'No Child' fosters compliance biz

SchoolNet CEO Jonathan Harber

The No Child Left Behind law is creating big demand for a technology infrastructure and tools to carry out the institutional and process reforms of the five-year-old law.

But most school districts and state agencies that are responsible for seeing that law carried out lack such technology resources, analysts and industry officials said.

Over the next decade, the No Child Left Behind Act will force sweeping changes to the American education system at the school, district, state and federal levels.

Ultimately, the way teachers teach, students learn and administrators plan their curricula will shift to take advantage of the data analysis and reporting, information sharing and student achievement progress requirements mandated by President Bush's federal education reform law, passed by Congress in 2001.

The early market opportunity likely will pale in comparison to those awaiting IT companies and systems integrators over the next decade. Projects and opportunities in a handful of states and several major urban areas range from $40,000 for a small school district systems upgrade to more than $50 million for an enterprise resource planning implementation to overhaul a state or large school district's education IT infrastructure.

"You won't see a business case for a new ERP system in a school district that doesn't include the need to meet the requirements for No Child Left Behind." | Philip Benowitz of Deloitte Consulting Inc.

Before teachers and administrators can use real-time student data to tailor how lessons are delivered and to track student achievement throughout the year, not only on year-end tests, schools must have the infrastructure to collect and analyze the data. That's the first step, and that's where most school districts still are.

"You have a lot of people still going through the evaluation stages of what they need to do," said Kevin Mergruen, vice president of public sector and higher education sales for New York-based Information Builders Inc., which specializes in business intelligence tools. "What is the game plan? Are they equipped to do it today, or do they need to bring in new solutions to help address it?"

Ultimate goal

To report student data, education departments must accurately and securely track each student, which necessitates implementing a student identification system. Each student is assigned a unique and secure number that moves with the student from grade to grade and school to school over the course of his or her academic career.

A data warehouse is essential to process and track the student data that school districts and states collect and report to the federal government, according to industry officials.

In Nebraska and New Mexico, Deloitte Touche Tohmatsu is implementing such a student ID and data warehouse system with partner eScholar LLC, White Plains, N.Y. Under a $2.1 million contract from Nebraska, the companies are running pilot programs in 15 school districts. State officials will lead the statewide roll out later in 2006.

The companies are implementing similar applications in a $4.6 million project in New Mexico, although that project is being expedited and will include eScholar hosting, a Web-based solution during the project's first two years, said Philip Benowitz, director of Deloitte Consulting Inc.

Both projects cover only the basics necessary to bring each state into compliance with the act's federal reporting standards. These require districts to send student test data to the state, which relays it to the federal government. The projects do not include any classroom tools, Benowitz said.

"That has been contemplated, but that's several years down the road," he said. "It's going to take a number of years to achieve that ultimate goal. Regardless, it can't be done in just one or two years. It's just too much, it's too costly."

States need to break the projects into smaller pieces or shorter phases for them to succeed, he said.

At the opposite end of the spectrum is the all-in-one approach taken by the Los Angeles Unified School District. In May 2005, the district hired Deloitte to implement a new ERP system from SAP America Inc. The district is paying Deloitte $55 million, but has an additional $40 million budgeted for the project, according to district documents.

The project, called "Business Tools for Schools," is aimed at reducing risk and improving efficiency as well as enhancing the quality of financial and staffing information for managers and policy-makers. It is a nod to the teacher qualification requirements of the act. The ERP implementation does not specifically address No Child Left Behind, but it's clear that the district had its mandates in mind, Benowitz said.

"You won't see a business case for a new ERP system in a school district that doesn't include the need to meet the requirements for No Child Left Behind," he said. "That's clearly a big part of the rationale for making these investments."

Los Angeles in 2003 hired Maximus Inc., Reston, Va., to implement its student information system at a cost of $43.5 million. Maximus' school-focused data warehouse will work in concert with the SAP business-focused data warehouse, Benowitz said.

Several other major cities are implementing student information systems to improve data reporting and analysis at the district and classroom levels. Both Washington and Atlanta in fall 2005 hired SchoolNet Inc., New York, to implement instructional management and human capital management systems, said SchoolNet CEO Jonathan Harber. He declined to give financial details of the two contracts. But in a similar project in Philadelphia, SchoolNet has earned about $6 million over the first four years of the work, Harber said. SchoolNet and Deloitte teamed in 2002 for the Philadelphia project.

Deadline extended

An October announcement by the Education Department gave states another year to comply with a requirement calling for a highly qualified teacher in each classroom by the end of the 2005-06 school year.

By itself, hiring such teachers is a huge problem for school districts. Having the IT systems to track and authenticate the assigned location of each teacher is another issue, and one that figures to command attention from school districts over the next year, said Bill Rust, research director for market research firm Gartner Inc., Stamford, Conn.

Work is likely to continue on student information system implementations and data warehousing projects, and the number of ERP implementations in 2006 is likely to increase, Rust said.

Many industry officials suggest that in several years, all the student data being collected and analyzed will be available to teachers and school administrators, as well as in aggregate form to the state.

And that's just where Deloitte's Benowitz, sees the market headed: into the classroom with tools that will help guide instruction.

"How do I take these reports and use them to inform my instructional delivery?" Benowitz asked. "How do I use that to consider changes to my curriculum? That's where the rubber meets the road, and ultimately, I think that's where most of the dollars are going to be spent."

Staff Writer Ethan Butterfield can be reached at ebutterfield@postnewsweektech.com.

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