6. IT SPEND AT PENN STATE
6
• IT Assessment – 2010
~$250 million associated with IT Spend or ~6% of
the Operating Budget
ITS
33%
Budget
Admin
67%
7. FUNDING IT – CONCEPTS
7
• Funding IT services is NOT about identifying
new funds
Tuition
Student IT Fee
Technology Access Fee
Other
• ONE UNIVERSITY!
Working towards a common mission
o Education
o Research
o Outreach
8. FUNDING IT – CONCEPTS
8
• Funding IT services is about efficiently
allocating a limited resource
• Influencing behaviors
Informed Decisions
IT Service Consumer
IT Service Provider
10. 10
+ Economies of Scale
+ Research/Resources
– Slow to respond to changes
in demand
– Requires strong governance
to be effective and efficient
ECONOMICS - MONOPOLIES
11. 11
+ Drives Innovation
+ Responsive to changes in demand
– Duplication of effort/resources
– Needs to be truly “open” to be efficient
ECONOMICS - COMPETITION
15. 15
Funding IT is about influencing the behaviors of
the service consumer and service providers
which best serves the institution.
• Efficient resource allocation and use
• Maximize benefits and impact to meeting
business requirements of institution
RELEVANT TO IT FUNDING – HOW?
16. 16
FUNDING APPROACH
Behavior Funding Characteristic Efficiency
Driver
No Consumer Choice
• IT services that everyone is
required to use
Service Provider Monopoly Governance
Consumer Choice
• IT services that units choose
to use must be paid for or
cost shared with the units
Service Consumer Competitive Market
Place
17. 17
APPROACH TO HOW TO FUND IT
Compliance/ Life
Safety/ Risk
No Consumer
Choice
Centrally Fund
Service Provider
Core/Enterprise
Service
Potential
Consumer
Choice
Shared Funding
– Central & Unit
Competitive/
Differentiated
Service
Consumer
Choice
Consumer/ Unit
Funded
18. 18
PROPOSED @ PENN STATE
Type of Service Target Behavior Optimal Funding Examples
•Compliance
•Life Safety
•Risk Mitigation
•Near Complete
Adoption
•No variability due to
differential priorities
•Centrally Funded •Payroll/Financial
•Video Surveillance
•Student Systems
•Core-Service
•Substantial Adoption
•Disincentive to
duplicate service
•Leverage Economies
of Scale
•Centrally Funded
•Technology Fees
•All units participate
regardless of
usage
•Wireless Networks
•Voice
•E-Mail
•Storage
•Server Hosting
•Data Center
•Differentiated
Service
•Meet specific and
unique business needs
•Options spur
innovation
•Funding provided
to unit for
discretionary
decisions
•Department
specific software
•Edge networking &
computing
19. OTHER CONSIDERATIONS
• Optimize the effective and appropriate use of
IT funding sources
Develop a common set of principles for all budget
executives to use for IT funding and costing
decisions
• Effective IT Governance is critical
A governance board without budgetary authority
is just an advisor board.
19
20. 20
SERVICE PROPOSAL
Project Name:
Person Submitting
Proposal:
Sponsors:
Stakeholders
Project Category ( ) Enterprise System
( ) Instructional Technology
( ) IT Service
( ) Research
Technology
( ) University
Services
Mission Critical ( ) Provides Competitive
Advantage
( ) Prevents Competitive
Disadvantage
( ) Address compromised operational
efficiency or customer dissatisfaction
( ) Provides significant incremental
revenue or cost savings to the
University
Nature of Project ( ) Renovation
/Enhancement of existing
system/process/asset
( ) Replacement of existing
system/process/asset
( ) Initiation of new system/process/asset
Core Mission ( ) Academic/Student ( ) Research
( ) Other
( ) Service
( ) None
21. 21
SERVICE PROPOSAL
University Strategic
Goals
( ) Enhance Student
Success
( ) Advance Academic
Excellence
( ) Global University
( ) Access/Affordability &
Diversity
( ) Serve Commonwealth
and Beyond
( ) Control Costs
& Generate
Efficiencies
Compliance ( ) Internal Mandate ( ) External Mandate ( ) No Mandate
Business Need &
Project Goals
Consequences if
Not Funded
Sectors of University
Impacted
Benefits
Risks
Budget
Requirements
Personnel
Requirements
22. 22
Year 1 Year 2 Year 3 Year 4 Year 5
1.0 Research, Development, Test and Evaluation
1.01 Development Engineering
1.01.1 In-House Labor
1.01.2 Vendor/Contract Labor
1.02 Development Equipment
1.02.1 Hardware
1.02.2 Software/Application
1.02.2.1 COTS/Vendor
1.02.2.2 In-House Labor (Mod/Change)
1.03 System Engineering/Program Management
1.03.1 Labor
1.03.2 Systems
1.04 System Test and Evaluation
1.04.1 Labor
1.04.2 Systems
1.05 Development Facilities & Infrastructure
1.06 Training
1.07 Other RDT&E
23. 23
Year 1 Year 2 Year 3 Year 4 Year 5
2.0 Production Procurement & Implementation
2.01 System Engineering/Program Management
2.01.1 In-House Labor
2.01.2 Systems
2.02 System Changes/Modifications
2.02.1 In-House Labor
2.02.2 Vendor/Contract Labor
2.03 Production Equipment
2.03.1 Hardware
2.03.2 Software/Application
2.03.2.1 COTS/Vendor
2.03.2.2
In-House Labor
(Mod/Change)
2.04 System Test and Evaluation (Production)
2.04.1 Labor
2.04.2 Systems
2.05 Facilities & Infrastructure
2.06 Training
2.07 Activation/Implementation
2.08 Other Procurement & Implementation
24. 24
Year 1 Year 2 Year 3 Year 4 Year 5
3.0 Operations, Maintenance & Support (OMS)
3.01 System Engineering/Program Management
3.01.1 In-House Labor
3.01.2 Systems
3.02 System Maintenance & Operations
3.02.1 In-House Labor
3.02.2 Vendor/Contract Labor
3.03 Production Equipment
3.03.1 Hardware Maintenance
3.03.1.1Spare
3.03.1.2Maintenace Spt/Contracts
3.03.2 Software/Application Maintenance
3.03.2.1COTS/Vendor
3.03.2.2In-House Labor (Mod/Change)
3.04 Facilities & Infrastructure
3.05 Training
3.06 Other OMS
25. 25
• Monopolistic => Fund the Service Provider
• Competitive => Fund the Service Consumer
FUND IT BASED ON DESIRED OUTCOME
