Patricia Tillotson molds Red Clay’s technology program into a success

During the past two years, the Red Clay Consolidated School District in Wilmington, Del., has developed a computer network the size of that in many Fortune 500 companies.

With more than 6,000 computers, 45 servers, 250 laptops, 2,000 printers, and 1,000 large-screen monitors distributed across 27 school buildings and approximately 16,000 students, the task initially was overwhelming.

But by managing the process in “smart” ways, explained Technology Director Patricia Tillotson, Red Clay completed the implementation early and $1.5 million under budget, without compromising quality. District technology employees say much of that success is attributable to some innovative and enthusiastic leadership by Tillotson.

Tillotson earned her Ph.D. in environmental physics and worked for Dow Chemical Co., among other employers, until she decided she “wanted to do something satisfying with [her] life.”

“I had a middle-aged crisis,” laughed Tillotson.

With years of technology experience in the business sector, Tillotson brought “a fresh viewpoint” to Red Clay’s technology services, said Judi Coffield, the district’s instructional technologist.

“There’s a sense of excitement now. She’s a cheerleader for technology, and she always puts the students and learning first,” said Coffield.

Tillotson’s first order of business involved working with KPMG consultants to develop a three-year district technology plan.

According to Coffield, “Some of the goals and objectives were to enhance instructional tools, use technology to improve student learning, provide flexibility in creative teaching methods, enhance achievement, enhance media centers and computer labs, ensure that all classrooms have four computers (one being a teacher media center), increase administrative efficiency, improve communications with parents, and provide technical skills required in today’s business world.”

Every one of those goals has been addressed since Tillotson took over in 1998, district officials say.

According to Tillotson, when she first arrived at Red Clay there was a “rudimentary” technology plan, but the district had just passed a $10.7 million bond issue for technology.

“The first thing I did was get together more than 100 people to do focus groups–coordinated through KPMG–and put together a really comprehensive plan,” she said. Tillotson asked teachers, students, and administrators to participate in the focus groups, and they discussed what they wanted to do with technology.

“That plan basically became my to-do list,” said Tillotson. Red Clay actually completed the three-year technology plan in two years, furnishing schools with brand-new computer labs and classrooms with four computers and a large-screen TV monitor.

The district also purchased a cache of laptop computers for each school, so teachers could check them out and engage in staff training at home.

“We put in the hardware, but we were doing the training in parallel,” said Tillotson. Under the new plan, teachers get instruction on using the software, as well as integrating technology into the curriculum.

Tillotson believes strongly in the “train the trainer”model, incorporating instructional technology teams at each building. These teams put together instructional plans for their buildings, based on past assessment scores.

The same teams also are charged with identifying software to help meet the specific needs of the kids in their schools.

“I really believe, rather than the district telling the schools what they need, the schools ought to have input,” said Tillotson. “So Judi Coffield, the instructional technologist, pulled together a ‘district-recommended’ software list.”

Building-level officials now can choose directly from that list, or they can show district officials why a new program should be added to the list.

“We also put into place a whole software evaluation procedure–we wanted to guarantee an alignment between the software and the outcome,” said Tillotson. “We really wanted to structure the process to ensure curricular alignment.”

Many districts don’t think about creating hardware standards, she said. But standardized hardware can be critical to maintaining total cost of ownership. Red Clay mass-purchased all its new hardware from Dell, selecting only three different models district-wide.

Tillotson is eager to spread the word about Red Clay’s successes and encourage other district to take similar measures to bring their technology programs up to snuff, focusing on student-centered planning, implementation, and evaluation.

She put together a list of recommendations for others who would like to see a similar metamorphosis unfold in their own districts. Her “Five Critical Success Factors for School Technology” are:

  1. Involve everyone in the planning process. Have all stakeholders– students, teachers, administrators, board members, and parents–help develop a clear, multi-year technology plan. Stakeholder vision from the trenches is better than your vision as an administrator or technology director.

  2. Standardize hardware. Select a single vendor for computer purchases, and use the fewest number of vendors possible for purchasing peripherals, to reduce your total support and maintenance costs over the long-term. Do research to select the best and most reliable products.

  3. Develop a customer service attitude. Treat all users with respect, as they deserve excellent service and support. It’s your responsibility to ensure their happiness, and service should be a No. 1 priority. Predict user needs and satisfy them before users know what their needs are. Use remote access technology to fix computer problems as soon as possible.

  4. Teach technology within the context of best instructional practices. Show teachers not only how to point and click through educational software, but also how to manage their classrooms so that technology instruction can occur within the context of existing lesson plans.

  5. Communicate, communicate, communicate. Communicate 10 times more than you think you need to, and be seen in the school buildings as often as possible. This helps everyone understand that technology is important at all levels of the organization.

Bonus success factor: Stay focused. You will be inundated with technology requests by all personnel in your district. Maintain a direct alignment between your activities and your technology plan. Don’t allow others to sway you from the documented path outlined in No. 1 above.

These strategies have certainly proven themselves at Red Clay, according to technology personnel.

“Patty is great,” said Ted Ammann, network services administrator. “She has a great ability to look at the return on investment that we get from our technology. And the new initiatives all support instruction, rather than technology just for technology’s sake.”

Links:
Red Clay Consolidated School District
http://www.dataservice.org/redclay/district.htm

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Dell recalls more notebook batteries due to fire hazard

Dell Computer Corp. is recalling about 284,000 batteries used in notebook computers sold to schools and other customers because they can overheat and catch fire.

Dell and the U.S. Consumer Product Safety Commission said the company had heard one report of a battery that overcharged and caught fire, resulting in minor property damage.

The recall, announced May 3, covers batteries used in Inspiron 5000 and 5000e notebooks shipped to consumers from January 7, 2000, to March 21 of this year. Dell and its service providers also sold the batteries separately during the same time for $100 to $130.

Dell spokesman Tom Kehoe said the recall would not have a material financial impact on the company.

Kehoe said the batteries were made by Panasonic, though a Pansonic spokesman disputed that characterization.

Kurt Praschak said the batteries were made by Matsushita Battery Industrial Co. Ltd. and do not carry the Panasonic name. Panasonic is a brand name of the parent company, Matsushita Electric Industrial Co.

Dell said consumers should remove the batteries from their notebooks and call the company. The recall doesn’t affect the computers themselves, which sold for $2,100 to $3,100.

The faulty batteries have a colored sticker with an identification number containing the either “99” or a series of numbers “00 51” or less and the letter P in the first line, Dell said.

This was the third notebook-related problem in the past year for Dell. The company last August warned as many as 400,000 customers that their machines may have contained defective memory chips.

In October, Dell recalled about 27,000 batteries used in notebook computers because of a similar fire hazard. That recall mostly affected Latitude and Inspiron 3700 and 3800 models sold last year.

Links:
Dell Battery Recall Program
http://support.dell.com/i5000battery

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New group to study emerging technologies in education

A new educational institute plans to research meaningful uses of emerging technologies–such as Internet2, handheld computers, and virtual reality–and share the results with school leaders.

The Institute for the Advancement of Emerging Technologies in Education (IAETE), which opened May 11 in West Virginia, aims to identify new technologies and work with their developers to see how these technologies can improve teaching, learning, and school management.

“Our entire focus is on new and emerging technologies,” said Tammy McGraw, executive director of IAETE. “We are trying to take those [technologies] and find ways they can be used in the classroom.”

The institute will research and test the technologies in schools to see how they can address individual learning styles, cultural and linguistic diversity, needs of children with disabilities, and geographic barriers.

Through research and development, IAETE aims to ensure not only that these technologies have a positive impact on learning, but also that their integration is cost-effective and timely.

“There are many tools in business that might be well suited for education, but we don’t find out about them,” McGraw said. “The burden [of integrating these tools] has always been on individual educators.”

IAETE intends to share information with policy-makers, technology developers, and business leaders in addition to educators so they, too, can learn how different technologies relate to the education market. IAETE will work closely with corporations and technology developers to help them create applications that are cost-effective and meaningful to education.

IAETE is investigating Internet2, virtual reality, teleconferencing, and technologies that will connect rural communities to schools. The group will continue to seek out and work with new technologies, too.

“Everything we do is research-based and unbiased,” McGraw said. “As we try these new tools out in a variety of settings, it’s really about funding what works in a school setting.”

IAETE will pilot and research these new technologies in school districts across the country. At these school sites, dubbed intensive sites, IAETE will figure out how best to modify and adapt new technology into a classroom setting. School districts interested in becoming pilot sites should contact IAETE through the organization’s web site.

As a division of AEL Inc., one of the nation’s 10 Advanced Educational Regional Laboratories that study learning and education, IAETE is built on a foundation of more than 35 years of experience in education research. IAETE receives its funding from the U.S. Department of Education.

The services IAETE plans to offer are especially important, as the Bush administration and the public demand more proof that the investment in education technology is a good one, McGraw said.

Schools “really have to be careful that [they] are using the best technology–not necessarily the newest–for the job,” McGraw said. “It isn’t about the newest technology, and putting more computers in the classrooms–it’s about doing what [schools] do well.”

The IAETE web site will let school leaders search for technology solutions to help alleviate particular education or classroom problems.

“It’s very important to look ahead at the next generation of technology,” said Chris Dede, one of IAETE’s advisers and Timothy Worth Professor of Learning Technology at Harvard University. “Schools have often been criticized because they’re behind the rest of society when it comes to technology.”

Links:
The Institute for the Advancement of Emerging Technologies in Education
http://www.iaete.org

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Oregon begins online testing of students

Oregon is moving the testing of its elementary and high school students onto the internet, something state officials hope will boost student achievement.

In April, about 6,000 third- through 10th-grade students in about 30 schools took their annual mathematics and reading tests online. Another 300 schools are scheduled to join the program next year, and about 400 schools will be added in 2002.

Eventually, all of the 1,200 or so Oregon schools will be able to test their students online, state officials said.

Online testing is expected to save the state up to $25 million in the next 10 years, much of that from the reduced cost of printing and distributing the exams.

But the biggest gain will come in the speed with which results can be returned to students and teachers, said Bob Olsen, team leader of the Technology Enhanced Student Assessment (TESA) program.

With online tests, the results can be made available immediately to students if they want them, Olsen said. For teachers, the results instantly show where potential problems exist, so instructional strategies can be retooled.

South Dakota also has begun to move the testing of its students online.

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Don’t write unacceptable acceptable-use policies

By now, you should know that every school district allowing the use of computers and the internet by students, faculty, and staff needs an acceptable-use policy (AUP) to establish the ground rules–and, in fact, most schools already have an AUP. In most cases, the AUP must be read and signed by each user and, if the user is a minor, the student’s parent or guardian also must give permission.

While some schools have a special form, in many cases parental consent is accomplished by having the responsible adult sign (or countersign) the same AUP as the student. Either method is perfectly fine. But how can you tell whether your AUP is gonna do the job?

I have read more than a hundred AUPs, many of which arrive via eMail from a variety of sources. AUPs are the bailiwick of everyone from full-time school district IT directors to faculty members who have been dubbed “internet coordinator” on a part-time or ad hoc basis by principals who found out they knew that a WAN was more than a weak smile. Many of these AUPs are pretty good, but few are really well-written–and more than a few are really meaningless collections of vague language that mention computers and the internet.

The worst offenders fail to fulfill the three main reasons for having an AUP in the first place. The first, and core, purpose of an AUP is to establish a clear set of rules for using school computers to access the internet. This means you should make some definite choices, such as whether you will allow users to access chat rooms or subscribe to so-called “Usenet” newsgroups.

The second (and some school lawyers believe the most crucial) reason for an AUP is to provide notice. The AUP must inform users about the rules, limits, and consequences for misuse. More importantly, it must give parents sufficient information so that the permission they give for their minor children is truly “informed” consent.

Finally, the AUP must be a clearly written mechanism for users (and students’ parents) to acknowledge that they have gotten notice of the rules and agree to use–or consent to allow their children to use–the internet in the manner allowed by these rules. If your AUP does not do a good job in meeting all three fundamentals, it’s time to sharpen the pencils and rework it.

If you question whether your AUP is up to the task, ask yourself whether it really provides an unsophisticated parent who has never sat down in front of a computer and browsed the “wild, wide web” any idea of what his child may be exposed to as part of the internet educational experience.

One of the worst examples to grace my in-box recently came from a Michigan school system that shall remain nameless, but not shameless. The AUP is so vague that parents could not possibly rely on it to obtain any real idea of what they are being asked to consent to. It says, “Members having accounts on the network should be advised that they might locate material that could be considered offensive or controversial. Parents of minors should be aware of the existence of such materials and monitor home usage of the system.” Yabbadayabbada … that’s all, folks.

The AUP then asks parents to acknowledge that “as the parent or guardian of this student, I have read the Electronic Access and Use for Educational Purposes Policy. [The school district] has taken precautions to prohibit access to inappropriate materials. However, I also recognize it is impossible for [the school district] to restrict access to all inappropriate materials, and I will not hold them responsible for materials acquired on the network.”

Then, based on this underwhelming disclosure, parents are asked to sign the following release: “In consideration for the privilege of using the system … I hereby release [the school district] and its operators and sponsors and its faculty and staff and all organizations, groups and institutions with which [the school district] is affiliated for any and all claims of any nature arising from my use, my child’s use or inability to use, the network.”

Of course, this release language is pretty much legally worthless, because it is based on inadequate, vague notice. It’s sort of like asking a parent to sign a permission slip for a field trip to an undisclosed location by whatever means the school decides to transport them. In many cases, schools think they must use vague, merely suggestive language in their AUPs, because otherwise parents will withhold permission.

School officials who adopt this broad-brush approach usually agree that an AUP is an important tool. They just don’t recognize the need to face the notice issues involved in creating an AUP that is more than just words on paper. If your AUP can’t pass the vagueness test, check back in this space over the summer for a few tips on how to give it a tune-up.

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Add some summer sizzle to your school web sites

Even though school’s almost out, you still need to keep your web site sizzling. Web surfers are notoriously fickle. If you wait until the dog days of August to update your home page, you’ll just find that your web site has, well, gone to the dogs.

To keep your site fresh all summer long, here are a few tips:

  • Show your stakeholders that learning is a year-round proposition by enlisting a troop of parent and student volunteers and arming them with inexpensive digital cameras. Their mission is to take photos of students’ and teachers’ summer activities, from band camps, sports clinics, and math academies to curriculum committees, building renovations, and faculty workshops. Then post the photos on the web, with a brief cutline or headline.

  • Find out if any student, staff, or faculty groups are traveling abroad or participating in school-sponsored exchange programs. Ask one member of each group to act as your correspondent, and have them email photos and short stories to you on a regular basis. The goal is to post something new on your home page every week.

  • Ask your guidance department to draft a simple “how to” section that walks parents through the registration process, from signing up at a new school to building a course schedule. Few things infuriate parents more than moving to a new city with kids in tow, only to find out that the schools have shut down for the summer.

  • On a related customer service note, make sure you have a knowledgeable person answering the phones and following through on information requests. Make sure you check your email frequently, especially those that come through web-based feedback mechanisms. If your staff isn’t going to be available during the summer, take their addresses off the web, post a web note, or arrange for an automatic email response.

  • Move your school or district calendar from the back recesses of your site to the home page. In addition to summer activities, be sure to include registration deadlines, teacher and new staff orientations, beginner’s days or kindergarten round-ups, bell schedules, opening of schools, and other key data.

  • Link to parent-friendly web sites that include information about summer and vacation activities that will keep kids learning from June through August. Public libraries and local and national cultural attractions–such as science and art museums, history centers, and zoos–typically have a wealth of web-based learning tools and fun activities. Parents will also appreciate tips and guidance regarding summer academic programs and tutors.
During the summer, many parents will have questions about transportation, food service menus, special education, tutoring, academics (by grade level), before- and after-school care, co-curricular activities, athletics, and athletic eligibility guidelines. You may want to package everything in a “new to school” section with a link from your home page.

Newcomers and new home owners will want to know which schools serve their neighborhood or address and who to call if they want a change in assignment. By anticipating parent questions, making it easy to find this information, and then advertising its availability on the web to parents, realtors, and others, you’ll market your schools all summer long.

Summer’s a great time to review your web site from top to bottom to see if every page, link, and section still has meaning and relevance for your key audiences. Don’t be afraid to delete or revamp sections that no one seems to visit; careful pruning during the summer months may result in a more plentiful harvest of web surfers this fall. Use NetMechanic, Web Site Garage, or some other source for a free web check-up.

If you need more qualified web help, offer free or low-cost summer training sessions for students, parents, and teachers. You can also partner with area community colleges and technical schools. As stated previously in this column, there’s a plethora of free resources on the web for content, graphics, logos, buttons, and images, as well as lots of practical “how-to” information (see the eSchool News archives). While you need to maintain fairly tight control on who has passwords and can post information, when it comes to developing content, the more hands the better.

Finally, if your school web master doesn’t have a 12-month contract or doesn’t receive any additional compensation for his or her work, you may want to revisit that policy. A well-maintained web site can make or break your public image, yet too many schools still expect web masters to work for free, on their own time.

This penny-wise, pound-foolish approach to web management may have worked when the average web site contained 50 pages and attracted few visitors. With quality expectations increasing exponentially and the average school web site now exceeding 500 pages, the stakes are too high to leave this critical business function to volunteers.

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Schools see mixed results so far from eProcurement

Eighteen months ago, electronic procurement sites for education seemed to be flooding the market, with new players appearing on the scene at a staggering pace.

As the internet economy softens across the board, however, most of the education-focused eProcurement sites are facing leaner times, according to venture capitalists and industry experts. That could leave schools using some of the online purchasing systems in a precarious situation.

In stark contrast to the circumstances a year and a half ago, venture capitalists and other investors today are generally reluctant to commit more money to eProcurement companies. Many eProcurement firms, in turn, have found it hard to cope with the long lead time that can separate start up and profitability in the school field. They also face the challenge of trying to establish a new genre of school service in what one executive called “a historically bad venture market.”

As a result, some companies have simply disappeared from the scene, while others have been forced to adopt a new business model that involves charging school districts for their services.

Early school adopters, meanwhile, have been reporting mixed results. Some say online purchasing has saved them time and money, as promised, but others report that integrating eProcurement systems with their existing back-end business software has been a slow, painful process.

Despite these problems, observers still see a future for eProcurement in education. But players and stakeholders agree: The softening of the internet economy has created a significant shake out. Consolidation is the key word. And the expert consensus is that the several companies that survive will do very well indeed, only those with the most “patient money” will be left standing.

Streamlining the Purchasing Process

Instead of selling supplies directly, companies such as Simplexis, Epylon, eSchoolMall.com (not affiliated with eSchool News), KawamaCommerce.com, SHOP2gether.com, and DemandStar promised to bring schools and vendors together in a way that would help school officials streamline the traditionally arduous purchasing process.

Among them, they hoped to win at least a small portion of what the market research firm Gartner Group estimated in 1999 was a $115 billion market.

Besides ordering supplies, many of the companies broker sales of services, including landscaping and building maintenance. They generally facilitate ordering without ever taking possession of the goods.

Although electronic procurement is nothing new in the business world, each of these online companies said they had tailored their services to the specific needs of school districts.

“We sell everything it takes to run the business of education, from hundreds of gallons of floor wax, to grandstands, to pencils and paper,” said Jared Cameron, vice president for communications at San Francisco-based Simplexis, in an interview last year.

Traditionally, school purchasing officials get on the phone or turn to catalogs to get information on products. Then, they must submit request forms, which are shuffled from department to department, often taking weeks and using up valuable time and money before finally being approved.

By estimates of the U.S. Department of Education, completing a single requisition form costs a school district $125 in labor and paper costs. Nationwide, school officials handle an estimated 25 million purchase orders per year, according to industry sources.

“There’s a lot of paper and a lot of suppliers doing nothing but trying to make a sale,” said Steve George, Epylon’s founder, president, and CEO. “We want to create a paperless solution to allow more time for teaching kids.”

Last year, Ben Holsinger, education product manager at SHOP2gether.com, told eSchool News, “We started doing electronic procurement in the small-business market and had a number of education customers, but the system wasn’t quite right for schools. So we built a new system just for schools, using educators’ input.”

But SHOP2gether is one of companies that didn’t make it through the internet shake-up, changing its business model and downsizing so that the once web-based service now sells procurement software to schools.

At least, that’s according to chief executive Ami Grynberg, who called eSchool News from traveling in Europe. Other company representatives did not answer phone calls or return messages.

Mixed Reactions from Schools

Educators’ opinions about whether eProcurement has been a success so far are mixed.

eSchoolMall.com customer Brenda Bray, business administrator for Pennsylvania’s Palisades School District, said web-based purchasing offers an advantage over shopping directly through separate vendor catalogs.

“We can cut across several different vendors and compare their products and prices,” she said.

“From the time we’ve started using Epylon, it has made us more efficient,” agreed Mary Simms, director of internal business affairs for the schools of Kern County, Calif. “We are getting better pricing and saving on labor and supplies.”

It used to take Kern County a week or longer to process one order, Simms said, but by purchasing through Epylon, her office can submit orders within a couple of hours.

“Before, you had to start from scratch each time,” she said. “This way, you can just resubmit orders that occur on a regular basis.”

But some educators using the sites have expressed reservations. They caution that integrating the process into their schools has been slow going.

Marylou Atwell is an assistant to the technology director for Interboro School District in Prospect Park, Pa., a district that is using eSchoolMall.com’s product.

“Right now, eSchoolMall is implemented, but it is still in the trial phase,” she said. “There are still some kinks. For instance, it has to interact with our business-end software we use for budgeting.”

According to Atwell, the feedback from purchasing officers has been mixed. “My experience with this is that it takes just as long to place an order online as it does with paper, at least from the school end,” she said, adding there is no way to gauge cost savings yet, since only a portion of the district’s purchasing staff is using the web-based solution.

“In my opinion, it’s a lot of screens to go through, and the forms do not look anything like the forms we have always filled out,” she said. “There is definitely some getting used to this.”

Another issue is the list of vendors these companies supply to their customers.

“School districts always have their ‘tried and trues,'” said Atwell. “They are the companies we’ve been dealing with for years, and they’ll give us discounts.”

Interboro still uses those companies, even though eSchoolMall doesn’t have them on its vendor list. “Sometimes [online procurement] is not worth it, because we still have to fill out paperwork for these types of orders,” Atwell said.

Regardless of early glitches, most educators still see online purchasing as inevitable.

eProcurement “will probably replace older methods to a big extent,” said Simms. Before that happens, though, the volatility of the market space will have to subside.

Venture Capital Bottoms Out

Market analysts and venture capitalists agree that new investment opportunities for online purchasing have all but dried up, and even those companies with sufficient initial funding are having a hard time finding sustained financial backing in the current market.

“Right now, it is not a matter of whether eProcurement will get a toehold, it is really a matter of revenue and business model,” said Lou Pugliese, entrepreneur in residence at Novak Biddle Venture Partners in McLean, Va.

According to Pugliese, the viability of an eProcurement company depends on how fast its business will scale inside of schools.

He thinks schools will adopt more readily once they begin to see a monetary savings, but that might not be before the venture capital runs out.

According to an industry insider who wished to remain anonymous, some of the top names in eProcurement might not have much time left to start turning a profit.

“School districts move slowly, and there’s a lot of inertia in the current purchasing system; the transaction-based model would take years to become profitable,” said this insider.

The “transaction-based” model was one that most online purchasing companies–backed by healthy doses of venture capital–adopted as their means of revenue.

Basically, it meant that schools were allowed to use the service for free, while vendors paid a small transaction fee each time a school customer purchased their products through the eProcurement site. Most online purchasing companies have now abandoned that model as a primary source of income.

“A fundamental problem with companies that try to be the middleman is that competition drives price towards cost. What ends up happening is that the consumer saves money, but the middleman companies don’t make any money,” said Jack Biddle, general partner at Novak Biddle Venture Partners.

“The new strategy is to keep going at a subsistence level and focus on revenue,” agreed the anonymous source. “For example, Simplexis is now charging school districts for implementation and use of the system, which actually makes a lot of sense. Relying solely on transaction fees was a pipe dream.”

“It should be easy for a district to share part of [its] savings with Simplexis,” said Simplexis founder and Chief Executive Amar Singh, who added that the company now receives revenue from a combination of transaction fees and fees from schools.

‘The Customer Always Pays’

Despite the market turmoil, companies still see the potential for education-focused eProcurement. Peoplesoft, a leading provider of large student information systems, recently announced that it will become involved in online purchasing at the K-12 level.

Peoplesoft’s director of strategy for education, Bert Landau, said the company has no illusions about the profitability of transaction fees.

“We have always said there would [have to] be a license fee,” he said. “All the firms that are going to survive now charge license fees, and those that signed large contracts without license fees are hunting for ways to [make] money.”

According to Landau, charging vendors will only increase the cost to customers anyway, because vendors will turn around and hike prices to account for their extra expenses. “One way or another, the customer always pays,” he said.

Landau said a number of companies have approached Peoplesoft with the hope that it would acquire them and take some of the pressure off the flailing venture market.

“We’ve noticed recently that when we invite one of the [eProcurement companies] in for a ‘show and tell’ of their functionality, during that meeting their first idea is whether or not we’d be interested in buying them or investing in them,” said Landau.

One company reportedly walking a thin line is Simplexis.

“It’s obvious we’re heading into a period of consolidation, with one or two companies left standing at the end,” said the anonymous source. “All the major players are flirting [with potential partners that can help sustain them]. It’s a bit like a high school dance, wondering who’s going to hook up with whom.”

Simplexis was caught in a difficult position because of the declining fortunes of its primary investor, Internet Commerce Group, the source said. ICG started putting pressure on Simplexis to show revenues sooner than planned–or else close up shop.

“From ICG’s point of view, they wanted to cut their losses; Simplexis still has more than $10 million left in the bank that could be returned to investors,” said the source. “For Simplexis, it was like a script change in the middle of a play.”

According to the industry insider, last fall ICG’s representatives on Simplexis’s board of directors reportedly tried to liquidate the company–but they were one vote short.

Company officials have not confirmed this report.

“Right now … we project we’ll start to make money in early 2002,” said Simplexis’s Singh. “There are about a dozen districts using our entire solution.” That figure refers to districts that have implemented the company’s system fully and trained their staff to use it, he said.

The anonymous industry insider tells a different story. “Basically, the management was subjected to a yo-yo effect from investors, who handed them $35 million in March last year and told them to ramp up like crazy,” he said. “Less than six months later, the investors did a one-eighty and told Simplexis management to cut costs, regardless of the consequences.”

The company’s only realistic option was to scale down operations drastically. Indeed, Simplexis, like almost every one of its competitors, began cutting staff. The company, which at one point had more than 100 employees, is now down to about 30.

“The lure of ‘free’ clogged the market for a while. It seems like everyone forgot the lesson we learned from our grandfathers: there is no such thing as a free lunch,” said Peoplsoft’s Landau.

Is the worst over?

To hear company officials speak, you’d never know the market had suffered a decline.

“We’re extremely bullish going into our second quarter,” said Mark Smith, senior vice president for product, marketing, and strategy at eSchoolMall.com. “It was a tough fourth and first quarters, but the fact that we’re still here talking to you best explains it. We’re still here, and we’re healthy.”

Epylon’s Steven George echoes Smith’s sentiments. “The business itself from a micro perspective is booming,” he said, though he acknowledged that “on a macro perspective, [venture capital] and public funding [have] basically come to a stop in almost every industry.”

And though Singh acknowledged significant layoffs at Simplexis, he said, “We still have more than half our initial investment in the bank. There is no other company with that much money in the bank.”

In fact, most company executives seem to believe the worst is over, and the companies that still remain are in it for the long term.

eSchoolMall’s Smith said his company also had to lay off employees, but he said it was not an unhealthy change, as it forced the company to step back and examine its business model.

Layoffs “make us no different from Lucent or General Motors or whomever,” he said, adding that the company has since rehired a significant number of staff. “A lot of the latecomers have already dropped off the radar screen. I think there will be three players at most, all with their own particular niches.”

One of those players is likely to be Epylon.

“We have 256 people today–that’s probably the largest our company has been–but we’re all struggling with a historically difficult financing market,” said Epylon’s George. “It’s happening globally, and we’re not immune to it. In fact, because we’re new, we may be more susceptible.”

KawamaCommerce.com’s partnership with the American Association of School Administrators, which endorses the company to its members, makes the company another candidate for survival, though CEO Jeff Goh said he “would not rule out” acquisition by another company if such a move would be best for its customers.

KawamaCommerce works with educational service agencies that represent several school districts. The company has developed an application for the King County Directors’ Association in Kent, Wash., that enables the group’s 290 school districts to solicit Requests for Proposals electronically to the vendors they already deal with.

Despite all the setbacks, eProcurement company officials and outside observers still see a future for electronic purchasing in the education market.

“I’ll be honest–it hasn’t been a runaway, but education is never a runaway,” said eSchoolMall’s Smith. That sentiment was echoed across the board.

But “the good thing for eProcurement companies is that schools are usually very conservative customers, to the extent that once you get that customer, you can usually hold onto them,” said venture capitalist Biddle. “Conservative customers are harder to get, but they are also harder to lose.”

Links:

Epylon
http://www.epylon.com

Simplexis
http://www.simplexis.com

eSchoolMall.com
http://www.eschoolmall.com

KawamaCommerce.com
http://www. kawamacommerce.com

Novak Biddle Venture Partners
http://www.novakbiddle.com

Palisades School District
http://www.palisadessd.org

Kern County Superintendent of Schools
http://www.kern.org

Interboro School District
http://www.interboro.k12.pa.us

Peoplesoft
http://www.peoplesoft.com

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“Paper Lake Times” gives students the scoop on journalism

This site is a great resource for budding journalists who want to get an idea of what news reporting is really like. The Paper Lake Times web site gives students a hands-on journalism experience, with answers to important questions for reporters, such as: What makes something newsworthy? What does “freedom of speech” mean? Why do reporters need to be objective, accurate, and fair? After students learn about issues that are important to understanding the basics of journalism, they can take a practice test and move on to learning the skills they need to start writing for the news media. The site provides lessons on how to interview subjects, how to write good lead paragraphs, how to use quotes correctly, and what exactly the “inverted pyramid” in news writing is. Once students gain an understanding of the basic components of news writing, they are encouraged to try their hand at writing a “real” news story for the Paper Lake Times. Young reporters first must read an assignment, then follow the links at the bottom of the page to “interview” residents of fictitious Paper Lake. One of the five assignments challenges students to find out what people are saying about last week’s Board of Education meeting, where school board members mentioned they might consider putting an addition on to Paper Lake Elementary. The young journalists then can write a 200- to 300-word story using the skills they gained and turn it in to the web site. This site is a fun resource with real-life applications. http://soe.kean.edu/~scarty

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