Inside Higher Ed recently asked Ives and Seymour about why analyzing return on investment is uncomfortable for many in higher education, especially those in administrative roles. They identified two main reasons. Firstly, return on investment can be difficult to measure, and secondly, the perceived lack of value from the returns can create anxiety.
The potential return on investment for higher education institutions is significant, especially for those in administrative roles, who are responsible for making key decisions about investment in areas such as technology, staffing and curriculum development. For instance, TOPEKA – Volatility in the stock market will push annual return on investment to the Kansas Public Employees Retirement System into negative territory in the short term. In the long term, however, the return on investment should remain positive.
To better understand the potential return on investment, institutions should consider conducting a Forrester TEI study. The Forrester TEI study examined the potential return on investment (ROI) and business benefits enterprises may realize by deploying the right technology. The study found that the return on investment of technology investment can be significant, with companies realizing an average of $1.64 in benefit for every dollar invested.
In addition to examining the potential return on investment, institutions should also consider the long-term implications of their investment. The return on investment of an investment over time will depend on the institution's ability to leverage the technology or resources for maximum return. For instance, the Kansas Public Employees Retirement System is expecting a return on investment of 5.1%, but the long-term performance of the investment will depend on the ability to generate more return in the future.
Higher education institutions should also consider the cost of not investing, which can be even more costly than the initial investment. For instance, if technology investment are not made, institutions may miss out on opportunities to gain an edge in the competitive higher education market. Furthermore, institutions may also lose out on potential revenue opportunities if they fail to invest in new initiatives or technologies.
Analyzing return on investment can be uncomfortable for many in higher education, but it is necessary in order to ensure that investment are made wisely and that the potential return is maximized. Institutions should consider conducting a Forrester TEI study to gain insight into their potential return on investment and ensure that their investment are made with the long-term in mind.
