Return-on-Investment (ROI)
Value-of-Investment (VOI)
Measuring the Value of a
Comprehensive Commerce Suite
Presented By
Timothy Aaron - Director, Blackboard Consulting
Tom Bell – VP, Industry Relations, Blackboard
April 12, 2005
A word from our lawyers…
•
Any statements in this presentation about future expectations, plans
and prospects for Blackboard and other statements containing the
words "believes," "anticipates," "plans," "expects," "will," and similar
expressions, constitute forward-looking statements within the meaning
of The Private Securities Litigation Reform Act of 1995. Actual results
may differ materially from those indicated by such forward-looking
statements as a result of various important factors, including the factors
discussed in the "Risk Factors" section of our most recent 10-K filed
with the SEC. In addition, the forward-looking statements included in
this press release represent the Company's views as of April 11, 2005.
The Company anticipates that subsequent events and developments
will cause the Company's views to change. However, while the
Company may elect to update these forward-looking statements at
some point in the future, the Company specifically disclaims any
obligation to do so. These forward-looking statements should not be
relied upon as representing the Company's views as of any date
subsequent to April 11, 2005. Blackboard, in its sole discretion, may
delay or cancel the release of any product or functionality described in
this presentation.
Welcome
• Session Objectives
– Outline a model for measuring net campus value of
deploying a comprehensive commerce suite
– Understand how to quantify the components of
measuring return & value of the commerce suite
• Innovation
– Understanding how to create, sell and implement a
comprehensive plan for deploying the commerce
suite
• Results/Outcomes
– Maximization of ROI & VOI of the commerce suite
It starts with a vision…
The Networked Transaction EnvironmentTM
…and it translates to value
EXPLORATORY
SUPPORTED
STRATEGIC
MISSION
CRITICAL
INSTITUTIONAL BENEFITS
Phase I
Phase 2
Phase 3
TIME
Phase 4
TRANSFORMATIVE:
THE NETWORKED
TRANSACTION
ENVIRONMENT
Phase 5
Overview
• What…
–
–
–
–
Increased Revenues
Decreased Expenses
Increased Services
Increased Security
• How…
– Blackboard Transaction System™
– BbOneSM
– Blackboard Community System™
• Result…Net Value
Measuring ROI and VOI
Investment
Operations
Direct Benefits
Indirect Benefits
Net Campus Value
Investment: Start Up
•
•
•
•
•
•
Card Production
Host Hardware and Software
Card Readers
Communications
Installation and Training
Office Set-up
Investment: Expansion
•
•
•
•
Card Software
Card Readers
Communications
Public Relations
Operating Costs
•
•
•
•
•
•
Labor
Equipment and Supplies
Maintenance and Repair
Public Relations
Depreciation
G&A
Direct Benefits
• Increased Revenues
– Integrated Accounts & Activities
– Expansion Efforts
– New Sales Opportunities
• Decreased Expenses
– Elimination of Duplicative Card Effort
– Elimination of Cash
– Distributed Management
– Systems Integration
Increase Revenues
• Integrated Accounts & Activities
Grow revenue opportunities by capturing
funds for on campus use
– Package Flexible Spending Accounts…
…and market to parents, students and
employees
– Account Management…
…allow for easy review of transactions and the
deposits of additional funds online, anytime
and anywhere (and anyone)
Increase Revenues
(continued)
• Expansion Efforts
Grow revenue opportunities by extending
acceptance of integrated accounts
throughout the campus environment
– Point of Sale
– Vending, Copies, Laundry
– Printing
– Event/Activity Access
Increase Revenues
(continued)
• With New Sales
Grow revenue by selling more items direct to
students, employees and parents online and
off-campus
– Students and employees…
…capturing off-campus spending via the card leads to
higher card office revenues through shared revenues
…online marketplace allows for nearly unlimited
expansion
– Unique markets…
…allowing parents/others to order packages online
(and market to them via internet)
Decrease Expenses
• Eliminate Duplicative Card Effort
Replacing all existing cards and related
transaction systems on campus with a
universal transaction environment reduces
multiple equipment, maintenance and
operating expenses
• Elimination of Cash
Replacing cash sales with card sales helps to
lower the handling costs associated with cash
as well as the losses/shortages that inevitably
occur
Decrease Expenses
(continued)
• Distributed Management
Allowing individual departments to manage
their privileges and locations decreases the
overall operating expenses
• Systems Integration
Automated data integration allows for nearreal time data flow between systems ensuring
accurate privilege management while
reducing the need for manual processes
between departments
Measuring the Impact
• Increase Revenues
Action
Avg. 3-Year Gain
New Flexible Accounts
25 – 50%
Online Account Management
15 – 25%
Expansion (Vending, Laundry)
5 – 15%
New Sales (Off-Campus)
5 – 15%
New Sales (Online)
5 – 15%
On a base of $5,000,000, the
increased revenues over 3 years could
be $2,750,000 to over $5,000,000.
Measuring the Impact
(continued)
• Decreased Expenses
Action
Avg. Annual Savings
Extrapolated
$10,000 per system
$30,000 to $50,000*
3.5 – 5%
$35,000 to $50,000**
Online Deposits
.5 – 1.0 FTE
$14,000 to $28,000***
Systems Integration
.25 – .5 FTE
$7,000 to $14,000***
Expansion: Printing
Reduced waste/abuse
Cost recovery
$25,000 to $50,000
Redundant Systems
Less Cash
Totals
$111,000 to $192,000
*Assumes 3 to 5 systems replaced by single card
**Assumes a base of $5,000,000 (with 33% cash) and that 67% of
the cash is converted to card.
***Assumes FTE at $25,000 with 12% Fringe Benefits
Indirect Benefits
•
•
•
•
More Efficient Operations
Better Customer Service
Improved Safety and Security
Enhanced Contract Management with
Distributed Reporting
More Efficient Operations
• Eliminate Cash Handling
• Direct Connection to Campus
Accounting
• Survey and Research without Major
Labor
• Integrate Existing Systems
Better Customer Service
• 24 x 7 x 365 via Web
• Efficient Shopping on-line
• Current and Up-to-Date Information
always available
• Customer can self serve
Improved Safety and Security
• Full Encryption of data meeting or exceeding
Government Standards
• Improved “Risk Management” procedures
• Better protection of university assets
• Managed access improves campus safety
Enhanced Contract Management
with Distributed Reporting
• Campus keeps the books not the vendor
• Reports track usage to measure
performance
• Survey to assess vendor performance
• Distributed reporting maintains priviacy
Net Campus Value
• Investment Required
• Operating Expense
• Direct Benefits
• Indirect Benefits
Net
Campus
Value
Case Studies
from the Field
University of Washington
Expands Vending Wirelessly
Approach
• Utilize Blackboard’s native IP
vending readers with wireless
network connectivity
• Added 17 additional wirelessenabled vending machines –
targeting total expansion up to 60
Outcomes
• Contributes to 300% increase in
overall vending sales
• Annual increase estimated to
exceed $1.5MM
• Targeting over 18,000 wireless IPenabled transactions annually
Building New Revenues by
Simplifying Accounts
Client Objective
• Give students more flex spending
choices on and off campus
• Desire to tightly manage conversion
to single account with increased
deposits capability
Blackboard Delivery
• Business analysis, planning,
change management controls, and
system reconfiguration services
Client Outcomes
• Smooth and timely delivery of
account reconfiguration
• 35% overall increase in deposits and
commission revenue
Clemson Integrates with Local Community
with Targeted Financial Results
Approach
• Launch off-campus merchant
program with existing and
successful Tiger 1 Card
• Partner with BbOne for
Merchant recruitment,
payment processing
$ 200,000
180,000
Gross Merchant Sales
160,000
140,000
80,000
60,000
40,000
20,000
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• Net receipts to Tiger 1 Card
projected at $100,000
annually
100,000
ct
ob
er
• Focused program launch
with targeted student
marketing
120,000
O
Outcomes
• Total merchant sales of
$550,000 over 5 months
Tulane Achieved Client Service
Automation for Card Services, Housing
Approach
• Automated integration
between Blackboard
Transaction System, RMS,
and Persona
• Automated integration
utilizing Blackboard’s Building
Blocks™ technology and
Blackboard Consulting
Outcomes
• Single entry of Cardholder
information
• Elimination of entry error and
significantly improved
customer service for over
7,000 residential students
Harvard University Automates
Merchant Processing
Approach
• Utilize web-based reporting and
integration tool
• Select merchant criteria and
direct integration to Oracle
financials payment processing
Outcomes
• Elimination of 50 person-days
annually
• Automation of payment
processing to over 110
merchants weekly and monthly
• Staff resources redirected to
additional activities
In Closing…
• Innovating Together in ‘05:
– Fully deploying the Blackboard Commerce Suite™ creates significant
value for the campus
– Direct benefits can be quantified as part of an ROI calculation but
additional indirect benefits are created and should be part of a net
value understanding
• Resources Available:
– Network Transaction Environment Whitepaper
– ROI Whitepaper (is this still around?)
• Follow up Contact(s):
– Tom Bell
– Tim Aaron
• IF YOU ONLY REMEMBER 1 THING:
– A return on investment and the value of your investment is maximized
through the expansion and deployment of the Blackboard Commerce
Suite on campus, off campus and online