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Benchmarking IT costs: first find reliable data that is comparable to your own, then figure out what that information means to your own IHE.

The rookie IT director, only a year or two on the job, was excited when he received the annual report from his college's peer data-sharing group. He rushed in to the president to show him that the increases they had made in the IT budget had catapulted the school from the bottom half to the top half of the list. Now they were keeping company with schools that had enviable reputations and a serious commitment to IT.

"What did you want to do that for?" said an older and wiser mentor later on. "Now the president will think that he doesn't have to spend any more on IT!"

How interesting that these two individuals could come to such markedly different conclusions about the same data. But it points up one of the dilemmas about getting your hands on such information: What actions can you reasonably take, based on the acquisition of comparative data? The other, more immediate dilemma associated with comparing IT costs across institutions is: How do you get reliable and comparable data in the first place?

FINDING RELIABLE DATA

The higher education world is notoriously collaborative compared to industries where secretive, cutthroat competitiveness is the order of the day. Ever since IT burst onto the campus, burdening budgets with new and outrageous demands, schools have been sharing information about what they spend on their technology, both formally and informally. For example, the 59 colleges that make up the Consortium of Liberal Arts Colleges (CLAC) have long shared data about IT budgets, staffing, and numbers of computers. In fact, CLAC makes the aggregated data from their survey available to everyone, at www.liberalarts.org.

On a wider scale, a major data-sharing project called COSTS (www.costsproject.org) was launched at a birds-of-a-feather session at the 1996 CAUSE conference (precursor to EDUCAUSE). By the following year, co-directors Karen Leach and David Smallen, now both of Hamilton College (NY), presented their first results. There were 100 participating schools in that first year, and over 200 institutions have participated in one or more years since then.

Leach and Smallen provided a much-needed set of definitions by identifying "core" IT services, and collecting data on how each institution funded each one of those services. In order to enable participants to make useful comparisons, the COSTS reports compute some key ratios, such as the percentage of the institutional budget that goes to IT, and the ratio of computer services staff to the number of people they are serving.

Based on the 2002 COSTS survey, Leach and Smallen have drawn the following conclusions:

* Growth in IT budgets is slowing.

* IT's share of the pie is relatively unchanged, compared to previous years.

* Half of IT budgets are for staffing.

* Selective liberal arts colleges spend twice as much per person (student, faculty, staff) as masters institutions.

* IT staff continues to grow faster than institutional staff, at all types of institutions.

More good news: Within the past year, EDUCAUSE has begun a new data-sharing project, Core Data Service, drawing on the expertise developed in previous projects (Smallen of COSTS and Martin Ringle of CLAC participated in the EDUCAUSE advisory group that designed the project), and incorporating Lessons Learned from the years-earlier CAUSE Institutional Database Service (ID) project. The first data from the Core Data Service is now available to those who took part in the 2002 survey (www.educause.edu/core-data). A summary of the data will be available to the non-participating public in September. A total of 619 institutions have participated thus far, including a very significant number of larger institutions, for which it often takes more work to pull together comprehensive data.

The EDUCAUSE Core Data Service collects information such as IT organization and reporting relationships, staffing levels inside and outside the central IT organization, dollars spent on various IT functions and services, sources of revenue for IT expenses, faculty and student computing activities, networking and security, and information systems.

HOW COMPARABLE IS THE DATA AND THE SOURCE?

Following are some of the key points of comparison between COSTS and the EDUCAUSE Core Data Service:

* Cost. Both are free.

* Longevity. COSTS has been collecting data since 1997 and has begun to draw longitudinal conclusions. ECDS is just completing its first cycle.

* Demographics. COSTS has appealed mainly to liberal arts colleges and comprehensive masters institutions. ECDS has already drawn significant participation from all Carnegie categories of institutions, and from both public and private campuses.

* Effort required. It depends on how good a handle you have on your own data. Institutions with distributed control over IT services and budgets will have a harder time pulling this data together; on the other hand, this effort may pay off in a better understanding of what the real costs of IT are, within the institution. One of the side effects of benchmarking other institutions may be to foster increased clarity about your own affairs.

* Access policy. Both projects provide only summary data to the general public and nonparticipating schools COSTS also provides aggregated data with analysis to all participants on a monthly basis. Institutions can request a custom-aggregated report for any five institutions of their choosing and any group of institutions that are willing to share complete data can form a "peer" consortium. Consortia members receive an additional monthly spreadsheet with all the data from their peers, as well as comparative analyses. There are currently three consortia within COSTS. On the other hand, all participants in ECDS have access to the raw detail of each participant's survey using a Web-based tool that also allows users to select their own comparison groups and apply various filters to the data. ECDS does not currently make custom reports for participants, but provides the tools to do your own reporting.

* More about access. Brian L. Hawkins, president of EDUCAUSE says that access to the specific responses of each of the participating schools is what gives the EDUCAUSE Core Data Service much of its value. "We did a lot of research in designing the Core Data project," says Hawkins, "and that's the kind of information that people told us they wanted. Aggregated data is less useful. The response so far has been tremendously positive." There was concern at the beginning of the project that schools would hesitate to take part if they knew that their responses would be read by others in the study. That has turned out not to be a problem, says Hawkins, at least in part because of the serious way that EDUCAUSE is approaching the confidentiality of the data. "Participants know that the rules are very strict about not releasing the data to others, even to the point of litigation," Hawkins points out. "This data is strictly for community use, for internal planning."

MORE SOURCES

Further sources that IHEs have found helpful in understanding what other campuses are doing include Kenneth Green's Campus Computing Project (www.campuscomputing.net), which focuses on academic computing, and the position-by-position salary comparisons and staffing survey of HEITS, Higher Education Information for Technology Services (www.heits.org). The College and University Professional Association for Human Resources (CUPA; www.cupahr.org) provides survey data on staffing performance and costs.

WHAT TO DO WITH THE DATA

What can you do with comparative cost data once you get it? Ah, that's the question, for applying this information to the planning process is the hard part. Smallen and Leach are preparing a paper for college presidents which will be distributed through the Council of Independent Colleges (CIC; www.cic.org). The paper uses the insights gained from the COSTS benchmarking project to help presidents answer the following questions: How much should I expect my institution to invest in core information technology infrastructure and services? How can knowledge about ranges in IT spending for other institutions, including peers, help my institution develop strategies that will be effective and efficient? What additional issues are important for me to understand, to go beyond core services and enhance competitive position? Importantly, the authors frame their answers in the context of the hard choices that presidents have to make about issues such as tuition and financial aid, faculty and staff compensation, plant maintenance, diversity, and the shifting realities of fundraising.

DRAWING CONCLUSIONS

Benchmarking IT costs is only the start of the conversation. As in the case of the new IT director and his president I spoke of at the beginning of this column, it is possible to read the same data and come to different conclusions. An institution has to weave the comparative data into a longitudinal picture: Where have you been, where are you now, and where do you want to get to? But the cost of acquiring that data is relatively low--it's whatever it costs to putt together the intelligence about your own budgeting situation--so make sure you have it in your hands as you head into IT budget planning.

John Savarese is a consulting principal for Edutech International (www.edutech-int.com).
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Title Annotation:Technology
Author:Savarese, John
Publication:University Business
Date:Aug 1, 2003
Words:1488
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