Putting TCO To Work in the Classroom

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Putting TCO To Work in the Classroom

• Consortium for School Networking
• February 20, 2001

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Goals of Todays Workshop

• Major components of TCO
• How they apply to K-12
• Share experiences and lessons learned
• Build our knowledge base
• Take the lessons to others

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Responding Panelists

• Vickie Banks Gaynor, Merit Network
• Roger Cooper, Fairfax County, VA Public Schools
• Bob Westall, School District of Philadelphia
• Jim Hirsch, Plano, TX, ISD

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The Problem

• When schools invest in computers and networks,
  they often fail to plan for the long-term costs
  of using them effectively and efficiently
• Schools need to evaluate the role of
  technologyand their goals
• Schools need to budget accordingly
• That means, planning for TCO

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This Is Nothing New

• If you buy a bus, you must also budget for
• Gasoline
• Maintenance
• Repairs
• Increased Insurance Premiums
• Another Driver

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Similarly. . .

• If you build a network or purchase computers, you
  must also budget for
• Software
• Maintenance
• Repairs
• Increased Utility Costs
• Support
• Staff Development
• Replacement Costs

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Where Can You Turn for Money?

• E-rate
• Grants and donations
• Bonds
• State and federal appropriations

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But Theres One Problem

• Many of those sources provide a one-time infusion
  of money
• Money cant be used to cover all expenses
• How long can you count on it?

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A Danger if You Get Hooked

• Ongoing technology expenses need to be funded
  from traditional sources
• Hiring support staff
• Staff development
• Parts, maintenance and upgrades
• Increased utility and telecommunications costs

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Unfortunately. . .

• Technology viewed as a frill
• Captive of a build it and they will come
  mentality
• It can be hard to find money for more staff
  positions

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How TCO Can Help

• At the start Understand all the costs that will
  have to covered
• Understand the potential long-term additional
  costs of a particular approach
• Understanding hard AND soft costs
• After installation Evaluating new ideas
• Purchasing versus leasing
• Outsourcing versus in-house
• Innovative technologies

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What Is TCO?

• All of the costs associated with deploying,
  operating and maintaining a computer network
• Analysis tool used by businesses since the
  mid-1980s
• Used to make strategic decisions and control
  technology costs

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Taking TCO to the Classroom

• CoSN Project since 1999
• Sponsored by
• Intel
• Citrix Systems
• Dell Computer
• Sun Microsystems, NetSchools
• Chancery Software
• eChalk
• National Semiconductor
• Vendor-neutral tools for education stakeholders

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TCO Is Less in Education World

• 1997 International Data Corp. study
• School w/ 75 computers 2,251/computer/year
• Small Business 4,517/computer/year

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Why Is It Less?

• Schools spend less on PCs
• Educational software costs less
• Schools have half the support personnel
• Schools try to use computers longer

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Other Budgeting Benchmarks

• 1998 Milken Study3.4 of operating budget spent
  on technology and 5.6 of capital budget
• Based on 1,990 districts in 21 states
• Projections of cost of wiring schools
• 500 per student per year, over 4-5 years

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Other Budgeting Benchmarks

• QED Average tech spending 132.57 per student in
  1999-2000
• 46.98 for hardware
• 30.29 for networks
• 11.47 for software
• 11.01 for service/support
• 9.18 for peripherals
• 7.37 for Internet services
• 6.86 for professional development
• 5.15 for supplies (disks, paper, toner)
• 4.26 for computer training
• Whats average is not necessarily ideal

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What Is That Telling Us?

• Professional development represented 5.2 percent
  of total
• Service/support represented 8.3 percent
• As hardware is purchased and installed, costs
  should shift to other operating categories such
  as training and support
• But computers will need to be replaced

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Comments from Panelists

• State of your network?
• Does your district have clear technology goals?
• Does your district understand TCO?
• Are you budgeting for the long term?
• Have you developed a dependable funding source?

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Major Components of K-12 TCO

• Tech Support
• Staff Development
• Replacement Costs
• Software
• Retrofitting
• Connectivity

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Tech Support Business vs. Schools

• In the business world, when a computer crashes,
  employee usually becomes useless
• In the education world, when a computer
  crashes...
• teacher goes back to teaching the old fashioned
  way OR
• students are expected to double up on computers
  that are still working.
• How do we calculate what is lost in the process?
• Will teachers integrate technology into the
  classroom if they have no confidence in it?

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Levels of Tech Support

• In business world, ratio is usually 1 support
  person for every 50-75 computer users
• In K-12 schools, ratio now is typically closer to
  1 for every 500 computer users--usually not
  enough
• Networks can be built with centralized management
  and support to help reduce the number of staff
  that will be needed

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But Theres No Single Right Number

• Factors involved
• Degree of centralized management
• Number of operating systems supported
• Number of software applications supported
• Geographical size of district
• Telephones in classroom?
• Outsourcing of some tech support

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An Approach to Calculating Tech Support

• Takes into consideration
• Number of computers and peripherals
• Number of major LANs, O/S, databases
• Number of software applications
• Number of users
• Number of teachers
• Webmaster?
• Telephone services
• Video/audio/satellite/broadcast
• Managers
• Adjusted by outsourced FTEs
• Available at http//techguide.merit.edu

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Strategies to Control Tech Support Costs

• Relied on teachers and non-tech staff to provide
  support--93.5
• Limited ability of teachers and students to
  modify the way computers are configured--91.1
• Standardized model of computer used--87.9
• Shifted to a centrally controlled district-wide
  network--86.3
• 1999 CoSN-NSBA survey on Tech Support

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Responses on Other Strategies

• Limited number of operating systems
  supported--81.5
• Reduced number of applications supported--72.6
• Hired outsiders to provide support--63.7
• Relied on students to help provide support--56.5
• Installed a thin-client solution--26.6

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Benchmarks to Monitor Support

• Only 38.7 have adopted benchmarks to measure
  adequacy of support
• Time it takes to respond to help call--85.4
• Amount of time network is down--85.4
• Length of time it takes to repair a
  computer--70.8
• Largest districts much less likely to monitor
  number of computers needing repairs

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How Many Operating Systems?

• Only 1--6.5
• 2 or 3--57.3
• 4 or 5--18.5
• More than 5--12.9
• 34.8 of districts w/ more than 20,000 students
  have to support more than 5!

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Other Findings

• 55.6 outsource at least some tech support
• 64.5 offer a help desk (95.7 percent of largest
  districts)

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TCO and Tech Support

• Cost of tech support may be low, but may also be
  inadequate
• How will you know?
• Need to benchmark quality of service achieved
• Need to know extent to which non-tech personnel
  are filling the gap
• Service Level Agreementswith vendors AND with
  userscan be very important
• Tech support isnt cheap if teachers are the
  ones who are doing it

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Comments from Panelists

• What is your ratio of tech support to computers?
• How are you trying to control tech support costs?
• Is that strategy working?
• Are you doing benchmarking?
• Where do you turn for help teachers, students,
  vendors? Are those good options?

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TCO Staff Development

• U.S. Department of Education recommends 30 of
  budgets
• Many states require 20-30 of state money be used
  this way
• Businesses often match every dollar spent on
  hardware and software with a dollar for training
• Some recommendations 1,500 to 2,000 per person
  trained per year
• Biggest component Cost of substitutes
• Schools generally are spending too little5.2 in
  1999-2000

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Possible Considerations

• In-house, outsourced, state, regional?
• Impact on existing infrastructure
• Teacher-related costs
• What standards will be used?

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When Do Teachers Feel Ready?

• Those with 32 hours of training (over 3 years)
  feel prepared
• But only 12 get that much
• 43 receive less than eight hours
• NCES Study (September, 2000)

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Targeting Your Training

• Pacesetters (5)
• Empowerables (35)
• Followers (55)
• Refuseniks (5)
• Principal can be key to success

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Things to Consider

• Will your investment go to waste?
• Wasted time of those who DO understand computers
• Wasted time when not in synch with installation
• Bad choices made by under-trained technology
  staff

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Comments from Panelists

• How are you handling staff development for
  teachers?
• Is that strategy working?
• How about staff development for the tech staff?

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TCO Replacement Costs

• Computers and peripherals need to be replaced
  about every five years (and in some cases,
  sooner)
• Industry standard3 years
• Industry laptops2 years
• As a districts technology investment matures,
  the district must plan for regular upgrades
  and/or replacement

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Things to Consider

• Strategy of channeling older machines to simpler
  uses (e.g., keyboarding)
• Can lead to increased costs for maintenance and
  support
• Bigger inventory of replacement parts to keep
• More models for support staff to master
• Older the machine, the harder to keep in service
• Donations of older computers can be a very mixed
  blessing
• Donations policy can help ensure that if
  computers are donated, they dont actually
  increase your costs
• And a new costcomputer disposal

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Leasing versus Purchasing

• Can provide faster standardization
• Using traditional business TCO formulas, may lead
  to savings over the long-term
• Makes budgeting more predictable
• But. . . .need predictable funding source

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Comments from Panelists

• What is your replacement cycle?
• Are donated computers a problem?
• Have you considered leasing as an option? Why or
  why not?

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TCO Retrofitting

• McKinsey Projections
• Older Schools (35 years or older)
• 65,000 for asbestos removal and other
  improvements
• 23 of schools will need electrical upgrade
• estimated cost of 240,000
• 4 will need HVAC upgrade
• estimated cost of 31,800

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TCO Retrofitting

• Council of Educational Facility Planners
• New constructionInfrastructure 1,500/classroom
• Renovation/Modernization--3,000/classroom plus
  minimum of 50,000/building for additional
  electrical service
• Wireless may offer savings if appropriate

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Comments from Panelists

• Do you have budgetary benchmarks for
  retrofitting?
• Have you encountered unexpected surprises?
• Any thoughts on wireless?

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TCO Software

• Generally represents less of the total cost in
  K-12 than in the business world
• About 10 of budget
• Some free resources are now available on the
  Webbut dont forget the cost of time to find,
  download and organize
• License management becoming an issue
• School Interoperability Framework

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Things to Consider

• Haphazard purchases lead to incompatibility and
  no connection to learning goals
• Impact of diverse applications and operating
  systems
• New delivery methods (downloading) provide
  management challenges
• Machines that move between home and school

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Comments from Panelists

• How do you manage software?
• Teaching needs vs. TCO requirements
• Other issues?

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TCO Connectivity

• Generally part of a school districts costs,
  though not always included in traditional TCO
  calculations by business

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Things to Consider

• How much bandwidth can you afford for what you
  want to do?
• What is your networking strategy?
• If youre forced to cut corners, how much time
  will be wasted?
• Whats the value of that time?

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Comments from Panelists

• How have you gone about managing your bandwidth?
• Is that adequate?
• Have you built for today or tomorrow?

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Thin Clients/ Application Service Providers

• Computing power is located in the central server,
  managed by school district or outside vendor
• Requires robust network, but less intelligent
  devices
• More centralized control usually translates into
  lower support costs

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Gartner Group Companies for Whom It May Work

• Companies that are growing too fast (dot-com
  companies)
• Companies that dont want to duplicate
  applications environment in many locations
• Companies that cant afford large upfront costs,
  but can afford a predictable ongoing cost
  (schools?)
• Companies that have trouble acquiring and
  retaining tech support staff (schools?)
• Companies that want applications that are only
  available in a bundle

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Comments from Panelists
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And Now, the View from Business. . .

• Shawn Gross, Sun Microsystems
• Tom Greaves, NetSchools
• Douglas Wiener, Citrix Systems

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Questions for Vendor Panel

• Based on your experience with K-12 schools, what
  do you think is the biggest difference in how
  your company manages its network and computers
  and the way that schools do?
• Has your company learned lessons that would be
  useful for schools, too?

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Questions for Vendor Panel

• What do you think is the biggest issue facing
  schools in how they manage their TCO? What
  strategies do you think would help them?

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Questions for Vendor Panel

• Schools that are trying to improve their
  technological capabilities sometimes find that by
  the time they evaluate and install a new
  technology, it is already obsolete.
• Do you see this happening?
• If so, how should schools approach technology
  decision-making?

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Questions for Vendor Panel

• How can schools work with their vendor to lower
  their TCO?

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Questions and Comments?
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Thoughts to Take Away

• Is your district prepared to make a long-term
  commitment to the technology budget?
• Are your taxpayers?
• If so, how big is that commitment?
• How long can your vision be sustained?
• If your financial commitment to technology is not
  big enough, is the school district prepared to
  rearrange its priorities?

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A Place to Find Some Answers

• Web site of Taking TCO to the Classroom
• http//www.cosn.org/tco
• White paper on Total Cost of Ownership
• Downloadable PowerPoint presentation to explain
  the issue
• Future Workshops
• Online Courses
• Benchmarking
• Watch this space