Getting the Answers

It’s difficult to know where you are going if you don’t know where you are.

While this saying applies to many aspects of life, it seems particularly accurate — and helpful — for IT directors. While IT directors can cite the bottom line of their technology budget, and probably the price of their district’s latest purchase, the information gets murkier when considering the total cost of ownership (TCO).

TCO, as measured by a tool created by the Consortium for School Networking (CoSN) and IT research company Gartner, is a model for determining all of the costs for implementing and maintaining networked computers. The goal of this exercise is to help schools understand annualized technology costs, direct labor costs and end-user costs associated with the technology infrastructure. Think of it as a planning building block.

But don’t think of it as merely more work. If the goal of this process were simply to give IT directors a better understanding of their schools’ hardware and costs, it would not be worth the time. Instead, the answers derived from this exercise can point the way to efficiencies, potential trouble spots and how to plan better in the future.

TCO Basics

There are examples of how to achieve a more efficient and enhanced computing experience. Round Rock (Texas) Independent School District found that most of its servers were old and ready for replacement, creating an opportunity for server consolidation. Northern Lebanon (Pa.) School District saw that end users were not being adequately supported. Hiring an additional user-support person was not only necessary, but would actually save money by reducing the time teachers spend dealing with IT issues, reports Sally Bair, the district’s technology facilitator. Use of a TCO assessment tool allowed these school districts to better articulate their costs and needs.

Included in TCO costs are items usually found on the school budget, with capital items amortized over their useful life, plus intangible items such as end-user lost productivity (described below). Understanding the direct (budgeted) costs and indirect costs allows for better understanding of the whole technology environment and a holistic approach for driving overall efficiencies.

“TCO allows us to understand our costs and streamline our operations where possible,” says Michele Cooper, school board member at the Denver School of Science and Technology. “This is especially critical since we are a small school. [We chose this] tool because it provided a well-defined model and methodology that allows us to be in sync with other schools for comparison purposes. It [also] provides a baseline to understand how changes in our own programs affect our bottom line.”

A TCO assessment can provide you with all of the facts and numbers to reassure constituents that tax dollars are being used wisely — or not. It is not uncommon for district leaders to make technology decisions based on initial hardware/software costs without considering the consequences. CoSN’s TCO case study involved the Wellington-Napoleon R-IX district in Missouri, which received a gift of used end-user computers from a government agency that was replacing them with new computers. This gift doubled the number of computers residing on the district network and requiring support. No thought or budget was allocated — beyond initial installation — to network upgrades, support, teacher training and eventual replacement needs. A current versus planned TCO assessment prior to this decision would have provided a tool for communicating all of the costs to district executives.

Performing Your Own Assessment

TCO assessments for most industries take weeks of focused effort and require onsite consultants and 1,500 to 2,000 data points from across the organization. Working with Gartner and with funding from the U.S. Department of Education, CoSN introduced a free Web-based TCO tool for K–12 schools and districts in the United States. This simplified version of Gartner’s distributed computing TCO model is designed to allow school technology leaders to perform their own assessment. It still takes time to collect the necessary information, but districts find that it’s worth the effort. Much is learned from the data collection itself as well as from the results calculated by the tool.

The CoSN-Gartner TCO tool consists of approximately 100 requested pieces of data, organized in categories as follows:

District Overview requests demographics, including number of students, teachers, school buildings and burdened salary information for end users. The salary numbers are used to calculate indirect labor numbers for students, teachers, teachers’ aides and nonteaching staff.

Technology covers hardware, software and service providers.

• Client Computers includes data about end-user workstations, including type (notebook, desktop), other network or connected peripherals, location and breakdown by user. From this data, the number of computers available for student use can be calculated.
• Other Technology includes the number and cost of servers, printers and supplies, as well as the number of live network ports and networking device costs. Amortized costs over the technology life cycle are used to calculate annualized costs. Also included in this category is the annual cost for application software providers.

Direct Labor includes everyone who has as a part or all of their responsibility the implementation and support of computer and network technology. This includes computer-services management, purchasing, planning, project management, training, development, help-desk and end-user support.

• Professional Development, Training and Content, and Curriculum Development are broken out to allow a perspective of professional development and curriculum support. This labor category is also segmented according to which people are providing the labor: technology staff, classroom staff, nonclassroom staff, students and volunteers.

Indirect Labor reflects the time computer users spend in training, dealing with their own or other users’ computer issues or receiving help, and in lost productivity when the system or network is down. Indirect labor is broken down into the following categories: students, teachers, aides and nonteaching staff. The essence is that indirect labor is lost productivity or time in training; think of it as overhead for computer applications designed to enhance productivity or learning. While indirect labor is not reflected in the technology or school budget, it is real time spent by professionals that could be spent elsewhere (such as writing lesson plans or curriculum development). This indirect labor is a real cost to the district; reducing this amount of time by providing current technology and responsive support to the end user is an important TCO consideration. The indirect labor data is most valuable when collected directly from the users through a survey.

Results

There is no magic to the calculations used to develop the results, but the final numbers provide a useful way to look at the TCO data and metrics. CoSN and Gartner also conducted eight case studies at a variety of districts. The high and low values for each of the appropriate result fields are provided to allow the district to put results in proper perspective. Results are shown in the following categories:

• Total Costs is a summary of direct and indirect district and per-client computer costs. Both total cost and per-client computer costs are shown, as well as case-study high and low values. There is a breakout of direct costs and indirect labor, and a breakout of direct costs by hardware, software, direct labor and external-application providers.
• Asset Metrics shows the pervasiveness of client computers broken down by user (student-available, teacher-dedicated and nonclassroom staff) and by infrastructure (client computers per server and per printer).
• Asset Cost Metrics breaks down direct annualized technology costs, including client computer, network, server, printer and hardware, plus supplies.
• Direct Labor Cost Metrics provides an overview of labor costs by end-user function (such as direct labor cost per teacher and per student) and a direct labor staffing breakdown by computer services, teachers, other staff, outsourced labor, students and volunteers.
• Direct Labor Staffing Metrics illustrates the number of client computers supported per support staff; average direct labor support-staff costs by technology staff, teachers, aides and nonclassroom staff; and a breakdown of percent of staff in each of these support categories.

Getting Started

The CoSN-Gartner tool, case studies and documentation can be found at www.classroomtco.org or at CoSN’s Web site, www.cosn.org. To access the tool, follow the links to the CoSN-Gartner TCO tool, which resides on a Gartner server at k12tco.gartner.com/home/default.aspx. Use of this tool is free for U.S. K–12 schools, districts and related state agencies.

The value of the exercise comes in analyzing your district’s information. A low per-client computer TCO in any category is not necessarily good, and a high TCO is not necessarily bad. The real question is, what are you doing with technology? How effectively are you using computers and networks? Generally speaking, larger districts have a higher total per-client computer TCO than do smaller districts. This has much to do with the complexity of the networked computing environment and required staffing and management.

Comparing your results with case study high/low values provides a guideline to flag areas that may need scrutiny. For instance, if your direct labor numbers are on the low side, but indirect labor is high, you may conclude that you need to provide better end-user support. You can validate this hypothesis by reviewing the Direct Labor Staffing Metrics in the TCO results.

The chief technology officer for the school or district is rarely looking for another time-consuming project. But there is no better time to take control of the networked technology environment, understand all the costs, and from that perspective, develop a cohesive technology plan.

Rich Kaestner is the project director for the Consortium of School Networking’s Total Cost of Ownership and Value of Investment projects. He coordinated the Web-based TCO tool.