Tag Archives: profit

Two Issues in EdTech: Profit and Procurement

Editor’s Note: This post has first been published on the MediaTaylor blog with the title Are you sitting down

Trying to work out how to create great edtech is very hard, but equally difficult is trying to ensure you get real value for money when you buy it. This leads us directly to the two issues that polarise debate in edtech specifically and education generally; profit and procurement.

When it comes to procurement in England a great deal of power has moved from the centre and been devolved down to schools. Centralised procurement of edtech saw the DfE’s predecessors spend:

  • £250m on VLEs yet the most popular was the free open-source product Moodle
  • £330m plus on e-learning credits to build capacity in the local edtech software industry
  • £75m (of £150m budget) on BBC Digital Curriculum (later called BBCjam), closed before it was launched
  • £65m p.a. on BECTA (inc. £65k on a new logo – ed-invent’s logo cost £150 via Freelancer.com)
  • £150m on hundreds of thousands of interactive whiteboards.

To try and improve procurement the DfES created the Centre for Procurement Performance, whose yardstick of success seemed to be the number of civil servants in the policy team, not whether any savings could or had been made. Their successor the DCSF renamed this the Education Procurement Centre and promptly wasted £10m+ creating OPEN (Online Procurement for Education Needs) a system that few schools ever used and which was quietly consigned to the dustbin of failed education ‘initiatives’ – the latest version beingEduBuy.

A key reason for the terrible centralised procurement of edtech is a fundamental misapprehension of what money is amongst Whitehall mandarins and their staff. When the House of Commons’ Education Select Committee queried the DfES about how it was going to contribute to the £4.3bn of saving mandated by the Gershorn Efficiency Review, their reply seemed to have been written by the scriptwriters ofYes Minister.  The Committee were so annoyed by the DfES’s reply they wrote, ‘This does not seem to be money as it is normally understood’.

Profit is an equally contentious issue in education. Many within the sector seem to openly resent the fact that companies who supply everything from light bulbs and toilet paper to hardware and software, do so because it is profitable. While disquiet about capitalism is nothing new, in a sector with such huge spending, the amount of fraud and what might be termed profiteering, is probably far lower than the statistical average for all government spending across England.

Profit in edtech is a fundamental issue. Without being able to make money, edtech entrepreneurs cannot raise capital or compete with established suppliers whose products are often technically inferior and sometimes over-priced (or both). It is also confusing because schools are increasingly being offered free edtech products. In reality there are very few truly free edtech products. As a well-known commentator said, ‘if it’s free, you are the product’. This applies particularly to free edtech products that collect large amounts of data about student performance and then use that to develop for-profit products (e.g. selling it to big data companies).

Profit and procurement are two big issues that we will be covering during ed-invent, but what prompted this post was a story in the FT Weekend titled, ‘School of Rock’, about the TipTon chair designed by Ed Barber and Jay Osgerby and manufactured by Vitra.

TipTon is an interesting chair, designed specifically for the education market, which it is claimed is indestructible, lightweight, stackable, and most importantly improves student attention via a slight rocking movement that apparently improves circulation and hence attention. If true, then this chair should revolutionise not just the education, but the wider commercial office furniture market. However, I have a few doubts. Firstly, non-height adjustable chairs are deemed suitable for school students of every size and shape, but not for office staff due to the fact they can’t accommodate widely varying ergonomic requirements (e.g. from a 120cm 20kg 7-year old to a 190cm 85kg 17-year old). Secondly, and more importantly, has there been any cost-benefit analysis of the promised educational improvement? The cheapest TipTon I could find online was £170. Even allowing for a substantial discount for bulk school purchases (say to £100) this is about five times more expensive than a plethora of plastic and steel stacking chairs sold by the likes of TTSand The Consortium (the original was designed by British designer Robin Day in 1963 and over 20m have been manufactured).

If a piece of edtech equipment (hardware or software) costs five times a similar product, is it worth it financially and educationally? Schools face this challenge all the time. For example, should they buy Apple iPads, Google Chromebooks, Android tablets or implement a BYOD policy? With limited budgets it’s amazing to see that few schools or bureaucrats have any metrics for evaluating edtech spend on educational outcomes let alone Total Cost of Ownership (TCO) – ironically the Cabinet Office has TCO advice document, but it seems no one has ever read or understood them. The confusion over procurement (and profit) is exemplified by the comments of a teacher I spoke to recently who said, ‘Yes, we could probably save millions if we dumped Apple, but our teachers are used to it now, so we won’t be changing’.


Picture via Vitra