1. Copyright Mary L. Pretz-Lawson & Andrew J. Clark 2005. This work is the intellectual property of the authors. Permission is granted for this material to be shared for non-commercial, educational purposes, provided that this copyright statement appears on the reproduced materials and notice is given that the copying is by permission of the authors. To disseminate otherwise or to republish requires written permission from the authors.

2. Chicken or Egg IT Services or IT Costs Mary L. Pretz-Lawson (Carnegie Mellon University) Andrew J. Clark (Syracuse University)

3. EDUCAUSE 2005* FTE 3 Comparison CMUSU Charter19001870 ControlPrivatePrivate Carnegie Class Doctoral / Research- Extensive Location Pittsburgh, PA Syracuse, NY UG students* 5,30011,700 Grad Students* 3,5004,700 Faculty*1,2501,050 Staff*3,9003,400

4. EDUCAUSE 2005 4 How do you review & value operational services/activities? 1. How do you cost operational services? 2. Can you quantify customer value? 3. Are the dependencies well known? 4. Has technology changed? (last 2-5 yrs) 5. Did customers’ needs shift (last 2-5 yrs) 6. Are the resources sufficient?

5. EDUCAUSE 2005Syracuse University 5 How do you cost operational services? Services Classroom Tech Support E-mail / Calendaring Services Faculty & Staff Desktop Services Satellite & Video Conferencing Activities (What people do) Analysis & design Development Installation Maintenance Project Management Resources (from General Ledger) Labor Wages Fringes Superfringes Hardware Software Maintenance Contracts Circuits

6. EDUCAUSE 2005Syracuse University 6 1.Develop a “proof of concept” & present to Directors. 2.Agree on provided services. 3.Identify standard list of activities. 4.Identify other pilot services to be costed. 5.(From standard list) Identify activities for service. 6.Identify the resources (e.g. labor, hardware, software, license fees, etc) used to perform the activity. Overview of cost determination

7. EDUCAUSE 2005Syracuse University 7 7.Determine how best to allocate General Ledger costs to identified activities. 8.Identify / estimate appropriate service utilization metrics. 9.Calculate cost per use or capitation or some other appropriate allocation formula. 10.Roll up all service/activity costs to identify total service costs. 11.Document future data collection & methodology needs Overview of cost determination (cont)

8. EDUCAUSE 2005Syracuse University 8 “What is it about IT that makes measuring its strategic value so difficult? Every consultant, practitioner, or faculty member has a unique method for capturing IT value” “What is it about IT that makes measuring its strategic value so difficult? Every consultant, practitioner, or faculty member has a unique method for capturing IT value” Mark R. Nelson, ECAR Fellow “Value is really problematic since it is so much ‘in the eye of the beholder.’ To me, value is really a function of an institution’s goals, so there is very little guidance in either the theory or the practitioner literature to help you there” “Value is really problematic since it is so much ‘in the eye of the beholder.’ To me, value is really a function of an institution’s goals, so there is very little guidance in either the theory or the practitioner literature to help you there” Richard Katz, EDUCAUSE VP Can you quantify customer value?

9. EDUCAUSE 2005Syracuse University 9 1.Agree on service – SU vision/goal alignment 2.Agree on possible value measures. 3.Identify appropriate value measures for each service. 4.Confirm pilot services and initial value to be assessed. 5.Refine assessment and apply to all services. 6.Determine and complete additional value measures for all services. Overview of value determination

10. EDUCAUSE 2005Syracuse University 10 Are the dependencies well known? ServiceComponentsContributing departments 123456 Academic Information Systems Application Delivery XX Application Support XX Application Enhancements & Development XX Information Delivery XX Application Installation XXX Maintenance X

11. EDUCAUSE 2005Syracuse University 11 Lessons learned Wins Wins CIO support CIO support Change in culture Change in culture Common framework for service discussion Common framework for service discussion Supports RCM Supports RCM Proof of concept Proof of concept Pilot approach with services Pilot approach with services To be Improved Multi-year complex effort Defining services Defining activities Data collection Value measurement

12. EDUCAUSE 2005Carnegie Mellon 12 Carnegie Mellon Activity Reviews WHAT service is being provided? WHAT service is being provided? TO WHOM is the service provided? TO WHOM is the service provided? HOW is the service provided? HOW is the service provided? Service description and goals Stakeholder, requirements, usage Work flow, operational issues, FTE count

13. EDUCAUSE 2005Carnegie Mellon 13 CMU Activity Review Process Attendees Attendees Management team – directors & CIO Management team – directors & CIO Architects from system, network, users groups Architects from system, network, users groups Stakeholder managers (internal only) Stakeholder managers (internal only) Preparation by manager/service lead Preparation by manager/service lead Worksheet asking the “hard questions” Worksheet asking the “hard questions” Pre-read/executive summary to attendees Pre-read/executive summary to attendees PowerPoint presentation and open Q&A PowerPoint presentation and open Q&A Break into management team executive session Break into management team executive session Feed action plan into 6-month tactical planning Feed action plan into 6-month tactical planning

14. EDUCAUSE 2005Carnegie Mellon 14 Has Technology Changed? (2-5 yrs) Lab/Cluster Software Applications activity review Lab/Cluster Software Applications activity review Statistics on # of applications Statistics on # of applications # of stations by OS type # of stations by OS type Staffing per OS software Staffing per OS software Areas of exposure Areas of exposure Reached saturation in ability to prepare applications for MacOS and Windows with current staff using current tools and procedures Reached saturation in ability to prepare applications for MacOS and Windows with current staff using current tools and procedures Solution Solution Evaluation of disk imaging and terminal server pilot Evaluation of disk imaging and terminal server pilot

15. EDUCAUSE 2005Carnegie Mellon 15 Did Customers’ Needs Shift ? (2-5 yrs) Email Client activity review Email Client activity review Goal to reduce email client support costs Goal to reduce email client support costs Replace anecdote with client usage data Replace anecdote with client usage data Turned on SMTP logs Turned on SMTP logs Graphs on client usage by customer sector Graphs on client usage by customer sector Fewer customers using Outlook than assumed Fewer customers using Outlook than assumed Director will propose solution based on support cost & complexity, not user survey Director will propose solution based on support cost & complexity, not user survey

16. EDUCAUSE 2005Carnegie Mellon 16 Are the Resources Sufficient? Computer Store activity review Computer Store activity review Vital statistics Vital statistics Store staffing complement Store staffing complement Sales segments – retail, bulk department purchase Sales segments – retail, bulk department purchase # of units sold per OS # of units sold per OS Reviewed P&L statement for last 4 years Reviewed P&L statement for last 4 years What would you do with 25% more or less resources? What would you do with 25% more or less resources? Approval to hire additional PT purchasing staff Approval to hire additional PT purchasing staff

17. EDUCAUSE 2005Carnegie Mellon 17 CMU Activity Review Improvements Wins Wins Visibility of service at executive level Visibility of service at executive level High level overview that opens the question High level overview that opens the question Information useful to manager and director Information useful to manager and director Some dependencies uncovered Some dependencies uncovered Tie into 6-month tactical planning Tie into 6-month tactical planning To be Improved Tie to allocation Slice/dice coverage for all divisions services Long term benefits may be negligible Missing metrics for apples-apples analysis Tracking of uncovered issues Better usage/client data

18. EDUCAUSE 2005Carnegie Mellon 18 Activity review web site http://www.cmu.edu/computing/techintegration/ http://www.cmu.edu/computing/techintegration/ activityreview.htm http://www.cmu.edu/computing/techintegration/

19. Questions ?

20. Contact Information: Mary L. Pretz-Lawson Carnegie Mellon University Associate Director for Technology Planning E-mail: E-mail: mlpl@cmu.edu mlpl@cmu.edu Andrew J. Clark Syracuse University Chief Process Architect E-mail: E-mail: ajclark@syr.edu