Cost Efficiencies and Revenue Opportunities for IT in Shrinking Budgets Kelly P. Doney Associate Vice President for Enterprise Applications

Agenda TimeWhoWhat 1:30-1:45DoneyKickoff and summary 1:45-2:30Panel (Nicholson, Sather, T. Evans, Huth, Denna, Bucher) IT Cost Modeling: How Much do IT Services Cost? 2:30-3:00HuthLooking for Cost Efficiencies at CMU: An Interim Report 3:00-3:30EvansUniversity of Iowa Cost Reductions Study and Implementation: The ideas actually work 3:30-4:00BREAK 4:00-4:40NicholsonIT Cost and Funding Strategies 4:30-5:00SatherBeing the Bad Cop: How a Vendor and Contract Management Group Can Help Save Costs

1.If you have implemented or attempted to implement any revenue generating ideas within IT, what have you done? How successful have you been? Survey Questions 2.What are the top three cost savings efforts you have implemented within your department within the last three years? 3.What’s the next target on your cost savings agenda? 4.What have been the most significant barriers to reducing your operational costs within IT? If you have been able to mitigate these issues, how have you done so? 5.Gartner research has found that on average, IT budgets are 4.7% of total revenues in the education sector. What percentage of total revenues is your current IT budget? What should it be? 6.What is your current cost of IT per student? What assumptions did you use to arrive at that number?

Participants Survey Participants (16) NYU University of Notre Dame Rice University Cornell University University of Colorado Boulder Princeton University Penn State University University of Pennsylvania UC Berkeley Virginia Tech Georgetown University University of Washington University of Virginia Yale University Stanford University Anonymous …and the results are…

Top/Interesting Themes: –Chargeback to campus departments –Better/more accurate service catalogs and cost of service estimates –Network/Wifi: Exploration of auctioning the Educational Broadband spectrum, charging for guest wifi, looking at new ways to monetize the campus network (e.g. becoming the vendor to stadium concessions instead of them outsourcing to Telco firms) –Co-location with other businesses to sell and/or lease data center assets –For fee server and storage services –Research: Providing high touch services to researchers –Student Technology Fees –Billing out staff with spare capacity Question 1 If you have implemented or attempted to implement any revenue generating ideas within IT, what have you done? How successful have you been?

Top/Interesting Themes: –Reduce duplication of services –Move to hosted and/or cloud services –Staffing realignment/reorganization/layoffs (e.g., to increase efficiencies, reduce redundancies, eliminate unnecessary positions) –Data center consolidation, server virtualization –increased vendor consolidation; constant review of licenses –VOIP (retiring legacy phone systems) –Modernized printing services –Investment in ITSM processes and tools to increase efficiencies –Facilities: Consolidation, reduction of old equipment in storage Question 2 What are the top three cost savings efforts you have implemented within your department within the last three years?

Top/Interesting Themes: –Reduce duplication of services –Eliminate “boutique” services to small sets of users or charge back for them –Sunset undersubscribed services –Move more to the cloud (including data center, administrative computing, applications, etc.) –Get better understanding of our costs to make data driven decisions before making any changes Question 3 Source: CSG LMS Survey, 2013 What’s the next target on your cost savings agenda?

Top/Interesting Themes: –Decentralized campus and siloed operations permits duplication/redundancy Lack of top down directives, prevalence of distributed decision authority and autonomy of units –Resistance to change on campus both in campus units as well as within central IT –Realizing staffing efficiencies –Rising everything: Demand for services, salaries, licensing and maintenance costs –Perception the central IT’s services are inadequate, overpriced –Lack of good data on the actual cost of services Question 4 Source: CSG LMS Survey, 2013 What have been the most significant barriers to reducing your operational costs within IT? If you have been able to mitigate these issues, how have you done so?

Gartner research has found that on average, IT budgets are 4.7% of total revenues in the education sector. What percentage of total revenues is your current IT budget? What should it be? Top/Interesting Themes: –2.4% to 7%, with most respondents falling in the 3-5% range –Of those who indicated what it should be, the general consensus was that more was still needed (at least what Gartner recommended for those who fell below 4.7% and still more even for those above 5%) –Decentralization Question 5 Source: CSG LMS Survey, 2013

What is your current cost of IT per student? What assumptions did you use to arrive at that number? Top/Interesting Themes: –Most everyone did simple calculation of IT spend (or IT budget) divided by number of students –$2K –$2.1K –$2.4K –$2.9K –$3.08K –$4.1K –$4.3K –$5.5K Question 6 Source: CSG LMS Survey, 2013

Questions?