During tough times come opportunities to make real change, but that change needs to be planned and executed properly so that the intended benefits are realized long-term.
Operating expenses are getting pared to the bone. Capital projects are being put on hold. In times of shrinking resources, it is not uncommon to cut costs first and ask questions later. In the higher education environment, cost cutting has risen rapidly to the top of the “to do” list at most institutions. As a result, information technology leaders are in the unique position of not just doing their part to look at expense reduction, but also identifying what technology can do to improve efficiency without significant investment.
According to a December 2008 article in Inside HigherED, approximately 45% of public colleges and universities reported IT budget cuts this fall, up from 16% last year. Private institutions and community colleges — between 22 to 25 percent — reported decreases as well. In spite of the cuts, one of the focal points in the ensuing budget year(s) will undoubtedly be technology’s role in improving campus efficiency, reducing manual processes, and ultimately cutting costs.
Typical responses to the current round of challenges in IT can be referred to as the “three O’s” of IT: Outsourcing, Open Source, and/or Optimization of existing systems. All of these practices can provide valuable cost savings and improvements in efficiency, but should not be seen as solutions in a vacuum.
Our experience indicates that careful and proper planning for IT investments can yield results that not only show a positive return on the initial investment, but improve the organization’s ability to support its core mission, vision and goals. The key word is planning, which is often the first thing to be found on the chopping block in lean times. Unfortunately, without the strategic vantage point that comes from a specific plan, IT is unlikely to provide the expected results that organizations seek for their investments, and those cuts that were expected to improve the financial health of the organization only make the patient sicker.
For example:
• Outsourcing tends to be a cyclical phenomenon that starts out wonderfully and over time loses its luster as the loss of direct oversight of staff and services takes hold. More common in today’s world, is the growing popularity of outsourcing cost-intensive applications, namely student email;
• Open Source continues to gain ground and remains a viable option for many institutions, the start up costs and critical need to have properly trained staff to operate and support an Open Source system can mitigate any returns expected on those investments; and
• Optimization of existing systems and processes has been a common response when belts are tightened, but requires extensive coordination, collaboration and communication between business users and technology managers.
In his seminal article, published more than five years ago, “IT Doesn’t Matter,” Nicholas Carr argued that IT had or would soon reach a commoditized place in the financial planning landscape. However, it is during these troubling economic times that technology leaders can demonstrate that IT is not just another commodity, but a fundamental component of organization planning, and the execution of that planning, can provide opportunities for strategic advantage.
For more information, please contact David Houle at 207-541-2218 or by email at dhoule@bdmp.com.