Do you know the full cost of your IT services? Jisc Financial X-Ray - Jisc Digital Festival 2015

Do you know the full cost of your IT services?Jisc Financial X-Ray

Paul ClaytonJisc, Business accountant, Financial X-Ray

Alison ClarkeDirector global IT partnering and service design, Information services University of Nottingham

10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 3

» Q: understanding of how much IT services really cost

» Q: understanding of how much IT service cost is incurred outside of the IT department (spend with suppliers, and also staff time)?

» Q: transparency of IT spend across the organisation?

» Q: can you establish an appropriate level of spend on IT services?

» Q: is the budget the only measure of financial performance?

» Q: sufficient information for strategic decision-making?

Current financial challenges facing IT decision-makers

Jisc Financial X-Ray


» A standard taxonomy or ‘catalogue’ of 43 IT services and platforms, developed by Jisc and HEIs

» Total absorption costs: pay and non pay and overhead

» Activity based costing: analyses of pay and non pay

» Covers central and devolved IT costs and possibly TNE sites

» Benchmarking against peer institutions on a like for like basis

The financial x-ray methodology



View of staff time (cost) allocated to the IT services



View of non-staff costs allocated to the IT services



DRIVER TABLE FOR GRAPH

Taxonomy category basic central Less income Central basic devolved Less income Devolved Sum

Data Centres (compute, DC network, storage, cooling etc) 800,000£ 800,000£ 150,000£ 150,000£ 950,000£

Printing, Photocopying and Scanning 400,000£ 400,000£ 400,000£ 150,000-£ 250,000£ 650,000£

Workstations in research settings 3,000£ 3,000£ 500,000£ 500,000£ 503,000£

Networking, campus-wide, wired and wireless 325,000£ 5,000-£ 320,000£ 75,000£ 75,000£ 395,000£

Library Management -£ -£ 300,000£ 300,000£ 300,000£

HR and Payroll Management 50,000£ 50,000£ 200,000£ 200,000£ 250,000£

Financial Management Information System 100,000£ 100,000£ 200,000£ 200,000£ 300,000£

AV Services (incl. learning space support, studios, photographic) 200,000£ 200,000£ 75,000£ 10,000-£ 65,000£ 265,000£

Workstations in general teaching and learning settings 175,000£ 175,000£ 150,000£ 50,000-£ 100,000£ 275,000£

CRM for Student Recruitment -£ -£ 250,000£ 250,000£ 250,000£

Telephony (traditional and mobile) 10,000£ 10,000£ 250,000£ 250,000£ 260,000£

Virtual Learning Environment 150,000£ 150,000£ 50,000£ 50,000£ 200,000£

Information Security Services 125,000£ 125,000£ 50,000£ 50,000£ 175,000£

Detailed breakdown of costs borne (a) for staff and (b) non-staff


IT platforms that enable IT services


» End-users do not interact with platforms directly

» IT platform costs must ultimately be absorbed into IT service costs, or ‘customer-facing IT services’

» We can provide the full annual running cost of your data centre



Top-level IT costs

Data source £ Sub-totals £

DIRECT COSTS OF CEN TRAL IT

1 All Central IT staff - total cost incl NI + Superannuation Actuals £2,900,000

2 All Central IT non-staff spend Actuals £2,850,000

£5,750,000

DEVOLVED / DEPARTMEN TAL / FACULTY / DIRECT IT COSTS

3 All departmental staff working on IT technical service catalogue Actuals £1,300,000

4 All IT non-staff spend outside Central IT Actuals £3,100,000

£4,400,000

IN DIRECT / OVERH EAD COSTS OF CEN TRAL IT

5 Apportionment of organisation-wide running costs for energy & cooling

6 Apportionment of organisation-wide space & estates costs

7 Apportionment of other general organisation-wide overheads Janet benchmark or estimate 1,300,000£

£1,300,000

IN COME

11 Income (from external sources only) -£250,000 -£250,000

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TOTAL IT SERVICE COSTS £11,200,000 £11,200,000

Checksum OK

Total pay costs £4,200,000

Total non-pay + overheads £7,250,000

Total income -£250,000

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Total costs £11,200,000

Summary of costs borne



Headline costs for delivering IT services


Headline costs for delivering IT services


» ‘‘How much of our IT spend has a direct bearing on our students’ experience?’’

» ‘‘We didn’t realise it was costing us so much.’’

» ‘‘We didn’t realise our peers are investing much more.’’



» Activity based costing of IT service and platform costs – can help with resource allocation and budgeting

» FXR may help make a business case for more IT budget, for a different allocation of existing resources, or for strategic change

» A standardised service catalogue permits benchmarking» Working in collaboration with Finance and IT colleagues is essential as

they hold the data needed» Jisc performs the detailed analysis, thus containing time input from your

institution to a fairly low level. » By the way, there is a service fee which covers direct cost & expenses

Financial X-Ray in summary


» The University of Nottingham has 43,500 students and is the nearest Britain has to a truly global university, with campuses in the UK (33,000 students), China (6,000 students) and Malaysia (4,500 students)

» It is ranked in the world’s top one per cent of universities by the QS World University Rankings, and 8th in the UK by research power according to REF 2014

Jisc Financial X-Ray, customer perspective



» Why did we do it?

» Our experience

» The value

Nottingham’s Experience of the Jisc Financial X-Ray

Jisc Financial X-Ray – customer perspective


» We wanted to understand the total institutional IT spend› Central and devolved IT costs

› Strategy kick-off planned – help us make informed decisions

› Better understand the cost of supporting our overseas campuses

› Help us analyse the level of IT service provided for what cost

› Help us understand how much of our IT spend has a direct bearing on our students’ experience

» Benchmark with peers › The benchmark cohort included 10 HEIs including Russell Group Universities

Why did we do it?



» Essential to have Finance and IT colleagues on-board - they hold the data

» Jisc performed the detailed analysis - keeping the amount of time we need to spend at a minimum

» We needed to work closely with Jisc to understand how costs were being allocated, and refine the inputs

» A good understanding is necessary of what staff (central and devolved) are working on

Our experience



» Transparency of spend across the institution

› Comparison of costs per beneficiary across all three campuses

› Supported an analysis of the level of service are we providing for the cost

› Supported a transformation of our budget structure

» Benchmarking

› Where are we spending more or less than our peers? e.g. student facing IT Services as a percentage of total cost

› What costs may be higher due to supporting ourinternational campuses

The value



» Strategy Development

› What is the total cost of providing personal computing per staff head and what could we save if every member of staff had only one device?

› What could we save if we had a more standardised or more locked down computing offering?

› What are we spending on mobile device support and what level of support should we be providing? Should the University be purchasing Tablets or should this be a personal expense (i.e. Tablets to be BYOD rather than corporate?)

The value


Find out more…

Except where otherwise noted, this work is licensed under CC-BY-NC-ND

Paul ClaytonBusiness accountant – Financial [email protected]

Alison Clarke

Director, Global IT partnering and service [email protected]

mailto:[email protected]

jisc.ac.uk

mailto:[email protected]

Nottingham.ac.uk

Education

Do you know the full cost of your IT services? Jisc Financial X-Ray - Jisc Digital Festival 2015