Traditionally, IT teams built their campus technology environment from the ground up. They implemented hardware builds that not only accrued large initial costs, but also hefty replacement expenses. In fact, preliminary costs were so large, cyclical expenditures into refresh cycles of equipment were often paid for as capital expenses. Because of the large investment, IT leaders were “encouraged” to service and extend the use of outdated equipment for as long as possible.
Fast forward to today. Technology is now increasingly agile, responsive, integrative, flexible, and streamlined, and funding models of higher educational institutions need to reflect this.
How to improve funding for IT
If capital expenditures are generally meant for static investments and operating expenses are intended for variable, operating costs, it only makes sense that rapidly changing technology would be better shifted to predictable operating expenses. So how can funding models be improved, and what conditions need to be in place so that they support, rather than hinder, innovation?
1. Shift capital expenses to predictable operating expenses.
Instead of purchasing technology based on outdated, long-term projections, shift spending to the cloud or a partnering provider that understands university industry trends and can be responsible for delivering results. Pay only for services needed, when needed. This, combined with reducing or eliminating up-front capital risk—and getting a service-level agreement (SLA) that ensures output—frees institutions from dependence on capital expenditures and leads to more proficient operational spending.
Universities can create predictability around technology changes by:
• Investing in services that naturally adapt to the ever-rapid changing technology
• Focusing less on technology service deliverables and more on delivering teaching, learning, and research
• Partnering with companies that have a perspective based on university industry trends rather than just on-campus
• Keeping abreast of future technology adoption trends
• Being nimble to adapt to changing conditions fast
2. Refocus personnel to achieve strategic goals
Once technology is shifted to an operating model, IT staff can focus on more strategic and mission-critical tasks.
• Move to the cloud
By removing typical IT constraints—infrastructure improvements, limited maintenance resources, and system incompatibilities—institutions can benefit tremendously. Cloud technology frees institutions to focus more on things that impact their core mission and bottom line. Many universities are now transitioning back-office applications such as student information systems and learning management systems to the cloud.
• Focus IT support on strategic mission
IT can spend less time on complex utilities like email and networking by outsourcing to third parties. And they can focus on research and support for applications that are core to a university’s strategic mission. Freeing up IT staff to pursue more strategic endeavors creates more value for the campus.
• Adopt assessment and data analytics
Assessment and data analytics can change the way learners, educators, and administrators communicate. This data makes it possible for stakeholders to make keener choices that enhance learner experiences, streamline teaching, and ensure institutions can account for student attrition, satisfaction, and success.
• Innovate around learning management, teaching delivery
Transforming academic delivery, student success, and operational efficiency are paramount to many institutions’ mission-focused goals. The cloud not only lets users access accounts from any device, anywhere but also gives IT staff time to improve academics, optimize student resources, and develop more tools for faculty, staff, and administrators. I know one large university that had an IT staff of 40 supporting 20 email servers. By moving to one cloud-based email system, they reduced the IT staff to two. Remaining staff are now focused on more mission-critical tasks.
3. Embrace cross-functional financial collaboration
Higher education financial leaders are well-positioned to drive significant and positive changes to their institutions by reaching across departments to collaborate more regularly.
• Interdepartmental collaboration
Whether it’s the chief information officer, chief business officer, student affairs, or housing officer, it’s important to understand the model across the table. It’s essential to collaborate throughout all processes. And it’s critical to build and retain trust with all stakeholders.
• Use new technologies to aggregate information
Financial leaders are expected to integrate data and sophisticated analyses into planning and decision-making processes. And they’re expected to ensure new investments are met with prudent financial planning. They need to be operationally agile and able to shift gears quickly to provide such strategic leadership. Because chief financial officers are typically faced with a disparate cost structure, simplifying and standardizing financial processes is crucial to gaining better insights into total cost of operations.
• Partner with tech companies who provide reliability, scalabilty, and support
What once required dedicated real estate, skilled employees, and costly time can now be fulfilled by higher education-focused technology companies. Universities also have more options because innovative technology does not require large sums of upfront funds.
The higher educational ecosystem can be complex. Because a university’s IT offerings directly impact recruitment and/or retention of students, technology matters more than ever. Institutions benefit from opting for partners who possess expertise in both higher education and technology. By morphing their funding models to be as nimble as their technologies, institutions ensure their universities’ longevity and success.
For more information, check out the author’ white paper on this topic.