the remodeling of a living unit to expand the ISIS program

Case Study 4-1: The Clarion School for Boys, Inc. – Milwaukee Division: Making Information Systems Investments.

Using the Case Study Template format found in Doc Sharing, submit your assessment of three projects that need to be implemented immediately at the Clarion School and how you would prioritize those projects. (What method and criteria would you use to prioritize the projects?) Your case study should be no more than five pages long, including the title page.


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John Young, Controller of the Clarion School for Boys, Inc.—Milwaukee Division, hung up the telephone as the school bell signaled the end of another day’s classes. Young’s conversation with Sean McHardy, the Superintendent and Chief Operating Officer of Clarion—Milwaukee Division, was short and to the point. McHardy had called to confirm that Young would be prepared to present his assessment of the current information systems (IS) at Clarion and propose a direction for information systems at the organization for the next fiscal year at the quarterly Board of Directors meeting scheduled for next week (June 13, 2006) in Chicago.

As an MBA student, Young had learned about the importance of an overall information systems strategy. McHardy’s request, however, required Young to formalize a full plan, complete with an assessment of the current situation as well as future projects and budgets. As Controller, Young knew that the members of the Board of Directors were anxious to hear how Clarion—Milwaukee’s current investment in information technology was paying off. Since 1998, when the Board had approved a sizable investment in hardware and software, there had been little formal monitoring of the system’s benefit.

Young had joined the Milwaukee Division of Clarion in November 2005. His previous job had been as assistant controller in one of the divisions of American Chemical Company (ACC) in Chicago; he

Copyright © 2010 by Stephen R. Nelson and Daniel W. DeHayes. This case was developed to support classroom discussion rather than to illustrate either effective or ineffective management practices.

After 10 years, Young had tired of big companies and narrow jobs and decided to move into a position with broader responsibility. However, most of his days at Clarion—Milwaukee had been spent “fighting fires” rather than planning business strategy. Although his position was quite different than he had expected, he felt the intangible rewards clearly surpassed those at American Chemical. Young had developed several good friends at Clarion—Milwaukee and enjoyed his daily routine.

The Clarion School for Boys, Inc.

The Clarion School for Boys, Inc., was founded in 1989 as “a refuge for wayward boys” by a group of investors from Chicago, all of whom had grown up in foster homes but accumulated considerable wealth during their lives. Their vision was to create an environment for boys who had got into trouble that would provide them with a diagnosis and treatment plan as well as the discipline and support needed to become productive members of society. They felt that they could operate these schools efficiently and make a small profit in the process. During the next 10 years, Clarion established a diverse program of care that relied on the dedication and devotion of this group of investors. The first school was opened near Chicago, Illinois, in 1991. Later, Clarion opened additional schools near Detroit, Michigan (1995); Indianapolis, Indiana (1998); and St. Louis, Missouri (2000).

The Milwaukee division was the second oldest school in the Clarion system, opened in 1993. It was housed on the grounds of a former monastery and contained several buildings and 80 acres of land on the edge of the city. As in other states, Clarion—Milwaukee Division depended somewhat on the parents for financial tuition. However, over 80 percent of the revenue came from per diem charges paid by government agencies for the housing and treatment of problem boys.

The Clarion School for Boys—Milwaukee Division was classified as a private, for-profit residential treatment facility for delinquent boys between the ages of 10 and 18. In 2006, there were 128 full-and part-time employees who provided care and treatment to 120 students. Of the 9 residential child-care facilities operating in Wisconsin, Clarion—Milwaukee was the second largest in terms of enrollment and the third most expensive in per diem charges. Unlike Clarion—Milwaukee, most other child-care facilities were not designed to help children who were exhibiting severe behavioral problems. As a result, Clarion—Milwaukee often functioned as a “last resort” before a child was placed in a mental hospital or state correctional institution.

Clarion—Milwaukee’s ability to manage difficult cases was largely the result of its comprehensive treatment program. The treatment effort was supported by a faculty-managed school program along with modern crisis-management facilities and tracking devices. Since 1999, Clarion—Milwaukee’s strategy to differentiate itself from its competitors emphasized the importance of using modern information technology in combination with a caring staff attitude. Because the school typically dealt with potentially dangerous students, the ability to contact support staff and access student records quickly was considered essential to effective performance.

As operational expenses and capital requirements continued to rise, the Milwaukee school became more dependent on increased per diem charges and higher enrollments to balance the budget. During the 2005–2006 fiscal year (ending June 30, 2006), Clarion charged placement agencies or families $150.50 per day for each student enrolled in the regular treatment program. For students enrolled in the ISIS program, a premium care/rehabilitation facility opened in 2001 for students whose next option was a juvenile delinquency institution, the charge was $197.00 per day. Total per diem revenue for the 2005–2006 fiscal year was budgeted at $4,891,000, but enrollment had been running well ahead of projections. As a result, there was considerable interest in expanding the school’s capacity in fiscal 2006–2007.

All capital expenditures were allocated from the Capital Assets Fund of Clarion, Inc. Each division competed with the other operations for access to this fund. Clarion—Milwaukee was proposing three major projects for fiscal year 2006–2007:

1. a major upgrade to the IBM AS/400 computing system and associated software, personal computers, and network,

2. the remodeling of a living unit to expand the ISIS program, and

3. the construction of a cottage that would accommodate 10 additional students for the regular program.

Young would have responsibility for managing each of these major capital projects. All capital projects exceeding $25,000 had to be approved by the Board of Directors of Clarion, Inc. The Board was known for reviewing each capital request carefully.

Information Systems (IS) Planning

With labor costs representing 68 percent of the school’s operating budget, Young’s predecessor (Jacob Miller) considered computerization as one way to increase staff effectiveness and productivity in accessing information and to improve communications among the staff. Miller did not emphasize using automation to reduce cost directly (e.g., by reducing staff). On the recommendation of Miller in January 1998, the Clarion, Inc., Board of Directors approved the purchase of an IBM AS/400 computer and associated applications software.

Because Clarion, Inc., had many demands for its capital, Miller knew that capital expenditures for computers were considered difficult to justify, especially if the purchases were not connected directly to a new revenue stream. Nevertheless, members of the Board of Directors exhibited interest in the new information systems project even before the approval in 1998. As Miller began to describe the capabilities of the system in detail, the Board’s interest rose even further. Likewise, staff from all treatment programs and support areas expressed enthusiasm for the proposed benefits. Based mostly on the treatment staff’s support, the Board approved the project.

The stated objective of the hardware and software investment was to save staff time by using electronic communications, to accelerate routine tasks, and to provide easier, faster access to computerized student data. Critical functions at the time were considered to be electronic mail, student database access, analysis of the data held in the student database, and appointment/room scheduling. Applications software was purchased for each of these functions as well as support packages for accounting and human resources. The AS/400 system acquisition was supplemented by the purchase of 60 personal computers, replacing those that had been purchased from1993 through 1997.

In order to synchronize implementation of the 1998 computer acquisition project with the needs of all departments, the Clarion Board of Directors had also approved a long-range organization plan for the Milwaukee Division. A joint effort between Board members and staff from all levels had led to the adoption of the division’s first five-year plan. This comprehensive plan focused on both administrative and treatment issues and was also approved in January 1998.

Clarion—Milwaukee’s Computer System

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While no longer considered by some as state of the art, Clarion—Milwaukee’s computer network was custom-designed for its application needs in 1998. The distributed system was networked campuswide and linked the 60 IBM personal computers and attached laser printers. Each personal computer was provided with the latest version of Microsoft Windows as well as the Microsoft Office applications software suite. According to the IBM sales representative, the network architecture allowed for 40 to 50 more personal computers to be added over time. Additional AS/400 computers could also be networked to provide peer-to-peer communications if more central computing power was needed at the school. No access to the Internet was allowed at the time due to concerns over providing students’ access to potentially harmful material.

Because of severe budget constraints at Clarion from 2000 through 2004, no major upgrades to the AS/400 system were made. While all 60 personal computers were replaced in 2004 with the latest IBM desktops, the main system and its associated software remained the same as in 1998. Five IBM laptops were purchased for checkout by staff, and staff access to the Internet was allowed at that time.

The school’s AS/400 computer was located in the front office building, where 14 personal computers were also located (see Exhibit 1). The primary system console—used for initial program loads and file backups by Jean Baker (the senior bookkeeper who worked for Young)—and the school’s PBX unit (for the telephone system) were also located in the front office. The “white house,” where the offices of the Assistant to the Superintendent and the Controller were located, housed 10 of the 60 personal computers as well.

The education center contained all of Clarion—Milwaukee’s classrooms and was by far the largest building on campus. Of the 60 total, 24 personal computers were available in a pool in the staff lounge of the center for teachers and the education supervisor, who also shared these systems with personnel who worked under the supervisor of services and other staff who worked in the east wing of the center.

The ISIS treatment program was located in Sherer Hall. Twelve personal computers were available in a community cubicle office environment for shared use by treatment and support staff. The Knight, Gibson, and Kunkler Hall dormitories (that could each house up to 45 students) were not equipped with computers, nor were the maintenance facilities. The proposed addition would place personal computers in each of the dormitories for student use, but still would not permit Internet access for fear that residents might access inappropriate materials.

Evaluating the Current System

After having the same system (except for new PCs) for over eight years, Young thought that the computing system should be formally evaluated. During his first staff meeting in November 2005, Young asked whether the administrative and treatment staff thought the current campuswide IS architecture was sufficient for Clarion. He also asked the group if they viewed the network as an advantage Clarion—Milwaukee had over other schools providing similar services.

In order to focus the discussion, Young asked, “What are your opinions of the system?” A sampling of the answers follows (the organizations these people belong to are described in Exhibit 2):

“We use e-mail to distribute weekly teaching plans to our aides.” (Teacher)

“We put the whole report card process on the system. Each teacher an input grades from a PC—it saves a lot of time since the cards don’t have to go to each instructor individually.” (Education Supervisor)

EXHIBIT 1 Campus Computing Network: The Clarion School for Boys, Inc.—Milwaukee Division

EXHIBIT 2 Unit Duties and Organizational Chart: The Clarion School for Boys, Inc.—Milwaukee Division

“I recently talked with an old classmate of mine who is using a computerized database to store addresses for frequent mailings. He addresses envelopes through the printer in a fraction of the time it used to take. I send a lot of mail to local businesses every month. Can we do that on the system?” (Executive Secretary)

“We had two programmers working for us at my last school. They would ask us about our needs in admissions and would customize software that we licensed. I enjoyed using the system since I helped design the applications. Why don’t we have that kind of help?” (After Care and Admissions Coordinator)

“Since I just joined the Clarion staff about a month and a half ago, I’m not sure what is available on the system. We used computers extensively at my university. Are there training sessions offered so I can learn more about the system?” (Associate Program Supervisor for Activities and Honor Jobs)

Following the staff meeting, Young spent time trying to determine if the current system was really cost-effective for Clarion—Milwaukee Division. Although it was clear that the system had potential, his inquiry showed it was not getting the level of use his predecessor had envisioned.

Young realized he faced a challenge in convincing his boss of the need for any improvement in the current system. Superintendent McHardy had always been hesitant to incorporate any new technology into the school’s operations. Young once overheard McHardy mention to a Board member that he felt that “computer technology and the treatment of troubled boys just don’t mesh.”

A New Long-Range IS Plan

In December 2005, McHardy called Young into his office. “John,” he began, “I’m hearing that you’re asking questions about the computer system. Your inquiry matches my concerns about the way we are managing our information system—or should I say not managing it? From what I can tell, few people on Clarion—Milwaukee’s staff fully understand how our current systems are functioning and what capabilities are available. Furthermore, we have only sketchy ideas of what our IS objectives should be over the next few years—and most of those are probably only in your head.”

Young nodded in agreement, as if he truly had a vision of Clarion—Milwaukee’s IS strategy. McHardy continued, “We’ve also got to get a handle on the cost situation. Are you aware that we have spent more than $80,000 on hardware and software maintenance agreements alone in the last 12 months? I want you to really dig into the information systems area so you can include an assessment of where we are now and a long-term direction for information systems for the Clarion Board of Directors next June along with your regular business plan and budget presentation. Can you do it?”

In mid-January 2006, Young formed the Information Systems (IS) Task Force to help develop the IS assessment and plan. Besides Young, the six-member task force included Christopher Larson, Director for Treatment; Brian Thomas, Assistant to the Superintendent; Ann Lyman, Supervisor of Social Services; Lara Kirk, Education Supervisor; and Michael Todd, Program Supervisor. As indicated on the organization chart in Exhibit 2, the task force was composed primarily of department-level management.

At its first meeting, Young defined the objectives of the IS Task Force—to explore the IS needs of Clarion—Milwaukee employees and determine what enhancements (if any) should be made to the hardware, network, database, and software so that the information system would better fulfill the staff’s mission-critical requirements. At the meeting, Young suggested that task force responsibilities would require only minimal time commitment by the staff. He told the group simply “to keep your ear to the ground and listen for needs that are not being met.”

The IS Assessment Process

By their mid-February 2006 meeting, the IS Task Force members had not developed a list of new needs. Instead, they reported that they had received substantial informal input from staff indicating that the current system was not living up to expectations. In an effort to identify the root causes of these disappointments, the task force decided to conduct a staff survey with the goal of understanding the most common complaint—the lack of communications throughout the organization and the failure of the school’s information system to remedy the situation. The survey was distributed by Young’s office during March 2006. Some responses were not received until a full month later. Results of the survey are shown in Exhibit 3.

An initial review of the results of the IS Task Force’s survey indicated that personal contact was seen by the respondents as the most important form of communication among staff at Clarion—Milwaukee. Second was the telephone system. Third on the staff’s list was the AS/400’s electronic mail system. Most staff members were aware of the communications software products available on the AS/400, but many were not using them. Further down on the list of ways to communicate was reports. Although hundreds of different paper reports were processed regularly, the importance of these types of written communication was perceived as low.

The task force considered the possibility that the current information system had not proved as effective as hoped simply because it was not being used extensively by staff. By checking the system logs (an automatic record of system usage generated by the operating system), it was determined that while an employee might have been logged on the system for most of the day, he or she was actively using it less than 15 minutes each day. The task force members were not sure why the system was not being used as expected.

In addition to conducting the survey, task force members allotted time at their own departmental meetings in March 2006 and during one-on-one conversations to solicit responses from other members of the units for which they had primary responsibility. Discussion of these issues was awkward for some of the task force members because they were not well educated in the area of information systems.

Task Force Interviews

Highlights from the IS Task Force’s personal interviews helped better define the attitudes of Clarion—Milwaukee’s staff. One task force member, Lara Kirk, reported to the committee at its late-March 2006 meeting that she had conducted a group interview with instructors who had used the system for electronic mail. She recalled one teacher saying, “It was great during the first month or two when we could actually find a PC available, but after that, they got so crowded. I don’t have time to wait in line. I thought these were supposed to be personal computers.” Another added, “I have found PCs available early in the morning, say between eight o’clock and nine, but whenever I try to log on, I get a message telling me the system is not available. I think it says something about backups—whatever that means.”

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