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!

How To Completely Undo Your IT Management

Truly this is not an article on how to dismantle the technical support mechanism at your school. It is however, a recounting of actual experiences – some of them unpleasant – that you should avoid; that is if you wish to have a better technical management support mechanism in place.

Although it is less painful to consider other’s mistakes, making them yourself has a silver lining. Your mistakes can always be used to point out a bad example, which can be instructive …. to others.

 Here are five of the most common self-defeating behaviors we have seen while managing charter schools:

1.       Paying for advice, then completely ignoring it
2.       Allowing everyone to develop their own agenda
3.       Making significant technology related expenses without involving IT
4.       Expecting short turnaround times for complex projects
5.       Assuming IT management grasps the political and leadership challenges in your school

Paying an expert for advice, then completely ignoring it

Several years ago a generous benefactor came to the religious community where we rented facilities for a small K-4 charter school. He had a terminal condition and was offering a generous gift of money to buy computers for both the school and the religious community (they had educational activities during the week).  I was asked to advise them about the best use of this generosity.

After considering the budget, the stated educational objectives, the current infrastructure, and the cost of managing the resources going forward; we proposed a solution to buy 20 laptop PC’s.   They would integrate seamlessly into the existing infrastructure at the school and add to the collection of PC’s currently used to form a full computer lab.

Unfortunately, at the same meeting, was an individual who had much greater influence with the kindly old gentleman, who was an unflinching MAC user; who, without any of the above mentioned considerations, persuaded the benefactor in the direction of using Apple Macs instead.

Please don’t misunderstand, I liked the MAC’s just fine, but given all of the other considerations it was not a good choice. Three months later I was asked to purchase software for the school/congregation to turn these perfectly good MAC’s into PC’s so they could be used with the existing systems and processes the rests of the school was using.

Presumably you have a relationship with a trusted technology consultant as part of your IT management. If that is not the case, you might consider making some changes. And when you seek advice, carefully consider completely ignoring it.

Allowing everyone to develop their own agenda

Want to stimulate creativity by engaging all levels of your staff in a brainstorming exercise of new ideas? Watch out! If you do this without a mechanism to vet those ideas, debate those ideas, and build consensus around the winning ideas you might be causing more damage than good. Trying to herd cats seems a helpful illustration of this concept, which has at its root great potential, but undirected creates chaos, division, power struggles, and politics.

We welcome creativity, the introduction of new ideas, insight into new discoveries, and the development of improved technology. We applaud all those who keep striving to do things better.

However, when those expressions of creativity become individual agendas, it can be detrimental to the organization as a whole – unless there is consensus building, implementation planning, and adequate training.

Several years ago an ambitious technology teacher determined that interactive white boards were an essential part of the classroom experience. And she was quite persuasive. The school purchased and installed the technology at great expense. The perfectly functioning whiteboards were rarely used by even the supporters of the technology and never used by those who did not want it in the first place.

When lesson plans and teaching styles have to be adapted to adopt a new technology, the failure rate rises in proportion to the change required. And without significant buy-in, a top down implementation, and significant training these kinds of projects will fail.

If you cannot manage the process of building consensus and properly implementing a project, then at least do it in a pilot program where the technology can be proved, and likely improved upon, without breaking the bank.

Making significant technology related purchases without input from IT

So common is this scenario that you only have to say these two words “Surprise, Surprise!”, and most technicians immediately know they have been handed a poorly specified, often incompatible, or otherwise problematic new piece of hardware or software to install.

“And could you have it installed yesterday?”

Not long ago we reviewed the USAC Form 471 for a small K-4 charter school that had been approved for over $25,000 of servers, switches, wireless controllers, and access points. While the expected reimbursement was exciting and gratifying, the components specified were not appropriate for the size and makeup of the schools infrastructure. It was the equivalent of putting Boeing 777 engines on a Piper Cub.

Granted, there are times when purchasing decisions cannot wait. And perfect scenarios don’t exists in every school where decisions are adequately considered and due diligence provided. And in a large view, this is a process of continual improvement.

Nevertheless, do yourself a huge favor and run technology purchasing past your IT team and avoid the headaches for both of you. There are two benefits in doing this. First, you will have a much greater chance of getting the right equipment and you may also spend less for the solution.

And this is especially germane to new construction or remodeling projects. Finding that you need a dozen new CAT6 network cables installed is exponentially more difficult after that final coat of paint has been applied.

Expecting short turnaround times for complex projects

Whenever I hear the preface of “How soon can you…” I wonder if adequate consideration has been given to a project or purchase. It’s understandable, logistics now make PC’s appear overnight and you can have an entire computer lab sitting in boxes ready for installation in a few days.

But that does not always happen. We recently placed an order for new lab equipment and were given a 10 day delivery notice. Three weeks later part one of two arrived and it was a full month before the final components were delivered.  It was embarrassing for us and understandably frustrating for the school waiting for the project to be completed.

From a cost perspective, rushing a project universally equates to added costs. And inadequate planning is the most common reason for projects to go awry.

Investigate early, specify clearly, and communicate regularly with your provider about order processing, shipping points, tracking numbers, and any known shipping delays.

Assuming IT grasps the political and leadership challenges of your school

Our management model and the model used by many charter schools are to utilize part-time support resources. In fact our most efficient model places support engineers in the school only a few times each week. And presumably that time is spent solving complex technical issues, rather than circumnavigating power struggles, personality clashes, and addressing individual agendas.

In large measure these are the realities of any organization, so one of the most powerful tools we have used to overcome these very normal challenges is to hold periodic (monthly at least) Technology Advisory Committee (TAC) meetings.

TAC meetings are an invaluable source of information for all involved. Problems can be better identified, the merits of proposed projects can be openly debated, and consensus can be built. A well formed TAC will consist of Technology Managers, Administrators, Department Heads, and representatives of other significant stakeholders. Parent and BOD representatives are especially helpful in this exchange and often provide invaluable “end user” insight.

Summary

Placing your technology team into the appropriate organizational level is an important first step in improving your IT management. Consider that most fortune 500 companies now have Chief Information Officers as part of the highest levels of their management team.

Information systems drive so much school activity and management process that you cannot afford to view IT as the guys who fix computers. And tolerating inadequate IT support staff is very costly. If you don't have the level of expertise you need, get it.

For concrete ways to do this, consider making improvements in the five areas listed above. A helpful moniker is “Just do it!”,… not “Let’s undo it”.

It’s time to upgrade to Windows 7… really it is.

Have you stopped for a moment, between fiddling with your Windows XP desktops, to consider the practical ramifications of running this outdated and no longer supported Operating System? You may be surprised at how much support time and resources are spent retaining it in your organization.

Sure, it still works and runs your existing programs. And yes, it will still work on those 10 year old computers, but at what cost?

The consumerization of desktop/laptop computers continues to bring prices down and features up as manufacturers compete for more business primarily through price. The benefit to you, the consumer, is that a new PC can be purchased for the rough equivalent of about 5 hours of modestly priced technical support. And how many times have you spent more than 5 hours, either all at once or piecemeal in resolving a computer issue.

Economics aside, consider what it really means when Microsoft “sunsets” an operating system, or it plain language, stops supporting it.

It does not mean that the software all of a sudden fails, nor does it mean that it will stop functioning at all in a steady state. In simplest of terms it means that Microsoft no longer does regression testing on new product releases. In other words, all patches, fixit utilities, service packs, hot-fixes, and new version roll-outs are not tested for backwards compatibility.

Due to the near infinite number of hardware combinations, system configurations, and software customizations it is impractical, if not impossible to test for backwards compatibility. Even assuring programs run on current Operating Systems is difficult enough. Furthermore, most new software is written or programmed for the new operating system architecture. Bottom line is you are on your own with Windows XP technical support.
In the back of your mind you probably know the upgrade is coming. But large upfront costs of purchasing and installing new workstations may persuade you to put it off. While that seems a reasonable course of action, the old saying of “Penny wise, pound foolish” really does apply. What you will begin to experience is support cost creep, an incremental, almost unnoticed, but constantly increasing expense to maintain your desktop/laptops.

Sadly, if your support personnel are paid on an hourly (break-fix) basis, rather than a support contract, they may not be motivated to push for the upgrade either.

Do yourself a favor, and do the upgrade to Windows 7. You’ll save money in the long run, and probably even in the no-so-long run. Even if you don't purchase new computers, do the upgrade! Windows 7 performs well on a large variety of not-so-new PCs
Now for some great news! The upgrade to Windows is very inexpensive for education customers. When you enroll in a Microsoft OVS-ES agreement for your school, you get blanket coverage for all computers in your organization. Furthermore, you also get a license to run Windows Office Professional 2010 on all of your computers in the school. Finally, there are many other software benefits you enjoy, such as work at home versions of the same software.

The cost of an OVS-ES agreement is determined by counting your full time staff and multiplying that number by $55.00 (approx.). Do the math and you will find this to be an extraordinary value. Windows 7, Office Professional, Core Client Access, and other benefits for a few dollars per PC.

It’s time to upgrade your phone system, start saving money, and get better service.

Voice Over Internet Protocol (VOIP) is no longer an emerging technology with the promise of providing better features at lower costs, someday. It is a stable and widely accepted industry with significant hardware, software, and technical service adaptation. And it is much, much, less expensive that Plain Old Telephone Service (POTS). In addition to lower phone bills, you will also enjoy a smorgasbord of features previously found only with very expensive phone systems.

And cost savings on your monthly phone bills are just the beginning. You can also enjoy an efficient virtual receptionist that provides better call routing and more relevant information based upon whether your school is open or closed. You can take a handset home and appear to be in the office, you can answer and make phone calls from an (internet enabled) airplane at 35,000 ft while traveling to a conference or meeting. And your phone messages and faxes can be delivered to your email inbox and be reviewed on any mobile device. And this is just a very partial list of features. Every possible feature, including call forwarding, conference calling, extension transfer, music on hold, intercom, voice mail, etc. are standard features of currently available VOIP systems.

There are two general types of VOIP systems – on premise and hosted. Simply stated the difference is a function of where your call controller hardware is located. With an on-premise system this hardware is located within your building much like a traditional phone system, with a hosted VOIP system all of your call center hardware is located in a datacenter not in your building. Most of the advantages discussed in this article relate to a hosted VOIP system.

Hosted VOIP requires only two things to operate – a handset on your desk (or software on your computer) and an internet connection. Prices start about $25.00/mo per line and the service is managed completely on line. If you are doing new construction, VOIP significantly reduces both the cost and complexity of installing a new phone system. A VOIP handset can be plugged directly into a network cable, so rather than pulling both phone and network lines, all you need are network lines. And with a hosted VOIP system, rather than having a proprietary and expensive call controller mounted in your server room, you can now outsource that function to a provider that maintains all of the hardware you need, for a low flat monthly rate.

There are several scenarios where a hosted VOIP system is particularly beneficial. If you are leasing space in a building while facilities are under construction it is a tremendous idea. If you are expanding to a new building, it is also very practical. And if your staff routinely has remote work assignments or a use a satellite campus, a hosted VOIP system will greatly simplify your phone configuration.

The reason a Hosted VOIP solution is so flexible is because there are no physical space limitations to the system. You can literally install your office phone any place in the world that has a reliable internet connection. I recently relocated to temporary office for a few months. And my only action to transfer phone service was to unplug my handset, transport it to the new location, and then plug it back into the internet. At power-up, the phone was routed onto the internet and into my VOIP server and within minutes, my office phone system was relocated.

If you are managing e-Rate reimbursement properly, a hosted VOIP system is particularly beneficial, because the monthly service fees are always reimbursable as a priority one expense, regardless of your discount rate. The only priority two expenses are handsets, which can be reimbursed two of each five years, conditioned upon your discount rate.

Take a closer look at the cost of your telecommunication service and features, then compare available VOIP services. You will be surprised at potential money savings and service improvements available. Just think, you could have enjoyed time at home with the family this holiday while appearing to be in the office!  

 

Improving your e-Rate experience

Improving Your E-Rate Experience

I continue to be surprised at the lackluster participation by many of the Charter School community in the USAC funding mechanism, commonly known as e-Rate. I believe that it stems from a lack of information; but whatever the reason, it seems a bit negligent in these resource constrained times.  This general lack of participation is found throughout the community; many administrators, finance companies, and service providers alike behave as though e-Rate is neither a significant opportunity nor a justifiable expenditure of time.

I believe they are wrong on both counts and unless your school has a philosophical position against government support, there is little excuse for not maximizing the benefits of this program.

Here a few very simple suggestions that will help you improve your experience in obtaining reimbursement for eligible technology purchases.

1.     Don’t try to do this on your own. One of the simplest ways to improve you e-Rate experience is to outsource the process in part or in whole to an e-Rate consultant who will assist you. State of Utah resources for e-Rate assistance, as compared to other states we have observed are quite limited and are mostly guidance in a self- service process. By outsourcing this task to a professional, you can focus on issues that you are uniquely qualified to manage, like educating children.

2.     Understand the formulas that drive discount rates. Your reimbursement options improve as your discount rate increases. And there are ways to improve your discount rate beyond a simple calculation of free and reduced lunches. This is uniquely true in Utah, where larger family sizes, depressed wages, and a general reluctance among many in the LDS community to accept free lunches tends to drive down your specific discount rate. Start planning now to do a household income survey to improve your e-Rate opportunity, especially if you are approaching the 70% – 75% bracket.

3.     Shift expenses to the priority one category. Albeit a limited opportunity (and no we don’t advocate trying to trick USAC) there are certain expenses that can be categorized in both the internet access (priority 1) and the internal connections category (priority 2). The best example of this is email. By utilizing a hosted email solution, rather than an on-premise solution with servers, software, and network equipment, you can obtain reimbursement without regard to your discount rate and/or the 2 in 5 rule for hardware. Another example of this is a hosted VOIP telephone system, instead of on premise (hardware concentric) VOIP telephone system. Your website hosting is yet another priority one expense.

4.     Align your purchases with the e-Rate calendar. E-Rate purchases typically need to be installed during a 90 day window starting with July 1 and ending (with some exceptions) on September 30^th. By structuring your purchases, such as your annual Microsoft School Agreement for software licensing, with this purchasing window, you can streamline the reimbursement process and improve your chances of having an expense accepted.

In at least one of the states where we provide services, we have observed, first hand, the loss of hundreds of thousands (yes that is 6 figures worth) of eligible expenses that were not reimbursed. That is not the kind of experience you want to emulate.

Right now is the time to be working on Form 470's for FY2012-13! Please don't wait another year.

Managing Technology Resources

Too often we think about technology in terms of acquiring it and fixing it, with only secondary consideration to how it is managed as a powerful asset.

Once the technology infrastructure is in place, it requires ongoing oversight and administration. This is the most significant challenge facing charter schools, which tend to inadequately staff the infrastructure, for good reason.

The level of complexity demands much more than a part-time staff member or a part-time parent volunteer. And prevailing rates for competent network engineers typically exceed the compensation for charter school administrators or principals —a situation that is not sustainable.

We suggest a different management model to addresses this dilemma. It starts with competent technical support using consistent (weekly) scheduling, automated monitoring systems, a robust help-desk system, simplified integration, and unlimited 8 X 5 support.

Most freestanding schools can be managed in one day per week, unless you are working on new projects or on major upgrades. This keeps the annual costs of managing your infrastructure in line, yet provides the level of expertise required to manage these complex systems.