Managing Change

Clark County’s emphasis on the classroom applications of technology has helped the district achieve lofty goals. But it’s this same focus on the classroom that has left the district without a comprehensive Enterprise Resource Planning (ERP) system for managing its business functions–until now.

Clark County has entered into an agreement with SAP America Inc., the United States division of German software giant SAP, to supply its ERP software to the district’s schools. Through the deal, which district officials estimate will cost them about $25 million altogether, SAP will customize and install its software in all of Clark County’s schools and will train district personnel in its use.

SAP began the implementation process in June. District officials hope to have their financial and procurement modules in place by next July, and their human resources and payroll systems up and running by January 2007. When finished, the ambitious project will tie together Clark County’s entire back-office enterprise through a single, integrated system.

Not only will this integrated system save district personnel time and money by improving efficiencies (they’ll be able to enter data once and have these bits of information flow throughout the system automatically), but it also will enable better decision making.

For example, as school district personnel create and submit purchase orders (POs) through the software’s online procurement system, budget figures in the district’s financials module will be updated automatically in real time to reflect these purchases. This will give key decision makers access to accurate, up-to-the-minute information about how much money is left in the budget to support other initiatives.

If the experience of some other large school systems is any indication, Clark County could see a significant return on its investment. In the Seattle Public Schools, which uses SAP software to streamline and consolidate its educational purchases, school district leaders reportedly have saved more than $1 million a year by eliminating “maverick purchases” that don’t qualify for generous bulk discounts.

The potential for huge cost savings notwithstanding, putting such a massive and multifaceted technology system out for bids–and then implementing the winning system without a hitch–are significant challenges for a school system of any size, especially one the size of Clark County. District officials have succeeded in this first step and are convinced they have a solid plan to achieve success with the second. Here’s their story.

Finding the right fit

With millions of dollars in public money at stake, writing a Request for Proposals (RFP) to solicit bids for a technology solution as complex as

an ERP system can be a daunting experience for school leaders.

From establishing clear goals and defining needs, to providing explicit instructions to potential software vendors, to accurately gauging the size and scope of the project, the initial planning that goes into drafting an RFP is crucial to the project’s success. That’s why, for large and complex technology projects such as this one, Clark County typically turns to outside experts for help.

“We write RFPs to choose companies to write our RFPs for large technology purchases,” explained Chief Technology Officer Phil Brody.

After soliciting bids, the district chose Government Finance Offices Association to help write the RFP for its enterprise resource project.

Four companies responded to this RFP, and based on these written responses, officials immediately discarded one proposal and invited the other three companies–SAP, Oracle, and PeopleSoft (then a company independent of Oracle)–to the district for presentations. Each was given three days to state its case for why it should be chosen as the district’s ERP provider.

If writing the RFP was a challenging and time-consuming process, choosing the right vendor was even more so. With so much money at stake, district officials knew they had to be thorough in their evaluation, carefully document the process, and be able to justify their final selection–both for district stakeholders and … for the losing bidders.

“Always behind us was lurking the shadow of who would protest” the district’s decision, Brody said.

Clark County officials evaluated the companies’ written responses and presentations, rated them, and visited other districts that were using the companies’ solutions. Finally, months later, they were ready to go to the board with their recommendation of SAP.

As luck would have it, the district “caught a break,” Brody said, when Oracle announced its plans to purchase PeopleSoft. In the resulting hullabaloo, the district’s choice of SAP–which, given the impending merger, looked to be the right call–slid through unchallenged.

‘Change management’ is critical

Choosing the right software vendor is only half the battle, Brody says. Implementing the project successfully will require even more care and consideration.

A series of high-profile blunders by school systems from Philadelphia to San Francisco shows just how hard it is to execute such a project smoothly.

In Philadelphia, officials saw what was supposed to be a $15 million project to install financial management, human resources, and payroll software balloon into a $36 million fiasco two years later. In San Francisco, officials spent $2 million on software to run all the district’s records, from payroll to personnel to student information–and then another $3 million-plus on consultants to figure out why the system wasn’t running correctly.

Other large school systems that have had problems implementing complex back-office enterprise systems include San Diego and the District of Columbia Public Schools.

Brody says he’s well aware of these examples.

“We do have the benefit of learning from others’ failures,” he said, “but we know it’s going to be a long row to hoe.”

One of the things Clark County officials have learned by studying the example of others is that “how you manage the change is critical,” Brody said. He explained: “A successful implementation changes the way you do business–and if you don’t do that correctly, people will resist the change.”

In fact, this “change management” piece is just as important as the technical piece, he added: “You’ve got to get buy-in throughout the organization, [or else] this type of project can be sabotaged at many different levels.”

In drawing up their contract with SAP, Clark County officials made sure the company put in a separate, full-time position dedicated to change management. The district also has designated its own resources to support change management, which includes getting stakeholders from all departments involved in the process, keeping them informed, training staff members associated with the project how to tell the story correctly, and making employees understand how things will be better for them with this new system in place.

“We’ve been communicating from Day One: ‘Here’s how this will help you,’ along with concrete examples,” Brody said. “It’s one thing to say, ‘In this new system, you’ll get POs processed faster,’ but it’s even better to say, ‘We’ll do PO processing in half the time–and it will immediately deduct from the budget, so budget figures will appear in real time, which is good for when crunch time occurs and we need accurate budget figures within a week.'”

Other factors for success

Steve Peck, president of SAP Public Services–the division of SAP America that handles the company’s government and education contracts–said one of the things Clark County did well was to go through a rigorous process to outline its needs up front.

In choosing their ERP system, Peck said, district officials evaluated not only the solutions’ capabilities, but also the vendors’ ability to pull off such a complex project. Here, SAP was able to point to its successes in three other giant districts–Los Angeles, Houston, and Broward County, Fla.

Peck identified three factors he said are critical to the success of such projects: (1) a willingness to change; (2) strong project leadership and oversight; and (3) a clear plan for resolving issues. “You need a milestone-driven approach, which allows for … anticipating problem areas,” he said.

He said SAP takes a structured, five-step approach to implementation that is repeatable in every district. Here are the steps:

  1. Project preparation phase–defining the project’s objectives and governance structure.
  2. Blueprint phase–designing the project. For example, with regard to Clark County’s financials module, company and district officials are looking at all of the district’s current business processes and matching the software’s design to these.
  3. Realization phase–configuring the software.
  4. Final preparation phase–testing the software.
  5. Go live and support.

At press time, Clark County was still in the blueprint phase, with the realization phase expected to begin late this fall. Though specific objectives were still being defined, Peck said, these will include streamlining the district’s procurement processes and integrating its staff recruiting and human-resource efforts.

This latter objective is vital for a district with such tremendous growth, he said; Clark County is expected to have to double the size of its teaching force soon to keep up with the explosion of its student population.Concluded Peck: “I think we’ll see a lot of ROI [return on investment] on this project”–returning dollars to the classroom, which is Clark County’s main focus after all. DP

Dennis Pierce

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