www.umn.edu/oit a saner it funding model(?): system-wide technology “cost-driver based”...
TRANSCRIPT
www.umn.edu/oit
A Saner IT Funding Model(?):
System-Wide Technology
“Cost-Driver Based”
Allocation
Common Solutions Group
January 2006
www.umn.edu/oit
Agenda• Context for IT Change• IT Funding
– Today’s budgeting process– Current IT environment– Roles within the service continuum
• Allocation Options and Details– The new budgeting process
• Discussion
www.umn.edu/oit
University of Minnesota’sStrategic Positioning Goal:
To become within the next decade one of the top three public research
universities in the world.
www.umn.edu/oit
Administrative Aspiration:
• “…that the University be known as much for its service and business innovation as for its high quality research, education, and public service.”
President Robert H. Bruininks
www.umn.edu/oit
New Budget Model Committee Principles• Mission and Goal Alignment
• Transparency
• Efficiency/Cost Control
• Revenue Enhancement
• Simplicity
• Predictability
• Adaptability
• Central Investment
• Information Rich
• Implementation
• Risk
www.umn.edu/oit
Current IT Funding Environment
• Broad IT Governance - but not tied to funding allocation.
• Current funding mechanism requires excellent relationship with CFO and executive team.
• Actual costs of centrally provided services unclear to revenue generators / stakeholders / Deans.
www.umn.edu/oit
Local Technology Principles
• Mission Specific or Strategic Importance to Local Unit• Uniqueness• High Touch, High Interaction• Little Cross-Unit Use• Emerging, Immature Technologies
www.umn.edu/oit
Local Technology Service Examples:
• Computer Desktop Support• Web Development & Content Management• Academic Application Development & Support• Research Application Development & Support
www.umn.edu/oit
OIT / Institutional Technology Investment Goals
• Maintain a competitive, institutional leadership role that attracts the brightest students, faculty, staff and scarce research funding.
• Create savings, efficiencies and effectiveness.
• Optimize the University’s scarce resources. Achieve the greatest institutional return on investment.
• Improve services to students, faculty, staff, patients, and other stakeholders.
• Exploit untapped ERP functionality and extend the usefulness of ERP systems with new technologies such as portals, workflow and others.
• Demonstrate value by producing meaningful ROI and performance (system and business process) information.
www.umn.edu/oit
OIT / Central Technology Investment Principles
• Institutional Vision & Mission Alignment• Institutional Mission Criticality• Strategic Leadership Opportunity• Interoperability• Common Need• Institutional Economy-of-Scale Value• Technology Maturity• Institutional Risk
www.umn.edu/oit
Budget Model Alignment
• Strategic Positioning alignment and promotion.• Internal Budget Model Working Principles alignment.• Embrace the Institution’s central technology goals
and principles.• ‘Cover’ the University’s core ‘in’ technologies.
www.umn.edu/oit
Core Technologies - What’s In
Student,Faculty,Staff Support
•Helpdesk (1-HELP)•Training•Digital Media Center.•Computer Labs•Security•MS license
Communications
•Data Network
ProductivityApplications
•Operating System•MS Office•File Systems•Web Collaboration (Breeze)•Email•Portal•Calendar (UMCal)•File Storage (SAN)
•Personal space•Enterprise storage
•Web Content Management (FileNet)
BusinessApplications
•PeopleSoft•WebCT•Imaging•Library Automation•E-Research•CUFS•IMS Reporting•EGMS•FormsNirvana•GradPlanner•Portfolio•GoldPass
All currently Centrally Funded
www.umn.edu/oit
Allocation Model Options
• Measured Usage (Consumption): Typical ISO model. Define measure to perceived value, real cost and strategic value.– Creates year-to-year volume fluctuations that cause budget
instability. Unpredictable.– Is an imprecise way to measure outcomes.– Requires significant investment in measurement tools and
corresponding administrative systems and processes. Significant implementation implications.
– Can effectively control demand.– Inefficient method to measure the value of a strategic asset.
www.umn.edu/oit
Current Technology Services Funding (Examples)
Centrally FundedUnit-Based Chargeback
Consumption-Based Chargeback
Telephone X X
VoiceMail X X
E-Mail X
Data Network X
Calendar X
WebCT X
Security X
Helpline X
www.umn.edu/oit
Recommended Allocation Model
• Headcount-Based: Allocation based on an unit’s student, faculty and staff population.– Simple. Easy to understand and administer.– Optimizes the institution’s technology investment.– Sustainable. Is adaptable to internal and external
environmental factors - including emerging technologies.– Predictable. Minimal year-to-year fluctuation.– However…
• Imprecise measurement for actual usage.
• Demand management more challenging.
www.umn.edu/oit
Headcount Allocation Model…
• In Alignment with:– Budget Model Principles– Strategic Positioning Goals & Objectives– The Institution’s Technology Investment Goals
• By…– Optimizing the University’s technology investment– Positioning the University’s technology investment strategy– Encompassing and encouraging the use of a core set of student,
faculty and staff technologies.
www.umn.edu/oit
Headcount Allocation Methodology
• Annual snapshot-in-time: – Previous year’s headcount.
• OIT’s budget for ‘In’ Core Technologies– Proposed OIT budget for managing these technologies.
• Per Head Rate• Allocate by Collegiate/Administrative Unit• Single annual bill / statement to each Unit• Two-Tiers - one for all campuses and one for Twin Cities (only).
www.umn.edu/oit
Headcount Allocation Formula
Core ‘In’ Technology Budget =
System-wide ‘In’ Technology Budget
+
Twin Cities ‘In’ Technology budget
www.umn.edu/oit
Headcount Allocation Formula
System-wide ‘In’ Technology Budget
System-wide Headcount____________________________ = A
Twin Cities Only ‘In’ Technology Budget
Twin Cities Headcount____________________________ = B
A = Coordinate Campus Rate ($24/mo.)
A + B = Twin Cities Rate ($48/mo.)
www.umn.edu/oit
Employee Allocation Details
• Employees with an X.500 ID as of the 9th pay period of the fiscal year• Employees holding multiple appointments will be assigned to a college or
administrative unit according to primary job code using the following logic:– Highest standard hours– Annual benefit base rate– Highest compensation rate– Lowest employee record
• Both part-time and full-time employees are counted equally.• Both paid and unpaid employees are included.• Temporary/casual employees are excluded.• Student employees (graduate or undergraduate) are excluded and counted as
students.• Employees in ISO’s having a unique area number within Auxiliary Services
only will be excluded from the budget model.
Note: The model is built upon headcount, not FTE. Units will not split charges.
www.umn.edu/oit
Student Allocation Details
• All students registered for fall semester as of the 10th day of the fall term.• Graduate School students are mapped to a college using a background table
that maps the student’s major to a college. (All graduate students are required to register, therefore all are counted)
• Students pursuing a dual degree program are assigned to a college and counted only once according the the following logic:
– Degree seeking gets priority over non-degree seeking– Priority is given to professional, then graduate-level, then undergraduate– FA primary number by career. Assigns priority by career (highest tuition)– Number of credits enrolled in each – Electronic random number (rare). Student is assigned to the college that gets the highest random
number.
• Part-time and full-time students are counted equally• Employees taking courses using the Regent’s scholarship or the academic or
civil service tuition benefit are counted as employees not students.
www.umn.edu/oit
Student,Faculty,Staff Support
•Premium ‘In’ Services(Where Applicable)•Computer Desk-top Support
•Telephone and Network Installation Services
•Hardware Sales•Software Sales•Web Development
Core Technologies: What’s OutCommunications
•Premium ‘In’ Services(Where Applicable)
ProductivityApplications
•Premium ‘In’ Services(Where Applicable)
BusinessApplications
•Premium ‘In’ Services(Where Applicable)
•Server Management & Support
•Back-Up Services and Data Restoration
•Telephones •Voice Mail
All currently funded through charge-back
www.umn.edu/oit
Core Technologies: What’s OutStudent,Faculty,Staff Support
•Premium ‘In’ Services(Where Applicable)•Computer Desk-top Support
•Telephone and Network Installation Services
•Hardware Sales•Software Sales•Web Development
Communications
•Premium ‘In’ Services(Where Applicable)
ProductivityApplications
•Premium ‘In’ Services(Where Applicable)
BusinessApplications
•Premium ‘In’ Services(Where Applicable)
•Server Management & Support
•Back-Up Services and Data Restoration
•Telephones •Voice Mail
All currently funded through charge-back
www.umn.edu/oit
Technology Allocation Assumptions…
• All heads treated equally• All ‘In’ Core Technologies applied to all heads• Base level of services with premium options at additional price.• PeopleSoft as headcount source• Coordinate campus distinction• Housing & Residential Life student technologies not included.
www.umn.edu/oit
New Cost Allocation Model Understanding / Assumptions
• The model itself is a set of stable revenue and cost attribution rules that assist in achieving (but don’t determine) the strategic goals of the institution
• A sound process for budget approval and rate development for “cost pool” units is key
• The process is dependent on strong leadership to approve cost pool budgets and to make strategic allocations of the state dollars
• The model will be implemented at a collegiate level – not a departmental level
• Good performance measures and good data are essential for analysis
• Existing consultative groups will be essential to promote transparency & understanding of decisions
• Process will evolve over time – year one will largely be a conversion to the basic structure, with refinements toward goals in the future
www.umn.edu/oit
Key Changes
• Today’s model is opt-in. Tomorrow’s is a rigorous opt-out.
• Provides the key stakeholders / revenue generators / Deans a clear understanding of what they are actually funding.
• The new model’s open budgeting process will bring those stakeholders together in a form of IT governance not experienced before.
• Will need to appropriately link the new budget model to the current IT Governance structure.
www.umn.edu/oit
Discussion…