Smart IT spending strategies.

With decreasing funding and increasing demand from students and faculty for the technology, smart spending of technology budgets is crucial at colleges and universities today. But IT decision makers are working hard to keep costs down and savings up while helping to further the missions of their schools. On the following pages are results of a University Business magazine survey of 160 chief information officers and IT directors from colleges and universities nationwide in which we sought to find out how and where their IT dollars were being spent. We also contacted many of the respondents to learn more about the challenges and successes at their institutions.

BEING 146 MILES APART DOESN'T KEEP LAKE FOREST College (Ill.) and Kalamazoo College (Mich.) from sharing their IT resources. Taking lessons from the for-profit sector, these small, liberal arts colleges, with only 2,600 students between them and similar institutional missions, began collaborating by sharing a server for their e-mail systems at a center in Chicago.

The savings, according to Lake Forest's Director of Library and Information Technology Jim Cubit, have only been $5,000 to $10,000 off the bat, but as they share more resources, and as more schools join their partnership, the return on investment can only multiply.

Resource sharing is just one of many different strategies IHEs are using to spend their IT dollar wisely. In times of decreasing state and federal subsidies and funding, combined with increasing demand from end users (students and faculty), institutions have been getting creative in use of their budgets.

That's one of the findings from "Higher Education Technology Spending Report 2005: Smart Spending Strategies," based on the results of a web survey conducted by University Business in October.

The survey also found that equipment standardization was not just an effective money-saver, it reduced support demands as well. Eighty-four percent of the respondents have made the move to standardization. Schools are no longer just worried about providing fancy computers at labs; now they have to provide technical support to a generation that is increasingly dependent on technology to meet their everyday needs and entertainment, but not so talented at, or interested in, say, fixing their hard drives.

On these pages are other highlights from the survey, as well as several stories of how the colleges and universities that responded have risen to the challenge of keeping costs under control.

An Unusual Partnership

Long-time colleagues Jim Cubit and Lisa Palchick have a lot in common. Both head up IT departments at their respective colleges, which have merged library/IT departments. Both work at small liberal arts college with budget constraints. And both enjoy collaborating.

As small institutions with limited resources, Lake Forest and Kalamazoo colleges realized the only way each school could continue educating students while providing high-quality IT services was to merge their back-office functions such as e-mail and help desks.

"I think the IT world is not as used to collaborating as the library world so it's fun to be thinking about something new like this," says Palchick, dean of Libraries and Information Services at Lake Forest College.

By maintaining separate help desks, servers, hardware and software licenses, and so on, each school was duplicating its efforts over and over again. As Cubit puts it, "We each kind of reinvented the wheel."

With both schools seeking an e-mail or groupware solution in 2004, it made sense to pool their resources and negotiate for a good deal.

They've gotten more than one. They've saved on the costs for maintenance, staff, and hardware and software purchases and licensing. With their shared space in a data center where they keep their servers, they're saving even more and can also guarantee security and internet access regardless of the power status on both campuses.

The colleges are already running their help desk tracking systems off a shared server, and are now merging their staffing capabilities so that either college could answer calls for the other. This would free up staff time for more pertinent concerns.

They are also moving toward sharing a server for their shared e-mail service. During negotiations the schools told telecommunications vendor SBC Communications, "If you win the contract for one, you win it for both."

In several years, the ROI for both schools could reach $250,000, according to Lake Forest spokesperson Liz Libby.

Profiting from Outsourcing

Patient care and academics is far more important at Nebraska-based Creighton University than spending on technology that may soon be outdated, says Vice President of Information Technology Brian Young at the institution, which supports a medical center.

"We are focusing every single dollar towards what we felt was important," he says.

That's why Creighton officials decided to outsource its high-speed communications service to Cox Communications. Students now have access to cable television and high-speed internet in their residence halls.

One problem the school faced prior to outsourcing its high-speed internet service and rewiring was that, although there was a replacement cycle in place, they didn't necessarily meet the technology goals every year. "So you wind up having some buildings that may not be as up to speed as others with higher speed communications," Young says.

Creighton considered outsourcing to avoid having to be beholden to a replacement cycle. With an annual budget of $8 million, it wouldn't have made sense to rewire eight buildings by themselves at a cost of $15 million.

Creighton had to look for a third-party vendor to supply high-speed access to its students at a reasonable cost, and if all things were taken into consideration, it would directly reduce what they would normally pay on a replacement cycle of seven to 10 years. "It really becomes a no-brainer to understand where we should maximize our dollar," Young says. "Some of the companies out there already have that model, that's their business," so it made sense for Creighton to go the way of outsourcing.

Now, not only do buildings have high-speed communications, they also have access to their very own dedicated IT help hotline operated by Cox. Creighton also has a sophisticated direct monitoring system that can detect whether even a single modern on campus is not running.

Young can't reveal how much Creighton has saved on outsourcing, but he said it is a substantial amount, and that money can now go toward other projects.

Making the Switch to VoIP

In January 2003, Brevard Community College (Fla.) decided that it was time to replace its telecommunications system with a Voice over Internet Protocol network.

Vice President of Finance and Administrative Services Al Little says the school needed to change systems before it experienced a "critical failure." At the time, an older analog switch was being used, but it had shown signs of failure and repair parts were becoming increasingly hard to find.

Switching to VoIP would save $600,000 over replacing Brevard's four-campus, 1,300-line system with a PBX switch at a cost of $2 million.

Since the college already had advanced WAN and LAN capabilities, administrators realized it would make sense to converge their data and voice networks.

The biggest obstacle, Little explains, was properly preparing Brevard's network for the increased traffic that came with converging these networks. By building in redundancies and traffic monitoring, Brevard was able to "protect, direct, and control network flow."

The school had certainly anticipated the cost of these upgrades when they began saving several years ago for the switch-over. At the time, Brevard did not know which telecommunications system would ultimately be adopted, but officials saw the need coming and began redirecting surplus funds into an account that would eventually be used to pay off the new system. Because of the planning and care put into preparing for a new system, the school was actually able to buy the new technology instead of leasing it.

Little says setting up the VoIP network has improved call routing, answering setup, and reporting functions. The school is also seeing savings on an ongoing basis in maintenance costs because it had eliminated a separate technology. (Brevard had previously contracted out the maintenance and servicing of the telecommunications system.)

Little says, "It's difficult to put a dollar figure on the savings, but we've been extremely pleased with our outcomes. I think it was a solid financial decision. Looking back, I wouldn't do anything different."

What's Your Definition of Smart IT Spending?

"Maximizing every dollar to fulfill your institution's mission of serving students, and, in our case, serving patient care. "

--Brian Young, vice president of Information Technology, Creighton University (Neb.)

"Trying to provide those top-notch user-support services while containing some of the costs in the back-office systems that we [and our institutional partners] all have in common."

--Jim Cubit, director of Library and Information Technology, Lake Forest College (Ill.)

"Using your resources judiciously, and, yet, providing the best the college can possibly do within their means to provide information technology. Smart means making your money go further. "

--Lisa Palchick, dean of Libraries and Information Services, Kalamazoo College (Mich.)

"A combination of a vision of where you need to go with the applications and resources that you have."

--Al Little, vice president of Finance and Administrative Services, Brevard Community College (Fla.)

"It's pretty simple: It's getting the most for your money, tailoring solutions to the size of the institution, negotiating cost, forming strong alliances with businesses, and academic alliances. "

--Mitch Davis, chief information officer, Bowdoin College (Me.)

"I think it starts right at the top, asking the right questions. I'm continually asking administrators, 'Is this something we really need to continue to support?' I'm always questioning and I'm always having my [staff] question the departments they work with."

--Terry Hutchins, vice president of Information Technologies, Kalamazoo Valley Community College (Mich.)

Have your total IT budget dollars increased
or decreased in the past year?

                        Percent     Total

INCREASED                 49%        77
DECREASED                 16%        26
STAYED THE SAME           33%        53

Total responses: 157

At Kalamazoo Valley Community College (Mich.), the IT budget
had increased substantially only because they knew that a number
of product warranties were about to expire. "We knew two years
ago or a year ago that we would be taking a hit on some of our
service contracts," says Vice President of Information Technologies
Terry Hutchins.

Note: Table made from bar graph.

Do you anticipate spending differently on
these areas next year?

ADMINISTRATIVE
COMPUTING

             Percent       Total

MORE           33%          52
LESS           16%          25
SAME           50%          79

Total responses:           156

ACADEMIC
COMPUTING

             Percent       Total

MORE           46%          73
LESS            7%          12
SAME           45%          72

Total responses:           157

CLASSROOM
TECHNOLOGY

             Percent       Total

MORE           59%          93
LESS            6%          10
SAME           33%          53

Total responses:           156

What area of IT
spending made up your
largest budget expenditure
this year?

Because of a federal grant
of $1.8 million to be
disbursed over the next
five years, Lackawanna
College (Pa.) spent
more money on the
administrative
computing category.
School officials
replaced an aging
database and
purchased web-based
instructional tools.
"If it wasn't for that
grant I don't know what
we would be spending,"
says Griff Lewis, senior
director, MIS.

Total Responses: 52           32%
Administrative Computing

Total Responses: 3             1%
Outside Services
(hardware installation,
warranties, services
contracts, etc.)

Total Responses: 5             3%
Servers/Storage

Total Responses: 8             5%
Software Licensing

Total Responses: 11            6%
Classroom Technology

Total Responses: 13            8%
Other

Total Responses: 15            9%
Networking

Total Responses: 25           15%
Academic Computing

Total Responses: 25           15%
Classroom Technology

Note: Table made from pie chart.

Compared with last year, have you spent
more, less, or the same amount of money
this year in each of these areas?

ADMINISTRATIVE
COMPUTING

                    Percent    Total

MORE                  49%        77
LESS                  16%        26
SAME                  33%        53

Total responses:                156

ACADEMIC
COMPUTING

                    Percent    Total

MORE                  43%        69
LESS                  13%        21
SAME                  43%        68

Total responses:                158

CLASSROOM
TECHNOLOGY

                    Percent    Total

MORE                  50%        80
LESS                  15%        24
SAME                  34%        54

Total responses:                158

Do you outsource any IT functions?

"We know we need help in areas," says
Terry Hutchins of Kalamazoo Valley
Community College (Mich.). In order
to keep our staff and training costs
down we have a couple of different
firms we work with on a regular basis
in terms of our overall network design.
It just makes sesnse that we pay them
to help us. We've got a great staff, but
they're not all network engineers. So
we pay for that service."

Yes              35%

HELP DESK         5%
IT SUPPORT       15%
SECURITY         10%
TRAINING         11%
OTHER            55%
No               65%

What is your institution's typical replacement
cycle on administrative and academic
computer hardware?

                   ADMINISTRATIVE   Total:    ACADEMIC   Total:

2 years or less          0%            1         5%        8
3 years                 30%           48        45%       71
4 years                 40%           64        36%       57
5 or more years         27%           43        12%       20

Total Responses:        156                     156

Note: Table made from bar graph.

Is your institution
more likely to buy
the latest technology
immediately, or wait
until the price point
on the product
category goes down?

"It depends on the need,"
says Bowdoin College's
(Maine) Chief Information Officer
Mitch Davis. If a faculty
member is doing computational
research, Bowdoin
officials are willing to buy the
latest technology to aid in the
faculty member's work.
Otherwise, they try to "negotiate
toward cost of quality."

Buy Now             15%
Wait                84%
Total responses     157

Has your institution standardized
its technology purchases?

YES  92%
NO    7%

If Yes, which vendors do you work with most?

Although it turns out that
Dell won this contest, its
competitors come in a strong
second because institutions
like Kalamazoo Valley Community
College standardize
hardware and software on a
departmental basis.

Dell                    34%
Apple                   20%
HP                      17%
IBM                     10%
Other                    8%
Gateway                  7%

If no, do you plan on
standardizing in the next year?

YES                     37%
NO                      62%