How to measure the ROI of public board management software
Making the decision to invest in any technology for your public board can be tricky, particularly if it’s hard to quantify the return on that investment. You don’t want to pay out for software that doesn’t deliver value, especially when using taxpayer money.
Have you been considering board management software and need to get the rest of the board to understand its benefits? This article outlines how to measure the ROI of board management software so you can bring a clear business case to your next public board meeting.
The cost of public board meeting inefficiency
Board meeting inefficiency can result in lost time, errors, and even risks — such as insecure data or bad decisions due to not having the right data to hand.
Inefficient processes slow down workflows. The slower the process, the more money school and local government districts lose.
Inefficiency means board trustees and staff lose time. What many boards fail to account for is the many minutes that can be lost within a day. It may not seem like much when one person loses a few minutes here and there, but it starts to add up when you multiply the minutes lost by many people.
Inefficient processes also negatively impact the morale of your board, leaders and staff. Low morale can cause people to work more slowly, and possibly, lose faith in the district and its leadership.
Conversely, more efficient processes help keep everything up to date, thereby decreasing risks. Board members and staff won’t spend as much time backtracking to retrieve data.
Moreover, technology gives boards more and better data, which can be used to make better decisions for the district. Better decisions save time and money, and improve the district’s reputational status as well.
When it comes to reputation, there is a lot to lose, considering districts are accountable to many stakeholders — whether it be students, parents or citizens — and the community at large.
The value of board management software really does pay off in efficiency terms, but it also provides other benefits that more than justify its cost.
On the other side of the coin, not having board management software brings another set of hidden costs and risks. Among these are:
- Potential data breaches and reputational risk. Stakeholders want to know that your organization is taking the necessary steps to keep data safe. Public sector organizations need to make cybersecurity and data safety a top priority.
- Risk of making the wrong decision. If your board makes a wrong decision because board members didn’t have the right information, the cost implications can be enormous.
- Material security. According to Forrester, who interviewed representatives of organizations using Diligent Board Leadership & Collaboration software, interviewees shared that board and committee materials and communications contain very sensitive information, and they viewed the need to print or email materials as a security risk.
Other key costs incurred by not having board management software
Freedom of Information Act (FOIA) requests can take up significant time and resources in fulfilling. (By providing the community with public transparency and an easy to search site through Diligent Community, you can significantly reduce this cost.)
Noncompliance with open meeting/sunshine laws can also incur costly civil penalties. (Board management software with a built-in public transparency website allows your organization to easily stay compliant.)
How to evaluate the benefits of public board management software
In making the case for software for a public board, you have to look at the outcomes and benefits of the software versus the software itself.
The most basic formula will give you a starting point for calculating the ROI of software:
The Benefit of Investment in the Software — Cost of the Investment
________________________________________________________ X 100 = ROI of Software
Cost of the Investment
As a simplified example, if your organization saved $10,000 because of investing in board management software and you made an investment of $5,000 on software, you would subtract $5,000 from $10,000 to get the top number, which would be $5,000. Then, divide by 5,000, which gives you 1. Now, multiply that by 100, and it gives you a 100% return on your investment.
While the investment cost is easy to calculate (your board technology software partner should give you a quote for those costs), the other benefits of a board management solution can be harder to figure out. It is easier to assess the benefits when you break them down into hard and soft benefits.
Hard benefits of board management software
What are the hard benefits of board management software? The easiest metric to calculate is outcomes resulting from better efficiency, usually measured in costs and/or time saved.
Start with working out how much time you could save on board meeting management.
Here you will need the hourly wage of your board admin or secretary and the number of board meetings per year.
Then quantify the time spent on activities and expenses for each board meeting.
So, for example, before, during and after board meetings, there’s usually time spent on:
- preparing and gathering information
- version control (updating documents, reprints and send)
- collecting feedback (sending out reminders and checking the documents)
You can also quantify costs such as printing, postage and delivery if you are currently printing and distributing board packets.
Forrester has quantified approximately 50% to 60% time savings for board and committee material creation through using Diligent board management software. This includes preparing and distributing board and committee materials for monthly and quarterly meetings which requires substantial effort from governance professionals.
They estimate annual time savings to create and share board and committee materials for an average organization to be 600 hours.
Forrester also cites time savings for IT administration of board management software. Organizations can nearly or completely eliminate time spent on ongoing IT support activities for board management software because product administrators are able to manage board and leadership collaboration themselves without needing IT support.
There may be additional savings made if you are switching to a better solution with reduced risk costs and reduced software subscription and support costs.
Freedom of Information cost savings can be quantified by working out the number of requests your organization typically receives multiplied by the average time to fulfil and the cost for administrator time.
Other hard benefits include:
- Saved time from simplifying workflow processes for your organization
- Quicker training of board members and support staff in key areas
- Faster reporting
What about soft benefits?
Soft benefits are more intangible and can be harder to quantify in dollars and cents. Nonetheless, soft benefits are no less important than hard ones and should be taken into account when calculating your ROI measurement.
What kinds of factors are considered soft benefits? The following list should give you a start:
Improved perception of the organization
There's improved perception among board and committee members and stakeholders. Your board is demonstrating its commitment to following best governance practices.
Improved board engagement, responsiveness and satisfaction
According to Forrester, organizations can expect better response rates from board and committee members because the technology is user-friendly, engaging, and reminds them to approve items and vote on resolutions, etc.
Quicker reporting from committees to help inform the board
Committee reports can be uploaded into the board area keeping the board informed.
Better data to inform decisions
By reducing the time and effort it takes to create and update board and committee materials and by improving user adoption, administrators can share the latest materials with board members faster. This allows executives more time to review materials and have richer conversations in their meetings, leading to better decisions.
Better onboarding and everboarding
Providing pre-induction materials to new board members while making important materials available to existing board members to keep them up to date on key areas for governance, compliance and risk.
Improved accessibility and transparency
Public board management software, such as Diligent Community, allows key information to be published to your public transparency website, as well as offering livestreaming of public meetings, subscription to alerts and updates for citizens, and other transparency features that all help build trust and inclusivity.
Compliance with your local disabilities act
One of the most overlooked aspects of disabilities legislation compliance is ensuring that taxpayers and constituents with disabilities can review or use the information that is published by local government organizations. This may include closed-captioning for videos and text-to-speech software for documents. This element is vital to ensuring that all community members are able to participate in the civic process.
Better policy lifecycle management
Managing your policy adoption and publishing including drafts, edits and approvals, maintaining version control, audit trails, and making policies available to your public stakeholders can be laborious. Streamlining the whole policy lifecycle with built-in oversight for your policy committee and board can save a huge amount of time as well as deliver transparency.
Improved security of sensitive board materials
The cost implications of data breaches can be enormous for the public sector — IBM cites an average cost of $2.6M for data breaches taking place in the public sector.
Partnership with your software vendor
By collaborating with a vendor like Diligent, your organization can leverage expertise in the governance, risk, and compliance (GRC) space, gaining access to valuable insights and best practices, with new opportunities for learning and growth.
The ROI is proven
With clear-cut calculations along with strong arguments on both the hard and soft benefits, a case for investing in board management software is straightforward to make. In fact, the question might be, can you afford not to invest in it? With challenges such as cybersecurity along with regulations and compliance requirements, calls for more transparency in communities, there’s a lot for public boards to manage.
Diligent Community offers many valuable benefits for public sector organizations, from secure communications, easy access to key documents, streamlined agenda and meeting management, policy lifecycle management, public transparency features from website to livestreaming, as well as peace of mind against evolving risks and potential costs. Request a demo today.
