CA, May 1995.

¹⁵ Used as a nominal figure throughout this summary.

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