Cost Efficiencies and Revenue Opportunities for IT in Shrinking

Budgets

Kelly P. DoneyAssociate Vice President for Enterprise Applications

kpdoney@georgetown.edu

Agenda

Time Who What

1:30-1:45 Doney Kickoff and summary

1:45-2:30 Panel (Nicholson, Sather, T. Evans, Huth, Denna, Bucher)

IT Cost Modeling: How Much do IT Services Cost?

2:30-3:00 Huth Looking for Cost Efficiencies at CMU: An Interim Report

3:00-3:30 Evans University of Iowa Cost Reductions Study and Implementation: The ideas actually work

3:30-4:00 BREAK

4:00-4:40 Nicholson IT Cost and Funding Strategies

4:30-5:00 Sather Being 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

Source: CSG LMS Survey, 2013

Questions?