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STONE EDUCATION WHITE PAPER ICT SOLUTIONS AND SERVICES IN THE EDUCATION SECTOR IN 2012 A STONE GROUP RESEARCH REPORT


MANAGMENT SUMMARY OVER THE PAST DECADE SUSTAINED ICT INVESTMENT HAS ENABLED THE EDUCATION SECTOR TO KEEP PACE WITH THE TECHNOLOGICAL DEMANDS OF THE MODERN WORLD, EXPANDING ICT INTO WIDER SUBJECT AREAS OF THE CURRICULUM. BUT AS CAPITAL INVESTMENT IS RADICALLY CUT, IS THERE A THREAT THAT THE USE OF OUTDATED EQUIPMENT WILL BEGIN TO DIMINISH THE LEARNING EXPERIENCE?

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BESA research http://www.egovmonitor.com/node/43944

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STONE EDUCATION WHITE PAPER

A recent survey undertaken by Redshift Research in December 2011 on behalf of Stone reveals not only that over 83% of schools anticipate ICT budgets to be cut in the next financial year but also that a massive 97% anticipate the quality of equipment available is likely to cause frustration and impact on the learning environment. With upwards of 60% of ICT budget already spent on maintenance prior to these cuts, schools are going to struggle to continue to invest in new equipment. Yet the reliance on technology as a teaching aid is now significant: the 2011 British Educational Suppliers Association (BESA)1 research indicated that by 2012/13 nearly half of all schools anticipate that more than 50% of pupil-time will be exposed to teaching and learning using ICT. Today just 9% of schools provide all pupils with dedicated access to a laptop PC; while in well over half (54%) of schools less than a quarter of pupils have dedicated access. How can schools continue with the robust plans for achieving dedicated access given the planned budget cuts? Extending the three to five year technology refresh programme beyond this timeframe, as planned by some institutions, will risk leaving pupils and teachers using out dated technology – a key concern in an era of technology consumerisation and widespread pupil access to state of the art equipment outside the school environment. If schools are to be able to sustain an investment in equipment and retain long term vendor relationships the onus is now on to leverage new financing options that exploit the revenue budget rather than capital budget. However, are schools in a suitable position to adapt to a different way of funding ICT investment? When asked whether access to the operational budget to purchase this equipment would actually put schools in a better place to ensure the level of service required is provided, 39% of respondents believe this is the case. Yet over two fifths (42%) are unsure, demonstrating a lack of insight into the financial options available to schools today. Furthermore, over half (54%) were not aware of the differences between an operating lease and a rental agreement – yet the distinctions between these two options are key for schools looking to exploit their revenue budget for ICT investment.

So

how ready are schools to leverage the increasingly creative and innovative finance models being delivered to the market, from leasing and rental to parental contribution schemes, to sustain the continued roll out of much needed ICT support and projects ? –3–


RESULTS AT A GLANCE…

3 8

%

97

of schools anticipate ICT budgets will be cut in the next financial year

%

91

%

expect the quality of equipment available is likely to cause frustration and impact on the learning environment

of schools did not provide pupils dedicated access to a laptop PC in 2011

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STONE EDUCATION WHITE PAPER

64

%

believe upgrading hardware will be one of the main challenges for the next financial year

42

%

of respondents are unsure whether access to the revenue budget to purchase ICT equipment would actually put schools in a better place to ensure the level of service required is provided

54

%

Vs.

Over half are not aware of the differences between an operating lease and a rental agreement – yet the distinctions between these two options are key for schools looking to exploit revenue budget for ICT investment

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THE RESEARCH The past decade has seen a transformation in the classroom, with innovative technology taking centre stage in the delivery of new teaching methods and pupil engagement. Over that time, sustained and dedicated investment resources have transformed pupil access to the latest technology, with pupil access ratios evolving from barely 1:10 a decade ago to 1:2 in the vast majority of secondary schools, and 1:3 in most primary schools.

1:10

A DECADE AGO - - - - - - - - - -

However, with many schools now having to manage as much as a 60% reduction in capital budgets, all IT equipment requirements will no longer be able to be replaced through a capital budget spend. Of course, school head teachers, business managers and bursars are understandably cautious; this is the first full financial year under the new regime and no organisation can afford investment mistakes. But how concerned are schools about the implications of the current investment hiatus and the potential impact on the learning environment? During December 2011, Redshift Research conducted a study for Stone into the use of IT in education. The vast majority of respondents, 83%, believe that ICT budgets will decrease in the next financial year; with only those outside traditional state funding, such as Faith Schools, Free Schools, Academies and University Technical Colleges, mostly protected from the financial squeeze. And the numbers are expected to be significant: two thirds (66%) of the organisations expecting a budget decrease believe the cut will be more than 10%; whilst almost a third (31%) are predicting a cut in excess of 20%.

2

Department for Education – http://www.education.gov.uk/aboutdfe/spendingreview/a0065470/2010/012

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STONE EDUCATION WHITE PAPER

SECONDARY SCHOOL

1:2 - - - - - - - - - - - - - - - - - NOW

PRIMARY SCHOOL

1:3

60

83

%

%

REDUCTION IN CAPITAL BUDGETS

BELIEVE THAT ICT BUDGETS WILL DECREASE IN THE NEXT FINANCIAL YEAR

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DAMAGING CUTS The implications of such cuts are feared, with 93% of those schools expecting a budget decrease to also restrict their ability to deliver the level of service they look to achieve – and almost half (49%) predicting a large or very large impact on the level of service. As a result, 78% of those schools expecting a reduction predicting the budget constraints will have an impact on the learning ability of pupils. These results demonstrate a clear link between IT investment and the quality of the learning environment. At the most basic level, an inability to refresh equipment will lead to more breakages, aging hardware and a lack of access that will affect not only ICT lessons but the delivery of the wider curriculum. Over the past decade, as schools have been empowered to invest in technology with a view to delivering 1:1 access to systems, the curriculum has been radically amended to exploit technology innovation. From Mathematics and Geography to Physical Education, ICT forms an essential component of the teaching toolkit. A certain amount of schools have evolved from one or two stand alone, dedicated ICT suites of desktops towards mobile based learning that is easily transferred from room to room. The survey revealed the value schools place in technology excellence within the learning environment, with 78% saying there is an improvement in the quality of the environment if pupils have dedicated access to a laptop/PC; with over half (51%) saying there is a large or very large improvement in the quality of the learning environment. It is clear that sustained technology innovation will remain essential to continually improve the learning environment. For example, recent European research has highlighted significant improvements in test scores as a result of learning with 3D content. Findings from the Learning in Future Education (LiFE 1) project research being undertaken across Europe to compare the difference

+ =

IT IS CLEAR THAT SUSTAINED TECHNOLOGY INNOVATION WILL REMAIN ESSENTIAL TO CONTINUALLY IMPROVE THE LEARNING ENVIRONMENT.

+

A

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93

%

STONE EDUCATION WHITE PAPER

OF THOSE SCHOOLS EXPECTING A BUDGET DECREASE

in comprehension, information retention and overall behaviour between students learning science using traditional 2D methods and 3D projection reveal that 3D shortened the time it took for students to learn concepts, increased attention spans and resulted in overall deeper thinking. Indeed, the post-survey of teachers revealed that 100% of teachers felt that the pupils paid more attention in 3D than other lessons, and 70% noted that pupils’ behaviour had improved when using 3D. Of course pupils are increasing familiar with such technology in everyday life. Some use it at home; and many may have seen 3D films. The consumerisation of technology means that individuals expect at least the same level of technology at work or school as they use at home, putting greater pressure on schools to continually innovate. Yet even before these budget cuts, only 9% of schools are providing all pupils with dedicated access to a mobile device; while the typical five year technology refresh programme always risks leaving pupils and teachers using out dated technology. In well over half (54%) of schools, less that a quarter of pupils have dedicated access to a mobile device to aid learning. With the current and on going funding situation, not only will the technology refresh programmes that are a core component of any education business model be under pressure, but schools will struggle to continue with other key projects, from wireless upgrades to changing the use of classrooms as part of the transformation in teaching, through the adoption of multi-functional learning spaces for example. As a result, not only do these schools believe teaching will be affected by the use of aging, less reliable equipment; but the lack of access to state of the art technology may disenfranchise pupils – especially those with current technology systems at home. Indeed 97% of all schools surveyed anticipate the quality of equipment available is likely to cause frustration and impact on the learning environment; with 40% expecting a large or very large impact. Indeed, the issue is not only about providing the right tools to deliver the curriculum but equipping young people for the workplace. Out of date technology and aging software is not going to provide the skills or experience demanded by employers. 3

The 3D in Education White Paper, Written by Professor Dr Anne Bamford, Director of the International Research Agency – http://contentm.mkt2787.com/lp/37548/136076/ The%203D%20in%20 Education%20White%20Paper--Web_0.pdf

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FINANCING LEARNING For schools facing the reality of budgets for the 2012/2013 academic year, however, concepts of 3D learning and innovation are barely on the radar. Under previous funding models schools have typically spent almost half of their budget on maintenance – ensuring teachers can print, pupils can hook up to the wireless network and that the new intake of pupils are added to the network in a coherent way with details stored on the learning management system. Cut the budget by upwards of 20% as feared by many respondents and schools face spending almost the entirety of their ICT budget on maintenance. Indeed, over half of respondents (58%) believe maintaining existing hardware will be one of the main challenges to delivering technology in 2012; just under half (49%) feel upgrading infrastructure such as networks will be a major challenge; 36% guaranteeing the level of pupil access; and 33% providing access to the latest versions of software. However, the survey reveals that 64% of schools believe upgrading the existing hardware will be one of the main challenges to delivering technology in 2012. Given this clear recognition of the challenges faced in simply retaining the status quo, what are the options for replacing aging equipment and continuing the investment in new mobile technologies in order to achieve the objective of 1:1 access and essential innovation? The challenge is exacerbated by a shift in ICT decision making responsibility over the past 12 to 18 months. Traditionally, the IT manager or network manager has been empowered to make purchases from a predefined budget. Decisions have been based not only on price – although that has always been an important factor within educational establishments – but also on the quality of service, market experience and support for issues such as equipment disposal and recycling. These purchasing decisions are now increasingly being made by the school bursar, business manager or, in the case of primary schools, head teacher. These individuals are often focused primarily on budgetary control rather than vendor relationship and cost is the key priority. For network and IT managers this shift in decision making process combined with the reduction in budget is creating a significant challenge; indeed many were unaware of the new capital funding constraints until requested – and as a result expected – investments were turned down.

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STONE EDUCATION WHITE PAPER

58

%

BELIEVE MAINTAINING EXISTING HARDWARE WILL BE ONE OF THE MAIN CHALLENGES TO DELIVERING TECHNOLOGY IN 2012

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INNOVATIVE OPERATIONS If schools are to be able to sustain an investment in equipment and retain long term vendor relationships the onus is now on to leverage new financing options that exploit the revenue rather than capital budget. However, how well placed are schools to adapt to a different way of funding ICT investment? Many schools are increasingly considering the value of the parental contribution scheme, under which parents contribute towards a mobile device used by their child in a monthly payment. These schemes include additional resources to ensure that all children, including those whose parents are unable to contribute, have access to a device to aid their learning experience.

MAINTENANCE

SOFTWARE

UPGRADES – 12 –


STONE EDUCATION WHITE PAPER

PARENTAL CONTRIBUTION

SCHOOL SUPPORT

PERSONAL LAPTOP Parental contribution schemes are managed by suppliers on behalf of schools and include support, warranties and software upgrades to ensure the compatibility of a hardware estate that is essential to deliver a consistent teaching experience. But there are other options that include device leasing and rental, allowing bursars, business managers and head teachers to mix and match finance strategies to reflect local needs and, critically, leverage revenue rather than capital budgets.

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INNOVATIVE OPERATIONS (CONTINUED) However, when asked whether access to the revenue budget to purchase this equipment would actually put schools in a better place to ensure the level of service required is provided, just 39% of respondents believe this is the case. The majority – over two fifths (42%) – are unsure, demonstrating a lack of insight into the financial options available to schools today. When asked how many finance packages are available to help facilitate ICT spending they were aware of, 73% cited operating lease; 57% second user/ refurbished and 53% parental contribution. This lack of insight is due, in part, to the fact that few respondents have seriously considered using any of these finance options. Just 42% had considered an operating lease, 24% second user/ refurbished, 23% rental and 20% parental contribution. Some 26% had never considered using any of these. Strangely 68% had heard of rental agreements despite this option being completely unavailable to the education market until 2012. Furthermore, over half (54%) were not aware of the differences between an operating lease and a rental agreement – yet the distinctions between these two options are key for schools looking to exploit operational budget for ICT investment.

Vs.

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STONE EDUCATION WHITE PAPER The lack of insight into the differences between these finance options was explored in greater detail. Just 32% of respondents are aware that a rental agreement comes from revenue not capital expenditure; only 21% believe that it has a predetermined break clause; and 24% that it can be terminated without penalties. Just half realise it covers a fixed period (49%) and less than half (45%) that it is based on a month to month basis. 32% believe it appears on the balance sheet. The survey results reveal a clear lack of understanding about the differences between these two options. Yet the key distinction is the flexibility. While an operating lease normally runs for a minimum of three years, a rental scheme is far more flexible allowing a school to walk away from a contract after an initial 12 month period. Indeed, if a school decided to pull out of an operating lease before the end of the contract, the entire balance outstanding has to be paid whilst a rental agreement can be cancelled with a short notice period. Operating leases and rental agreements are also accounted for completely differently. A rental agreement – which can cover anything from a coffee machine to headmaster’s mobile telephone – shows as a weekly or monthly expense rather than a long term committed debt. The break clause offered by the rental agreement provides schools with the ability to take a three year agreement in the knowledge that it can be terminated after 12 months with just a minimal penalty should the budgetary situation change. Furthermore, the return clauses under the rental model are far less demanding than those imposed by an operating lease. It is critical that ICT decision makers understand these distinctions. With schools now forced to increasingly explore using their revenue budget, decision makers are understandably nervous about making any commitments beyond 12 months when the budget might be cut even further. Furthermore, some Local Authorities are prohibiting the use of operating leases, leaving schools with no option until now but to cut back on investment or adopt parental contribution schemes which are limited to mobile device provision. The ability to add rental agreements to the mix of finance options adds real flexibility and, critically, provides an alternative avenue for both desktop and mobile PC investment. The rental scheme model can also be extended to include support options to supplement any gaps existing internally. This could become another key factor for schools as they battle the implications of budget cuts on ICT headcount. Today, the survey reveals that the vast majority of schools manage key services internally – with application support (85%), network management (82%), server management (78%), desktop management (91%), help service desk (80%) and IT security (76%) managed in house. Of those, 22% rate network management as the most significant support challenge, followed by server management (20%), application support (18%), IT security (14%), help desk (14%), and desktop management (13%). Today, just 32% use out-tasked support/managed services; 22% leasing equipment; 20% open sourcing; 9% acquisition through a consortium; and 34% none of the above. As demand to cut costs continues, the education sector will come under pressure to follow the model adopted across the public sector of outsourcing tasks or relying more heavily on external resources – despite the on going resistance as a result of the poor experiences of managed services in the past. The key will be to find a financing model combined with vendor experience in the sector that meets both economic constraints and the educational objections of the institution.

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RENTAL VALUE ¿¿ PCs can be rented for an indicative agreement period of 3 years ¿¿ Devices can be returned, upgraded or swapped out at any time after the first 12 months – subject to a 90 day notice period. ¿¿ Rental schemes can include additional support to meet internal resource requirements, with support costs bundled in with the device to provide a clearer view of the Total Cost of Ownership associated with deploying, managing and supporting student devices ¿¿ There is no need for the usual Local Authority approval process; the rental agreement provides the schools with access to the latest technology when released, ¿¿ As a result, schools can achieve new technology innovation faster than the typical five year refresh periods ¿¿ Technology can be scaled up or down to match new curriculum requirements, changing class sizes or amendments to an organisation’s catchment area/ student intake.

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STONE EDUCATION WHITE PAPER

CONCLUSION

There is little doubt that the financial squeeze facing the UK’s educational establishments is set to continue for some years. At the same time technology advances will play an ever increasing role in transforming the learning environment and enabling schools to deliver the skills and knowledge required in today’s working environment.

Indeed, the results of the 2011 British Educational Suppliers Association (BESA) research indicate that by 2012/13 nearly half of all schools anticipate that more than 50% of pupil-time will be exposed to teaching and learning using ICT. Indeed, 10% of respondents note that nearly 100% of all pupil-time will involve exposure to ICT. It is, therefore, inevitable that the results from this survey conducted by Redshift Research on behalf of Stone reveal the vast majority of schools believe a reduction in ICT investment will damage the quality of education provided. Indeed, while there is often criticism aimed at the Government’s lack of guidance with regards to ICT in schools, each institution is expected to demonstrate in Ofsted inspections at least a maintained standard of ICT, preferably an improvement. Given the sustained focus on attainment through league tables and the growing parental pressure for innovation through Academies and Free Schools, there is little leeway for relaxing ICT investment. Indeed, schools need to be exploiting innovations in teaching, such as 3D and greater wireless access that offer demonstrable improvements in pupil awareness and learning. No school wants to see its investment in improving standards and moving towards 1:1 equipment provision undermined; or to endure a decline in teaching standards as a result of poor ICT equipment and infrastructure that could not only damage the pupil experience but jeopardise the future of the school. But, as this survey reveals, the vast majority fear budget cuts will affect learning and increase pupil frustration.

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CONCLUSION (CONTINUED)

SO WHAT ARE THE OPTIONS? The education sector cannot make this transition from government led funding alone. And under the new, significantly more challenging financial model, there will be no ‘one size fits all’ approach. The IT industry needs to step up and offer a range of innovative new financing options that will support the very diverse needs of the UK’s education system. The challenge for head teachers through to business managers, bursars and ICT decision makers will be to rigorously assess these new opportunities for flexible financing and determine quickly how best to reinvigorate technology investment and minimise the risk of diminishing the teaching experience.

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STONE EDUCATION WHITE PAPER

ABOUT

STONE Established in 1991, Stone is a leading provider of best value PCs and associated services to the UK Public Sector and Education sectors. With a low total cost of ownership (TCO) at the centre of everything they do, Stone offers tangible benefits that answer the specific challenges currently faced in the Public Sector landscape, such as resource gaps exposed by reduced budgets. Although technology continues to be important, Stone is proud to offer a superior service that has been created and continually refined to meet the specific and evolving needs of the UK Public Sector. This drive for service excellence was recently recognised as a result of an independent survey conducted by TNS Global and Microsoft, where 95% of customers surveyed agreed Stone offered good or excellent service.

stonegroup.co.uk

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STONE EDUCATION WHITE PAPER Email: marketing@stonegroup.co.uk Tel: 08448 22 11 22 Granite One Hundred | Acton Gate Stafford | Staffordshire | ST18 9AA

stonegroup.co.uk


Stone Education White Paper