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Wow! USAID Finds 3 Global Digital Health Goods are Worth $109 Million Dollars

By Wayan Vota on December 16, 2019

usaid valuation tool ihris software

We have all struggled with trying to assign value to digital health solutions, especially when software development in international development usually relies on a mix of direct support and project-based funding.

Then add in Open Source solutions that combine paid and volunteer staff to design, write, and test software code, and who knows how much any system cost to build or replace. Well, until now.

Software Global Goods Valuation Framework

USAID has introduced the Software Global Goods Valuation Framework and related Spreadsheet. These tools enables donors, software development organizations, governments, and others to estimate the cumulative development cost for software global goods. This estimation is based on two key outputs:

  1. The retrospective development costs of a software global good
  2. The ongoing costs of maintaining and further developing the software

Together these estimations of financial investments into software global goods provide a calculation of their valuation to-date, and can serve as a data point for consideration by decision-makers in selecting software systems to meet country public health needs.

While the framework and user guide were developed in the context of global health sector opportunities and need, these tools can be used more broadly in other development sectors as well.

The Valuation of CommCare, OpenMRS, and iHRIS

usaid software valuation

At the Global Digital Health Forum, I had an engaging discussion with Merrick Schaefer, Dr. Theresa Cullen, and Jonathan Jackson on What Does It Really Cost to Develop Global Digital Health Goods? We dove into new research from USAID and the Boston Consulting Group that analyzed the development costs and maintenance needs of OpenMRS, Commcare, and iHRIS using the Software Global Goods Valuation Framework.

What did USAID and BCG find?

  • OpenMRS: An estimated at $4–5 million direct spend on development, with in-kind contributions suggesting an ~$8M total cost. COCOMO methodology implies market replacement cost of $76M.
  • CommCare: An estimated $15.6 million in development cost using FTE-based estimates, and $11.9M using revenue-based methods. COCOMO methodology implies market replacement cost of $22M.
  • iHRIS: Between $1.8M and $2.4M in direct spend on software development. COCOMO methodology implies market replacement cost of $10.8M

And that is just the retrospective development costs of these software global goods. When they looked at annual investments to keep these systems going, and growing, they found that iHIRS needs $1.25 million, OpenMRS needs $2.8 million, and CommCare needs $4.2 million dollars. None of which any of these systems get in any year.

How to Use USAID’s Software Valuation Framework

I do like USAID’s Software Global Goods Valuation Framework as a way to foster a discussion with country governments, funders, and other development partners on how publicly-funded investments in digital systems can leverage software global goods by default.

Even better would be a framework that can compare the economics of using software global goods for healthcare implementations versus customized solutions or commercial off-the-shelf solutions and help users understand if and when global goods may be more cost effective than other software alternatives.

Of course, there is an even better valuation framework than costs. In our GDHF session, Jonathan Jackson made the point that we should really be talking about value they bring to healthcare services. The inefficiencies and even deaths avoided by using digital systems, which I am convinced far outweigh the costs of any digital system – global good or not.

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Written by
Wayan Vota co-founded ICTworks and is the Digital Health Director at IntraHealth International. He also co-founded Technology Salon, MERL Tech, ICTforAg, ICT4Djobs, ICT4Drinks, JadedAid, Kurante, OLPC News and a few other things. Opinions expressed here are his own and do not reflect the position of IntraHealth International or other ICTWorks sponsors.
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