Why some school districts are
outsourcing their technology operations

By Margaret Trimer-Hartley

Navigating the sea of high-technology can be treacherous for school districts. New waves of hardware, software, and online services flood the market faster than most districts can catch their breath. One bad decision about wiring, maintenance, or training could swamp a district's budget and leave the technology plan years behind schedule. That's why many school districts are turning to outside experts. Newcomers to technology outsourcing such as ServiceMaster and long-established industry giants such as Electronic Data Systems (EDS) are lining up to offer school districts guidance and hands-on support in technology management.

Technology outsourcing isn't likely to save your district money. But it can give you instant access to experts and the flexibility to add, eliminate, or reassign them without breaking contracts or fighting with unions. Indeed, some educators say, outsourcing is the only way to ride the technology wave safely.

Only a handful of districts pay outside companies for such basic data-processing tasks as payroll, test scores, scheduling, or report cards--simple off-the-shelf software does these jobs, or the work can be sent to countywide consortiums. Instead, most technology outsourcing involves the big stuff--planning, installation, and maintenance of complex computer networks.

"We could never have done this alone," says David Tiffin, executive director of information and technology services for the Richardson (Texas) Independent School District, referring to his district's comprehensive technology implementation plan. "We were floored by the enormity of it all--especially the enormity of the costs."

Like many districts, Richardson had been installing technology piecemeal. At the rate the schools were adding computers and networking buildings, it would have taken more than a decade to get every classroom wired, Tiffin says. ServiceMaster showed them another way.

The Downers Grove, Ill.-based facilities management company helped Richardson officials draft a plan to equip all 3,000 classrooms with computers, rewire buildings, and train staff over the next three school years. ServiceMaster also signed on to help pitch and manage a bond issue to raise the $50 million to $75 million necessary to complete the project.

The relationship between Richardson and ServiceMaster began five years ago with a small contract to repair equipment in student computer labs. Each year, as the district bought more computers, video equipment, and software, its needs and its contract with ServiceMaster grew. Today, nine ServiceMaster technicians have virtually become the district's technology department at a cost of about $700,000 per year.

Timing is all

Technology costs--plenty. Projects that include rewiring and redesigning outdated and often rundown old school buildings usually require huge bond issues. Given industry advances, computer capacity doubles every 18 months, and systems are generally considered obsolete in three years. "When you look at the life-cycle of a computer, it was clear that we didn't have forever to do this," Tiffin says. "We had to go for the whole pie sooner or later."

Chris Columbo, superintendent of the Osceola County Schools in Florida, agrees. Timing was everything in his poor and growing school district, he says. "We had bad air, bad roofs, bad heating, bad cooling, and bad technology," Columbo says. "We had to invest in everything."

Under a so-called performance contract, the 27,000-student district near Disney World worked with Minneapolis-based Honeywell. The company promised to update energy systems, improve air quality to meet new state codes, and save the district money. The new equipment cut nearly $10 million from energy bills, which the district subsequently invested in new wiring for computer networks.

The Osceola schools contracted with Honeywell to maintain the computer network, train staff, and troubleshoot. And thanks to a $25 million certificate of participation (a nonvoted bond issue to be paid off in 20 years), Honeywell also is helping plan and set up additional improvements--including computers, heating and cooling equipment, and roofing--at two of the district's high schools.

Without the energy savings and the bond issue, the district would have continued to spend about $1.5 million annually on technology. "But that wasn't enough," Columbo says. "I had principals pounding on us to upgrade the stuff they got six years ago."

Now, the district has established wide-area and local-area computer networks, and virtually every classroom has access to the Internet. Students can catch up on missed homework assignments from home, and parents can correspond with staff on-line. "As a parent, I don't have to worry if my kid is going to fall behind because he's home with the chicken pox," Columbo says. "All I have to do is log on."

Inside or outside?

Some educators, however, caution that relying on outsiders to manage technology only delays the inevitable. "Sooner or later, educators need to develop these skills," says Cornelia Brunner, associate director of the Center for Children and Technology, a research organization in New York City. Businesspeople and technology whizzes don't understand education and don't have the best interests of children or taxpayers in mind, she says.

"If the schools don't learn themselves what they need, they can be sold very easily something they don't need," Brunner says. Educators must decide how they will use technology to help students, research what's available at what cost, and then dive in. Districts can find enough experts within public education to help them learn the nuts and bolts and establish effective plans, she says, adding that the process--from planning to training to implementation--takes about five years.

Outsourcers insist they work within their clients' limitations. Indeed, their first task is usually to audit a school district's technology services. Many find inefficiencies and costly mistakes that had gone unnoticed and that can free up thousands, even millions of dollars for new technology.

Dave Barry, consulting manager for Network Integration Services, a subsidiary of Johnson Controls Inc., says he worked with one school district that had been paying for 1,800 separate phone lines when it needed fewer than half that many. "That's $40 a month times every unnecessary line. The phone company has no vested interest in telling you that you don't need all those lines," Barry says. "But our first job is to show you where you can save money so you can afford to invest in the technology you need."

Most districts recognize that eventually they must wean themselves from outside experts. That doesn't mean that educators must become experts in wiring or designing computer networks--though many districts elect to hire such experts. But they need to understand enough about computers and programs that they can evaluate new products and technologies for classroom use. And they should be capable of solving everyday software and hardware headaches, from frozen screens to system crashes.

"Districts are basically deciding that if it's one-time, short-term expertise they need, they'll contract for it," says Jan Van Dam, coordinator of computing, technology, and library services for the Oakland County Intermediate School District in southeast Michigan. "If it's a long-term need, they'll learn it themselves."

Training is key

All staff members should be trained to use technology as skillfully as they use textbooks and other reference materials. In fact, experts say, training should account for about 75 percent of a district's technology budget. Otherwise, teachers will become frustrated, embarrassed, and unwilling to use technology in their classes. In schools with site-based management, especially, all teachers and building-level staff members must know how to manage technology independent of the central office and independent of outside contractors. Huge mainframe computer systems are becoming relics of the past as schools use networked PCs to keep track of their own budgets, make report cards, and file annual reports.

Teachers with a knack for fixing things--the ones who ran computer labs or who taught shop and electronics classes--often emerge as resident technology experts. Additionally, today's librarians are becoming savvy media specialists who can evaluate software, download information, and even design and manage home pages on the World Wide Web.

Ideally, though, technology expertise won't be limited to a few staff members. "It's not just a matter of getting a monitor in every classroom," says Lane Pierce, technology management services representative for ServiceMaster. "It's a matter of making sure everyone knows how to use it."

To aid in staff training, most outsourcers make their technicians and trainers available to districts under contract. These experts not only run seminars, they usually stay on site to help staff members through the clumsy first months of learning new equipment or programs. Afterward, they are usually accessible by phone and can return to the district within 24 hours.

"They move around the district and interact so that you really can't tell who are our people and who are theirs," Tiffin says of the ServiceMaster technicians assigned to the Richardson schools. "We never could have recruited this kind of staff or paid them what they're worth."

A growing market

The market for technology outsourcing is likely to boom in the next five years. Even educators who are comfortable with today's technology will need help keeping abreast of innovation. ServiceMaster currently has about seven technology outsourcing contracts with school districts, and another 20 are considering signing up. Small districts such as the 10-school Harlem district in Rockford, Ill., are outsourcing portions of their technology services. And so are large ones such as Richardson, where nine ServiceMaster employees handle the technology needs of 52 schools.

Large or small, most of the districts that are outsourcing technology services are affluent and progressive. Many are in communities with high-tech industries in their backyards. Parents and other taxpayers in such districts usually understand the importance of technology in the classroom and support funding it.

But ServiceMaster, Johnson Controls, and other outsourcing companies say they want to make their services more accessible to less-affluent districts as well. They are considering forming consortiums with four or five neighboring school districts. Under such an arrangement--in the planning stages--individual districts would still need to purchase their own equipment, but they could share the cost of planning, maintenance, and training.

Many school officials with experience in the field recommend working with a vendor-neutral technology outsourcer, rather than a dealer for a specific kind of equipment. Vendor-neutral outsourcers usually make the same amount of money whether they help build and maintain an Apple system or an IBM-compatible system. The advantage to the school district is one of streamlining. As go-betweens, these companies urge districts to simplify contracts by limiting the number of vendors they deal with. The outsourcers also are more inclined than vendors to help districts get what they need, regardless of brand.

"You don't have to have a showplace to get the job done," says ServiceMaster's Pierce. "If a school doesn't absolutely need to go leading edge, I suggest it stay back. [School personnel will] be far happier with the price and the selection of software."

For districts already struggling to find time and resources to educate and provide social safety nets for students, taking care of technology seems increasingly like somebody else's job.

"One way or another the job is going to get done," says Dave Barry, of Network Integration Services. "It's just a matter of how much pain the district feels. And when you have teachers or other personnel spending all their time solving computer problems, they're going to feel a lot of pain. We're here to keep the systems going so the educators can concentrate on their core business--kids."

Sidebar: What about leasing technology?

It didn't matter to Bill Hamilton that voters in the Walled Lake Consolidated School District said No to bond issues for technology and new construction three times in about a year. Students in that burgeoning southeast Michigan district still needed computers, buildings still needed wiring, and teachers still needed training.

So Hamilton, assistant superintendent for curriculum, came up with a plan to lease used equipment from corporations as they upgraded. The arrangement didn't give the district top-of-the-line, leading-edge technology. But at a cost of about $1 million last school year and an expected $2.5 million this school year, it made a lot more sense to taxpayers than a $32 million bond issue.

"We said, 'OK, now that they've told us we can't do it, how do we do it anyway?'" Hamilton explains. "We had to find a way to make [technology] a priority line item in our general budget."

The district had been doing some costly wiring over the past several years as it built new schools and additions to hold the 500 new students that come to the district annually. As a result, many buildings were just waiting for the hardware and software to get students on-line. MicroAge, a Tempe, Ariz., Fortune 500 computer products and services distributor, worked with the district to locate high-quality used equipment. The company found 154 two-year-old Compaq 486s at Dana Credit Corp. in Troy, Mich. MicroAge leased the equipment to the district and provided a service agreement. The district is leasing an additional 800 computers through MicroAge this school year.

"We buy the latest and the greatest when we pass a bond issue because we know we'll be using that equipment for several years," Hamilton says. "But when you organize to do this out of the general fund, you don't need the latest and the greatest because you upgrade all the time."

Howard Hardesty, academic team manager for the Novi, Mich., branch of MicroAge, says many computers being replaced by corporate America are still usable. "This was a new spin for us," Hardesty says of the Walled Lake arrangement, "but one that made a lot of sense."

In fact, leasing new or used computers makes sense to many school districts as one way to get technology into the classroom. And some experts say it's smarter than using the traditional bond issue to pay for purchasing technology.

"In the old days you could say, 'Yeah, I'll use bond money to buy a computer, and it will still be useful seven years later,'" says Jan Van Dam, coordinator of computing, technology, and library services for the Oakland County (Mich.) Intermediate School District, which serves 28 school districts. "Now, the cycle of innovation has tightened up so much you can't be confident that it will be useful tomorrow, let alone several years from now."

No two lease agreements should look alike. School districts have different needs, preferences, and budgets. But educators and businesspeople agree on the following advice for districts considering leasing:

* Compare prices. Some distributors and leasing companies offer name-brand equipment at the same or lower price as lesser-known brands.

* Purchase a maintenance or service agreement that guarantees 24-hour repair or equipment replacement. District technicians should not attempt to repair equipment that is leased, because they are liable for any damage to the equipment.

* Make sure the company agrees to remove equipment when the lease agreement expires. And, if the lease is renewed, make sure they agree to replace equipment immediately.

* Be sure you can petition for an upgrade for specified reasons. You'll probably have to pay a fee, but it might be worth it for a computer drafting class, for example, that needs to stay on top of emerging technologies.

-- Margaret Trimer-Hartley is a Detroit-based freelance education writer.