copyright mary l. pretz-lawson & andrew j. clark 2005. this work is the intellectual property of...

Copyright Mary L. Pretz-Lawson &Copyright Mary L. Pretz-Lawson &Andrew J. Clark 2005. This work is the Andrew J. Clark 2005. This work is the

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Chicken or EggChicken or EggIT Services or IT CostsIT Services or IT Costs

Mary L. Pretz-Lawson (Carnegie Mellon University)Mary L. Pretz-Lawson (Carnegie Mellon University)

Andrew J. Clark (Syracuse University)Andrew J. Clark (Syracuse University)

EDUCAUSE 2005 * FTE 3

ComparisonComparisonCMUCMU SUSU

CharterCharter 19001900 18701870

ControlControl PrivatePrivate PrivatePrivate

Carnegie ClassCarnegie Class Doctoral / Doctoral / Research- Research- ExtensiveExtensive

Doctoral / Doctoral / Research- Research- Extensive Extensive

LocationLocation Pittsburgh, PAPittsburgh, PA Syracuse, NYSyracuse, NY

UG students*UG students* 5,3005,300 11,70011,700

Grad Students*Grad Students* 3,5003,500 4,7004,700

Faculty*Faculty* 1,2501,250 1,0501,050

Staff*Staff* 3,9003,900 3,4003,400

EDUCAUSE 2005 4

How do you review & value operational How do you review & value operational services/activities?services/activities?

1.1. How do you cost operational services?How do you cost operational services?

2.2. Can you quantify customer value?Can you quantify customer value?

3.3. Are the dependencies well known?Are the dependencies well known?

4.4. Has technology changed? (last 2-5 yrs)Has technology changed? (last 2-5 yrs)

5.5. Did customers’ needs shift (last 2-5 yrs)Did customers’ needs shift (last 2-5 yrs)

6.6. Are the resources sufficient?Are the resources sufficient?

EDUCAUSE 2005 Syracuse Universit

y5

How do you cost operational services?How do you cost operational services?Services

•Classroom Tech Support

•E-mail / Calendaring Services

•Faculty & Staff Desktop Services

•Satellite & Video Conferencing

Activities(What people do)

•Analysis & design

•Development

•Installation

•Maintenance

•Project Management

Resources(from General Ledger)•Labor

•Wages•Fringes•Superfringes

•Hardware•Software•Maintenance Contracts•Circuits


y6

1.1. Develop a “proof of concept” & present to Directors.Develop a “proof of concept” & present to Directors.

2.2. Agree on provided services.Agree on provided services.

3.3. Identify standard list of activities.Identify standard list of activities.

4.4. Identify other pilot services to be costed.Identify other pilot services to be costed.

5.5. (From standard list) Identify activities for service.(From standard list) Identify activities for service.

6.6. Identify the resources (e.g. labor, hardware, software, Identify the resources (e.g. labor, hardware, software,

license fees, etc) used to perform the activity.license fees, etc) used to perform the activity.

Overview of cost determinationOverview of cost determination


y7

7.7. Determine how best to allocate General Ledger Determine how best to allocate General Ledger

costs to identified activities.costs to identified activities.

8.8. Identify / estimate appropriate service utilization Identify / estimate appropriate service utilization

metrics.metrics.

9.9. Calculate cost per use or capitation or some other Calculate cost per use or capitation or some other

appropriate allocation formula.appropriate allocation formula.

10.10. Roll up all service/activity costs to identify total Roll up all service/activity costs to identify total

service costs.service costs.

11.11. Document future data collection & methodology Document future data collection & methodology

needsneeds

Overview of cost determination (cont)Overview of cost determination (cont)


y8

““What is it about IT that makes measuring its What is it about IT that makes measuring its strategic value so difficult? Every consultant, strategic value so difficult? Every consultant, practitioner, or faculty member has a unique practitioner, or faculty member has a unique method for capturing IT value”method for capturing IT value”

Mark R. Nelson, ECAR FellowMark R. Nelson, ECAR Fellow

““Value is really problematic since it is so much ‘in Value is really problematic since it is so much ‘in the eye of the beholder.’ To me, the eye of the beholder.’ To me, valuevalue is really a is really a function of an institution’s goals, so there is very function of an institution’s goals, so there is very little guidance in either the theory or the practitioner little guidance in either the theory or the practitioner literature to help you there” literature to help you there”

Richard Katz, EDUCAUSE VPRichard Katz, EDUCAUSE VP

Can you quantify customer value?Can you quantify customer value?


y9

1.1. Agree on service – SU vision/goal alignmentAgree on service – SU vision/goal alignment

2.2. Agree on possible value measures.Agree on possible value measures.

3.3. Identify appropriate value measures for each service.Identify appropriate value measures for each service.

4.4. Confirm pilot services and initial value to be assessed.Confirm pilot services and initial value to be assessed.

5.5. Refine assessment and apply to all services.Refine assessment and apply to all services.

6.6. Determine and complete additional value measures Determine and complete additional value measures

for all services.for all services.

Overview of value determination Overview of value determination


y10

Are the dependencies well known?Are the dependencies well known?

Service Components Contributing departments

1 2 3 4 5 6

AcademicInformationSystems

Application Delivery X X

Application Support X X

Application

Enhancements &

Development

X X

Information Delivery X X

Application Installation X X X

Maintenance X


y11

Lessons learnedLessons learned

WinsWins CIO supportCIO support Change in cultureChange in culture Common framework Common framework

for service discussionfor service discussion Supports RCMSupports RCM Proof of conceptProof of concept Pilot approach with Pilot approach with

servicesservices

To be ImprovedTo be Improved Multi-year complex Multi-year complex

efforteffort Defining servicesDefining services Defining activitiesDefining activities Data collectionData collection Value measurementValue measurement

EDUCAUSE 2005 Carnegie Mellon 12

Carnegie Mellon Activity ReviewsCarnegie Mellon Activity Reviews

WHAT service is WHAT service is being provided?being provided?

TO WHOM is the TO WHOM is the service provided?service provided?

HOW is the service HOW is the service provided?provided?

Service description Service description and goalsand goals

Stakeholder, Stakeholder, requirements, usagerequirements, usage

Work flow, Work flow, operational issues, operational issues, FTE countFTE count


CMU Activity Review ProcessCMU Activity Review Process

AttendeesAttendees Management team – directors & CIOManagement team – directors & CIO Architects from system, network, users groupsArchitects from system, network, users groups Stakeholder managers (internal only)Stakeholder managers (internal only)

Preparation by manager/service leadPreparation by manager/service lead Worksheet asking the “hard questions”Worksheet asking the “hard questions” Pre-read/executive summary to attendeesPre-read/executive summary to attendees PowerPoint presentation and open Q&APowerPoint presentation and open Q&A Break into management team executive sessionBreak into management team executive session Feed action plan into 6-month tactical planningFeed action plan into 6-month tactical planning


Has Technology Changed? (2-5 yrs)Has Technology Changed? (2-5 yrs)

Lab/Cluster Software Applications activity reviewLab/Cluster Software Applications activity review Statistics on # of applications Statistics on # of applications # of stations by OS type# of stations by OS type Staffing per OS softwareStaffing per OS software

Areas of exposureAreas of exposure Reached saturation in ability to prepare applications Reached saturation in ability to prepare applications

for MacOS and Windows with current staff using for MacOS and Windows with current staff using current tools and procedurescurrent tools and procedures

SolutionSolution Evaluation of disk imaging and terminal server pilotEvaluation of disk imaging and terminal server pilot


Did Customers’ Needs Shift ? (2-5 yrs)Did Customers’ Needs Shift ? (2-5 yrs)

Email Client activity reviewEmail Client activity review Goal to reduce email client support costsGoal to reduce email client support costs Replace anecdote with client usage dataReplace anecdote with client usage data Turned on SMTP logsTurned on SMTP logs Graphs on client usage by customer sectorGraphs on client usage by customer sector Fewer customers using Outlook than Fewer customers using Outlook than

assumedassumed Director will propose solution based on Director will propose solution based on

support cost & complexity, not user surveysupport cost & complexity, not user survey


Are the Resources Sufficient?Are the Resources Sufficient?

Computer Store activity reviewComputer Store activity review Vital statisticsVital statistics

Store staffing complementStore staffing complement Sales segments – retail, bulk department Sales segments – retail, bulk department

purchasepurchase # of units sold per OS# of units sold per OS Reviewed P&L statement for last 4 yearsReviewed P&L statement for last 4 years

What would you do with 25% more or less What would you do with 25% more or less resources?resources?

Approval to hire additional PT purchasing staffApproval to hire additional PT purchasing staff


CMU Activity Review CMU Activity Review ImprovementsImprovements

WinsWins Visibility of service at Visibility of service at

executive levelexecutive level High level overview High level overview

that opens the that opens the questionquestion

Information useful to Information useful to manager and directormanager and director

Some dependencies Some dependencies uncovereduncovered

Tie into 6-month Tie into 6-month tactical planningtactical planning

To be ImprovedTo be Improved Tie to allocationTie to allocation Slice/dice coverage for Slice/dice coverage for

all divisions servicesall divisions services Long term benefits Long term benefits

may be negligiblemay be negligible Missing metrics for Missing metrics for

apples-apples analysisapples-apples analysis Tracking of uncovered Tracking of uncovered

issuesissues Better usage/client Better usage/client

datadata


Activity review web siteActivity review web site

http://www.cmu.edu/computing/techintegratihttp://www.cmu.edu/computing/techintegration/on/

activityreview.htmactivityreview.htm

Questions ?Questions ?

Contact Information:Contact Information:

Mary L. Pretz-LawsonMary L. Pretz-LawsonCarnegie Mellon UniversityCarnegie Mellon UniversityAssociate Director for Technology PlanningAssociate Director for Technology PlanningE-mail: E-mail: [email protected]

Andrew J. ClarkAndrew J. ClarkSyracuse UniversitySyracuse UniversityChief Process ArchitectChief Process ArchitectE-mail: E-mail: [email protected]

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