1. The University of Memphis Costs and Budgeting for IT in Higher Education IT Trends & Issues in Higher & Adult Education February 14, 2006 Class #4 College of Education Department of Higher & Adult Education Leadership James Penrod

2. The University of Memphis NASULGC Universities Connecting with the Future, 1999 From the laptop to the gigaPoP, colleges and universities are pouring significant resources into a wide array of advances in information technology needed to fulfill their multiple missions of teaching, research and public service in the Information Age. Investments in basic information technology, equipment and services have been underway for several years, and many …universities already have highly sophisticated capabilities. …The ever-increasing technological needs, coupled with the tremendous expense and brief shelf-life of rapidly emerging technologies, challenge university administrators to make difficult choices about funding priorities and to creatively seek out new sources of of financing.

3. The University of Memphis Elements of a Typical Higher Education IT Budget Personnel Computers –Servers –Personal devices –Special purpose –Peripheral equipment Software –Administrative and academic applications –Research /instructional –Personal productivity Networks –Voice, data & video –Internet2 –Peripheral equipment –External services Special purpose equipment/software Professional development Consulting General Operations Contingency

4. The University of Memphis Total IT Budget 2004 Academic Proportion All Institutions $9,276,740 (33.3%) Public Universities $33,333,333 (30.0%) Private Universities $26,834,373 (21.4%) 4-Year Public Colleges $7,491,939 (33.2%) 4-Year Private Colleges $3,488,384 (34.1%) 2-Year Public Colleges $4,012,110 (39.1%) 2-year Private Colleges $2,418,750 (32.0%) Source: Campus Computing 2004

5. The University of Memphis 2004 IT Budget versus 2003 IT Budget for Universities (Academic Computing) Private Reduced > 5% 7.7% Reduced 3-5% 2.6% Reduced 1-3% 12.8% No Change 35.9% Increased 1-3% 28.2% Increased 3-5% 10.3% Increased >5% 2.6% Source: Campus Computing 2004 Public Reduced > 5% 1.4% Reduced 3-5% 11.1% Reduced 1-3% 19.4% No Change 36.1% Increased 1-3% 20.8% Increased 3-5% 6.9% Increased >5% 4.2%

6. The University of Memphis 2004 IT Budget versus 2003 IT Budget for 4-Year Colleges (Academic Computing) Public Reduced > 5% 24.0% Reduced 3-5% 12.5% Reduced 1-3% 8.7% No Change 30.8% Increased 1-3% 13.5% Increased 3-5% 3.9% Increased >5% 6.7% Private Reduced > 5% 6.3% Reduced 3-5% 2.6% Reduced 1-3% 6.3% No Change 46.2% Increased 1-3% 33.2% Increased 3-5% 7.9% Increased >5% 6.3% Source: Campus Computing 2004

7. The University of Memphis 2004 IT Budget versus 2003 IT Budget for 2-Year Colleges (Academic Computing) Public Reduced > 5% 4.7% Reduced 3-5% 5.7% Reduced 1-3% 5.7% No Change 46.2% Increased 1-3% 23.6% Increased 3-5% 6.6% Increased >5% 7.6% Private Reduced > 5% - Reduced 3-5% - Reduced 1-3% - No Change 60.0% Increased 1-3% 40.0% Increased 3-5% - Increased >5% - Source: Campus Computing 2004

8. The University of Memphis Percentage of Current Operating Budget Allocated For IT All institutions6.6% Public Universities5.2% Private Universities4.5% 4-Yr Public Colleges6.1% 4-Yr Private Colleges6.7% 2-Yr Public Colleges8.9% 2-Yr Private Colleges8.2% Source: Campus Computing Survey, 2004

9. The University of Memphis Funding for IT Initiatives at NASULGC Institutions: 1998-99 Operating Budget 85% Student Fees 71% Earmarked State Funding 66% Federal Funding 45% State Funding Increases 43% Auxiliary Funds 39% Private Donations 31% Private Partnerships 26% Other Sources 6% Source: NASULGC IT Survey, 1998-99

10. The University of Memphis Some Common IT Expenditures All Institutions 2004 Academic PCs 77.0% Desktop PCs 74.3% Net servers 83.6% Server software 84.4% User training 81.8% Portal service 91.7% ERP services 91.3% E-commerce 90.5% External svcs 81.7% Security issues 93.0% Consultants 73.4% Source: Campus Computing Survey, 2004

11. The University of Memphis Annual Student Fee Funding Public Univs = $230 Private Univs = $164 The UoM = $225 Public 4-year = $248 Private 4-year = $168 Public 2-year = $140 Private 2-year = $134 All Institutions = $182 Source: Campus Computing Survey, 2004

12. The University of Memphis IT Budget Related Issues (All Institutions) 30.5% reducing computer purchases 22.6% charging units for services 49.8% charging student IT fee 20.9% leasing hardware 75.9% recycling older equipment 43.4% using IT to reduce instructional costs 20.4% outsourcing services 15.3% reducing hours in public access labs 21.6% reducing services 49.0% reorganizing operations 22.4% reducing staff 72.0% using more students Source: Campus Computing 2004

13. The University of Memphis FY01FY02FY03FY04 TAF 4,444,9754,500,000 Operating 7,317,1977,619,0197,479,0007,568,558 Sub Total 11,762,17212,119,01912,119,00012,068,558 Capital 2,646,0002,231,0002,280,0002,625,141 Total 14,408,17214,350,01914,259,00014,693,699 UoM IT Budget (In Dollars)

14. U of M TBR Designated Peers University of Alabama University of Arkansas, Fayetteville University of South Florida Georgia State University University of Louisville University of Mississippi University of South Carolina University of Houston George Mason University Virginia Commonwealth University Funding formula...

15. The University of Memphis U of M Ranking with Peers 2003 Institution FTE Dist IT FTE IT FTE IS Budget U of M (15889) 65 95 $14.257M Peer Mean (18382) 80.6 179.6 $19.421M Dr. Ext Mean (NA) 223.4 208.1 $26.412M Based on 7 of 10 THEC peers

16. The University of Memphis UoM IT Budget as % of Total

17. The University of Memphis Concluding Observations IT budgets have & will continue to grow and maintain a set proportion of the total institutional budget. IT budgets must be seen as basic to institutional operation & essential to all. IT budgets should be multi-tiered, centralized & distributed. Changing IT budgets are complex & growing more so; they must be understood & supported by senior administrators as well as IT leaders.

18. The University of Memphis Concluding Observations--2 IT budgets are far too important today & in the future to be left to technicians!! It is critical in any institution for the “critical mass” to understand the IT budgeting process. IT budgets should be derived to support institutional mission, goals & objectives. –Each institution must determine it’s desired IT playing field--only then can it do good IT budgeting. –The IT $$ must follow successful plans.

19. The University of Memphis …Our management systems and financial formulas are still geared to the organizational unit--the department, the division, the library, the information technology division--as the center of the institution, and this cripples the inherent power of the technology to decentralize access and control. In the digital university, this welcome and beneficent capacity must be carefully balanced with a new concept of central coordination mechanisms to achieve maximum connectivity, technical platform interoperability, equitable access to information resources, and reasonable cost control. As a further consequence, new interrelationships and organizational structures will be necessary to manage, finance and coordinate the choices and opportunities made possible by digital information resources. Pat Battin & Brian Hawkins, The Mirage of Continuity, 1998 Trivia: It is possible to lead a cow upstairs…. but not downstairs.