EdTech Price Index: Mapping the Journey to Smart Spending and Implementation
Last year, district administrators brought us a challenge: figure out actual edtech costs.
If we all know that education technology gets purchased, but has varying degrees of use, how can we figure out what the stuff we're paying for actually costs?
How can we understand our actual investments — let alone compare investments in different edtech tools to one another — to inform what's best for our budgets?
In our individual situations, how should we best understand and compare product pricing that comes in all sorts of fee structures?
Enter the EdTech Price Index™…
The EdTech Price Index (or EPI) is a standardized metric that conveys the true cost of an educational technology by accounting for licenses that were actually used. The calculation is a useful tool for education organizations to quickly and easily understand what instructional technology actually costs by dividing the total cost of licenses that were purchased by the total cost of licenses that were actually used.
An EPI score of 1.00 is ideal, meaning that every $1 spent is fully utilized. Conversely, an EPI score of 2.00 would indicate that an education organization is actually spending twice as much as the license price. In these two situations, for every $1 of license cost the organization spends $1, whereas in the second example, it costs $2 for every stated $1 of license cost.
Education organizations use EPI to not only understand costs of individual edtech tools, but also to have a consistent apples-to-apples comparative tool when thinking about investments across their edtech ecosystem. The licenses that are used essentially carry the cost load for unused licenses in determining what a product actually costs an organization.
Since the formula can be applied in virtually any licensing model (monthly/annual subscriptions, per student fees, one-time costs as applicable to specific student populations), the EPI creates a standard, comparative understanding of costs across products with different pricing models. The product’s cost efficiency improves as more licenses are used, because the total cost of the digital tool is less per license. Conversely, in scenarios where licenses are purchased and unused (for whatever reason), those licenses are calculated at a higher rate because that waste is factored into their true cost.
In more than a hundred IMPACT™ Analyses conducted by partner schools and districts across the country, a range of EPIs have been calculated to inform true edtech costs. Two examples of EPI scores from these analyses are:
EPI = 4.61
$35/license core math product used in a charter school district in the eastern U.S. (used August 2015 to January 2016)
EPI = 1.01
$51.35/license core reading product in a public school district in the southeastern U.S. (used August 2016 to January 2017)
While every district strives for 100% utilization, such that all purchased licenses are implemented and measured, don’t be intimidated by a higher than 1.00 EPI score. In fact, it’s extremely rare to have an EPI of 1.00, and, like a long race, the goal isn’t perfection… the goal is to consistently improve based on your situation, strengths and goals!
Understanding what’s being used, how often and how much is the map, with engaging educators and conducting in-depth quantitative analyses as guides and mile markers along the way. Gathering these data points and looking holistically at actual edtech product spending gives schools the information necessary to select instructional technology with usage and effectiveness metrics established, and drive equitable access and personalized learning at scale.