In what might be the first such initiative of its kind, the Detroit Public Schools (DPS) have chosen local computer firm Compuware Corp., of Farmington Hills, Mich., to manage the district’s entire information technology (IT) department.

DPS announced the five-year contract with Compuware at a news conference Aug. 16. According to the Detroit News, the deal is expected to exceed $90 million.

“This is a first in the education arena. But we are excited. We think our knowledge of technology, combined with the school’s knowledge, will improve the service to customers across the district,” said Pat Bennett, professional services sales director for Compuware.

Said Thomas Diggs, the district’s chief information officer: “We looked at a number of companies, and Compuware came out on top with the most competitive bid. They had the best transition plan; we liked their methodology; and [we] loved the management team they sent to DPS.

“Compuware is on the leading edge of technology in [its] other endeavors, and when we looked at our core competence, which is education, we saw the advantage of going to a company whose core competence is IT.”

The district is the 10th largest in the country, with 167,000 pupils, 22,000 employees, and 263 schools. It has been seeking ways to privatize parts of its operations to improve them and control costs.

The district’s IT department is responsible for 28,000 computers and has had chronic problems in the past, especially in payroll.

“Clearly, the existing system hasn’t provided what’s needed in the classroom,” said school board Chair Freman Hendrix. “The Compuware deal will get us up to speed pretty quickly, as opposed to taking several years rebuilding the department with what we have in place.”

“Essentially we hope to improve the quality of the service we provide,” Diggs said. “We had things we could not do well, because we did not have the personnel. Compuware will improve response time for field services, create a more stabilized network, improve the payroll processing, and improve the help desk in the district.

“Right now, we employ 80 DPS employees and more than 30 outside contractors. Going to a single vendor will really save us money. We also like the fact that DPS employees will transition and become Compuware employees,” he added.

That means educators worried about job security can breathe a sigh of relief, according to district officials.

“There may be some concern among employees, but Compuware offered a very nice transition plan, in which [the company] essentially transitions all district employees to Compuware employees, and they retain their same salaries,” explained Diggs.

The school district currently spends about $20 million internally per year to operate its own IT services. The professional services agreement with Compuware will provide Detroit schools with mission-critical IT services that support finance and budget operations, human resources and payroll, food services, transportation, special education, and student information services.

Compuware specializes in writing software for computer systems and electronic commerce operations. It also has a professional services division with experts who are contracted out to help companies run or upgrade their computer systems.

Interim school Chief Executive David Adamany said last spring that the district would seek to privatize four of 15 central office departments to cut costs and send more money to the classroom.

Its new contract with Compuware marks the second effort made by DPS to turn the management of a district department over to an outside service provider. In May, the district announced that Office Depot had submitted the winning bid to take over and run its purchasing department.

New Chief Executive Kenneth Burnley said he also is considering hiring outside companies to operate food service and groundskeeping.

“We’re looking at any and all things that would allow us to be more efficient. As educators, we need to look at what is our core mission. And that is students’ instruction, learning and teaching,” he said.

“Outsourcing is not the panacea for solving a district’s woes, but we feel pretty confident we can save money by doing it,” said Diggs. “Hopefully, in the final analysis, other schools will also see the success we are having and decide to get out of the IT business and leave it to the IT guys.”

Detroit Public Schools