Money Grows on TREEs

January 2011

A Technology Review for Efficiency and Effectiveness (TREE) helps college leaders identify cost savings and service improvements to enhance student outcomes.

“Higher education institutions are excellent at teaching, research and public service. However, affecting student outcomes by increasing the effectiveness and efficiency within the IT dollars they are currently spending is not their forte.”
—Richard Middaugh, Senior Vice President, Dynamic Campus

Declining budgets and record enrollments are putting the squeeze on colleges across the country. Funds from state education budgets have been slashed following the more than normal economic downturn. Public scrutiny of expenditures at public institutions has heightened awareness of budget overruns, and the effects are being felt everywhere on campus.

The financial pressure is complicated by the fact that many colleges face increasing demands to enhance operational efficiency and effectiveness on campus, while improving student outcomes and services for students, faculty, staff and the greater community. Fortunately, information technology (IT) offers a path to helpful solutions; however, it often takes a fresh set of eyes to identify and redirect IT expenditures to achieve better results without increasing the IT budget.

“Most colleges and universities struggle to determine if an IT investment has a measurable return or how to ascertain IT effectiveness and efficiency,” Middaugh says. “By effective, I mean we should ask if students, faculty, staff and executives being served well by technology. By efficient, I mean we should ask if money is being spent wisely.”

Money Grows on TREEs
With diminishing funds available to colleges and universities, how will administrators fund technology advancements, let alone keep funding IT at current levels? First, it is critical to understand the current IT expenditures institution-wide so investments can be aligned with the overall strategic goals of the institution. Left unaligned and without strategic direction, it is extremely difficult to exact optimum impact for the allocation of technology funds. Most institutions do not need to spend more on IT. They need to get more from the dollars they are currently spending.

This is why a TREE becomes so valuable for college leaders. A comprehensive TREE will shed light on where current IT dollars are being allocated and spent. Leveraging these dollars to maximize the operational benefits of campus technology, thus driving student outcomes, must be a priority for college leaders, especially when every dollar counts.

“Many colleges don’t truly know the total amount spent on IT, nor do they understand the total cost of ownership when they acquire IT software and hardware,” says Middaugh. “Often, IT expenditures are distributed across several budgets that range from departmental operating budgets, to grant budgets, to capital budgets,” Middaugh says. “The question is: Are all these IT expenditures aligned with the strategic goals of the institution?”

A TREE conducted by a team of unbiased, objective and seasoned experts can unearth some truly mindboggling decisions tied to IT spending that otherwise would go unnoticed. A fresh set of trained eyes may be more likely to uncover these hidden but significant expenditures that could be allocated for a greater impact on service delivery and student outcomes. Whether a TREE identifies $100,000 or $1,000,000 of misaligned expenditures, the positive impact of aligning these expenditures can be significant.

The goal is to gain a better understanding of how IT expenditures are made by the various departments and divisions across the institution, and align the available dollars for the greatest overall value to the institution.

Harvesting a TREE’s Fruit
A comprehensive TREE assessment will result in identifying funds that can be better aligned with institutional priorities for better results. But without a technology plan, newly identified funds could be misplaced. It is imperative to first have a firm grasp on institutional priorities and desired outcomes before any new IT expenditure is approved.

“Most intuitions do not have a formal technology plan. To maximize the return on IT expenditures, one must define what is needed, why it is needed and what the measureable outcomes will be.”
—Dr. Leonardo de la Garza, Chancellor Emeritus, Tarrant County College District (TX)

The high cost and ever-changing nature of technology often leads to constant, repetitive spending, without full consideration of alternatives. When this happens, presidents and faculty feel that money is going into a big black hole. Dr. de la Garza asserts, “There should not be anything ‘automatic’ about replacing expensive equipment after a set amount of time—say three years for a desktop computer—yet, such practices are more the norm than the exception.”

While many campus CIOs are excellent strategic planners, some are more inclined to think about tactical plans. They have their budgets from last year and propose their budgets based on those prior year initiatives and services. But a long-term technology plan is essential in order to have any hope of success with regard to adding and implementing efficient technology on campus.

A technology plan should identify outcomes, not technology or purchases. Often, the IT budget is developed around a list of desired, or required, purchases of hardware and software without also identifying the outcomes of such purchases. Furthermore, the justifications for such budget requests are presented to senior leaders in terms that they are not familiar with, or techno-babble. To get the most of your dollars, tie the dollars to outcomes that can be tied to student success.

“Symptoms indicating your campus would benefit from a TREE:

  1. Lack strategic plans that include all areas: IT, Capital, Annual, and Project
  2. IT efforts not developed in concert with users
  3. Insulated IT management and IT communications
  4. Buying hardware and software, not outcomes
  5. Unanticipated expenditures
  6. User access limited or difficult
  7. Reporting—challenging for campus leaders
  8. Explanations and justifications stated in technical language
  9. Security cited as reason for service denial
  10. No proven, exercised disaster recovery strategy
  11. Infrastructure unreliable
  12. Spending over seven percent of college operating budget on IT

TREEs Have Roots
The single largest expense component of an IT budget is staff. When evaluating the overall efficiency of the IT budget, one must evaluate its largest expenditure. As technology diversified from the mainframe to today’s complex technology environment, the staff required to support and operate it grew. Over the last couple of decades, colleges have expanded the IT support services available, and the corresponding IT staff has grown. It is very common for staff expenses alone to consume nearly 80% of the overall IT budget.

Outside of the IT department, it is hard to find campus leaders who truly understand the daily activities of the IT staff or how to assess their effectiveness; yet, staffing consumes a majority of the available dollars. It is critical that college leaders align staff expenses in support of the college’s IT initiatives. Furthermore, technologies continually converge, making it is easier to integrate and operate disparate systems. This convergence should cause the college to assess and realign its resources regularly, but often the staff is shielded from such scrutiny.

“When assessing the overall effectiveness of a campus IT organization, one would be remiss not to include a review of staffing patterns ensuring those budget dollars are being allocated appropriately,” commented Dr. de la Garza.

Planting a TREE
A technology plan should span multi-years, keeping an eye on the future and identifying funding that may be required to migrate to a new technology that becomes mainstream.

Additionally, there must be a change in the institutional mindset. “Committing to a multi-year technology plan is needed to succeed, but most institutions struggle to commit to plans that expand years into the future,” says Dr. de la Garza. “As a college leader you have to get the board to buy into this concept of long-term success. The finances have to exist to make sure that your technology infrastructure, including personnel and everything else, stays as close to state-of-the-art as possible. It may seem ‘pie in the sky,’ but if you don’t think you can do it, you won’t. You have to plan for success and work hard to make it happen.”

A TREE for Change
As college leaders gain insight from a TREE, using it as a catalyst for change may require leaders to make unpopular choices. Change can be hard and rarely is welcomed with open arms. Change creates uncertainty, and people may respond to this uncertainty with resistance. Changing technology support and services delivery affects all constituents on campus—from the students, to the faculty and administration—so it must be encased within a 360-degree communications plan. Ensuring everyone is kept informed and aware of the target outcomes will help leaders garner campus-wide support for change.

For a campus imperative to remain relevant to an increasingly tech-savvy student body, IT must be flexible and do “more with less” with its resources. Finding out where the money is being spent may be a great start. And placing a greater emphasis on institutional efficiency and effectiveness just may be the key to continued growth and better community service for all constituent groups.
It’s remarkable what a TREE can do to improve the overall strength of a college campus.

Dynamic CampusDynamic Campus, Inc. is the premier outsourcing firm dedicated to serving the Higher Education marketplace. Serving over sixty institutions from its headquarters in Austin, Texas, Dynamic Campus provides critical technology vision, leadership and execution across a diverse set of complex universities and colleges. Dynamic Campus effectively manages essential administrative solutions, academic solutions, reporting solutions, and all underlying infrastructure components for its clients located across the country. Our solutions fit the specific needs of the institution, and our practice is to offer vendor-independent services so that we are 100% aligned with your interests.

Further information:

Jody Glubke
Dynamic Campus, Inc.
2806 Flintrock Trace, A-205
Austin, TX 78738
Ph: 888-805-3022