CASE STUDY IV-1 The Clarion School for Boys, Inc.—
Milwaukee Division: Making
Information Systems Investments
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 had worked at ACC for 10
years after receiving his MBA in finance from a wellknown Midwestern business school.
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 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. 594 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 Case Study IV-1 • The Clarion School for Boys, Inc.—Milwaukee Division 595 charges. Unlike Clarion—Milwaukee, most other childcare 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
While no longer considered by some as state of the art,
Clarion—Milwaukee’s computer network was customdesigned 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 596 Part IV • The Information Management System 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) Maintenance
Education Center Scherer Hall Gibson
Hall Kunkler Hall
Knight
Hall Front Office
&
Main Reception Area
White House EXHIBIT 1 Campus Computing Network: The Clarion School for Boys, Inc.—
Milwaukee Division Case Study IV-1 • The Clarion School for Boys, Inc.—Milwaukee Division 597 Social Services Department
The social services department is responsible for ensuring that those under care receive the appropriate clinical treatment. Because
of the involvement of this department with the boys and their placing agencies as well as the wide variety of treatment options,
access to the treatment files as well as e-mail, mail routing, and dictation is extremely important. The supervisor of social services
functions as department head and is a member of the administrative council. She is also a member of the institutional treatment
team.
Social services counselors handle direct counseling and casework functions, enter various progress data, and serve as
members of the institutional treatment team and unit treatment teams. Most of the documents and reports that are the responsibility
of the unit treatment teams require user data entry and report generation on the part of counselors. Program Department
The program department is responsible for the group living environment as well as activities such as crisis intervention, recreation,
and special events of the treatment program. Staff members in this department supervise part-time employees within their treatment area (child-care workers, recreation workers, and program aides). One lead program supervisor functions as the primary
department head and needs access to computer treatment data and all other information resources. Seven associate program
supervisors share direct supervisory responsibility for the child-care and recreation data. Education Department
The education department is responsible for the operation of Clarion—Milwaukee’s comprehensive year-round education program.
Because the education department coordinates its activities with the program department, effective communication between these
departments is critical. The education supervisor functions as the principal for the school. She is a member of the administrative
council and the institutional treatment team. Within this department, 20 teachers provide instruction to the boys in a regular
classroom environment. Some teachers have telephones while others do not. Most communication is through direct contact and
written memos. Transition Department
The transition department is responsible for the treatment and care of 20 boys enrolled in Clarion—Milwaukee’s “transitional living”
program. In most respects, the transition program is a separate treatment entity with its own supervisory, counseling, and care
staff, but most supplementary functions are still performed by main campus personnel. The transition supervisor serves as the
department head and is on the institutional treatment team and the administrative council. ISIS Department
The ISIS department was created in response to the development of the ISIS rehabilitation program. The ISIS department reports to the
supervisor of social services but has its own program supervisor. ISIS social service counselors perform some of the same functions
as their counterparts in the regular program. Certain treatment needs require computer access to specialized treatment data. Development Department
The development department is responsible for all human resource issues and a variety of other tasks, including the fund-raising
efforts and public relations of Clarion—Milwaukee. The development director also serves as assistant to the superintendent. This
department has access to the AS/400-based human resources data, telecommunications, dictation, and mail routing. The director is
a member of the administrative council. Controller’s Department
The controller’s department performs purchasing, information systems, and financial control functions as well as all accounting and
treasury functions. The controller, who also assumes overall responsibility for finance, leads the department. The head bookkeeper
reports to the controller and spends about one-quarter of her time performing system operator responsibilities. Typical daily
tasks include answering users’ questions and performing file backups for the AS/400. The controller is also responsible for the
housekeeping and maintenance departments. Neither of these departments is tied into the computer network. EXHIBIT 2 Unit Duties and Organizational Chart: The Clarion School for Boys, Inc.—Milwaukee Division 598 Part IV • The Information Management System President, Clarion
School for Boys, Inc. Chief Operating Officer
and Superintendent
Milwaukee Division Executive
Secretary Director for
Treatment Controller Asst.
Superintendent/
Development
Director After Care and
Admissions
Coordinator
Supervisor of
Social
Services ISIS
Supervisor Education
Supervisor Program
Supervisor Transition
Supervisor EXHIBIT 2 Continued “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 Case Study IV-1 • The Clarion School for Boys, Inc.—Milwaukee Division 599 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 600 Part IV • The Information Management System Background
A questionnaire was distributed to all full-time employees except for janitorial and temporary services personnel. A one-week
turnaround time was requested. Although the employees were not required to identify themselves on the form, department
names were noted on each questionnaire befo...

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