Consider All Costs when Accepting Free Funding Opportunities for New Systems!

Written by Debbie Karcher

When districts consider systems with comprehensive plans, partners, budget and district consensus these projects may have a better chance of success then when each organizational unit approaches new systems on their own. Too many times, large projects are initiated without a business case, total cost of the project, and budgets for ongoing maintenance, support, and license costs. This happens for several reasons but usually because funding is made available in the form of grants, bond referendums, loans or an operating budget surplus; all of which are not reoccurring.

Since 2001,  district per student expenditures have increased, when adjusted for inflation, but capital expenditures have been on the decline and interest payments have increased. The continuous loss of students to private and charter schools is yet another loss of revenue. This has put pressure on districts’ operating budgets resulting in a  need to decrease staff in central offices. With reduced operating budgets districts do not have any choice but to take advantage of funding alternatives.

The problem with this approach is that information systems are purchased using only the funding received through the grant or special entitlement. This amount does not usually include the total amount needed to implement, support and maintain these systems in the future.  This article provides an example when  districts will use temporary funding to implement new systems and provide implementation strategies that can mitigate some of the unfunded implementation and future costs. 

In 2015, Florida provided funding for the replacement of a legacy Vocational Academic Systems. Districts had to implement the preferred systems or forgo the funding. Since this was an opportunity to replace old and unsupported systems there was not much discussion and Florida counties began the replacement process. The system selected was excellent and the implementations were successful. However, there were costs incurred that were not included as part of the grant. These included in-house development costs to integrate the new systems, annual license fees, and on-going maintenance and support. The annual license fees were a new and reoccurring costs to the district. Since this implementation was initiated by the Adult/Vocational Divisions, there was also very little discussion regarding the strategic use and integration of the system’s data, benefits, additional functionality, and future costs.

It was only after the project was in the full implementation stage that people realized that additional  funding and IT resources were going to be needed. This put the project at risk and required the IT and Finance departments to reallocate funding and resources to meet the project and grant deadlines. The project went from having one stakeholder to many.

New systems surprises are not new the Information Technology (IT)organization. Systems crop up frequently without the knowledge of the organization or IT.  However, invariably your IT group is going to have to be involved if not just to integrate the new system into the network. Not a criticism, but without the assistance of IT and a project manager the owner of the new software may not be aware of all the details and steps necessary to implement a system. In order to mitigate some of the problems when these opportunities arise use some of these best practices to align the project with the rest of the district:

  • For any new system develop a business case identifying key stakeholders, milestones,  the total costs of implementation and ownership, risks, mitigation, and ongoing support and maintenance.
  • Have IT commit resources to fully integrate the new system into the network and other systems.
  • Another consideration is that when legacy systems are replaced districts may not be paying any license or support fees or sometimes the systems are so old that the companies have gone out of business. The new system will be a new reoccurring cost for the district.
  • Once costs are determined get a commitment from  Budget and Finance groups that they will  provide the funding to implement the unfunded activities and to fund future maintenance and  support.
  • Determine the consequences of not implementing the system.
  • Provide a demonstration of the new system so that key stakeholders can be aware of all the functionality. There may be other areas who can take advantage of the new system.

The most important activity above is identifying key stakeholders and getting them involved in the project. This will help uncover any hidden costs and barriers and establish an awareness about the new system. Bringing in other stakeholders, especially IT, does not mean giving up project ownership. It is following one of the many project management practices that can lead to a successful project implementation. If you are still unsure about leading a project, Worldgate can help assist in this area, using their project management resources to help you get started.