School Report Card: Outsourcing Earns Straight A’s in Detroit

By Outsourcing Center, Kathleen Goolsby, Senior Writer

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School Report Card: Outsourcing Earns Straight A’s in Detroit

Outsourcing Excellence Award – Most Improved Process – Detroit Public Schools and Compuware

Achieving cost reduction in operating expenses is always a good return on an outsourcing investment. Dr. Kenneth Burnley, Detroit Public Schools’ CEO, considers the district’s relationship with its service provider, Compuware Corporation, a huge success. The district estimates current savings at $5Million annually — funds that can then be more strategically invested into teachers and textbooks.

An assessment in 2000 identified a need for a significant system and network upgrade to support major IT implementations of PeopleSoft 8.4 Financials, PeopleSoft 8.3 HR/payroll, an email upgrade and a student attendance project. However, their existing staff had not been trained to support a new IT infrastructure, and the district had been relying on temporary consultants to keep the IT services operational.

With no means of increasing its revenue, the district had to improve efficiencies and cost-effectiveness to meet its needs.

The totally integrated solution of Compuware, the Detroit, Michigan-based outsourcer, met the state’s requirement that government contracts demonstrate best value in provider selection. The Detroit location of the provider’s headquarters was also a significant factor. “When you’re spending millions of taxpayer dollars annually, you have to give strong consideration to a firm that has its roots in the tax base,” comments Ken Forrest, the district’s chief financial officer. Compuware, he says, understood crucial facets of Detroit’s culture and tough operating environment, including very old buildings and a strong union presence.

Compuware’s proposal for total outsourcing of the district’s schools and school administration technology functions included transitioning all of the school district’s approximately 50 information technology employees to the provider.

Classy IT Overhaul

The outsourcing transition — with a PeopleSoft implementation going on simultaneously — was completed on time, under budget and produced immediate improvements. The projects were practically seamless, which is a tribute to the provider’s expertise and flexibility.

“That’s especially true when you consider just how crummy our network was when Compuware came on board,” remembers Forrest. “If you can imagine plates of spaghetti — that’s how the termination area of our computer room looked. There were piles of wires up to the middle of your thighs and about four feet in width — with no easy way to find which wire was plugged into what. They made about a 500 percent improvement there without balking at the challenge!”

In the pre-Compuware days, Forrest says it was not uncommon for the Microsoft speed test to indicate 700 baud. Now most days it’s at a million.

Compuware rolled out an arsenal of process improvements. As a result, the old snail’s pace network is gone, and the Detroit School District is now the first in Michigan to enjoy T3 Internet access. It also has a disaster recovery solution.

In the first week, the new network prevented over 2,800 violations of racial, sexual, dirty words and viruses in messages sent to the system.

The provider also added a proprietary software tool for network troubleshooting. It can determine whether there is a switch or router problem, a software issue or other problem — a valuable tool in the school district’s immense network.

Compuware is overseeing the rewiring of Detroit’s nearly 300 school buildings for the circuit migration from 56k modems to T1 lines and has achieved an average 19 percent drop in wiring costs.

Hundreds of PCs in the school center building were replaced, 54 of 75 legacy servers were eliminated, a Web-based mail and calendar system was installed and monthly printer costs were reduced by 61 percent. District employees now have 24/7 access to the systems, and the Web site is improved. The payroll function for the district’s 23,000 employees was upgraded, with options expanded from only printing checks every two weeks to include direct deposit or automatic fold-and-seal checks.

They have worked together to develop standards for the school district’s desktops, laptops and PDAs, as well as an application development testing process.

Although Compuware initially thought it would be working on standard applications, the district added requests for a substitutes system, a work order system, E-Rate and some enterprise learning management software. “These were all initially foreign to Compuware,” states Forrest, “but they gave us what we wanted. We’ve grown together.”

Compuware was flexible in meeting another challenge. Forrest wanted an IT person whose priority would be dedicated to the finance division. “Although the person would be available to the entire school district, I wanted to know that if I have a problem in payroll, that person will stop whatever he or she is doing and fix payroll, no matter what,” he states. The service provider worked out a price for the service and made a small amendment to the contract to meet this important need.

High Marks

There are organizations who need a year and a half, or even longer, for ERP implementations. Forrest compares the “norm” to Detroit’s success story — full district implementation accomplished in only nine months.

He credits the outstanding interpersonal skills and diplomacy of Compuware’s onsite manager who oversaw the implementation. “She was outstanding at getting representatives from PeopleSoft, Compuware, Detroit Public Schools and the implementer to talk together. I didn’t expect an IT outsourcer to have staffers with the people skills to keep all those parties happy throughout such a complicated project.”

Compuware waited until after the opening of the school year to begin training district staff members. Implementation was phased in, a few departments at a time, then a few schools at a time. Forrest describes it as first crawling then walking.

With the district’s system off and running now, Forrest praises the IT services provider. “Compuware has more than met our expectations and has been a true partner in getting us to where we need to be. You’d have to ‘go some’ to do better than Compuware. I truly believe there is no way we could have pulled this off without them.”

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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