Capital project management and implementation

Capital Project

The simulation mannequin is an important part of nursing training, so is a valuable asset to a nursing college. The cost of the mannequin is $10,000. This is just one of many pieces of equipment that are required for the running of a high quality nursing college. There is a considerable body of research that supports the use of high quality simulation mannequins in medical training. One study showed that 85% of students and educators viewed sessions with simulation mannequins favorable to the overall education experience and 80% of respondents in the same survey said that they would recommend such mannequins "for all medical students" (Gordon et al., 2001). Other studies have achieved even higher levels of success, and students indicated that mannequins allowed them to learn better than if they had just learned from a text alone (Fernandez, et al., 2007). There is further evidence to suggest that the use of such mannequins is just as valuable in nursing as in other medical professions (Henneman & Cunningham, 2005), especially for things like patient safety.

High fidelity mannequins have several benefits. First, they allow students to practice without risk, because there is no real patient. A mistake does not hurt anybody, so such mannequins are an effective way to students to learn, especially at the beginning levels when risk to patients would be significantly high (Gordon, 2001). Such tools are also becoming quite common. They are popular with students and educators alike, and are an essential technology for a modern medical education. Nursing is a modern medical profession, so it stands to reason that there are specific competitive advantages, in addition to educational advantages, to the use of such simulation mannequins. The reality is that any nursing college that does not have a mannequin is not going to be viewed in the marketplace as having the best education. Students are likely to have this view, but so are employers. The school needs to meet the needs of both.

The cost of $10,000 is basically nothing. Tuition is that much for a single student, and there are hundreds of students. A simulation mannequin has a multi-year life span. The cost per student per year for a single mannequin is somewhere in the range of $10. Not having a mannequin will probably cost the school more than the cost of buying one. From a financial perspective, not having a mannequin makes about as much sense as a dentist not having an x-ray machine. At this point, there is no realistic expectation that having such a mannequin will specifically add to revenues on a traceable, incremental level. That isn't really how education expenditures work -- it's not Wal-Mart, we're not selling this asset directly. All assets of the school are bundled into an education and it is that education that we sell. Specific revenues are not attributable to specific training tools.

There are no organizational or compliance risks to the purchase of this item. If anything, the mannequin reduces risk because the students are better-trained, and you do not end up with rookie students risking the health of real patients when they are training. The mannequin reduces risk. As such, there is no need for risk avoidance strategies. Nursing is about getting patients to heal and recover; it is not about avoiding risk at all costs. The whole point of using a mannequin is to better train the nurses, and not having a mannequin increases risk. Yes, you need to have a plan for the mannequin, but quite frankly this is not expected to be a problem. The biggest problem is likely that demand for its use is going to outstrip the supply; there are so many uses that there will soon be calls for a second or third mannequin. Those can be evaluated at the time.

The issue of compliance is a curious one -- compliance to what code? That is something you go through line by line with the code. There is no such thing as generic "compliance." Management roles are not complicated here, either. There is a manager in charge of training equipment, and that person will be responsible for the mannequin and its maintenance. Someone is in charge of curriculum -- that's who will determine the courses where the mannequin is going to be needed. I would imagine this request is being considered because some departments/instructors have already submitted proposals that will outline their plans for using the mannequin. Final decision will be the responsibility of the department heads. Financing is even simpler -- at $10,000 the payables department is responsible for issuing the check, and forwarding the paperwork to accounting.

Section III: Financial Analysis

As noted in Section II, this is a nursing college. We are not buying a piece of machinery to improve productivity of a manufacturing line. The assets that are used for training, unless they specifically increase our training capacity, do not have a direct, measurable impact on productivity. Our educational service is a bundle of assets (facilities, equipment) and instructors, along with curricula, and as such no one component of that bundle has direct, measurable impact on the gross revenues. Such mannequins are a standard part of training for nurses in 2014, and we are going to fall behind without investments in such training equipment. Over time, if the school experiences on a routine basis a lack of investment in its facilities and equipment, enrollment can be expected to decline. However, it holds true that no one piece of equipment is a deal-maker or deal-breaker for any given dollar of revenue.