CADRE Resources

Evaluating the Fiscal Effectiveness of ADR Processes: Cost Benefit Analysis (CBA) - Return on Investment (ROI)

by Doug McDougall

Introduction
Alternative dispute resolution (ADR) processes have resulted in positive outcomes for parents, students who receive special education and related services, advocates, school district staff, and others. Persons in dispute are provided opportunities to have their disagreements dealt with promptly. The anxiety of long waits in the due process/litigation system is relieved, often times with low, or no cost, professional services provided to all parties. And perhaps most importantly, ADR has provided a process for effectively mending broken relationships and set a course for positive future interactions.

Organizations that have implemented ADR programs expect results that can be measured. These results can be surveyed using multiple measures that can include: appropriate provision of services, resolutions that are reached in a timely manner, user satisfaction with the process, willingness to use an ADR process in the future if a disagreement occurs again, and other measures of this kind. Another evaluative measure accounts for the effective use of financial resources. Given the high cost and high stakes decision making involved in disagreements in the area of special education, it is appropriate to turn attention to the discussion of developing a fiscal capability model that demonstrates effective use of ADR procedures in both tangible and intangible returns on monies and resources invested by school districts, parents and others.

Cost Benefit Analysis/Return on Investment
Health Care Education Associates of Dana Point California, describe cost benefit analysis as an accounting process that compares money spent with the revenues that money produces or allows the organization to save. Return on investment calculates the results of an intervention in financial terms.

One factor to consider when developing dispute prevention and resolution programs is that ADR processes are an investment. This investment has returned value in the form of user satisfaction and the appropriate provision of special education and related services. Another factor to determine is the extent that ADR processes have returned a financial worth.

Evaluation of ADR procedures at times relies on the reflections and results of those who have received training or have made use of an ADR process such as mediation or early neutral evaluation. These results can help determine whether or not the ADR process was useful. User evaluation measures can include whether or not the parties reached resolution, the fairness of the ADR process, and overall satisfaction. In the area of ADR training, typical evaluation indicators may show whether recipients enjoyed the training, the ease and use of instructional material by the instructors, and whether or not training experts believe that the content is accurate, relevant, and complete. Davidove and Schroeder point out that these indicators may not provide a premise for making strategic decisions.

Pine and Tingley state the key to determining a programs return on investment lies in selecting the desired outcomes to be measured and linking the training to those outcomes. When using this process, ADR implementation planners can use fiscal information in combination with user satisfaction in a way that contributes to the organizations ability to execute an ADR strategic planning procedure. Health Care Education Associates suggest use of the following model to demonstrate a return on investment procedure.

• Step I - Cost Identify costs of current situation prior to ADR implementation.
• Step IA Identify costs of ADR implementation.
• Step II - Benefit Tangible - Determine any fiscal gain resulting from ADR implementation. Determine potential ADR implementation value, e.g. decrease in attorney fees, reduction in staff preparation time, determine value/cost of parents/advocates time, decrease in repeat requests for due process/complaint process (conflict repetition), appropriate services for the pupil, and other associated costs. Intangible - Ascertain any benefit that cannot be determined using fiscal measures, e.g. user satisfaction, improved relationships, lasting durable agreements.
• Step III - Analysis Compare: a) costs of ADR implementation, b) costs of conflict resolution prior to ADR implementation, and c) benefit trade-offs.
• Step IV - Recommendation Based on an analysis of the money spent with the results that the ADR implementation produced, select appropriate options.

As a result of using a fiscal evaluation measure, the potential and real time use of implementing ADR processes can be clarified. An evaluator can now demonstrate a projects worth based on based on user satisfaction, and a measurement of fiscal return on investment.

1. Demonstrating ROI of Training - Training and Development, Eric A. Davidove and Peggy A. Schroeder, August 1992
2. ROI of Soft-Skills Training - Judith Pine and Judith C. Tingley
3. Managing Hospital Education - Health Care Education Associates, Dana Point, California

DISCLAIMER: This web page was developed by the Consortium for Appropriate Dispute Resolution (CADRE), a project of Direction Service, Inc., Eugene, Oregon, pursuant to Grant No. 326D980002 with the U.S. Department of Education, Office of Special Education and Rehabilitative Services. The materials on this page were developed by others and the opinions expressed therein do not necessarily reflect the position or policy of the U.S. Department of Education, and no endorsement by the U.S. Department of Education should be inferred.