Three budgeting tips for higher ed

Budgeting in higher education will be the primary pain point for technology leadership in the next decade

budgeting-higher-edBudgeting in government and higher education used to be difficult.

It has always been a challenge to rally for increases to accommodate technology purchases in historically tepid budget-growth environments.

For high-number, like-valued purchases, guesswork could often be removed by initiating standard equipment “refreshes” on comfortable cycles – 2 year, 3 year, 4 year – resulting in chunks of capital dollars.

Continuous transparency on the utilities-esque budgetary constraints surrounding software licensing, telephony, maintenance agreements and similar was always required; after all, you can’t not pay bills, right?

Those costs were operational and would increase annually on fairly familiar increase arcs. Annual fees for large administrative systems often became familiar what with the massive multi-year contract negotiations. Also operational, also expected.

Compensation budgeting proved to be uncomfortable as it is always less than our competition on the corporate world. We fight and claw for 1-3 percent for our employees, continuing to sell the reality that our benefits are comparatively great, our environment is “education chic” and you get tangible albeit non-financial satisfaction from your work. Training and travel would always be the “first to be cut” in trying times. That’s the drill.

(Next page: How can you manage budgeting and funding intangibles?)

One would think with all the advancements in technology–the streamlining and efficiencies–that the process would only get easier. Budgeting in government and higher education is more difficult than ever and, mark my words, will be the increasing-to-primary pain point for technology leadership in the next decade within our industries.

Why? We are replacing large, multi-year, heavily negotiated super-solutions with many one-off, scalable softwares (sometimes hundreds) and a high percentage of those will be, dare I say it, in the cloud.

We are lowering the number of hardware purchases and replacing these with invisible purchases in pursuit of a more agile network environment (VDI Virtual Desktop Infrastructure, server virtualization, file storage and sharing) resulting in the answer, “I can’t show you anything tangible that I’m buying besides the invoice.”

Bring Your Own Device (BYOD) initiatives also lessen the standard computer refresh purchases and require more invisible bandwidth, storage, speed.

All of this is happening at an increasing rate but, hold on, these purchases are contracts, licensing, and annual agreements. Contracts, licensing and agreements are operational expenditures, not capital. But we have a finite amount of operational funds…those are not increasing dramatically. We have large clumps of capital dollars that we can’t spend and that can’t be simply transferred to our operational bucket.

So now what? Suddenly we’re replacing high-dollar historically capital expenditures with massive amounts of operational expenditures. What will be easier? Advocating for significantly more operation dollars in the non-profit sphere (never happen) or redefine what “capital” means as it pertains to technology?

Today, if not yesterday, begins the heavy collaboration and communication with your finance teams. How can you manage this? How can you manage budgeting and funding intangibles – storage, space, bandwidth, speed – that used to be traditional tangibles like servers, wiring, computers and physical SANs? It’s going to take some creativity, some updated policies and some clear definitions of technology infrastructure, but hopefully it will all shake out in the end. (Note: I do not have this all figured out yet, just trying to start the discussion and keep it at the forefront.)

(Next page: Three higher ed cost-saving tips)

In the meantime, while we all try to sort this out, a few things to note:

1.  Intangible is the “New Black”

There’s no denying it. Wireless, bandwidth, and storage are all invisible to the non-tech eye. Yes, we need it. Without it, you can feel its lack of presence. Without it, all connectivity and online activity will be impeded. No, we can’t show it to you. And the “old black” is the clunky hardware that some need to hold on to until it fails but that most of us are trying to get away from as soon as possible.

2.  Infrastructure = Infrastructure

Completing capital maintenance on a residence hall roof is no different that completing capital maintenance on your core network. All maintenance, without it conditions are not “livable” by today’s connected standards and these projects need to integrate and be prioritized.

3.  Budgeting 101 Needs an Update

Technology leaders need to spearhead initiatives to update outdated policy and procedure as it pertains to budgeting tech expenditures. Capital expenditures are slowly being addressed in federal policy. Unfortunately the pace of technology is not slow. Capital projects need to be redefined at their most basic level.

“Data in the cloud” today needs to be treated the same way that “physical servers in the cold room” were treated five years ago. The dollars need to be applied in the same way, with the same treatment under the same financial definition.

Ideally a magic answer will appear to solve all of these technology needs jutting up against budgeting restrictions. Since that is likely not going to happen, the next few years will be rough. In the end, hopefully we will create a financial funding model that is every bit as agile as the technology infrastructure we are implementing. A model that is scalable, adaptable to a fast-changing environment, and where solution-centric discussions replace the word “no.”

Paige Francis is the CIO for Information Technology Services at Fairfield University in Fairfield, Conn. Northwest Arkansan turned New Englander, Paige Francis is a successful executive IT leader, energized by education, recently named to the Top 50 Most Social CIO’s in Higher Education, one of Computerworld’s 2014 Premier 100 IT Leaders and, most recently, was named a member of eCampus News’ new Advisory Board.

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