benchmarks: helping your president understand it investments david smallen, hamilton college...
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Benchmarks: Benchmarks: Helping Your President Helping Your President
Understand IT Understand IT
InvestmentsInvestments
David Smallen, Hamilton CollegeDavid Smallen, Hamilton College
Educause 2004Educause 2004October 13, 2004October 13, 2004
Fundamental AssumptionsFundamental Assumptions
IT has become essential (IT does IT has become essential (IT does matter)matter)
IT has become financially significantIT has become financially significant Therefore:Therefore:
– IT can/ must be managed/ explained/ IT can/ must be managed/ explained/ understood in ways similar to other understood in ways similar to other traditional institutional resourcestraditional institutional resources
Explainable costsExplainable costs Reasonable alternativesReasonable alternatives
Today’s PresentationToday’s Presentation
How much should IT cost?How much should IT cost?– High level views of budgets and High level views of budgets and
staffingstaffing Making useful comparisonsMaking useful comparisons
– Focus today on BLA and HC Peer Focus today on BLA and HC Peer institutionsinstitutions
Data fromData fromThe COSTS ProjectThe COSTS ProjectCost Of Supporting Technology ServicesCost Of Supporting Technology Services
www.costsproject.orgwww.costsproject.org
Project began 1997Project began 1997 Co-director Karen LeachCo-director Karen Leach Data collected Data collected
– Institutional demographicsInstitutional demographics– IT budgetsIT budgets– IT staffingIT staffing
IT Benchmarks developedIT Benchmarks developed
Presidents ask…Presidents ask…
How much should IT cost?How much should IT cost?– BenchmarksBenchmarks
IT budget as a percent of institutional IT budget as a percent of institutional budget (Budget Impact)budget (Budget Impact)
IT budget per capita (Budget Support IT budget per capita (Budget Support Level)Level)
IT Benchmark IT Benchmark TechniquesTechniques Select Peer/comparison GroupSelect Peer/comparison Group Look at the Look at the typical rangetypical range Look at multi-year trendsLook at multi-year trends
The The Typical RangeTypical Range
Economies of scale?
Effective strategies?
Inadequate resources?
Strategic emphasis?
Exceptional quality?
Efficiency opportunity?
25th percentile
75th percentile
Upper quadrantLower quadrant
Budget Impact Budget Impact (IT budget as percent of institutional budget)(IT budget as percent of institutional budget)
2003/2002003/20044HC = 4.6%HC = 4.6%
BLABLA MAMA
2525thth PercentilPercentilee
4.2%4.2% 3.9%3.9%
5050thth PercentilPercentilee
4.94.9 5.25.2
7575thth PercentilPercentilee
5.95.9 6.36.3
# of # of casescases
6868 2929
Budget Impact (IT budget as a percent of institutional budget)
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
MA - 25th percentile
MA- 50th percentile
MA - 75th percentile
IT budget as a percent of institutional budget
3.0%3.5%4.0%4.5%5.0%5.5%6.0%6.5%7.0%
1999
/200
0
2000
/200
1
2001
/200
2
2002
/200
3
2003
/200
4
BLA 25th percentile
BLA 50th percentile
BLA 75th percentile
Hamilton
Budget Support Level (IT budget per capita)
$0$100$200$300$400$500$600$700$800$900
1999/2
000
2000/2
001
2001/2
002
2002/2
003
2003/2
004
MA - 25th percentile
MA- 50th percentile
MA - 75th percentile
IT Budget per capita
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
BLA 25th percentile
BLA 50th percentile
BLA 75th percentile
Hamilton
Budget Support Level -Budget Support Level -Comparison Group is Comparison Group is important!!!important!!!
2003/2002003/20044HC=$1,57HC=$1,5722
BLABLA HC PeersHC Peers MAMA
2525thth PercentilPercentilee
$989$989 $1,502$1,502 $516$516
5050thth PercentilPercentilee
1,3911,391 1,6931,693 618618
7575thth PercentilPercentilee
1,6821,682 2,1502,150 819819
IT Budget per capita
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
BLA 25th percentile
BLA 50th percentile
BLA 75th percentile
Hamilton
IT budget per capita
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
$2,200
$2,400
1999
/200
0
2000
/200
1
2001
/200
2
2002
/200
3
2003
/200
4
HC Peer 25thpercentile
HC Peer 50thpercentile
HC Peer 75thpercentile
Hamilton
Budget Support LevelBudget Support Level
What drives per capita What drives per capita spending on IT?spending on IT? Institutional or IT Service Level?Institutional or IT Service Level? Institutional Size?Institutional Size?
– Is there evidence of economies of Is there evidence of economies of scale?scale?
Complexity of IT environment?Complexity of IT environment? Other?Other?
50
01
000
15
002
000
25
00
IT p
er
He
ad
20000 40000 60000 80000 100000
Budget per Student
Small Medium
Large
by Institutional Resources and Institutional Size
IT Budget Per Head – BLA Institutions
Budget Impact
(IT Budget/Institutional Budget)
X
Institutional Budget per capita
(Institutional Budget/Total campus population)
=
Budget Support Level(IT Budget/Total campus population)
Institutional budget per Institutional budget per
capitacapita
2003/2002003/20044HC=$34,311HC=$34,311
BLABLA HCHC
PeersPeersMAMA
2525thth PercentilPercentilee
$21,67$21,6744
$28,787$28,787 $10,000$10,000
5050thth PercentilPercentilee
26,03126,031 32,80032,800 12,08212,082
7575thth PercentilPercentilee
32,40032,400 36,49736,497 15,46615,466
Presidents ask…Presidents ask…
What are the key components of What are the key components of an IT budget?an IT budget?– What alternatives exist to manage What alternatives exist to manage
that budget?that budget?
Budget Profile (Percent of overall IT Budget Profile (Percent of overall IT
budget)budget) 2003/20042003/2004
(averages)(averages)BLABLA MAMA HCHC
PersonnelPersonnel 51 %51 % 52%52% 50 %50 %
Student HelpStudent Help 33 33 55
Contract/ConsultingContract/Consulting 44 55 55
Hardware/Software/ Hardware/Software/ CapitalCapital
3737 3535 3737
Professional Professional DevelopmentDevelopment
11 11 22
OtherOther 44 44 11
IT Staffing BenchmarksIT Staffing Benchmarks
?
Institutional Level
Aggregated Service Level
Service Level
Total population/Total IT staff
40.0
50.0
60.0
70.0
80.0
90.0
100.0
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
BLA 25th percentile
BLA 50th percentile
BLA 75th percentile
Hamilton
Total Population/Total IT Staff
40.0
45.0
50.0
55.0
60.0
65.0
70.0
75.0
1999
/2000
2000
/2001
2001
/2002
2002
/2003
2003
/2004
Peers 25th percentile
Peers 50th percentile
Peers 75th percentile
Hamilton
Student IT staff as a Student IT staff as a percentage of overall IT percentage of overall IT StaffStaff2003/20042003/2004
HC = 34%HC = 34%BLABLA HC HC
PeersPeers
2525thth PercentilePercentile
19%19% 19%19%
5050thth PercentilePercentile
2727 2727
7575thth PercentilePercentile
3737 3434
Aggregate Service Areas - Aggregate Service Areas - definitionsdefinitions Infrastructure supportInfrastructure support
– RepairRepair– InstallationInstallation– NetworkNetwork
Enterprise Systems SupportEnterprise Systems Support– ERPERP– WebWeb
User SupportUser Support– Help LineHelp Line– Curricular Curricular – StudentStudent– TrainingTraining
Service staffing as a Service staffing as a percentage of overall IT percentage of overall IT staffing (averages)staffing (averages)
BLABLA
HCHC1999-1999-20002000
2000-2000-20012001
2001-2001-20022002
2002-2002-20032003
2003-2003-20042004
Infra-Infra-structurstructuree
26%26%
141425%25% 23%23% 24%24% 24%24%
2222
Enter-Enter-priseprise
2424
21212525 2323 2424 2525
2121User User supportsupport
3939
55554040 4242 4040 4141
4949
Faculty/IT Curricular Faculty/IT Curricular Support StaffSupport Staff
2003/20042003/2004
HC = 43HC = 43BLABLA HC PeersHC Peers MAMA
2525thth PercentilePercentile
3232 2525 8585
5050thth PercentilePercentile
4949 3939 126126
7575thth PercentilePercentile
8282 4949 259259
Campus Population/ Campus Population/ Help Desk Help Desk
2003/20042003/2004
HC = 609HC = 609BLABLA HC HC
PeersPeersMAMA
2525thth PercentilePercentile
464464 431431 826826
5050thth PercentilePercentile
649649 531531 15681568
7575thth PercentilePercentile
902902 714714 25882588
Campus Computers/ Campus Computers/ Network Support Staff Network Support Staff 2003/20042003/2004
HC = 637HC = 637BLABLA HC HC
PeersPeersMAMA
2525thth PercentilePercentile
539539 432432 819819
5050thth PercentilePercentile
771771 655655 12201220
7575thth PercentilePercentile
10231023 795795 18601860
Students/ Student IT Students/ Student IT Support Staff Support Staff
2003/20042003/2004
HC = 184HC = 184BLABLA HC HC
PeersPeersMAMA
2525thth PercentilePercentile
215215 221221 465465
5050thth PercentilePercentile
374374 372372 810810
7575thth PercentilePercentile
662662 544544 12791279
StrategiesStrategies that could that could affect IT servicesaffect IT services InfrastructureInfrastructure
– Replacement scheduleReplacement schedule– StandardsStandards– SourcingSourcing
Enterprise systemsEnterprise systems– IntegrationIntegration– CustomizationCustomization
User supportUser support– Service levelService level– SourcingSourcing– PartnershipsPartnerships
ProgramsPrograms that could that could affect IT servicesaffect IT services InfrastructureInfrastructure
– Number of technology classroomsNumber of technology classrooms Enterprise systemsEnterprise systems
– Self-service (Web) Self-service (Web) User supportUser support
– Number of computersNumber of computers– Institutional emphasesInstitutional emphases
Quality
Cost
IT ServicesIT Services
Low High
Low
Hig
h
Strategic/
innovative??
Best Practice??
????
Opportunity for change???
Takeaways – Takeaways – GeneralGeneral
Utilize ratios (benchmarks) NOT Utilize ratios (benchmarks) NOT absolute numbers in comparisonsabsolute numbers in comparisons
Compare with similar institutions Compare with similar institutions (peers)(peers)
IT benchmarks are reflective of overall IT benchmarks are reflective of overall institutional resources institutional resources
The “typical range” is a starting point The “typical range” is a starting point for exploring institutional alternativesfor exploring institutional alternatives
Staffing/budget changes should reflect Staffing/budget changes should reflect programmatic changesprogrammatic changes
Fine grained benchmarks may be less Fine grained benchmarks may be less reliablereliable
Takeaways – Takeaways – SpecificSpecific
(BLA and MA institutions) IT investments (BLA and MA institutions) IT investments have moderated in the last year after several have moderated in the last year after several years of outpacing institutional budgetsyears of outpacing institutional budgets– IT budget typically between 4 and 6 % of IT budget typically between 4 and 6 % of
institutional budgetinstitutional budget– IT Budget per capita reflects available IT Budget per capita reflects available
institutional resources.institutional resources. (BLA and MA institutions) Approximately 50% (BLA and MA institutions) Approximately 50%
of IT budgets are for staffof IT budgets are for staff (BLA institutions) IT staff support loads are (BLA institutions) IT staff support loads are
leveling out after several years of outpacing leveling out after several years of outpacing the growth in the campus populationthe growth in the campus population
Takeaways – Takeaways – SpecificSpecific
(BLA institutions) Student help (BLA institutions) Student help provides approximately 25 % of provides approximately 25 % of total IT support total IT support
(BLA institutions) Staffing for IT is (BLA institutions) Staffing for IT is approximately:approximately:– 25% for infrastructure, 25% for infrastructure, – 25% for enterprise systems 25% for enterprise systems – 40% for user support40% for user support
Each IT staff member at MA Each IT staff member at MA institutions support approximately institutions support approximately twice the number of people as IT twice the number of people as IT staff at BLA institutionsstaff at BLA institutions
Additional ResourcesAdditional Resources
COSTS project: COSTS project: www.costsproject.orgwww.costsproject.org
Educause Core Data Service; Educause Core Data Service; www.educause.edu/apps/coredata/index.aspwww.educause.edu/apps/coredata/index.asp
CIC paper: Information Technology CIC paper: Information Technology Benchmarks, A practical guide for Benchmarks, A practical guide for College and University PresidentsCollege and University Presidents www.cic.org/publications/books_reports/index.www.cic.org/publications/books_reports/index.aspasp