Being Responsible and Creative in Financially Challenging Times - Notes from Midwest Regional Discussion Session

Being Responsible and Creative in Financially Challenging Times

Notes from Midwest Regional Discussion Session provided by Cathy O'Bryan

Discussion Group:  ~32 participants

I.        Share our campus effects of economic crisis

II.      How are we applying these effects creatively within IT

Endowment dived at Carroll Univ.; Board of Trustees have set 20% aside into safety nets for preservation; investment risk management.  Usually draw from endowment every year to support operating budget; will not do so this year.  Carroll U. will not not be taking any funds out of endowment this year.  Avoid withdrawing with market at a low.  Looking to reduce costs as a result.  Setting aside $200K for scholarships to help students afford tuition.  Enrollment is looking positive.  Not doing drastic cost cutting; not doing layoffs, but minimal raises.  Staggering raises to offset effect on budget depending on enrollment

Miami Univ.  Opportunity to do what we should have done years ago…. I.e. still have a dial-in modem pool = $135M; decreased by 2/3^rd; no one noticed; phasing out.  Need to make a $22million budget cut.  IT budget is $23million, need to cut %2.3 million.  Discontinued some earlier commitments for a total of $2.5 million cut total in IT.  Brainstorming on cutting expenses.  Established process for budget cut with guiding recommendations.  Pleased with the process itself.  13 staff positions will be eliminated.   Some will just not be recruited for a total cut of 22 IT staff.  Enrollment in fall may require more cuts.  Miami is heavily dependent on out- of-state tuition.  Applications are up for the year.  Using faculty to improve recruitment.  Hoping for payoffs on these new  very personal outreach efforts.  Old organizational structure won’t work with this large IT cut, reorganizing as a result.  Outsourced to a third party to obtain recommendations for restructure.  Recommended reduce leadership team by 3 people.  Challenges from staff from positions that are eliminated are underway.  These are being submitted to the president.

University of WI Madison:  5% cut exercises; deans charged with sending memos to chancellor with their priorities for cuts.  School of Ed. IT perspective.  Looking for partners; I.e. Bomgar on maintenance charge.  Discontinuing help desk ticketing product called Track It.  Stop annual maintenance.  Looking for open source tools and replacement firewall service modules.  Ditching large maintenance contract on firewall maintenance.  Large cuts to 101 state funded resources, continuous looking at cuts.  Roughly 1% set aside for ‘overcut’ and reallocation to key projects that will eventually reduce costs and eliminate duplication.

Ohio State U:  Political hot buttons with the need to reduce expenses has led to support to move forward on these controversial items.  Elimination of redundant systems, duplicative costs to be eliminated; political silos are highly discouraged by the funding challenges.  # of workstations per faculty reduced.  More control over inventory and asset management.  Seen as the silver lining to the budget cut.  Many of these thing should have happened before, but weren’t easy with available funding.   Expecting to 5 to 10% cut, unsure of actual amount at this time.

Benedictine University:  Creating cross-functional teams to help with recruitment and retention.  From an administrative point of view this is an opportunity to reallocate positions to more cost effective areas that need help.  Every vacated position is highly scrutinized, and will consider eliminating if not essential.  No layoffs anticipated.   Have been able to add onekey position to support the classroom technology.  CIO encouraging asking IT staff to examine purchasing choices to consider new brands;  CIO is challenging much more rigorously the cost differential for items.  Raises are unknown. Frozen tuition has been adopted to positively impact recruitment.  CFO has told everyone to expect 0% increase in capital budget for two years.  Looking for money to support tuition scholarships and book scholarships for students.

Are their projects within ITS that result from financial environment to increase revenue?

Ill:  LAS to attract resources???

Carroll:  ERP provider partnership to get ahead with a retention management system to identify at-risk students who may unable to complete degree by freshman or sophomore year.  Mid west is challenged with declining number of students at traditional college age.  Emphasis on retention as well as enrollment to insure revenue flow seen as a potential win for well-time ERP system deployment.

Univ. of Chicago:  Provide our own loans to students to provide replacement for bank loans should they become less available.

Australia vendor:  Protected by distance from financial crisis.  Had time to see it coming.  New strategies with improved websites are a theme to obtain the good will generated by new marketing efforts.  Previously universities needed long period of time to switch to open source technology  that can save money and time; now they are moving much more quickly.  Is the politics similar here?  Will universities continue to spend $$ on things that always work rather than consider new things?

Who is now considering open source that you wouldn’t have considered before?

‘Open source is free like a puppy is free.’   Long term viability of the product is very much part of the question.  So is scalability.  With mission critical systems, we need to plan contingently if vendors may not be here tomorrow.  Problems exist on both side of the fence.  State supported institutions have long, drawn-out  purchasing processes.  If you only have 6 months notice of vendor going out of business, it is asking for ‘miracle’ to complete RFP & RFI in that time.

Universities should ask for escrow agreements for code and maintenance.  Get this clause to avoid loss of service with the vendor goes out of business.  The more SaaS we do, the more we should consider data escrow services as well.  You then keep the data and/or code if the vendor goes out of service. 

Universities should also think differently about vendor financials.  Be very careful, depending upon on how they present it.  Look for longevity, access to capital, excluding line of credit.  Top line revenue makes no difference. Cash on hand, is much more important.  How does the cash on hand compare to critical operating expenses.  Look closely at that ratio.  Don’t just ask for numbers, think about the questions that you want answered.

Universities are looking for more the collaboration across the entire university for cost sharing on maintenance and other annual software costs.   Need to be collaborative because there are cost savings for doing so.  Negotiating for long term maintenance up front is emphasized with private vendor and in cost-sharing situations as well.

Carroll:  Will no longer be providing phone service in Res Halls.  Opt in only for next year.  Reducing manned hours in computer labs.  Reducing hours of help desksupport (24 by 7 currently); Looking to outsource support for CMS; some schools are down to 16 hours of daily help desk support.  Outsourcing is reducing costs for Ex. Ed. with international students, support 24 by 7 is needed.

Any other ways we are changing the ways we do business:  MIT and Wentworth Technology Institute; backup and disaster recovery were considering a backup hot site.  Now using Amazon elastic cloud services due to cost considerations.  MIT backups only the part they need.  Buy server cycles only when you need it.  Educause staff are doing the same.

Engineering  ERPS for less paper, less filing, less staff time.  Carroll has been trying to get business areas interested in similar improvement projects to avoid duplicated data entry.  Now due to the fiscal climate they are interested.   Increased need for Business Analysts and Project Managers to carryout these iniatives is seen across the board at universities. 

Collaborations with other institutions, within the higher education is see as preferable to vendors.   CIC Committee on Institutional Cooperation is trying to step up cross institutional sharing with the Big Ten schools and Univ. of Chicago.  CIO’s at these schools have been building out a fiber network.  As a direct result they have all this capacity to share amongst each other at much lower prices than vendor offerings. Reduce redundancies for email, help desks, duplicate on every campus, outsource to each other.  Still same trusted framework with close ties to institutions makes this cross-institutional cooperation more appealing.

Key success factors for collaboration:

Trust, history of working together and building things out over time, I.e. federating identities to provide cross institutional registration and working on sharing sensitive or student related data with each other.  Starting small, with manageable projects and goals that you can meet. 

How do you collaborate with your competitors for students?  Varying degrees of success with that; grant writing; research computing; these are much more competitive.  Avoiding the everyone should reinvent the wheel mindset on backend systems.  Purchasing those services from that one college and have 20 colleges share their service.  Different purchasing and legal requirements have made this challenging in some cases.

At OSU there are over 100 email systems, over 126 at last count.  A lot of distributed places are willing to give that up, but won’t give up the funding to the central IT to seed it.  Someone needs to be making these hard choices for them. 

If you were in charge, what would you do differently, ???? 

What would you mandate?  Why are we still paying the telecom provider several $100 a month for high speed bandwidth to outlying buildings?  Answer:  Zoning requirements sometimes prohibit the amount or type of equipment on the roof.

Two universities have outsourced entirely to Msoft or Google email.  Students only, not faculty and staff.  Slowly migrating old students.  New students move much more quickly.  Technical hurdles are minimal.  Msoft was very helpful and you could talk to them on the phone.  Really. Integrated with Exchange and Active Directory environment.  Google migration was also a great success.

Another uses Zimbra in-house.  Students seem enamored with Google not Msoft, but AD and Exchange environment prefers Msoft from university point of view.  Another university is likely to do both like IN.  Concerns:  support will skyrocket like IN, we also have no new release control and won’t get know when they happen or are prepared to support it.   Cost of doing this business; not as free as we think it is.  This is inevitable, this loss of control in the cloud.

No one has done the real cost study to show the savings of moving to a outsourced email with fac/staff email remaining.  How does it scale cost wise?  Do students really want another university-based  email account???  The biggest reason to keep in house; we want to be able to guarantee that if we want a message sent to all.  If we run the system, we can guaranteed that it is received.  Blacklisting makes that impossible with an outsourced system.  Yes, you go it!

Anything else?

Real opportunity for most people to move to something else… like a conversion, all of these new opportunities to reduce costs, measure everything against some sort of scorecard, real opportunity to do comparisons objectively.  An emergency now, will add credence to the need to have some objective form to the priority, costs, etc.  A governance path will pay benefits after the crisis is over.  Let’s use this as time to develop the filters and improve value.  Scorecard could be very simple.  Starts the conversation to eliminate pet projects or start something new?  Why?  Should be defensible?