For discussion
FCR(98-99)5
on 3 April 1998

ITEM FOR FINANCE COMMITTEE

CAPITAL WORKS RESERVE FUND
HEAD 710 - COMPUTERISATION
Education Department
New Subhead "Implementation of Information Systems
Strategy 1998 Phase I"

Members are invited to approve a new commitment of $357,130,000 for rectifying the computer systems of the Education Department for Year 2000 compliance and implementing a Target Oriented Curriculum System under Phase I of the Information Systems Strategy 1998 of the Education Department.

PROBLEM

The computer systems of the Education Department (ED) are not fully Year 2000 (Y2K) compliant. If not rectified in time, this will impair the operations of the department and its services to schools and the public. Moreover, the existing information systems strategy implemented since 1993 in ED cannot support the information needs for implementing the Target Oriented Curriculum (TOC).

PROPOSAL

2. The Director of Education (D of E) proposes to create a new commitment of $357,130,000 for implementing a Y2K Compliance Project and a TOC System in ED as part of Phase I of its Information Systems Strategy 1998
(ISS 1998).

JUSTIFICATION

Y2K Compliance Project

3. ED uses information technology (IT) widely to support its
day-to-day operations and services to schools and the public. These include, for example, computer systems facilitating school administration and management, registration of schools and school managers, allocation of school places, etc. In addition, the computer systems of ED interface with other government bureaux, departments and relevant public organisations (such as the Hong Kong Examinations Authority).

4. In mid-1997, ED and Information Technology Services Department (ITSD) jointly conducted a technical study on Y2K compliance for the existing computer systems of ED. The study has established that a Y2K project is necessary to ensure that the computer systems of ED can continue to function efficiently and provide uninterrupted service to users beyond the year 2000. The rectification works, which need to be completed by mid-1999, include upgrading or replacing non-compliant system hardware and software, and rectifying non-compliant software applications developed in-house.

The TOC System

5. TOC is an innovative way of teaching and learning whereby students achieve their learning objectives by attaining the learning dimensions of individual subjects. In order to know whether students are able to attain the set targets, ED has introduced a formative assessment based on criteria reference principle to record the day-to-day progress of students and to identify the strengths and weaknesses of students for individual attention. We will extend TOC for the core subjects of Chinese, English and Mathematics to all primary levels in the 2000/01 school year.

6. We need to install a computerised management system in ED and schools to support the implementation of TOC. We will provide schools with additional computers, from one to six depending on their size, to link up with the existing School Administration and Management System. The TOC System aims to -

1. provide an ‘easy to learn and use ' tool for teachers to plan, record and report TOC assessments in respect of the three core subjects of Chinese, English and Mathematics;

2. facilitate the analysis of assessment data within schools for effective monitoring of students ' performance;

3. provide an effective and efficient means for teachers to access and use exemplar learning and assessment tasks; and

4. enable ED to effectively access aggregated assessment data for the purpose of monitoring overall performance and to access individual student assessment data for allocating Secondary One Places.

7. We expect that the proposed TOC System will bring about further benefits, such as -

1. providing built-in consistency checking for determining Bands of Performance and reduce clerical errors, thereby improving the quality, accuracy and consistency of assessment; and

2. reducing lead time for disseminating curriculum information from four months to within one week and that for exemplar task materials from four months to within two weeks.

Other projects in ED ' s ISS 1998 Phase I

8. Other than the Y2K Compliance Project and the TOC System, ED ' s ISS 1998 Phase I also comprises the following eight projects -

1. Infrastructure Enhancement Project (Phase I);

2. Internet Opportunities Project (Phase I);

3. Newly Arrived Children Support Information System;

4. System Enhancement Project (Phase I);

5. Personnel Information Management System;

6. School Accountability and Improvement Project;

7. Special Education Information System; and

8. Whole School Inspection and School Benchmarking System.

We will conduct feasibility studies on the above projects and, in the light of the findings of the studies, we will seek funding for their implementation.

Staffing Support for IT development in ED

9. In 1994, ED established an Information Systems (IS) Division to manage the projects under its Information System Strategy 1993 (ISS 1993). Finance Committee approved the creation of three permanent directorate posts of one Assistant Director of Education and two Principal Education Officers to staff this new IS Division. Although the posts were created on a permanent basis, Members were then advised that we would critically review the roles of the officers and the continued need for dedicated directorate support in the light of experience and progress of each project. We further advised that towards the end of the implementation of ISS 1993, that is, by March 1998, we would conduct a full scale review.

10. In consultation with the Civil Service Bureau and Finance Bureau, D of E has completed the review and concluded that there is a strong need to continue to have a dedicated team to steer ED ' s IT projects, including the one proposed in this paper and others identified in the ISS 1998. She considers that continuity, experience and knowledge in the team will be conducive to a successful implementation of the ISS 1998 Phase I projects and various other initiatives regarding the use of IT in teaching and learning. D of E will review the continued need for these posts in three years ' time.

Cost-benefit analysis

Y2K Compliance Project

11. As the Y2K project is to ensure the continued effective operation of the various computer systems beyond the year 2000, the normal cost-benefit analysis (CBA) is not entirely applicable. However, successful completion of the project would avoid computer breakdowns and/or system failures which could disrupt the provision of services by ED and result in ineffective use of resources.

The TOC System

12. The tangible benefits of the TOC information system are not significant at this stage partly because other projects under the ISS 1998 are yet to be implemented to reap an aggregated effect. Furthermore, the benefits of the TOC are more of an intangible nature and cannot be quantified easily in financial terms. Collectively, they will provide efficiency in processing information; faster turnaround of reporting; faster and more efficient decision-making; more accurate and timely information; and smooth implementation of the TOC initiative.

13. D of E expects that much of the savings of the TOC System would come from avoidance of costs of teaching and clerical staff, which might otherwise be required to implement TOC for schools. She estimates that inclusive of cost avoidance, the System would start to generate a net benefit from 2001-02. Upon full implementation of the System in 2004-05, annually recurrent realisable savings would amount to $6.09 million, being saving in expenses for stationery, printing, postage and employment of temporary staff.

14. A detailed cost-benefit analysis for the implementation of the TOC System is at the Enclosure.

FINANCIAL IMPLICATIONS

Y2K Compliance Project

Non-recurrent cost

15. D of E estimates that implementation of the Y2K Compliance Project will incur a total non-recurrent cost of $16,330,000, made up as follows -

		1998-99 $ million	1999-2000 $ million	Total $ million
Non-recurrent cost for development and implementation
(a)	Hardware and software	3.18	0	3.18
(b)	Implementation services	6.24	0.18	6.42
(c)	Data conversion	0.25	0.02	0.27
(d)	Contingency (10%)	0.03	0.96	0.99
	Sub-total	9.70	1.16	10.86

Non-recurrent staff cost
(e)	Staff cost
	ED	2.18	0.20	2.38
	ITSD	2.95	0.14	3.09
	Sub-total	5.13	0.34	5.47
	Total	14.83	1.50	16.33

Items (a) to (d) represent the non-recurrent expenditure for which we are seeking a commitment.

16. As regards paragraph 15(a), the expenditure is for acquisition and installation of computer hardware and software and network equipment including upgrading of 1 580 copies of communication software.

17. As regards paragraph 15(b), the expenditure is for acquisition of contract services including 1.4 man-months of project manager, 39.5 man-months of system analyst, 94 man-months of programmer and 1.7 man-months of temporary staff for development and implementation of the system.

18. As regards paragraph 15(c), the expenditure is for hire of 8.5 man-months of temporary staff for data conversion.

19. As regards paragraph 15(e), the expenditure is for meeting the staff cost in ED and ITSD for supervising, developing and managing the project. The non-recurrent staffing requirements of ED include 2.3 man-years of Education Officer (Administration) grade officer and 0.6 man-year of clerical staff. The non-recurrent staff requirements of ITSD include 3.5 man-years of Analyst/Programmer grade officer.

20. The non-recurrent staffing requirements of ED and ITSD will be met by creation of additional posts and internal redeployment where appropriate. A supernumerary post of Chief Systems Manager approved by Finance Committee
on 20 March 1998 for the enhancement of the use of IT in education will oversee the progress of ISS 1998 Phase I projects.

Recurrent cost

21. As the Y2K project is a one-off rectification work, it will not incur any additional recurrent expenditure.

The TOC System

Non-recurrent cost

22. D of E estimates that the implementation of the TOC System will incur a total non-recurrent cost of $473,840,000, made up as follows -

		1998-99 $million	1999-2000 $million	2000-01 $million	2001-02 $million	2002-03 $million	2003-04 $million	2004-05 $million	Total $million
Non-recurrent costs for development and implementation
(a)	Hardware and software	20.76	33.06	41.32	41.77	32.90	15.03	2.35	187.19
(b)	Implementation services	30.59	28.90	23.79	5.00	2.72	0.72	0	91.72
(c)	Training	0.72	1.71	2.12	2.10	1.54	1.29	0.02	9.50
(d)	Data conversion and site preparation	3.02	5.15	6.08	6.08	4.06	1.00	0	25.39
(e)	Miscellaneous items	0.51	0.30	0.13	0.11	0.11	0.11	0.03	1.30
(f)	Contingency (10%)	0.59	0.29	0.29	0.17	0.14	16.16	13.53	31.17
	Sub-total	56.19	69.41	73.73	55.23	41.47	34.31	15.93	346.27
Non-recurrent staff cost
(g)	Staff cost
	ED	36.09	33.14	18.44	7.96	7.63	3.41	0	106.67
	ITSD	6.74	9.55	2.93	0.56	0.56	0.56	0	20.90
	Sub-total	42.83	42.69	21.37	8.52	8.19	3.97	0	127.57
	Total	99.02	112.10	95.10	63.75	49.66	38.28	15.93	473.84

Items (a) to (f) represent the non-recurrent expenditure for which we are seeking a commitment.

23. As regards paragraph 22(a), the expenditure is for acquisition and installation of computer hardware and software and network equipment in ED and schools, including 2 400 computers and about 700 to 800 servers.

24. As regards paragraph 22(b), the expenditure is for acquisition of contract services including 19.9 man-months of project manager, 103.7 man-months of system analyst, 48.8 man-months of programmer, 24 man-months of project assistant, 934.2 man-months of implementation service provider and
170 man-months of temporary staff for development and implementation of the system.

25. As regards paragraph 22(c), the expenditure is mainly for hire of training agents and 216 man-months of temporary staff for training of about 19 000 teachers and departmental staff.

26. As regards paragraph 22(d), the expenditure is for hire of service provider and 165.5 man-months of temporary staff for data conversion and site preparation.

27. As regards paragraph 22(e), the expenditure is for provision of consumables, furniture and equipment and other project related services.

28. As regards paragraph 22(g), the expenditure is for meeting the staff cost in ED and ITSD for supervising, developing and managing the TOC Project including the programme management aspect. The staff are required to undertake supporting activities such as specification of user requirements, user acceptance test, site preparation, roll-out, extended school support and general administration. The non-recurrent staffing requirements of ED include six man-years of directorate grade officer, 28.2 man-years of Education Officer (Administration) grade officer, 8.8 man-years of Executive Officer, 20.9 man-years of clerical staff, four man-years of Personal Secretary, 2.2 man-years of workman, 2.8 man-years of Vice-principal and 50.3 man-years of Inspector (Graduate) grade officer.

29. As regards ITSD, the non-recurrent staffing requirements include 19.5 man-years of Analyst/Programmer grade officer for overall management of the project, acquisition of contract service, provision of supervision to and quality

assurance on contract services and procurement of hardware and software, etc. and six man-years of Computer Operator grade officer for providing advice on drawing up guidelines in site preparation, signal cable installation and equipment installation, etc. As in the case of the Y2K project, the Chief System Manager mentioned in paragraph 20 above will also supervise the TOC project.

Recurrent cost

30. D of E estimates that the annually recurrent cost of the proposal will be as follows -

		1998-99 $ million	Full year cost $ million
(a)	Hardware and software maintenance	0.24	18.81
(b)	Contract services	1.04	29.20
(c)	Training and support	0.02	0.03
(d)	Miscellaneous items	0.25	5.55
	Sub-total	1.55	53.59
(e)	Staff cost
	ED	0.25	22.74
	ITSD	0	3.71
	Sub-total	0.25	26.45
	Total	1.80	80.04

31. As regards paragraph 30(a), the expenditure is for maintenance service charges for the computer hardware, software licences, maintenance fees and computer bureau charges estimated at 10% of cost of equipment cost as in previous contracts.

32. As regards paragraph 30(b), the expenditure is for employment of contract services including 21 man-months of programme manager, 74.9 man-months of system analyst, 15.7 man-months of programmer, 12 man-months of project assistant and 286 man-months of implementation service providers for providing on-going technical support and maintenance services.

33. As regards paragraph 30(c), the expenditure is for providing on-going training of teachers and departmental staff.

34. As regards paragraph 30(d), the expenditure is for provision of consumables such as data cartridge, computer forms, toner for laser printer and raw CD and other project related services.

35. As regards paragraph 30(e), the expenditure is for meeting the staff cost in ED and ITSD for on-going end-user support, help-desk services, technical support and maintenance services relating to the computer system. We estimate that upon full implementation of the TOC System, the recurrent staffing requirements of ED would comprise one post of directorate grade officer, four posts of Education Officer (Administration) grade officer, four posts of Executive Officer, five posts of clerical staff, one post of Personal Secretary, one post of workman, one post of Vice-principal, eight posts of Inspector (Graduate) grade officer and three posts of Computer Operator grade officer. We will review these requirements in 1999-2000 when we have more information about the likely operational needs of the system before we seek approval of Finance Committee, through its Establishment Subcommittee, for the creation of the directorate post and creation of the non-directorate posts through the Departmental Establishment Committee machinery.

36. As regards ITSD, the recurrent staffing requirements include three posts of Analyst/Programmer grade officer.

BACKGROUND INFORMATION

37. The purpose of the ISS approved in 1993 was to maximise the effective utilisation of resources through the introduction of new IT facilities for both ED and schools. Upon completion in 1998, a basic IT network linking up ED, the Hong Kong Examinations Authority and some 1 200 primary and secondary schools throughout Hong Kong will have been established. We will provide schools with computer applications to facilitate school administration and management, student attendance and assessment, planning of timetables, staff deployment, and financial monitoring and planning.

38. We commissioned an ISS review in late 1996 to update ED ' s current ISS plan and chart a future strategy in the face of changes in school environment, new policies, workload and other requirements. The review was completed in September 1997. It recommends the implementation of 23 essential IT projects to meet latest information needs of ED and schools, including the Y2K Compliance Project and the TOC System in this submission.

39. The implementation of the 1993 ISS projects has achieved efficiency and savings which will be realised in phases starting from 1998. The TOC System, Y2K Compliance Project and other ISS 1998 projects are expected to
bring about further savings, sustain operational efficiency accrued from the 1993 ISS, and significantly improve the quality of educational services.

Education and Manpower Bureau
March 1998