Publications & Tools

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A School Administrator's Guide To Planning for the Total Cost of New Technology (PDF) - This document was published by CoSN in July, 2001, as a first step in defining TCO in the school environment.

At the advent of the 21st century, American schools are devoting more and more financial and staff resources to the task of incorporating technology into the classroom.

This revolution in learning is occurring for many reasons. Increasingly, parents are demanding that their children have access to the latest technology-and school officials and politicians are responding. Governments at all levels are making more funds available to support technological improvements. The "E-rate" program, created by the Telecommunications Act of 1996, has provided an infusion of funds to help schools and libraries get wired and connected to the Internet. And there is growing evidence that if technology is incorporated wisely, it can improve the learning experience.

But when a school district purchases computers or installs a network, the cost of the hardware is only one small part of the expenses it can expect in subsequent years if it is going to use those technological resources effectively.

In this, a district's technology budget is no different from its transportation budget. When a school district buys a new bus, the expense doesn't stop with the cost of the vehicle. There is gasoline to keep it running, maintenance to keep it well tuned, repair bills when it breaks down, increases in insurance premiums and the salary of an additional driver-expenses that all must be covered year after year.

If school districts don't do this kind of planning for their technology budgets, there may not be enough money available to provide teachers with adequate training, to maintain new computers or to replace them when they become obsolete. Districts may fail to budget for increases in power consumption or necessary improvements in their physical plant. They may connect their computers to the Internet, but forget about the additional telecommunications costs associated with making that connection. As a result, America's investment in educational technology could fall short of its expected return-or even produce a backlash against spending additional dollars on new technology.

As a major Silicon Valley newspaper noted in late 1998: "The question asked in the mid-'90s, amid the optimistic din created by high tech, was, 'How do we get more computers in our classrooms?' Swiftly, that question has given way to one more difficult-'How can we afford to keep them?' "

The goal of "Taking TCO to the Classroom" is to provide school administrators and technology directors with tools so that they can better estimate the total cost involved when they build a network of computers and wire their classrooms to the Internet-a concept known in the business world as Total Cost of Ownership. "Ownership" in this context includes all of the costs associated with using and maintaining networked computers, no matter whether a school district owns or leases them. TCO traditionally also includes calculations of costs that may not turn up in a budget, but that can still have an impact on school district operations-for example, when computers sit idle because they need to be repaired or when teachers can't use them because there is no money available to train staff members.

"Taking TCO to the Classroom" is an ongoing project because there has been very little hard data collected on the long-term costs associated with operating and maintaining technology in schools. Many of the projections cited in this report were developed in the mid-1990s, as policy makers began to lay the groundwork for a major push to wire the nation's classrooms. Now, as more and more school districts have installed computers, built networks and connected classrooms to the Internet, more "real world" numbers are becoming available. Further, alternatives to traditional networks of computers are now being proposed for school settings.

Increasingly, school and government leaders are awakening to the need to monitor and manage these costs. For instance, in 1996, North Carolina, in its Long-Range State Technology Plan, advised schools to consider Total Cost of Ownership, which it defined as "acquisition, annual maintenance and upgrade fees," along with five other factors when they selected software and hardware. More recently, in January 2001, the California Department of Education released a state technology planning guide that said, "Technology planning needs to be comprehensive and include consideration of the long-term implications of the choices made. . . . Hardware purchased should meet district needs and have the lowest cost of ownership over the long term."

It is hoped that this document will promote a process of better defining those costs, and ultimately, creating guidelines to help school administrators determine whether they have provided adequate funding for all of their expenses so that they can truly understand the "total cost" of their technology decisions. By better understanding the "problem," administrators will be in a better position to evaluate proposed "solutions."

In detailing these costs, we do not want to deter school administrators from making an investment in technology. Rather, we want to help them plan for that investment, so that they do not "bite off more than they can chew." This will help ensure that when school districts integrate new technology, they don't do it for technology's sake or simply because it is "this year's fad," but rather to make long-term improvements in the educational experience and ensure that more real learning can occur in the classroom.

What's Your TCO Type? - A chart to help school districts assess where they stand in controlling TCO.

Budgeting for the Total Cost of Ownership of School Networks (Revised June 2003) - A downloadable PowerPoint presentation designed to help you explain the concept of Total Cost of Ownership to school administrators, school board members and other decision-makers.