What We've Learned About TCO

As the number of schools that are getting wired and connected to the Internet grows each year, more and more of them are beginning to wrestle with managing the long-term costs of managing their new technology.

Adequate tech support, staff development, replacement costs -- all are important components of Total Cost of Ownership, that is, the long-term costs of owning and operating a network of computers. Just as businesses were forced to reckon with TCO as they began to move from mainframe computers to a client-server architecture in the mid-1980s, so too are schools starting to tackle the very real costs associated with supporting technology and keeping it functioning well.

Understanding the Basics

In 1999, the Consortium for School Networking began a project, called Taking TCO to the Classroom, which was designed to help school administrators and technology directors better understand the long-term costs of operating and maintaining their computer networks. As the project began to review, research and catalog the costs involved with managing computers in the K-12 environment, it developed two goals: first, to help administrators understand all of the costs for which they should be planning, and second, to help them understand the potential effects of their decisions on the long-term costs of operating their networks. The project’s Web site is .

In reviewing the costs involved, it became clear that if schools don’t plan carefully when it comes time to retrofit existing school buildings to accommodate new technology, the result could be cost overruns, bad technology decisions, and continued headaches down the road.

Too often well-meaning school districts may plunge into a major technology project without fully understanding what the project will cost -- or, more importantly, what they hope to achieve by making technology improvements.

Is the goal to achieve administrative savings? To free teachers from the demands of certain recordkeeping tasks? To use interactive media to improve students’ test scores? To reduce drop-out rates by challenging and retaining at-risk students? To enable students to access Web-based resources from around the world? To enable students to access courses offered by other institutions through distance learning? If all of these are goals, how are they prioritized?

Until a school or school district understands what it wants to achieve, it will not be able to plan what kind of network it will need to build today, and how that network will need to evolve in the future to accommodate student population growth or changing technology needs.

The Problem of Retrofitting

The costs of retrofitting buildings to accommodate technology are not generally highlighted in the calculation of traditional business TCO. But the costs will be real for most school districts, and a failure to anticipate them may lead school leaders to under-budget for their projects or make decisions that are not cost-effective.

In a 1995 study, the General Accounting Office reported that 46 percent of the nation’s schools did not have adequate wiring for computers or communications technology. More than 60 percent, it said, had insufficient conduits for computer and network cables and 34 percent had inadequate electrical power to support technology.

That same year, as part of a study designed to project the costs of wiring the nation’s schools, McKinsey & Co. estimated that 65 percent of schools were more than 35 years old and had not yet undergone a major renovation to support technology. It estimated that it would cost an average of $65,000 per school in asbestos removal and other improvements to wire these older schools. Schools that were between five and 35 years old were expected to require wiring improvements, but not asbestos removal.

McKinsey also projected that 23 percent of the nation’s schools would require that their electrical system be upgraded -- probably a conservative estimate as schools have moved forward in analyzing their capacity needs. It projected that another four percent would require improvements to their heating, ventilation, and air conditioning systems -- again, a projection that was probably too conservative. When a district needed to upgrade its systems, the consulting firm projected it would cost the average school $240,000 on electrical upgrades and $31,800 on heating, ventilation and air conditioning. It based its projections on an “average” school with 533 students and 21 classrooms.

In 1997, Glenn E. Meeks, Ricki Fisher, and Warren Loveless conducted a study of 30 school construction projects in the Midwest with an average of 35 “instructional spaces” each. The study, which was published by the Council of Educational Facility Planners International, found that when a school was being renovated, it cost about $3,000 per “classroom equivalent” for infrastructure improvements. That included one new 20-amp, 110-volt AC circuit; six empty data box drops; and six duplex outlets. If the building required additional electrical capacity, they estimated it would cost at least $50,000.

Experts suggest that about 10 percent of the cost of wiring and upgrading infrastructure for new technology can be saved if the work can be scheduled when a building is being renovated or modernized. The actual costs will vary, of course, reflecting local demand for wiring contractors and other issues.

E-Rate Complications

While the E-rate program’s funding support has proved to be a boon for many schools’ networking projects, the program’s long lead times for getting contracts in place and then subsequent tight deadlines for installation have provided financial and management challenges for many districts as they try to wire and renovate older buildings.

In January, 2000, Glenn W. McGee, state superintendent of education for Illinois, provided some examples in a letter to the Federal Communications Commission about the need to extend the deadline for installing networking equipment in the program’s second year. E-rate program delays, he said, had cost Rockford School District 205 “more than originally anticipated in higher labor charges. Moreover, the vendors are reporting shortages of equipment and skilled labor to complete the projects under such a tight timeframe.” In the case of St. Patrick High School in Chicago, he said, the project’s completion on schedule would depend “on vendors procuring equipment and labor, and minimal delays that winter weather can bring.” In addition, West Chicago Community High School District 94 reported that its wiring vendor “is finding shortages in skilled labor willing to work the evening and weekend hours the project requires.” (The FCC subsequently extended the installation deadline for that funding year to enable E-rate applicants to take advantage of the summer months for their installations.)

If a project gets behind schedule or runs over budgeted costs, the impact can ripple through the district, leading to delays and possibly more projects coming in over budget.

Will Wireless Be the Answer?

The high costs associated with upgrading old school buildings for technology are leading more and more school districts to evaluate the use of wireless technologies. Although wireless is not an appropriate solution in every setting, many school districts are beginning to use it to address certain kinds of situations.

Although a wireless solution will not eliminate the need for wires, it can reduce the extent to which the walls and ceilings of a classroom will need to be disrupted. Some districts also turn to wireless as a solution for portable classrooms, or in cases where a school wants to provide greater flexibility in how it deploys its computers throughout a school building from one day to the next.

Here, too, it’s important to assess how computers will actually be used in a school to determine whether a wireless solution can provide the necessary bandwidth for the kinds of uses that are anticipated. From a Total Cost of Ownership perspective, a lower-cost solution is not cost-effective if it results in teachers, students, and administrators having to endure lengthy waits to print documents, exchange files, or connect to the Internet.

Many companies that built their businesses on selling traditional networking equipment are now selling wireless solutions, too. They should be able to provide a school district with guidance on the solution that is best suited to the district’s existing infrastructure and its technology goals, both short- and long-term.

How Infrastructure Affects Tech Support

When a school district has not yet taken steps to improve its infrastructure, that presumed cost savings may force the district to pay more in the future to provide adequate tech support.

Over the past two years, a project has been under way in Michigan to help school districts estimate the level of tech support they should provide, based on a number of factors, including the number of computers that must be supported. With the help of a Technology Literacy Challenge Grant, the project has attempted to define school districts’ tech support needs, and suggest appropriate levels of staffing to meet those needs.

On a checklist of factors that could affect the level of support necessary, the project lists “buildings are old and/or badly wired or set up for technology” as an environmental factor that could increase tech support needs by as much as 10 percent if certain other factors are present, such as a reliance on old computers or a district that is large geographically.

In the current draft of its materials, the project notes, “Buildings which are old or poorly wired demand more maintenance. Therefore, technology staff members spend more time on projects that would be much easier in a newer building.”

“It’s like the difference between going online in a new home and a 30-year-old home,” says Betty Van Dam, who has worked on the project as manager of the Merit Network’s Center to Support Technology in Education. “The new home will have a phone jack in every room, making it easy to get connected. But in the older home, you will probably have to cut into the wall and pull some wire” if you want the connection in a particular room.

Van Dam also notes that building codes have changed over time. “Current codes contain requirements that make it easier to maintain technology. Thus, it will take more time to maintain technology in buildings that were wired to an older standard. In addition, technicians working in an old building may find situations where corners were cut. These situations must be rectified before you can go forward with a project or handle normal maintenance.”

More details about the Michigan Technology Staffing Guidelines are available at .

Technology planning involves far more than simply preparing a wish list of technology products a school district would like to purchase. From the day the first wires are pulled to the day a lab full of aging computers is ready to be replaced, all components of a technology project are interrelated. Saving money in one area can often mean higher costs in another, even when those costs don’t appear as a line item in the budget. That’s why it’s important for school administrators to understand where they want to go with technology, and the total picture of what it will take for them to get there.

Sara Fitzgerald is project manager of the Consortium for School Networking’s “Taking TCO to the Classroom” initiative. For more information, see .