ROI CASE STUDY KRONOS BROWARD COUNTY PUBLIC SCHOOLS

Transcription

1 ROI CASE STUDY KRONOS BROWARD COUNTY PUBLIC SCHOOLS THE BOTTOM LINE The Broward County Public Schools used Kronos Workforce Management to reduce overpayments to substitute teachers and improve the productivity of staff at its schools and headquarters. ROI: 52% Payback: 1.88 years THE COMPANY The Broward County Public School system is the nation's sixth largest and largest fully-accredited school district. The school system is responsible for the education of 260,000 students at 138 elementary schools, 42 middle schools, and 32 high schools. In addition to these public schools the school system has three technical centers for adults and 55 charter schools. The school system has 34,000 part-time and full-time employees, approximately 17,000 of whom are full-time teachers. THE CHALLENGE With only half of its workforce dedicated to full-time teaching, Broward County Schools is continually trying to reduce costs unrelated to teaching so that it can dedicate as much of its budget to teaching as possible. The school system continually looks for opportunities to reduce costs and monitors how much it spends on operating expenses per student. One reason for this cost consciousness is that many of its vocational schools which help people become certified in fields such as nursing and auto repair compete with for-profit schools with lower operating costs. In late 2005, the school department evaluated the time and attendance workflows for substitute teachers in an effort to reduce costs. The school department employed 5,000 part-time substitute teachers and on an average day, 2,000 of them were teaching. Substitute teachers recorded their own attendance by writing the number of hours they worked on a time sheet at a central location in the school. A school administrator would then combine this data and transfer it to a payroll administrator in the school department s headquarters. At the time that these workflows were being analyzed, one of the technical schools was about to purchase a time and attendance system on its own, prompting the school district to begin looking for a system that would be used centrally and distributed consistently across all of its schools. Corporate Headquarters Nucleus Research Inc. 36 Washington Street Wellesley MA Phone: Fax: Nucleus Research Inc.

2 TOPICS Human Resources Operations Education Government Employee Management Applications THE STRATEGY Even though Kronos is the only approved time and attendance vendor with the state of Florida, the school system also evaluated time and attendance systems from Kaba Benzing and Timelink. The school district is an SAP shop, but SAP was not considered and the district believed that clocks were not available from SAP. The school system sat for product demonstrations, evaluated technical specifications, and spoke with reference customers. Kronos was selected because the other vendors did not offer sufficient additional functionality that would have made it worthwhile to work with a non-approved vendor. Such a decision would have added a year to the project timeline. In February 2006, Broward County Schools began deploying Kronos for tracking the time and attendance of its substitute teachers in all its schools. First, the deployment was completed at the system s three technical centers. The deployment team interviewed administrators, both at the schools and the headquarters, in order to determine what data was being gathered, what data was required, and what reporting was needed. Based on these interviews, configuration was completed for both Kronos software and the clocks that would be installed at the schools. After deploying at the vocational schools but not going live deployments were completed at 12 schools. Once these deployments resulted in a methodology and set of best practices, the deployment team then deployed Kronos in all of the remaining schools. The deployment was completed by 9 staff members. Four dedicated all of their time to the deployment, and five dedicated less than 25 percent of their time. A third-party contractor completed the installation including communications and electrical wiring of 600 clocks in 230 schools. The deployment was finished in August 2006 and went live for the beginning of the school year. The school system anticipates extending the deployment to its bus drivers, maintenance workers, custodians, and food preparation staff. At the end of the deployment, Kronos was integrated with the district s SAP system, which uses the data to generate payroll for the substitute teachers. KEY BENEFIT AREAS Deploying Kronos Workforce Management enabled Broward County Schools to reduce overpayments to substitute teachers and improve the productivity of administrative staff. Key benefits from the solution include: Reduced overpayments. Because the attendance of substitute teachers is now tracked by time clocks rather than time sheets, there is far less padding in their recorded number of hours worked. As a result, the payroll cost for substitute teachers has decreased by 4 percent. Improved administrator productivity. By automating time and attendance workflows for substitute teachers, the schools have reduced the amount of time their administrative assistants spend on these tasks from 90 minutes to 30 minutes. The deployment has also freed up one employee in the headquarters who previously spent the entire day configuring SAP so that it could properly allocate the cost of substitute teachers time to the schools in which they taught that day. Eliminated paper costs. Because of the deployment, the school department no longer purchases, prints, or stores timesheets related to substitute teachers. 2

3 BENEFITS Indirect 27% Direct 73% TOTAL: $4,106,930 KEY COST AREAS Key cost areas for the deployment included hardware, software, personnel, consulting, and training. The deployment of Kronos Workforce Management, which began in February 2006 and ended in September 2006, required 600 clocks for 230 schools, as well as 9 servers for both the application and data storage. Personnel costs consisted of time required by 9 employees, half of whom dedicated only a portion of their time to the deployment, as well as installation of all of the clocks by a third-party contractor. During the deployment, Kronos consultants were on hand to assist with both programming of clocks and setting of parameters in Kronos so that it would both gather the right data and create the right reports. At the conclusion of the deployment, 8 employees attended two days of formal training by Kronos. These employees then provided training to other employees on an asneeded basis. COSTS Consulting 8% Personnel 15% Training 5% Software 21% Hardware 51% TOTAL: $2,712,623 LESSONS LEARNED Critical to the success of the deployment was early information gathering performed by the deployment team. Before the team began clock installations or system configuration, extensive interviews were performed with administrative 3

4 staff at the schools, in the payroll department, and in the department that oversees substitute assignments. This enabled proper configuration of clocks, as well as easy design of the reports Kronos would create, and the data it transmitted into the company s payroll system. These interviews also enabled use of the Kronos system to be extremely end user friendly, which minimized adoption resistance. The deployment was also successful because it extended the benefits from the district s SAP deployment. By integrating Kronos with SAP, the district s payroll system has more accurate data and the resulting cost reductions increase the returns on the investments already made in SAP. CALCULATING THE ROI Nucleus calculated the costs of software, hardware, personnel, consulting, and training over a 3-year period to quantify Broward County s total investment in Kronos Workforce Timekeeper. Direct benefits calculated consisted of reduced overpayments to substitute teachers and the elimination of paper costs. Indirect benefits consisted of improved productivity for administrative staff located both in the schools and the organization s headquarters. Benefits from reduced overpayments and improved productivity were calculated based on the average fully loaded annual cost of the employees. Productivity improvements were adjusted by a correction factor to account for inefficient transfer of time between time saved and time worked. Nucleus Research is a global provider of investigative technology research and advisory services. Building on its unique ROI case study approach, for nearly a decade Nucleus Research has delivered insight and analysis on the true value of technology and strategies for maximizing current investments and exploiting new technology opportunities. For more information or a list of services, visit NucleusResearch.com, call , or info@nucleusresearch.com. 4

5 DETAILED FINANCIAL ANALYSIS BROWARD COUNTY PUBLIC SCHOOLS SUMMARY Project: Kronos Annual return on investment (ROI) 52% Payback period (years) 1.88 Net present value (NPV) 484,179 Average yearly cost of ownership 904,208 ANNUAL BENEFITS Pre-start Year 1 Year 2 Year 3 Direct 0 994, , ,352 Indirect 0 374, , ,625 Total Benefits Per Period 0 1,368,977 1,368,977 1,368,977 DEPRECIATED ASSETS Pre-start Year 1 Year 2 Year 3 Software 300, Hardware 1,400, Total Per Period 1,700, DEPRECIATION SCHEDULE Pre-start Year 1 Year 2 Year 3 Software 0 60,000 60,000 60,000 Hardware 0 280, , ,000 Total Per Period 0 340, , ,000 EXPENSED COSTS Pre-start Year 1 Year 2 Year 3 Software 0 45,000 85, ,000 Hardware Consulting 225, Personnel 400, Training 127, Other Total Per Period 752,623 45,000 85, ,000 FINANCIAL ANALYSIS Pre-start Year 1 Year 2 Year 3 Net cash flow before taxes (2,452,623) 1,323,977 1,283,977 1,238,977 Net cash flow after taxes (2,452,623) 1,323,977 1,283,977 1,238,977 Annual ROI - direct and indirect benefits 54% 53% 52% Annual ROI - direct benefits only 39% 38% 37% Net present value (NPV) (2,452,623) (1,301,339) (330,468) 484,179 Payback (years) 1.88 Average annual cost of ownership 2,452,623 2,497,623 1,291, ,208 3-year IRR 27% 27% FINANCIAL ASSUMPTIONS All government taxes 0% Discount rate 15% All calculations are based on Nucleus Research's independent analysis of the expected costs and benefits associated with the solution. 5