Considering a Long-Term Edtech Contract? Ask These 4 Questions First

In the 2022-23 school year alone, districts across the United States used over 2,500 edtech products to support their students, teachers, administrators, and staff. 

2,500!

That number will only continue to hold steady — if not increase — with the advent of new tech tools focused on students, including AI writing assistants, online tutoring services, and more. And this means that you, a district administrator, might have a growing number of software contracts to manage! 

However, as an HR director or leader, you already have enough on your plate — from solving staffing logic puzzles to attracting and retaining teachers during a shortage. The last thing you need is the headache of extricating your organization from a long-term contract for an edtech platform that isn’t delivering the results your staff needs.

Yet this is exactly the problem that so many educators face when it comes to signing onto multi-year deals with vendors. Over and over again.

Why are long-term contracts so attractive for district and school administrators? What are the hidden costs of these seemingly great opportunities to save money and support students or staff? How can districts evaluate if a multi-year contract for edtech software — specifically an absence management solution — is right for them?

In this article, we explain the not-so-secret downsides to this common vendor practice and provide you with key questions your organization can ask itself before signing any multi-year contract.

The “new car” dilemma

A long-term contract in edtech is much like a brand-new car on a dealer’s lot. It looks stunning to behold, and the vendor may even have thrown in a few perks or knocked down the price to sweeten the deal. On the surface, buying that new car seems like a great idea.

However, any economist would tell you that, the moment a new car drives off a dealer’s lot, its value immediately diminishes.

Let’s explore what attracts educators to long-term contracts for edtech solutions in the first place — and why it’s essential to check, double-check, and triple-check the fine print when the time to sign comes around.

Shiny-object syndrome: why long-term contracts appear attractive in K12 education

When pitching their products to districts, edtech vendors work hard to make multi-year contracts look like the best options for both parties. Below are just a few of the common incentives they offer to entice education leaders to sign a long-term agreement:

• The longer the term, the deeper the discounts. Many vendors offer discounts that scale strategically with the duration of a partnership. Their logic is that, with a longer commitment by a district, vendors reward educators for their dedication. Vendors in turn receive the benefits of an assured partnership and the accompanying revenue projected. Allegedly, it’s a “win-win” scenario.
• “Lock in” a yearly rate. For districts with lean budgets or even uncertain consistency year to year with financial resource allocations, a “locked-in” rate sure sounds promising. In theory, having the same cost allocated for multiple years should simplify budgeting — especially for certain funding sources that have an expiration date attached, such as ESSER. However, to secure these rates, vendors often require districts to sign multi-year contracts.
• Become a “strategic” partner. It’s not uncommon to hear talk of long-term contracts unlocking certain “special” support, resources, and other bonuses that may not “typically” be available to new district partners. Though not explicitly described this way, you may hear vendors describe faster customer service response times, mention a more hands-on approach to onboarding, or even offer additional training or support calls free of charge — all in exchange for a longer-term partnership in writing.
• A great first impression. Districts don’t usually see this attractor unless they’ve already entered into a long-term partnership with a vendor. But when the ink dries on such contracts, vendors are quick to impress districts with high-touch, responsive services during the first few months of partnership and onboarding.

As with any honeymoon phase of a new relationship, these incentives and immediate benefits for districts make multi-year contracts look that much more appealing.

Unfortunately, every honeymoon phase comes to an end.

Reality check: why multi-year contracts create more issues than solve

Despite the many efforts by vendors to encourage districts to sign long-term contracts, these kinds of partnerships bring significant downsides — ones that lurk in the shadows until it’s too late to address them. 

Here are just a few of the detractors that whittle down the value of a multi-year agreement from the start:

• Payment upfront to secure discounts or extra bonuses. Any vendor would be delighted to receive payment upfront for a multi-year contract from a school district. But this is a major red flag for districts, even those attempting to use specific time-sensitive funds such as ESSER. Why pay for a new product if its impact on your unique priorities and school communities has yet to be proven?
• A “locked in” rate means a “locked in” partner. No vendor wants to lose a customer relationship. In the case of long-term partnerships, districts may be surprised to discover that the fine print does not offer them many opportunities to back out of an agreement, except in egregious cases where terms are grossly unfulfilled. At best, the exit clause is vague and written exclusively with the vendor in mind. At worst, districts might be forced to pay a penalty to the vendor for breaking a contract early.
• Diminishing customer service quality. It’s not uncommon for districts to discover that the initial “white glove” support they received from a vendor in the early days quickly dissipates as the implementation settles into a maintenance phase. All those promises of high-quality support and “strategic” services (unless spelled out clearly in the contract) diminish over time as the vendor’s attention and priorities shift to other partnerships.
• Lump sum costs. One of the most dangerous aspects of long-term contracts is their tendency to lump the costs of multiple services and line items into one number. For districts, it muddies the waters of the actual ROI on their investments in a product. It also makes it difficult to tell if district teams are using everything that they’re paying a vendor for — if they can even distill the exact services or features they’re paying for at all!

In the end, when any (or multiple) of these pain points emerge — or worse, when a solution does not deliver on its promised impact — your teachers and staff are the ones who pay in time and frustration. Multi-year agreements mean you’re stuck using a product your staff are fed up with for that much longer.

To quote an IT director’s apt explanation from a 2020 online forum:

“I'd much prefer 1-year contracts, rolling if possible — being stuck with a service [that] you don't like or [that] deteriorates over the years is the worst.”

4 Questions to Ask Before Signing

HR Directors, you’re not alone in navigating the complexity and allure of long-term contracts! To support your teams in making the best decision for your organizations, we’ve compiled four critical questions to ask while reviewing an edtech contract before writing your name on the dotted line.

#1: Are the right team members aware of and in the loop about this contract?

This may seem simple, but it is critical to ensure that you have the right people in the room to review and negotiate any contract. This includes the business manager, representatives from adjacent departments who may benefit from a new solution, and those roles who ultimately will manage the solution if purchased. All these voices help determine if a short- or long-term contract is right for your organization.

In particular, make sure the entire team understands the exit clause and processes. This is critical for any contract, not just for edtech software. It’s also essential to be transparent, if possible, about the resources that will fund the solution purchase. Most funding sources will have certain reporting requirements to justify a purchase, so keep these factors in mind as you proceed through the remaining questions.

#2: What’s the ROI we need to see on our investment? When should we see it?

Once aligned, your team can focus to defining the ROI of the solution. Every purchase a district makes is, in some shape or form, examined for its ultimate impact on the lives of teachers, students, school staff, or administrators. If you’re considering a new solution for a core HR process, like absence management, a smooth implementation will rely on making the must-have requirements clearly spelled out for all stakeholders.

In particular, focus on clarifying the following:

• Which outcomes do our team want to improve by implementing this solution? For example, is the goal to save HR admin time through automation? To streamline data management across multiple tools? To generate substitute teacher delight?
• How quickly should this solution (realistically) create tangible results according to these goals? HINT: If you expect to see improvements in less than 12 months, don’t sign a multi-year contract!
• What data does your team need to measure progress against these outcomes?

#3: How flexible, collaborative, and responsive is this vendor? What evidence supports the story about their services?

Though it can be challenging to assess before entering into a partnership, it helps to look for evidence of positive or negative experiences with a vendor’s services.

During contract negotiations, you can test these waters by reflecting on the vendor’s openness to make changes to their often boilerplate contracts, such as adding in or tightening customer support SLAs. You can also try asking for evidence from the vendor of the last time they implemented a customer-requested feature. In particular, look for examples of scenarios like feature requests being fulfilled or exceptional response times by customer support in testimonials and other online reviews from current customers.

K12 educators deserve exceptional and receptive vendors who are willing to nurture a two-way partnership. Read the story of Glenbrook High School District 225 for an example of the customer service standards that Red Rover practices with every one of its partners.

#4: Do we see clearly how a solution’s price tag breaks down in terms of features and services?

It bears repeating that, if you cannot see the exact breakdown of tools and services you’re paying for — proceed with extreme caution!

Here are a few details you can look for in any software contract to determine if you’re facing lump sum costs:

• Customer support SLAs — What response time does the contract guarantee? Is there a consequence spelled out for the vendor’s failure to meet these SLAs?
• Costs per user — Are costs associated with creating user accounts clearly documented? Is there a penalty or extra charge associated with exceeding allotted user licenses, if applicable?
• Onboarding and training services — Does the contract identify specific events, resources, or touch points associated with initial implementation? How many of each type of service are guaranteed? Are the costs of additional services beyond those guaranteed clearly outlined?
• Data management, integration, and interoperability — Does the contract clarify the costs and services for managing solution data, requesting exports or custom reports, or improving the solution’s interoperability with other platforms you’re using? Is there a recurring fee for routine maintenance on the platform after onboarding?

Similar to the questions above, these guidelines below can help you determine if your existing partnerships are fulfilling the costs associated with them.

Why Red Rover Focuses on Partners First

We at Red Rover believe that K12 districts and schools deserve better — better solutions, better services, and better partners.

That’s why we keep our pricing transparent, predictable, and affordable for all of our customers. From day 1 to day 501 and beyond, we give our partners the flexibility they need.

Our mission is to modernize K12 workforce management and save educators time, money, and energy for the real goal: improving student learning and teaching practices.

Request a demo or contact our team to learn more about how we can ensure your absence and substitute management systems work for you, not against you.