How Much Should Computer Support Services Cost Your School District?

The Chicago Board of Education has no method for gauging what it should pay for information technology support services. Education officials there-deep into a three-year, $100 million campaign to buy computers and networks for its 557 schools-crave benchmarks to compare their outlays for such services as PC training, repair and network maintenance with what other districts are paying.

"We are actually in the process of negotiating a contract with IBM [Corp.] to provide a lot of support services, including help desk, telecommunications and network support," said Tom Lynch, director of finance at the board's Department of Procurement and Contracts. "We'd like to create a single point of contact for these services. But we've had a hard time tracking expenses and haven't been able to come up with good estimates of what things cost."

Estimates of the true costs for such services as help desk, administrative information services, technical support, research and development, and World Wide Web development are almost entirely missing from the educational IT toolkit, educators said. Also missing are methods for comparing the cost of infrastructure-related services such as desktop installation and repair. Without such information, there is no reliable way to calculate a return on investment for the millions of dollars U.S. schools spend annually on IT.

But two college administrators who noticed the void are busy deriving such benchmarks. "Obviously the issue of return on investment is a big one for all of us," said Karen Leach, chief information officer for Colgate University. She is co-authoring an analysis-dubbed Costs-that is designed to determine what IT services really cost. "One of the things that drove us into this has been the cost-of-ownership studies-the studies that show how PCs cost $15,000 or $13,000 over the course of their lives. Even if you understand how these ownership studies calculate costs, they do not break out the costs for services.

"There is a need to understand the cost for services and to identify common services," Leach said. "We believe that once we understand the costs and what the differences and commonalities are among them, we will be able to translate that to a return on investment."

David Smallen, director of IT at Hamilton College, Clinton, N.Y., is working with Leach on the Costs project. "There is a relationship of services being delivered and what those services cost," Smallen said. For example, if a school can wait days for a desktop computer to be repaired, it will naturally pay less than a school demanding around-the-clock availability of technicians. "There are incremental costs to provide different levels of service. But there is no way to measure what is the return on investment for having repair services available 24 hours per day."

In 1996 Smallen and Leach began their Costs research with a simple query: "If we were to set up a company to deliver services, what would we charge?" As the two started to answer the hypothetical question, they fell far short of having the information necessary to "formulate a vendor contract." After polling colleagues at that year's annual meeting of CAUSE, the association for managing information resources in higher education, the pair decided there was a need to "drive toward tangible outcomes."

So far, Smallen and Leach have published only preliminary calculations, as they are just beginning to receive data from enough institutions to establish common service criteria. "We expect that our number of participants will grow to about 100 institutions representing a whole variety of community colleges and [kindergarten through 12th grade] institutions," Smallen said. "Essentially, we are saying that all education institutions are welcome."

In Chicago, those estimates are "something that we need but don't have available," said Lynch, who considers the city's school district an anomaly because of its size. "We certainly can't compare ourselves with other school districts because we are so large," he said. "Corporate America would be a better gauge, except that we are so far behind technologically." And because officials have nothing against which to compare prices quoted by vendors, the district is at a disadvantage in purchasing services.

Established benchmarks likely would do more than help the school board make its purchasing decisions. They might also help sell Chicago schools on using centralized service contracts that the city is working hard to put in place.

"We have a decentralized school system, and individual school principals have responsibility for their own budgets and technology decisions," Lynch explained. "For instance, if a high school has three internal computer labs, that school will have fairly high support costs for those [local-area networks]. They would have to fund the services from their own budget. Since we have no mechanism for comparison, we often have a hard time showing schools why the use of districtwide contracts would be cost-effective for them." Individual schools are required only to use citywide contracts for the purchase of administrative PCs.

Although the schools' use of a central service agreement is optional, the success of those programs depends on volume buying. To promote use of the contract, Chicago-like most school districts-must rely on best practices rather than hard numbers.

"From my perspective, it makes the most sense to have economies of scale," Lynch said. "I recognize that there is a value in having principals take responsibility for their own budgets and technology decisions. But it tends to cost us a lot of money."

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Costs Benchmarks — Some Early Results

Network Services

*Cost per port ranged from $112 to $293, with an average of $223.

*Cost per computer ranged from $300 to $1,344, with an average of $99.

*Cost per student ranged from $123 to $540, with an average of $260

Desktop Repair (institutions with 230 to 1,800 computers)

*Cost per computer ranged from $39 to $192, with an average of $104.

Administrative Information Services

*Costs per institution ranged from $225,000 to $325,000

Cost per employee ranged from $328 to $1,220, with an average of $594.

*Cost per computer ranged from $181 to $789, with an average of $441.

**Note: Figures derived from 26 educational institutions. All costs are annual.

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Contact information for people mentioned in story

David Smallen: dsmallen@hamilton.edu

Karen Leach: kleach@mail.colgate.edu