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Forecasting ROI from Fast ForWord® and Reading Assistant™ Products

June 21, 2011 by Andrew Ostarello

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Return on Investment, or “ROI” is a straightforward concept. With educational interventions, we invest something (typically time, money, or energy) and receive some benefit.

The primary benefit of investing time, money, and energy in Fast ForWord® and Reading Assistant™ products is increased student achievement. This benefit has always been a focus for Scientific Learning. However, in our discussions with customers, we realized that many district stakeholders had a parallel benefit that they are concerned with: the financial impact on their district as a whole. We decided to see if we could address and quantify this parallel (and perhaps complementary) view of ROI.

We identified four areas where data suggest that implementation of Scientific Learning products can impact a district’s financial costs:

Reduction of the high school dropout rate
Reduction of referrals to special education
Reduction of the number of students who require ELL services
Reduction of the number of students classified as “struggling readers”

Here’s an example of how we tried to quantify one of these benefits. A district in Swartz Creek, Michigan observed a 30% drop year-over-year in special education referrals after implementing Fast ForWord products with their students. To be safe, we chose a very statistically conservative estimate for the reduction a new customer might expect to see in their special education referral rates: 21.2%. Technically, we got this by looking at the lower bound of a 95% confidence interval for the effect based on the Swartz Creek data.

These estimates led to the creation of Scientific Learning’s Return on Investment Tool. The tool estimates the ROI—that is, the true financial cost—of using Scientific Learning products over a three year horizon. This includes the initial software purchase and three years of product support. Note that we often see ROIs greater than 100% (i.e. a net financial benefit) for medium to large implementations with lots of students.

If we take a look at a three-year ROI for a large implementation, in year one the costs exceed the financial benefits, but in subsequent years the products more than pay for themselves. Actual estimates will depend greatly on the individual district and the scope of the implementation.

To get an ROI estimate for your school or district, contact us.

79% of ELL Students Increase Proficiency by One or More Levels