Competitive Purchasing of Technology

The intention of state purchasing guidelines is pretty simple – to ensure a competitive bidding process for significant technology purchases (normally over $5000.00). But complying with purchasing guidelines can be time consuming and difficult.

What’s a school to do?

The answer to this question varies with each financial manager. And sadly we have seen a few clever attempts to circumvent purchasing guidelines as we have bid competitively on posted items. But for purposes of this article, we will assume that your brother-in-law is not part of the equation, that you are not getting kickbacks from favorite vendors, and your IT provider has an arm’s length relationship with your financial manager. With few exceptions, we have observed great integrity with the charter schools and managers we have had the pleasure of serving.

However, the sheer volume of purchasing in a school can lead to unintended purchasing that is less than compliant. Here is a suggestion that we have found to be pretty simple and complies with the intent of purchasing guidelines.

Disclaimer: I do not pretend to know every states purchasing guidelines and this may technically not comply with the rules of your state. Check with your local state office of education.

First, let’s illustrate an important concept and consider a story of two guys selling watermelons.

Two men formed a partnership. They built a small shed beside a busy road. They obtained a truck and drove it to a farmer’s field, where they purchased a truckload of melons for a dollar a melon. They drove the loaded truck to their shed by the road, where they sold their melons for a dollar a melon. They drove back to the farmer’s field and bought another truckload of melons for a dollar a melon. Transporting them to the roadside, they again sold them for a dollar a melon. As they drove back toward the farmer’s field to get another load, one partner said to the other, “We’re not making much money on this business, are we?” “No, we’re not,” his partner replied. “Do you think we need a bigger truck?”

What does this have to do with technology? More than you might imagine.

Margins for most technology purchases are razor thin and the marketplace is very opaque, meaning you can in an instant determine the best price for nearly anything digital. Just do a quick search on Amazon or eBay. By taking this small step, the chances of overpaying significantly for technology is reduced greatly. Know what it is you are purchasing.

So why not purchase from an online venue such as eBay, Amazon, or others? Good question; and the answer is you just might! Especially for the occasional one or two items that are primarily consumer electronics/technology. However, using eBay or Amazon becomes more problematic when you need a specific type of technology, a specific quantity (often large), and with the manufacturers warranty included (or extended warranty if you choose).

Furthermore, it is a little difficult for most schools to actually specify the correct solutions, they need. That is presumably why you have technology managers in your organization. The biggest mistake we see with respect to purchasing is what to purchase rather than how to purchase, or from whom. And then there is the installation and management of that technology going forward.

But I digress…

One of the simplest ways we have found to provide our schools with a competitive bid is to take three simple steps:

1. Identify clearly what technical solution is required (this is the most important step).
2. Utilize a technology distributor that represents a large variety of vendors.
3. Arrange for a cost plus, or percentage of invoice markup for your purchases.

Let’s look at an example of how this works:

 

Assume that a school administrator comes to us with a requisition for new desktops for all staff members. Specifications are agreed upon in advance and would include features such as form factor, operating system, memory, and storage requirements. Added to that feature list is a general idea on the budget available.

 

Our next step is to provide our distributors with those specifications and obtain competing quotes from their list of vendors. Now if you are dealing with a single vendor, your purchasing program will break at this point. So be sure you deal with a distributor’s representative, not a single vendor’s representative.

 

We work with two of the largest technology distributors in the US and, with few exceptions, receive a wide variety of products that match the required specifications. We then select based primarily upon price (all other considerations being equal). The school is then presented with our recommendations and the PO is obtained, the invoice is marked up the agreed upon amount, and the items are ordered.

This simple process provides our partner schools with a fair and competitive bid for items requested. The cost plus markup scheme can be easily audited to verify fair pricing and we provide the interface for warranty claims, service, etc.

 

One of our competitors claims to sell hardware at cost to their customer schools. Perhaps this is to offset the high fees charged for services, or perhaps they just need a bigger truck!

Tis the season to do eRate, File-a-li-la-la the forms today!

I love the Christmas season, now termed the Holiday season by those more politically correct. As a technology provider for schools, it marks the start of the annual gift giving season by the Universal Services Administrative Company for eligible technology hardware and services.

The gifts are in the form of reimbursements through the eRate program, and you might not be getting your fair share!

Like me, you may not generally favor government largesse; but  the eRate program is reasonably well run, self-funded, and designed to support the most financially disadvantaged student populations (among other institutions). Take a look at your last telephone bill – mobile or otherwise – and you will see a small fee titled Federal Universal Services Fee. That is the source of the funding – everybody pays a little.

Charter Schools, unfortunately are more likely to receive a proverbial “lump of coal” in their Christmas – woops – Holiday stockings, than traditional school's. The reason is simple, it takes a level of expertise and a significant investment of time to wade through the myriad of forms, compliances, and dates associated with the program. Many Charter Schools simply don’t have the resources to successfully do this.

What a shame!

In a nutshell, there are two broad categories of reimbursements you can receive; they are labeled in the eRate program as Priority 1 eligible services and Priority 2 eligible services. Priority 1 services consist primarily of Internet, Telephone, Email, and Website Hosting Services. Priority 2 services consist of hardware components and services used within you’re your building to connect, route, secure, and deliver technology to end users.
 
These expenses are reimbursed at a rate roughly equivalent to your free and reduced lunch count percentages. Priority 1 services are always eligible for reimbursement; Priority 2 services have discount level thresholds, technology plans, and additional requirements.

What is the easiest way to participate in this annual gift giving? It might not be as difficult as you would think.

Here are a few  things you can do to improve your chances of having a Happier eRate Holiday:

1. Identify state eRate consortiums and join them

Check with your state office of education to see if there is an eRate Consortium. If one exists, they will often handle your Priority 1 items.  In fact some states will give you a steal of a deal on broadband AND help you file the eRate forms to boot.
Give yourself plenty of time. These organizations can be quite bureaucratic and move at a snails pace, but the value proposition can be excellent.

2. Verify that your telecom provider has an eRate department

If your state does not offer broadband, your telephone company should have the resource to help you file for your eRate reimbursement. In fact, you might even find a provider that will only bill you for the unreimbursed costs of your telephone, internet, and fax lines. It is common to bundle internet service with your telephone, especially in rural areas.

Be careful, you still must comply with the eRate program for both priorities and you can easily run afoul of the rules when your telecom sales representative gets involved.

3. Don’t forget your email and webhosting costs

While normally not significant, email services and web hosting costs are always eligible for eRate reimbursement, regardless of your discount rate. If you are settling for a third rate website and the crappy email system that comes attached to it, do yourself a huge favor, upgrade your email and website system and get reimbursed for doing so. It makes the cost very reasonable, and you will likely get huge productivity improvements to boot!

4. Outsource the entire eRate filing process to a professional

The adage of “Penny wise, pound foolish” is my favorite description of those who elect not to choose door #4. In the decade of my involvement with Charter Schools, I have seen very large sums of money lost because school administrators thought they could do this on their own.

Freestanding and independent Charter Schools lack the economy of scale to compete on the eRate playing field. Traditional school districts often have full time staffers just for this purpose.
 
The most common mistake is to presume an incorrect discount rate (there are ways to improve it significantly rather than just counting free and reduced lunch percentages), then buy the prevailing wisdom that you do not qualify for the big ticket Priority 2 items. And the results are both predictable and deplorable. All it takes is a cursory search on the USAC website to demonstrate how poorly most charter schools fare in receiving Priority 2 reimbursements.

Did you know that in in 2010, every school at every discount rate received their Priority 2 funding!  There are multi-year adjustments to the funding pool, and even the most seasoned eRate professionals don’t really know where the exact cutoff will fall for Priority 2 funding.

Don't listen to the naysayers that Priority 2 funding is impossible to acheive. It's bad advice!

Summary

When you are faced with critical tasks that require a high degree of specialization, but for only small projects or periods of time, it is usually best to outsource the task. This is exactly our position about the design and engineering aspect of your technology infrastructure.  Likewise, eRate is a highly specialized process, which trained professionals can manage in a fraction of the time you would spend.

Don’t brush this matter off for another year! Locate an eRate consultant, one who is a Certified eRate Management Professional, and invest in their services. You do it for special ed, technology, finance, and many other tasks – why not for eRate.

‘Tis the season to do eRate, and have a much happier holiday… or Merry Christmas, as the case may be by getting your share of the eRate gift giving.  

What to do now that you have been approved

Congratulations on the state approving your new charter school. Take a deep breath, exhale slowly, and relax. OK, time to get back to work!

No doubt the application was challenging, and by now you have a board and a few eager volunteers to help, let’s take a look at the specific things you should do with respect to technology in order to be ready for opening day.

This is only from the perspective of technology, other things will certainly be required; but there are four key waypoints you should consider during the next year or so.

• Build your communication infrastructure as quickly as possible
• Create your Technology Plan and participate fully in the eRate process
• Ensure your critical network components get included in the construction/remodel
• Install your hardware and software  30-45 days prior to opening

Communication Infrastructure

Think of your new school as a product launch. How quickly you put systems into place that will help you market, build your brand, recruit students, engage the community, and establish management systems will in large measure affect opening day. And while that may seem a long way off, it will happen very quickly.

With the world’s finest set of collaboration tools available and free to any academic organization, your first stop should be at the Microsoft Office 365 website to sign up for a free trial. This cloud based suite of solutions will provide the foundation of a technology infrastructure which will serve you well during this critical start-up phase; and it will continue as the core communications infrastructure for years to come.

Included in the Office 365 offering is:

• Exchange based, SPAM free, secure, and compliant email that works on any device
• Lync 2010 unified communications client, with  live meeting, chat, and file sharing
• SharePoint  for document storage, collaboration, and access control

You’ll also need to decide upon a Charter School Management System, or outsource the business office functions. We believe keeping things in house is the best solution. See our post about Education Resource Management Software( eRM) powered by Microsoft Dynamic CRM.

Technology Plan (for Erate)

You’ve probably written enough plans to last a lifetime during the application process, but it’s time to review that technology plan one more time. It will probably need to be fine-tuned in order to pass the state Erate Plan approver. In a perfect world your application plan, eRate plan, and real life (what you will actually do) plan would be the same, but if they truly are, that would be the exception rather than the rule.

An important aspect of the eRate process is determining your discount rate.  Calculating your discount rate for the first year is a little tricky, since you have no financial measures of your student population.  Normally you measure free and reduced lunch percentages to calculate the eRate discount; and ultimately you should conduct a family survey to determine more accurately your actual discount rate. This will be especially important if you are close to reaching the priority two funding levels, which is the level at which you obtain the most significant reimbursements for eligible technology purchases.

You would be well advised to get some professional help with eRate because the dollars at stake are very significant. We know of one school that incorrectly calculated their discount rate and missed out on getting reimbursed for several hundred thousand dollars of eligible equipment. Ouch …. don’t do that.

One final eRate reminder, work on the front side of the eligible time periods for filing. Don’t even think about waiting until the deadlines loom large. Invariably you will miss something and the deadline will come…. and go, along with your opportunity.

Network Components

Ask any network cable installer about the ideal time to install cabling and they will universally agree that it is before you finish out the walls and ceilings. Waiting until the drywall is in and ceilings are hung will increase your cabling expenses significantly. And it increases the likelihood of damaged or improperly routed cables as well.

Having said that, don’t be too ambitious about the rest of the gear. Patch panels, maybe – but definitely not switches, routers, servers, or access points. Those all come in after finish out and several cleanings. Drywall dust is very destructive to electronics, so be sure to do a thorough cleaning of your server room before installing routers, switches, and servers.

If all of your hardware and software is on premise, you can easily wait until the month prior to opening to install this equipment. Please note that waiting to install the equipment is NOT the same thing as waiting to acquire it. While waiting a little may save a few dollars, waiting too long will ensure you are not ready for opening day.

Final Systems Installation

As you count down the month before opening, there will be plenty of tasks to accomplish. Desktops, laptops, and multipoint lab systems should be installed and tested. Wireless access points will be attached and configured. And the server room will come to life with servers, switches, and a good quality firewall.

See articles about managing desktops, UTM devices, Windows Multipoint, and other items not mentioned here for this final step.

Summary

The common, almost predictable experience we have observed in opening schools, is to wait until the building occupancy permit is issued to begin technology implementation. Don't do that! It will create a very shaky foundation for your information systems because you will be rushed, stressed, and making decisions under a great deal of pressure.

We speak of planning as though it only requires thought and conversation, it also requires a significant amount of time. Do yourself a huge favor and start the process early... as in yesterday!

Sidebar

One of the tremendous advantages of the cloud is the capacity to build infrastructure off premise and then connect it to the physical facilities when the time comes. This is a sound strategy in launching your new school.

By building your key infrastructure in the cloud (hosted solutions), you will not only have advanced communication abilities during the critical planning year; but, once you are comfortably housed in your new facilities, you will be using a familiar set of tools and features.

Working across town or across the country today might be necessary to get up and running, but across the hall later on will be necessary to operate smoothly and efficiently. And you may ultimately, as many have, decide that leaving your infrastructure in the cloud is a sound strategy.

Congratulations on your approval, feel free to call if you have questions.

Putting a Customer Relationship Management (CRM) solution to work in your school

A core assumption in the Charter School movement is competition. Most competitive measures are geared toward educational outcomes. But before you can compete in the area of outcomes you must compete in the arena of sound business management. Running the business side of a Charter School is enormously challenging. In addition to the key metric of recruiting students, you must manage all kinds of relationships with parents, teachers, administrative staff, board members, volunteers, the community, vendors, and regulatory agencies.
Managing a school is a relationship management intensive undertaking! And how well you manage these crucial relationships will have a far reaching impact on your organization. But how many of you are using any kind of a Customer Relationship Management program? More specifically, how many of you are using a CRM system that is deeply integrated into your existing information systems?
Increasing numbers and types of businesses are adopting Customer Relationship Management (CRM) systems.  CRM systems cover a lot of territory: sales, marketing, case management, and documentation; so making general observation here is not really going to help. But try to imagine how different your school would look if you had a system in place that could help quantify measures of performance, more clearly define and manage processes, automate administrative tasks, centralize information, and increase the capacity of your staff to work in a more unified manner.
A CRM system is not a simple solution to implement, but managing the business of a Charter School is not a simple undertaking. And while complex systems require thoughtful planning, testing, and deployment; the complexity exists whether or not you have such programs. Traditional school districts have a huge advantage. Although they deal with the same array of relationships they also have significant resource advantages and economics of scale, often employing an entire team to accomplish what a solitary administrator is expected to do.
The best way to overcome this inherent disadvantage is a Customer Relationship Management System designed specifically for Charter Schools.
From a funding perspective, students and their families are your paying customers. But in reality you have a long list of “customers”, or groups without which you could not function.  And as simple as it may sound, keeping them happy is most likely to occur when using a Customer Relationship Management system designed just for that purpose.
Nobody likes a hard sell, and perhaps that is what comes to mind when you hear about CRM software. In fact effective CRM programs do more than just build brand awareness, deliver consistent marketing messages, and track interaction with potential customers until you “sell” them. CRM systems help you manage all of the aspects of the important relationships that define your organization and make it as easy as possible to do business with you.
Customer Relationship Management software has been successfully implemented in all kinds of businesses, and for the same reasons it makes sense for your school. Consider things you could do with a CRM system designed for a Charter School:
Contact Management

• Centralize the essential contact information for students and their families and tie it to their Student Information Records
• Consolidate all other contact lists for the school into a single source and enjoy a much more accurate source of information
• Identify relationships among the various contacts to better understand communication requirements and preferences
• Communicate effortlessly with any combination of individuals within groups and track those communications for accountability
• Streamline the records update process by distributing the task to the end points of interaction
• Provide financial and case management records for context (as allowed by security roles) within your contact information

Marketing

• Create, execute, and measure campaigns for recruiting, fundraising, and volunteering
• Communicate with potential students at the frequency and intensity of their interest level
• Track all interactions with potential students, donors, and volunteers and measure defined goals of those relationships
• Build better relationships through consistent messaging, improved responsiveness, and uniform processes
• Manage Social Media campaigns

Case Management

• Establish workflow and manage documentation for new student from application to entrance
• Manage facilities and contractors with workflows and centralized documentation 
• Manage support issues (help desk) for all kinds of issues - technical, personnel, facilities, finance
• Track grants and funding opportunities with better reminders of deadlines and tasks management
• Comply with Board Meeting minutes publications using permission based workflow and oversight
• Manage questions, complaints, or discipline with current students (outside of SIS)
• Streamline communication with key team members by centralizing information stores
• Develop a centralized policy and procedure knowledgebase
• Manage field trips, group events, and meetings

Fee Management

• Manage student fees and simplify the reconciliation process for finance
• Centralize accounting for all sales or service fee collection for all groups in or out of the  student store
• Improve the process for collecting library fees, yearbooks , DVD sales, and sporting equipment
• Integrate the accounting and development functions for fundraising and donation management
• Document and improve collection for property damage fines
• Improve inventory management for all product based items

As you can see, this is a pretty comprehensive list of features touching many departments and individuals both in and out of the school. As such the architecture of this system is vital. In order for this system to succeed it must have a common and familiar interface, utilize existing rather than new policies and procedures, and it must be a cloud based solution with unrestricted availability from anywhere on any device.
Our recommended solution is Microsoft Dynamics CRM online configured specifically for use in the Charter School Community and managed with familiar tools you use every day – Microsoft Outlook, Word, and the other Microsoft Office programs. But whatever solution you choose it must be capable of delivering administrative efficiencies to support the non-academic aspects of your school.
One last point - while we did not directly address the educational side of your organization, it too will be greatly enhanced by a CRM system.

Why you need an e-Rate consultant (and why it cannot be me)

Imagine receiving a coupon in the mail that was redeemable at any grocery store which offered you 70% off of all bread, milk, eggs and meat. Eligibility for the coupon was conditioned upon stating your house had a refrigerator to store the items and completing a few forms before your first shopping spree. In these resource constrained times, few of you would pass up such an opportunity!

Now imagine driving to the store intending to use your coupon to find that only bread and milk were available to you, because of your income. Imagine further that it would take you several hours if not days, to complete the forms required to redeem your coupon, and that the store providing the groceries was prohibited from talking to you about how the coupon worked or how to use it. Additionally, imagine being scheduled for training meetings to learn how to complete the forms which have very time sensitive windows for completion and a long list of approved uses for the discounted groceries. And finally imagine being required to plan your menu 3 – 5 years in advance for your most costly groceries, which of course had to be approved by a complete stranger.

Your coupon suddenly becomes not quite so appealing.  Yet giving up a 70% discount (or more) on items you use every day is very appealing, and for some, quite necessary! What do you do?

This is the “stranger than a reality show” world of e-Rate at a large majority of Charter Schools. Does this sound familiar? Here is the corollary:

• E-Rate is the coupon, USAC controls who gets them, and the relative prosperity of your student’s families is part of your eligibility
• CIPA (Child Internet Protection Act) compliance is your refrigerator, which you must have to even be considered for eligibility
• Your technology service provider is the grocery store who is prohibited from assisting you in obtaining your coupon
• The groceries for which you seek the coupon are your telephone, internet, email, website, and related technology equipment bills

So how do traditional school districts do this? It usually boils down to economy of scale (which most Charter Schools don’t have). Traditional districts are sufficiently large and the funds so significant, that they can afford to hire full-time e-Rate staffers.  Such is not the case with most freestanding Charter Schools.

Is it any wonder that the Charter School Community has difficulty obtaining their fair share of e-Rate funding? With few exceptions what I observe is a complete disaster; in one case the financial losses exceeded one hundred thousand dollars (yes that is six figures worth) in a single school year. And this even happened at a school where financial management was outsourced by supposed professionals, which is truly perplexing.

Here are the most common mistakes I observe regarding e-Rate:

• Attempting to do this without a significant investment in training and time. This is not a good second duty for a principal or math teacher.
• Assuming you are ineligible for reimbursement. Certain expenses are always eligible for reimbursement, regardless of your free and reduced lunch count.
• Failing to utilize a family survey to get a more accurate e-Rate discount. This is especially important where “free lunches” run counter to social norms..
• Structuring technology resources in manner that is ineligible for reimbursement or incorrectly classifying the expenses as priority two.
• Believing (erroneously) that the money is too insignificant to justify the effort 

For most charter schools, this is simply not a task that you should attempt on your own, unless you belong to a consortium of schools that can afford a full-time professional. If you doubt my advice, all that is needed to prove my point is a simple search at the official USAC website which maintains a complete database of e-Rate reimbursement. For example, in the State of Utah in FY 2010 fewer than a dozen charter schools received any e-Rate reimbursement that was not filed by an e-Rate professional.

In states that have a large population of freestanding Charter Schools, an e-Rate consortium is an excellent idea. It essentially brings the economies of scale to individual Charter Schools by filing e-Rate as a group. However, this requires a high degree of co-operation and may provide fewer benefits for some within the consortium than others. Getting independent and highly individualistic charter schools to co-operate seems to be a challenge.

For these reasons, we strongly encourage the use of e-Rate professionals, but it is important to do your homework when selecting an e-Rate professional. There are no formal credentials in the world of e-Rate consultants, although the e-Rate Management Professionals Association is attempting to change that. In our experience, fees range widely, as do the personal interaction with your staff. Some companies provide a mostly web-based do-it-yourself interface; others have a very personal and accountable approach. Our recommendation is Kellogg & Sovereign, LLC located in Ada, Oklahoma.

Now for the “not me” part of this article. By statute, technology service providers are restricted in many aspects of the e-Rate process, especially in the pre-bid time frame. This is to prevent undue influence and fraud associated with contracting procedures, and rightly so. E-Rate fraud has been problematic in the past, which is inexcusable, but understandable as the amount of money involved is significant.

So what’s the bottom line? Decide now to get some professional assistance for your e-Rate process. We are well into the FY 2012-13 e-Rate program year. In the worst case scenario you will be dollars ahead for telephone, fax, email, and web hosting costs each month; and in the best case scenario you will receive a huge discount on those expensive technology upgrades every few years.

In these resource constrained times, you simply cannot continue to ignore this important funding mechanism.