Do you know the full cost of your IT services? Jisc Financial X-Ray - Jisc Digital Festival 2015
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In order to make informed decisions about your IT strategies, it is imperative that you understand the full cost of delivery for your IT services. This session demonstrated how Jisc Financial X-Ray service can help fully understand the IT landscape and the cost profile of your institution, whilst benchmarking against peer organisations.
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Do you know the full cost of your IT services? Jisc Financial X-Ray - Jisc Digital Festival 2015
- 2. Do you know the full cost of your IT services? Jisc Financial X-Ray Paul Clayton Jisc, Business accountant, Financial X-Ray Alison Clarke Director global IT partnering and service design, Information services University of Nottingham
- 3. 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
- 4. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 4 » 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 possiblyTNE sites » Benchmarking against peer institutions on a like for like basis The financial x-ray methodology Jisc Financial X-Ray
- 5. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 5 View of staff time (cost) allocated to the IT services Jisc Financial X-Ray
- 6. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 6 View of non-staff costs allocated to the IT services Jisc Financial X-Ray
- 7. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 7 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 Jisc Financial X-Ray
- 8. IT platforms that enable IT services 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 8 » 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 Jisc Financial X-Ray
- 9. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 9 Top-level IT costs Data source £ Sub-totals£ DIRECT COSTS OF CENTRAL 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 / DEPARTMENTAL / FACULTY / DIRECT IT COSTS 3 All departmental staff workingon IT technical service catalogue Actuals £1,300,000 4 All IT non-staff spend outside Central IT Actuals £3,100,000 £4,400,000 INDIRECT / OVERHEAD COSTS OF CENTRAL IT 5 Apportionment of organisation-wide runningcosts 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 INCOME 11 Income (from external sources only) -£250,000 -£250,000 --------------------- 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 --------------------- Total costs £11,200,000 Summary of costs borne Jisc Financial X-Ray
- 10. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 10 Headline costs for delivering IT services Jisc Financial X-Ray
- 11. Headline costs for delivering IT services 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 11 » ‘‘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.’’ Jisc Financial X-Ray
- 12. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 12 » 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 Jisc Financial X-Ray
- 13. » 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 (6,000students)andMalaysia(4,500students) » It is ranked in the world’s top one per cent of universities by the QSWorld University Rankings, and 8th in the UK by research power according to REF 2014 Jisc Financial X-Ray, customer perspective 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 13
- 14. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 14 » Why did we do it? » Our experience » The value Nottingham’s Experience of the Jisc Financial X-Ray Jisc Financial X-Ray – customer perspective
- 15. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 15 » 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? Jisc Financial X-Ray, customer perspective
- 16. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 16 » 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 Jisc Financial X-Ray, customer perspective
- 17. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 17 » 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 our international campuses The value Jisc Financial X-Ray, customer perspective
- 18. 10/03/2015 Jisc Digital Festival, 9-10 March 2015, ICC Birmingham 18 » 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 purchasingTablets or should this be a personal expense (i.e.Tablets to be BYOD rather than corporate?) The value Jisc Financial X-Ray, customer perspective
- 19. Find out more… Except where otherwise noted, this work is licensed under CC-BY-NC-ND Paul Clayton Business accountant – Financial X-Ray paul.clayton@jisc.ac.uk jisc.ac.uk Alison Clarke Director, Global IT partnering and service design Alison.Clarke@Nottingham.ac.uk Nottingham.ac.uk
Editor's Notes
- Alison Clarke from Nottingham University has very kindly provided her time today to provide a customer perspective on the financial x-ray service. There will be an opportunity for questions but can we take these at the end of the presentation please.
- If you can answer ‘yes’ to all of these questions I’d very much like to meet you after the meeting to find out how you do it… PC to quickly read through and move on to the next slide
- Need to list some of the IT services within the catalogue and state that all activities across Academia fits within the standard service catalogue that has been devised after consultation with institutional partners. Costing models are often criticized for not including a relevant share of overhead needed to support any institution. A relevant share of corporate costs from statutory accounts are included – stat accts data is used as SORP accounting treatment ensures consistency. The Financial year and HESA data are used for all Financial X-Ray tasks as part of maintaining robust benchmark data.
- The task starts by identifying which staff perform IT services both inside and outside of the IT department, and having one to one discussion with Managers / team leaders to identify the services they and their staff worked on during the financial year, and to allocate a % of total time worked to these services. Uing payroll data this translates and rolls up into total staff costs per service.
- Via collaboration with Finance two data files are needed, downloaded from the Finance system, and these are analysed to ensure that relevant spend is booked to the IT service catalogue by Jisc. This task can highlight areas of concern and/or where spend has not been visible historically.
- …so, having the data as collected, this will help an informed view on future initiatives to control, or reduce, or increase costs, make decisions on whether to explore the Jisc-procured telephony service, or to explore the economics of moving servers to the Jisc-procured data hall, or to explore Jisc framework agreements as a means to reducing 3rd party spend in some areas.
- At very top level, there is a summary of spend both on IT staff and non IT staff in support of the IT services, along with a total 3rd party spend centrally and devolved.
- Discuss what can be gleaned from this, – suggest AV services, BYOD service, and discuss the % of IT costs of total organizational turnover, & against benchmark
- Discuss what can be gleaned from this, – suggest AV services, BYOD service, and discuss the % of IT costs of total organizational turnover, & against benchmark
- …so, having the data as collected, this will help an informed view on future initiatives to control or reduce costs, making use of Jisc-procured telephony, to move servers to the Jisc-procured data hall, or to look at Jisc framework agreements as a means to reducing 3rd party spend in some areas.
- Please do get in touch if you have any queries or wish to discuss the opportunity further.