Benchmarks: Helping Your President Understand IT Investments

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%


4.94.9 5.25.2


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


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- 50th 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


$989$989 $1,502$1,502 $516$516


1,3911,391 1,6931,693 618618


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



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


$21,67$21,6744

$28,787$28,787 $10,000$10,000


26,03126,031 32,80032,800 12,08212,082


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



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%


2727 2727


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


3232 2525 8585


4949 3939 126126


8282 4949 259259

Campus Population/ Campus Population/ Help Desk Help Desk

2003/20042003/2004

HC = 609HC = 609BLABLA HC HC

PeersPeersMAMA


464464 431431 826826


649649 531531 15681568


902902 714714 25882588

Campus Computers/ Campus Computers/ Network Support Staff Network Support Staff 2003/20042003/2004


PeersPeersMAMA


539539 432432 819819


771771 655655 12201220


10231023 795795 18601860

Students/ Student IT Students/ Student IT Support Staff Support Staff

2003/20042003/2004


PeersPeersMAMA


215215 221221 465465


374374 372372 810810


662662 544544 12791279

Strategies

+

Programs

=>

Staffing/Budget Levels

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

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Benchmarks: Helping Your President Understand IT Investments