Chicago Public Schools’ Robert Runcie says CIOs don’t spend enough time drilling down into their IT organizations to find efficiencies.

Oct 31 2006

Surgical Strike

Best practices that can make your systems shop a picture of health.

Best Practices that can make your systems shop a picture of health.

When Chicago Public Schools opened its doors in fall 2003, faculty and students had a big surprise waiting for them. The district had been hit with the Blaster virus over the summer, and when the computers were powered up, the virus spread. The district hadn’t installed virus protection software on its vast network of PCs. It cost a half-million dollars to eradicate.

“That was an easy one to fix,” says Robert Runcie, who had just started as CIO and put antivirus software on the top of his to-do list.

Since then, Runcie has undertaken a long list of projects to run the district more efficiently and shave costs off its information technology budget. He’s cut $7 million annually by in-sourcing certain functions and outsourcing others and is implementing a Voice over IP system that’s expected to save $6 million in annual telecommunications costs.

“We’ve taken a very deliberate and focused approach to work smarter,” Runcie says.

Challenged to stretch their limited IT budgets, many school districts struggle to keep outdated equipment running without even assessing whether it adds value. Some districts have been mismanaged for so long that there’s nothing left but IT chaos. But systems chiefs such as Runcie say that taking time to find redundancies and outdated procedures can uncover hidden IT dollars.

Chicago by the Numbers

3rd largest U.S. school district, 420,982 students (2005–2006), 44,417 employees, 623 schools and centers, $4.4 billion operating budget

“Most technology organizations probably don’t run as efficiently as they could,” Runcie says. “I believe we don’t spend enough time looking at the internal IT processes so that they’re optimized.”

To begin, school districts need to understand the total cost of ownership, or TCO, for their IT infrastructure, says Bill Rust, research director for Gartner in Stamford, Conn. That includes direct and indirect costs.

For instance, replacing new computers every three to five years might seem like a luxury, but the hidden costs of keeping aging equipment — repairing and monitoring machines and having teachers tinker with them during class time — can be higher than the cost of buying new equipment, Rust says. “This is one case where spending money saves you money.”

In April, Chicago Public Schools plans to go live with a new human resources system to replace an antiquated 35-year-old legacy system.

“There are literally a handful of people alive who can do maintenance on it,” Runcie says. “It’s a scary situation to be in. We’re working for the technology versus the technology working for us.”

Fairfax County by the Numbers

13th largest U.S. school district, 164,295 students, 21,859 employees, 238 schools and centers, $2.1 billion operating budget

SOURCE: FairFax County Public Schools

Taking Stock

With nearly 22,000 employees, more than 164,000 students and 238 schools and centers, taking stock of Fairfax County Public Schools’ technology inventory was easier said than done. But in 1999, with year 2000 looming, the Virginia district undertook the monumental task and found a lot of duplication.

By centralizing IT purchases, standardizing software and ensuring licenses were up to date, the district — the 13th largest in the country — was able to boost its buying power and secure bulk discounts from vendors.

“The first thing you need to do is to figure out what you have,” says Maribeth Luftglass, CIO and assistant superintendent at Fairfax.

Runcie agrees and suggests working closely with the purchasing department. Chicago buys and leases more than 15,000 computers annually, which translates into tens of millions of dollars in purchases — similar to the purchasing budget of a Fortune 500 company, he says.

Early in his tenure, Runcie told the district’s vendors that they would all be on a probationary period for 18 months, during which time his department would evaluate their products and services. At the end of the probation, the district would choose two vendors, one to supply PCs running Microsoft Windows and one to supply Apple systems.

“They worked for it,” Runcie says. Many vendors even started providing full-time onsite support staff at no extra charge. “It’s a whole different world than it had been before. And we hold their feet to the fire.”

Automatic Savings

Every time the information technology staff at Fairfax County Public Schools in Virginia had to update software, employees had to physically go to each of the district’s 92,000 computers. Last year, the district implemented systems management software to automate the process.

Fairfax schools also installed a new benefits information portal so the district’s 32,000 full- and part-time employees could make changes to their benefits online instead of relying on support staff, says CIO and Assistant Superintendent Maribeth Luftglass.

Automated processes can shave big costs off district budgets, though these soft-dollar savings are hard to quantify. Chicago Public Schools, for instance, intends to find savings by automating the processes for taking attendance and for compiling individualized education plans for its 58,000 special education students.

“We’re able to give teachers a real valuable commodity, and that is time,” says CIO Robert Runcie.

The top initiative in the district is replacing its more than 35-year-old student information system with a new Web-based system being rolled out to schools this year and next. It will let faculty run complex queries and pull data to drive critical decisions for the district.

“We can’t run a district without good, quality information,” Runcie says. With more than 420,000 students in 623 schools spread across the city, “you need technology to accomplish anything.”

—Melissa Solomon

Try These Cost-Cutting Ideas

  • Include an escape clause in contracts in case unexpected problems arise.
  • Have IT and classroom staff evaluate technology to ensure it delivers educational value and fits in with the overall infrastructure.
  • Use standard software and lock down desktop systems to reduce maintenance costs.
  • Make systems interoperable so that data can be typed in once and distributed networkwide.
  • Set up content-filtering software to block unauthorized downloads and cut bandwidth costs.
  • Lobby to make the IT chief a cabinet-level position. Big cost savings require a major organizational transformation, which is difficult to achieve without a seat at the executive table.
  • Evaluate paper-intensive processes to see if all the information is necessary. If so, determine if it can be collected more efficiently.
  • Communicate with stakeholders. A good customer relationship management strategy that gets information out to parents, students and faculty means that staff can spend less time on the phone and in meetings.

At Los Angeles Unified School District, the second largest school district in the nation, recently retired CIO Megan Klee also set the ground rules for the district’s vendors when she started in 2001.

Rather than negotiate new contracts for every project, Klee invited vendors to apply for a master contract that would prequalify them to bid on task orders. When new projects started, everything was set except for price. That strategy cut the cost of contracts by 50 percent during Klee’s tenure because her department didn’t have to go through an entire solicitation process for each new project.

She also worked hard to attract small vendors, which she found to be more eager to please customers. “We actually turned some small vendors into large vendors,” says Klee, who stepped down as CIO last summer.

L.A. by the Numbers

2nd largest U.S. school district, 708,461 students, 77,377 employees, 1,155 K–12 schools and centers, $11.2 billion operating budget

SOURCE: Los Angeles Unified school district

Any organization looking to cut costs should look closely at its contracting process, Klee advises. When she started in Los Angeles, she says the district spent an inordinate amount of time cleaning up litigation from vendors seeking payment. Working with the district’s new general counsel and new procurement staff, she was able to negotiate tighter, more competitive contracts and make lawsuits a thing of the past.

“Be willing to go toe to toe with the vendors” and demand better prices and terms, Klee says.

Maribeth Luftglass, CIO for Fairfax County Public Schools, says it’s crucial to start with a systems inventory.


Dream Teams

Initially, Klee also found that Los Angeles had a problem with squatters. Often, it was district employees who unofficially took over vacated buildings and offices where phone lines were accidentally left on, but sometimes outsiders moved in. Klee found an Internet café operating out of an old district office.

One of her first duties as CIO was to hire a qualified telecommunications expert, who in turn hired recently retired telephone company employees. By verifying the legitimate use of the district’s school-run sites and vacating unused offices, the team cut $30 million from the district’s phone bill over the course of five years — a period that simultaneously saw increases from new digital telecommunications lines to support local area networks at 750 school sites.

“It’s real money,” Klee says. “This was probably 30 years of installations that needed to be cleaned up.”

With the right team, IT leaders can find tremendous savings and efficiencies. The challenge is choosing the best players.

Klee also netted savings from another of her first hires: an IT security expert. The district didn’t have any antivirus software or a working firewall when she arrived, and the network was in such bad shape that a major Internet service provider had blocked all e-mail from the district because its domain had been commandeered by spammers.

“We had a very vulnerable network,” Klee says. “If you’re going to do business electronically, security is a primary factor. It will cost you more initially, but save you so much over the long run.”

Another place to look for savings is consulting fees. In Chicago, Runcie discovered his department used a large number of maintenance consultants. Believing that consultants should be used for projects with a beginning and an end rather than for ongoing jobs, he hired the consultants as full-time staff and shaved $3.5 million a year from his budget.

“You can’t just outsource your whole operation,” he says. “You need to look at each cost individually.”

For instance, internal staff were maintaining the district’s legacy mainframes. Runcie had planned to retire the machines in a few years, so rather than devote more staff and resources to them, he outsourced mainframe management and cut $1.5 million from Chicago’s annual budget. Finally, Klee adds, once you get the right employees on board, it’s critical to keep them motivated. It boosts productivity and makes a tremendous difference to the bottom line. Klee liked to give her staff the authority to make improvements they found necessary.

“I told my staff, ‘If you haven’t screwed up at least once a year, you probably haven’t tried enough new things,’ ” she says.

What’s It Worth?

Before schools can find savings, they need to know what technology they have and what it’s costing them. The first step is to take a complete inventory of all hardware and software. Step two is to understand the cost of that equipment. But that’s easier said than done.

The Consortium for School Networking, a non-profit education technology organization, teamed up with Gartner research firm to create a free tool that can help U.S. K–12 schools determine the total cost of their information technology.

For more information, visit

Texas School Expects Savings with E-Books

Fifth- and sixth-graders at Johnson Elementary School closed their textbooks three years ago and haven’t opened them since.

Forney Independent School District outside Dallas has been running an e-books pilot program with the students, and it plans to expand the program districtwide. Clearly, computers are more expensive than textbooks, but as Technology Director Roger Geiger explains, cost savings can come in unexpected ways. He anticipates that e-books will pay for themselves in the long run.

For starters, with notebook computers for every child, the district won’t need computer labs. That’s extremely valuable for the fast-growing district, which expects to double in size — from 6,000 to 12,000 students — over the next five years, Geiger says. Today, only fifth- and sixth-grade students use notebooks. But a ballot initiative to expand the program to all students won approval in November, paving the way for e-book use in fifth through 12th grades in the next two years. Geiger anticipates that the program will equal or beat the cost of purchasing textbooks when the cost of required computers drops to $400 each.

Notebooks for all students would translate into savings in other areas, Geiger explains. Notebooks eliminate the need for computer labs. Without the freed up lab space, the district would eventually have to add on to schools or use portable classrooms, which can translate into hundreds of thousands of dollars, he says. Eliminating computer labs also cuts the cost of teachers to man them.

Geiger also points out that using notebooks instead of textbooks is more likely to engage today’s technologically savvy students. As engagement goes up, discipline issues go down. That could free up faculty time and lead to fewer support staff down the road.

Attendance rates are likely to rise along with student engagement, Geiger adds. Since Texas school funding is based on daily attendance, better attendance means additional funding. “That’s a measurable thing,” he says.

Storage is another cost savings, Geiger says. The district has whole rooms devoted to textbook storage, which would be freed up if students all had their own notebooks. “Room is money in our district at the rate we are growing,” he says.

Then there are the replacement costs. Textbooks become outdated quickly, so the district needs to buy supplemental materials. Most electronic texts, however, offer free updates.

The district has been looking for other cost savings to offset the price of the e-books. Since last spring, it has been testing thin clients and smart clients, which are less expensive and easier to manage than regular computers, Geiger says.

He also is thinking of switching from ink-jet printers to laser printers, which cost more up front but produce a quick return on investment because of the lower cost of consumables.

Although Geiger feels it is important for big districts to look closely at the numbers, he warns small districts not to fall into the trap of overanalyzing cost. “Just use your good judgment,” he says. “It costs you a lot of time and money just to prove you’re right.”

—Melissa Solomon