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Counting down on the Top Ten IT Issues 2012:  http://www.educause.edu/ero/article/top-ten-it-issues-2012
Issue #7: Funding Information Technology Strategically

The IT funding issue is an ongoing conversation, not a problem that can be resolved conclusively. In addition to the general financial squeeze that educational institutions currently feel, other important factors are influencing campus IT funding. As IT resources are becoming more decentralized—putting resources where they are needed—the IT funding big picture becomes more difficult to see clearly. For similar reasons, it is very important that IT funding is not viewed as unrelated to other academic and operational decision-making about funding. Information technology serves the mission of the institution; strategic decisions about funding can be made only when the relationship between technology and that mission is clear. As Christopher Watts noted: "To put it another way, you don't plan a trip to the moon without arranging for transportation, and you don't build a rocket if you're not planning a trip." Thus, the IT organization needs to engage its institutional colleagues in the processes of setting funding priorities and building their ownership in the decisions.

"Transparency and ongoing communication across the campus are more critical than ever to avoid unnecessary redundancies and to help ensure that different groups do not inadvertently work at cross-purposes."
—Christopher Watts, Director, Newell Center for Arts Technology, St. Lawrence University
_____

Ah, the never-ending quest of "how will we pay for all of this technology?" - and the corollary question from our campus presidents:  "Why is this all so expensive?"  For a while, whenever I entered a meeting in our president's office, he would start the meeting with "How much is this going to cost me today?"

Two of the posted questions are close in nature:
  • How can IT leaders create an institution-wide view of IT funding and expenditures? What relationships and partnerships will they need to cultivate to do so? What business processes might need to be changed to create such a view on an ongoing basis?
  • How can IT leaders interweave an IT funding component into broader, institutional initiatives to ensure the IT organization is funded appropriately to be able to deliver what is needed?
I have one strategy to share.  We had software licenses embedded in different funds across our UTS central IT organization, and in some cases, across the university.  In fund accounting, there was a sub-code to indicate software, but it was very difficult to assess what the university was paying for software, particularly enterprise and mission critical software.  Within central IT, all the licenses were increasing with year-over-year percentages that were different, and it became very difficult to predict the needed budget.  I found myself annually going to campus leadership and begging for funds to cover increases, even though in some cases the original purchase was board approved.  It was difficult to get the campus leadership to understand the funding commitment made in software licensing.  It was becoming a routine annual event to permanently reduce some area of the central IT budget in order to cover a software increase.

Actions I took:
  • Created a separate fund in central IT and moved all central IT managed software to be paid from that fund, including all ERP software, all network software, and broadly used desktop software like the Microsoft Campus Agreement.
  • Created a spreadsheet listing all the software, with the projected year-over-year increases, and showing a projected total software budget over five years.  Maintenance of this spreadsheet is now a routine part of a staff member's job.  These two steps actually took a couple years to do!
  • Every new purchase serving the "campus" was added to the list.
  • Then I started lobbying senior campus leaders about doing long-range budget commitments to the software on the list.  It took a while, but they finally agreed to change the funding source of that separate software fund to "central funds", similar to a utility, rather than general fund.  On my campus, that means that the annual software increases for committed software are funded "off the top" like annual utility increases, amounting to an automatic annual budget increase.  I no longer have to make an annual case or reduce budgets elsewhere to cover annual increases. 
  • Campus financial leadership said that if we drop a software package, the "savings" will return to central funds, rather than my department (as was the case before) but that happens so rarely it really isn't an issue for me.  If in the future we replace software on that list with "open source", we will need to develop a strategy for funding the support model for the open source solution.  We dropped email for a Google implementation, for example, so the software savings did not return to my organization for reuse somewhere else.

This has opened the door for an annual formal conversation with financial leadership about the university's software commitment and what that list of software does for the university, which I think gets at the "institution-wide view of IT funding and expenditures."

I had similar problems with our Internet bill, but with our wonderful relationship with Merit in our state, this was much more manageable.  Still, it took a couple years to get the university to commit to paying the bill with permanently allocated budget, instead of annual faculty-salary savings.  We've been able to manage our campus network with a 20-25% a year cyclical replacement.

I'm struggling a bit more to find a cyclical replacement model for key infrastructure, like the virtual server environment.

What other stories are out there?



Best wishes, and I encourage everyone to share.  This group is amazing for their great willingness to share creative ideas.


Theresa


--
Theresa Rowe
Chief Information Officer
Oakland University
 
********** Participation and subscription information for this EDUCAUSE Constituent Group discussion list can be found at http://www.educause.edu/groups/.

Comments




Jack Suess             UMBC VP of IT & CIO
jack@umbc.edu     1000 Hilltop Circle
410.455.2582          Baltimore Md, 21250
Homepage:             http://bit.ly/fSB5ID




Communicating with your CFO seems to be key to funding success.  What methods or approaches do you use to successfully communicate with your CFO?

Educause resources might be helpful when considering how to communicate to your CFO:

There were reports of CIOs moving organizationally to reporting to the CFO.  If you report to your CFO, how is that working out? 


http://www.educause.edu/ero/article/cfos-talk-about-finances-glimmers-hope  CFOs Talk About Finances...
http://www.educause.edu/library/resources/dynamic-duo-cfocio-partnerships-surviving-economic-downturn  The Dynamic Duo:  CFO/CIO Partnerships...


Terrie


I do, and have for years. It's great, as long as you have the right CFO, and communicate ... Don't ever allow him/her to be surprised by not being aware of something that is happening in your area. Carmen A. Rahm Asst. VP for Information Technology Central Washington University 400 East University Way Ellensburg, WA 98926 Direct Phone: (509) 963-2925 Mobile Phone: (360) 271-2992 ITS Office Phone: (509) 963-2333 ITS HelpDesk: (509) 963-2001 ITS Homepage: www.cwu.edu/~its Go Green: Emails use 100% recycled electrons! >>> Theresa Rowe 07/10/12 05:51 AM >>> Communicating with your CFO seems to be key to funding success. What methods or approaches do you use to successfully communicate with your CFO? Educause resources might be helpful when considering how to communicate to your CFO: There were reports of CIOs moving organizationally to reporting to the CFO. If you report to your CFO, how is that working out? http://www.educause.edu/ero/article/cfos-talk-about-finances-glimmers-hope CFOs Talk About Finances... http://www.educause.edu/library/resources/dynamic-duo-cfocio-partnership... The Dynamic Duo: CFO/CIO Partnerships... Terrie
While I report to the president, I fully understand that the CFO and Provost -- along with the President are the key people on funding decisions. As a result, even though I don't report to them I meet with both the Provost and CFO at least once a month in a one-on-one. I focus mostly on what they are trying to do and make sure that I can give them honest feedback on challenges and issues facing them. Sometimes it is easier when you don't report up to them to give them honest appraisals of what is happening.

One important piece that IT brings to the table is we interact with everyone. I can help the provost understand issues outside the academic area and I can help the CFO understand some issues in the academic side. 

Carmen's point is very important, CFO's tend to be detail oriented. We had a difficult ERP implementation years back -- I leveraged the fact that my CFO had a long commute every day and caught up with hi 2-3 times a week on the phone as he was stuck in traffic getting his input and keeping him abreast of issues. He felt it was important that he always had the latest information so if someone raised a point he could note how it was being addressed. 

On the Provost side, while many are equally detail oriented, they have so many issues hitting them that I've found they just want to know with confidence that if they assign you something it will get done.

What educause could do is partner more with NACUBO on common issues and encourage CIO/CFO teams to come to the event. EDUCAUSE did this on cloud computing and security. I think there are some potential opportunities in research administration, compliance, analytics, and training and development of the higher ed workforce where CIO's and CFO's could do more together. Those areas tend to be inter-disciplinary in nature require multiple people bring expertise to the table to get the best solution.

jack




I'd like to put a strong vote for a comment Jack made:

What educause could do is partner more with NACUBO on common issues and encourage CIO/CFO teams to come to the event. EDUCAUSE did this on cloud computing and security. I think there are some potential opportunities in research administration, compliance, analytics, and training and development of the higher ed workforce where CIO's and CFO's could do more together. Those areas tend to be inter-disciplinary in nature require multiple people bring expertise to the table to get the best solution.

This would be great.  I have found that keeping my CFO educated and apprised is a key to a successful relationship.  It reduces the what-I-read-in-the-airplane-magazine effect, and even reduces the what-I-read-in-the-airplane-magazine effect coming from the president, because the CFO has the information up front to help answer questions.  I think my CFO would gladly come to an EDUCAUSE conference if I encouraged him to, but I haven't yet because I don't think there's enough content that would be relevant to him.

Several years ago there was a joint annual conference of NACUBO (the business officers), APPA (the facilities folks) and SCUP (the capital planners)--in Honolulu!  In that vein, it seems like it might be interesting to discuss a joint NACUBO-EDUCAUSE annual conference.  (Especially if it's in Honolulu.)

Eric  


-- 
Eric Bird
Associate Vice President for Technology and Chief Information Officer
Massachusetts College of Art and Design
621 Huntington Ave.
Boston, MA 02115
ph: 617-879-7878
fax: 617-879-7979
email: eric.bird@massart.edu

Technology staff will NEVER ask for your password, particularly not by email.  Any request for it is a scam and should be ignored.

From: Jack Suess <jack@UMBC.EDU>
Reply-To: The EDUCAUSE CIO Constituent Group Listserv <CIO@LISTSERV.EDUCAUSE.EDU>
To: "CIO@LISTSERV.EDUCAUSE.EDU" <CIO@LISTSERV.EDUCAUSE.EDU>
Subject: Re: [CIO] Topic #7 Funding Information Technology Strategically

While I report to the president, I fully understand that the CFO and Provost -- along with the President are the key people on funding decisions. As a result, even though I don't report to them I meet with both the Provost and CFO at least once a month in a one-on-one. I focus mostly on what they are trying to do and make sure that I can give them honest feedback on challenges and issues facing them. Sometimes it is easier when you don't report up to them to give them honest appraisals of what is happening.

One important piece that IT brings to the table is we interact with everyone. I can help the provost understand issues outside the academic area and I can help the CFO understand some issues in the academic side. 

Carmen's point is very important, CFO's tend to be detail oriented. We had a difficult ERP implementation years back -- I leveraged the fact that my CFO had a long commute every day and caught up with hi 2-3 times a week on the phone as he was stuck in traffic getting his input and keeping him abreast of issues. He felt it was important that he always had the latest information so if someone raised a point he could note how it was being addressed. 

On the Provost side, while many are equally detail oriented, they have so many issues hitting them that I've found they just want to know with confidence that if they assign you something it will get done.

What educause could do is partner more with NACUBO on common issues and encourage CIO/CFO teams to come to the event. EDUCAUSE did this on cloud computing and security. I think there are some potential opportunities in research administration, compliance, analytics, and training and development of the higher ed workforce where CIO's and CFO's could do more together. Those areas tend to be inter-disciplinary in nature require multiple people bring expertise to the table to get the best solution.

jack




 

I’d like to share my perspective on this which has been shaped over 15 years of strategically managing IT funding at Indiana University. I realize that the topic is funding information technology strategically.  I suggest  that the game is also about strategically managing IT funding.

 

I do not disagree with the insightful comments already shared.  I will add to a couple of them.

 

1.       CIO’s relationship with CFOs.  It is worth noting that CFOs (and Provosts and Presidents) are not immune from the perceptions and opinions of deans and others in the institution.  Thus, while the CIO’s relationship to these leaders is indeed very important, the CIO must also ensure that the community generally agrees that IT is delivering timely and relevant services at verifiably competitive price and performance levels.  This might entail adopting a discipline of regularly fully costing IT services, measuring the community’s satisfaction with them and making this information public.  (Let me offer these Indiana University examples:

https://webdb.iu.edu/uitsfs/scripts/abc/reports/web_files/0910/RCQS/Basic/RCQS_09-10_UA_BASIC.pdf and

http://www.indiana.edu/~uitssur/ )

 

              For CIOs to strategically manage IT funding means constantly keeping an eye on a balance sheet in which the assets are not just money and tangibles but also intangibles such as relationships, alliances, credibility and reputation.  This is what a business would do to maximize its value to the market and its shareholders and I might add, attract more capital when needed.  This strategy pays off in a lot more ways than one might think but most especially when the CIO has to champion radical and controversial changes with all their political and financial implications.  A recent example of this at Indiana is the CIO’s initiative to shift telephone services from chargeback to baseline services and the resulting shift of the funding to recurring baseline allocation to the IT organization.  This was all done in the context of a 10-Year Network Master Plan that is being funded solely from reallocated telephone service income.  We could not have done this without the intangibles that we cultivated over many, many years.

 

2.       To maintain the IT organization’s intangible values, the CIO must ensure that the organization is responsive, innovative, agile and nimble.  In order to do that, the organization must always “plan for the surprise” and set aside resources for it.  While very unpleasant surprises such as security breaches have enabled CIOs to obtain funding that otherwise would not have flowed freely, having one’s own resources to be agile in responding to the “expected surprise” is a really good strategy in the long run.  Further, the IT organization must also innovate where major gains or efficiencies or even strategic advantage might result for the institution.  Again, it must plan for this innovation and set aside resources for it.  Finally, the IT organization must be able to nimbly adapt to a changing environment and initiate new or expanded services without always going to the campus for new funding.

 

Okay, so you are all wondering now.  Where are all those resources supposed to come from?  No one has a dime to spare these days for the absolute essentials, much less for emergencies innovation and new services.  At Indiana one strategy that we have adopted over 15 years is a cycle of requiring x% of the IT organization’s recurring budget to turn over to an internal reinvestment fund.  Over the last 5 years our goal has been 5% every year for a total of 25% turnover.  We are meeting that goal.  And yes, to be brutally honest it is absolutely not easy and it gets worse once you’ve picked the low hanging fruits which happened in the first year or two back in 1998-1999.  At times it is gut-wrenching. The question is “Is this any more difficult than reactively wringing your hands or feeling helpless because there is no funding for emergencies, innovation or new initiatives?”  My answer would be a definite no.  Indeed, I believe that a disciplined approach to pruning, and reallocating is a requisite competency for today’s IT leaders. 

 

 

Laurie G. Antolovic

Deputy Chief Information Officer

Indiana University

lantolov@iu.edu

 

From: The EDUCAUSE CIO Constituent Group Listserv [mailto:CIO@LISTSERV.EDUCAUSE.EDU] On Behalf Of Jack Suess
Sent: Tuesday, July 10, 2012 9:13 AM
To: CIO@LISTSERV.EDUCAUSE.EDU
Subject: Re: [CIO] Topic #7 Funding Information Technology Strategically

 

While I report to the president, I fully understand that the CFO and Provost -- along with the President are the key people on funding decisions. As a result, even though I don't report to them I meet with both the Provost and CFO at least once a month in a one-on-one. I focus mostly on what they are trying to do and make sure that I can give them honest feedback on challenges and issues facing them. Sometimes it is easier when you don't report up to them to give them honest appraisals of what is happening.

 

One important piece that IT brings to the table is we interact with everyone. I can help the provost understand issues outside the academic area and I can help the CFO understand some issues in the academic side. 

 

Carmen's point is very important, CFO's tend to be detail oriented. We had a difficult ERP implementation years back -- I leveraged the fact that my CFO had a long commute every day and caught up with hi 2-3 times a week on the phone as he was stuck in traffic getting his input and keeping him abreast of issues. He felt it was important that he always had the latest information so if someone raised a point he could note how it was being addressed. 

 

On the Provost side, while many are equally detail oriented, they have so many issues hitting them that I've found they just want to know with confidence that if they assign you something it will get done.

 

What educause could do is partner more with NACUBO on common issues and encourage CIO/CFO teams to come to the event. EDUCAUSE did this on cloud computing and security. I think there are some potential opportunities in research administration, compliance, analytics, and training and development of the higher ed workforce where CIO's and CFO's could do more together. Those areas tend to be inter-disciplinary in nature require multiple people bring expertise to the table to get the best solution.

 

jack

 



Laurie has articulated some very useful strategies here.  I found that one section really interesting:
"At Indiana one strategy that we have adopted over 15 years is a cycle of requiring x% of the IT organization’s recurring budget to turn over to an internal reinvestment fund.  Over the last 5 years our goal has been 5% every year for a total of 25% turnover. "

It's interesting you were able to create an internal investment fund; we are not able to do that, and only in the last couple years have we been able to carry-forward unspent funds, and only for targeted existing projects.

I wonder how others are funding innovation.  Where is the budget coming from development or purchase of mobile apps?  How did you fund your VOIP project?  Virtualization needs an up-front investment; where did those funds come from?

Please do share your strategies - I'm grateful for your ideas!

Theresa


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