Cindy Patterson, CETPA CTO Mentor Candidate

 

Learning Outcomes:

FM-07. Demonstrate a working knowledge of budgeting, budget controls and the K12 budgeting calendar.

FM-08. Demonstrate a working knowledge of Management Accounting.

 

Context

As Manager of Applications Support at the Santa Clara County Office of Education it is my responsibility to align all efforts with the stated goals of SCCOE and the Technology Branch. The group that I manage, Applications Support, usually aligns with the goals of service to districts and operational efficiency.  There is also a shadow goal of – no tech just for tech sake.  Meaning we must have purpose for the technology we implement and support.  That purpose can be cost savings or operational efficiencies.  The best investments are those that provide both.

 

Applications Support supports districts within Santa Clara and San Benito counties and consists of 7 System Analysts and one Technology Trainer totally 8 FTE. The technology we manage for our customers are business related systems.  We look for new technology that can complement the systems already in place.

 

Artifact

The artifact provided is a review of the Total Cost of Ownership of Document Management and exploration of the potential savings, ROI, of offering this service to the districts.

 

Artifact Summary

In this artifact I have demonstrated a working knowledge of budgeting, budgeting controls and the K12 budgeting calendar. In addition I have demonstrated a working knowledge of management accounting.

 

Executive Summary

The purpose of this paper is to:

Describe current Document Management in place at Santa Clara County Office of Education, SCCOE.

Determine the total cost of ownership, TCO, to date of Document Management.

Explore future possibilities for Document Management - Document Management services to COE supported districts

Background

Santa Clara County Office of Education goals are as follows:

·         Improve student equity and reduce access discrepancies to high quality education

·         Provide support to districts, communities, schools and students

·         Be a premier employer

·         Improve organizational effectiveness and efficiency

The Technology Services Branch supports internal departments of Santa Clara County Office of Education as well as school districts in Santa Clara and San Benito counties. 

 

The Technology Services Branch Goals are

• We use technology to achieve academic goals, and to advance teaching and learning

• We provide outstanding support to the COE, and are the provider of choice to the county's districts and other organizations

• We provide reliable, secure, readily available technologies, products and services, as and where needed

• We provide access to accurate, complete, understandable and actionable data

• We empower users to fully utilize the best technology resources

 

In support of SCCOE goals 2 and 4 and TSB goals, Document Management is a service provided to internal departments at SCCOE.  We are also moving to provide Document Management to districts with cost recovery.   Document Management includes storage, management and tracking of electronic documents and electronic images.  OCR, optical character recognition, is applied to the documents when they are entered to provide text search within stored documents.  Metadata or tags are also attached to documents to improve document retrieval.

 

Document Management grew organically at SCCOE.  SCCOE began using the Document Management tool, Laserfiche, in 2006. The initial implementation was driven by Human Resources and was considered a small project with 6 client licenses.  Based on their success several departments quickly adopted Document Management.  Since that time the use of Laserfiche has spread to every department in the County Office of Education with data storage of approximately 1TB. Below are examples of the departments using and the rea of use:

Office of the Superintendent

Board Packages and minutes

Business Services Branch

District Business Services

Internal Business Services

Back-up documentation for AP

Payroll backup and timecards

Purchasing

Back-up documentation for purchases

Purchase Orders

Vendor information

Human Resources Branch

Personnel Files

Student Services Branch

Head Start

Student Information

Alternative Education

Student information

Technology Services Branch

User Security Requests

 

The County Office of Education was approached by several districts requesting assistance with Document Management and has adopted an offering as shown in the attachment.

 

Assumptions

 

Infrastructure Costs

It is difficult to assign a hard cost to the infrastructure needed for Laserfiche; server hardware, Windows software, and database software.  The server exists in a server farm of 200 servers which are maintained in a group with normal process and back-up. The software has been obtained through a CAMSA agreement.  CAMSA is CETPA and Microsoft Strategic Alliance subscription based licensing model calculated on the number of full time equivalents.  The Manager of Network Operations estimates the total cost associated to date with Laserfiche infrastructure at $25,000.

 

District Interest

We assume that district interest will continue.  There is pressure for space as schools grow and funding becomes more positive.  Space used for storing boxes can be used for other activities.  Districts are also receiving pressure to be as automated and efficient as possible from the job market.  With the improving economy the difficulty in staffing is increasing.  More efficient processes can reduce staffing growth and assist in maximizing existing staff time.

 

TCO Components and Calculation

 

The original configuration of Laserfiche consisted of a Laserfiche server and software on the desktop.  This has grown to a larger configuration including a web server and other services.  The total expense for License software and consulting services is $697,000.  In addition to this expense there is the hardware, server operating system license and data base license.  We have also added .25 FTE at 130% for support from an Applications System Analyst.  We use 130% of the FTE compensation to include a component for employer paid benefits.

 

Total Cost of Ownership is calculated by adding one-time costs to costs over time and dividing the sum by the period of time.  The total cost of ownership for Laserfiche is:

(Initial costs + ongoing costs + employee support costs over 9 years) Divided by the length of the project

$697,000 + $25,000+$380,000=$1,102,250/9 = $122,470 per year

 

Each year as part of our planning and budget cycle we request a quote from the vendor during the budgeting cycle in the 3rd quarter of the year.  This quote is included in our budget under object code 4322, software, or object code 5800, professional services – based on instruction and interpretation from our budget office.  The actual bill is processed through AP in the fall during the first quarter of the fiscal year.  We have our quote for next year and going forward costs will be $65K for maintenance and the $38K for personnel expense (.25 FTE X 130%) to total $113K.

 

ROI – Return on Investment

 

The total benefit of this investment cannot be quantified without extensive research into time saved by using this tool.  However we can consider how much time would need to be saved each year to equate to the total cost of ownership, $113K. Given that there are 351 current users of laserfiche; the average person works 260 days per year and 8 hours a day totaling 2080 hours per year.  The following chart provides the computational overview

Estimated Savings Needed to Offset investment

Average Salary                                                         $   75,000

Fully loaded at 130 K                                              $    97,500

Number of days per year                                                  260

Number of hours per day                                                      8

Hours per year for 1 FTE                                                2,080

Hourly pay rate                                                        $           46.88

Savings needed to offset cost per year               $   113,000

Number of hours saved needed to offset cost     2,410.67

Number of current users                                                  351

Number of hours saved needed per user per year          6.87

Number of hours saved needed per user per month      0.57

 

An average user would need to save a half an hour of time each month to offset the annual total cost of ownership which is a reasonable expectation.

There is also the benefit of saved space, controlled access, auditability and emergency preparedness.  The servers are included in the emergency preparedness plan including back-ups.  Physical documents do not usually have back-up.  While we will not calculate a true ROI, the labor savings, physical space savings, and security of documents, should offset this easily.

 

The difference between a School District creating a standalone Laserfiche environment with initial costs of $43K compared to using the County hosted solution with initial costs of $744 initial is $42K, for each School District.  Offering the County Hosted solution provides a significant cost savings to the Educational Community and opportunity to small districts that would otherwise be unable to afford this type of technology.  Next we will evaluate the potential savings to districts of a county hosted solution.

 

County Hosted Solution

 

SCCOE will provide access to the application over the secure network and secure FTP from networked multipurpose devises. This leaves Districts with only the cost of the end user licenses. Districts will avoid the initial purchase price of the application server software and associated hardware and software by selecting the SCCOE hosted solution.  An end user license is approximately $600 with annual maintenance of $144 for a total cost of ownership for the district of $744 per end user.  There is also a small fee for storage.  This $744 TCO for a district standalone implementation is compared to $43K.  There is also the unquantifiable opportunity of flexibility and expandability.  The Santa Clara County Office of Education operates a server farm with over 200 virtual servers and is offering storage space on an as-used basis.  Districts will be able to instantly increase memory usage without the process of expanding their infrastructure; requesting budget, procurement, installation. Given that the implementation savings for the districts is $42k, if 25% or approximately 7 districts, opted for the county hosted solution the total savings to those districts, is approximately $300,000.

 

Comparison of Costs for Stand Alone District vs SCCOE Hosted

                                                                                   Stand Alone District Solution                             SCCOE Hosted Solution

App Server HW & SW

                                                                                                                             $$$K                                                   $0

                                                                                               $202 /server+$47/user                                                 $0

SQL License                                                                                                           22K                                                  $0

Storage                                                                                 $20K for 8TB iSCSI SAN                                                $150/500GB/Month

Client License                                                                                                      $600                                                  $600

Client Maintenance - yearly                                                                              $144                                                   $144

Client Initial First Year/User                                                                              $744                                                   $744

 

Challenges and Unknowns

 

Technology changes – a is technology goes forward new infrastructure upgrades may be required

Labor costs continue to rise

Consistent overall interests from districts

 

Findings

Over the past 10 years SCCOE has invested over 1 million dollars in document management.

There will continue to be an ongoing cost of approximately $113K per year for the Document Management Infrastructure.

Offering a County Hosted solution provides individual districts a savings of $42K in implementation costs.

 

Conclusions

By providing internal Document Management the Technology Services Branch has met goal 4:

• Improve organizational effectiveness and efficiency. 

Extending this to districts will address SCCOE goals:

• Improve organizational effectiveness and efficiency. 

• Provide support to districts, communities, schools and students

 

While the adoption of Laserfiche grew organically from a small installation to an enterprise system the Total Cost of Ownership can be justified by the offsetting costs of efficiencies and space savings.

County hosted document management offers economies of scale to districts and significant cost savings.