Mission Impossible?Making the University More Cost Effective

Larry ConradVice Chancellor, IT

and CIO

Mike PatilExecutive Director

Carolina Counts

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Backgroundand Introduction

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About UNC Chapel Hill

first public university in the US, founded  179328,570 students3,600 faculty8,600 staff $2.4 billion overall budget$1.2 billion in contracts/grants/ services

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Consultant Study‐ Historical Timeline

•Consultant hired      Spring 2008

•Economy does deep dive    Fall 2008

•Consultant report 2009  Summer 2009 ($167M in potential savings)

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Consultant Report Follow‐up

• Establish a program, Carolina Counts, to realize the cost savings

• Identify and act on high‐potential saving areas

• Use data based methodologies

• Get community involved in the program

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About the Program

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Mission

To make the University of North Carolina at Chapel Hill the most collaborative, well‐managed university in the country.

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Objectives

• streamline and automate campus operations• implement more responsive, less costly 

processes• reduce bureaucracy and create a more 

satisfying work environment

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February 2010

“There’s no reason we can’t conduct nonacademic functions as efficiently as possible.”

11/15/09www.nytimes.com ALL THE NEWS THAT’S FIT TO PRINT

UNIVERSITIES TURN TO CONSULTANTS TO TRIM BUDGETS

Holden Thorp, Chancellor

The New Normal?

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Remarks by the President on Higher Education and Economy.

August 9,2010

..responsibility for controlling these (college) costs falls on our colleges and universities. ..institutions like the University of Maryland, University of North Carolina, Cornell, are all finding ways to combat rising tuition without compromising on quality.

The New Normal?

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Program Scope‐ areas of improvement

Teaching, Research& Public Service

UniversityOperationsAdmin Support

2.Procurement3.IT4.HR5.Finance

6.Utilities7.Facilities8.Space

9.Centers &Institutes

10.Research &Compliance

1. Overall University Structure and Strategy

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Leadership, Project Selection,Timeline, Results

Project Team Management, Reporting

Oversight, Direction,Decision Making

Guidance, Know-how, Progress Tracking, Coordination

Initiative Champions

Project Team Leader

Oversight Committee

Carolina Counts(Program Office)

Role Major Responsibilities

Program Structure and Roles

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Process/Tools/TacticalChange

Competency/OrganizationalChange

Strategic/Cultural Change

Year 1

Year 3

Year 5

DesignDevelopExecute

DesignDevelopExecute

DesignDevelopExecute

Targets and Milestones 

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Mission Possible?Information Technology

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~1100 IT FTEs, >85% in ITS/ERP and academic units

0

20

40

60

80

100%

Percent of IT FTEs

ITS/ERP

Information Technology Services

Enterprise Resource Planning

487

Academic

Libraries

Sch Business

Sch Education

Sch Medicine

Sch Pub Hlth

Arts & Sciences

Sch Info & Lib

ProvostSch PharmacyOther (5)

Sch DentistrySch Nursing

Sch Govt

464

C&Is

Ofc

of

Res

ea

rch

IS

Ca

roli

na

Po

pu

lati

on

Ce

nte

r

FPG

Ch

ildD

evel

opm

ent

Inst

Other

OtherVCRED

ShepsCtr for

HlthServ Res

102

Cen

tral

Adm

inV

CA

dva

nce

men

tA

sso

cV

CC

am

pS

vc

VC

Hu

ma

nR

esou

rce

s

Other

VC

Stu

de

nt

Aff

air

s

54

Total = 1,107

11 81 2 7

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0

20

40

60

80

100%

ITS/ERP

Other sources

Internal UNC customers

F&A and tuition & fees

State Appropriations

$52M

Academic

Other sources

Research Contracts & Grants

Endowments & Private Gifts

Internal UNC customers

F&A and tuition & fees

State Appropriations

$32M

C&Is

Other sources

Res

ear

chC

ontr

acts

&G

ran

ts

Internal

F&Aand

tuition& fees

StateApp.

$8M

Ce

ntr

al

Ad

min

Oth

erso

urce

sE

nd

ow

me

nts

&P

riv

ate

Gif

tsF&

Aa

nd

tuit

ion

&fe

es

Sta

teA

pp

rop

ria

tio

ns

$4M

Percent of IT personnel spend Total = $97M

UNC spend ~$100M annually on IT personnel

Spend per FTE* $82K $70K $108K($94K if excl. cont’rs)

$71K

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0

20

40

60

80

100%

ITS/ERP

AdminIT MgtSecurity

Network Mgt

System monitoring

Systems Admin/Maint

End-User Support

Admin/Biz Apps

Research AppsAcad/Inst Apps

487

Academic

OtherAdmin

IT MgtProject Mgt

SecurityNetwork Mgt

System monitoring

Systems Admin/Maint

End-User Support

Admin/Biz Apps

Research Apps

Acad/Inst Apps

464

C&Is

OtherAdmin

IT MgtProject Mgt

SecurityNetwork Mgt

SystemsAdmin/Maint

End-UserSupport

Admin/BizApps

Res

earc

hA

pps

102

Ce

ntr

al

Ad

min

Other

Admin

ITMgtProject

MgtSecurity

Sys

tem

sA

dmin

/Mai

ntE

nd-U

ser

Su

ppor

tA

dm

in/

Biz

Ap

ps

54

Percent of IT FTEs Total = 1,107

24%

40%

Staffing Levels by Functions by Organizations

PotentialSavings

$4-6m

$3-4m

≈$1m

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Carolina Counts IT Process

Engaged the Carolina IT community: formed planning committee with ITS, campus IT directors (ITEC), and campus IT staff (CTC) reps

Have generated 32 proposed projects which can directly or indirectly impact IT costs

One key project is to define which functions should be centralized vs. which should be distributed

Created the Carolina Counts IT Partnership Program to drive adoption of the projects by campus units

Zeroed in on a subset of “priority” projects which hold the most promise of delivering savings

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Proposed Model for RebalancingCentral vs. Distributed

Communications infrastructure (network and phone system, phone conferencing) 4.9

Data Center space and access 4.5

Email and Calendar 4.5

User account management 4.5

Campus‐wide business applications 4.4

Help desk support 4.1

Web site hosting 4.1

Research computing facilities 4

Server hosting and virtualization 4

Data storage 4

Software Licensing 3.9

Instructional facilities 3.86

IT Security 3.4

CentralDistributed

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Collaboration applications (Sharepoint, wiki, web conferencing) 3.4

Video conferencing 3.4

Database administration and support 3

System administration 3

IT Training 2.9

Instructional applications 2.86

Research computing support 2.71

Instructional support 2.71

Research computing applications 2.6

Web site development 2.6

On site support 2.3

Web site support 2.1

Unit‐specific business applications 1.8

Specialized discipline or unit‐based support 1.36

CentralDistributed

Proposed Model for RebalancingCentral vs. Distributed

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IT Partnership ProgramDesign

Target the program individually for each unit

Focus on “priority” projects for greatest ROI

Meet with unit IT leadership in advance of “entrance” meeting

“Entrance” meeting with unit executives and IT leadership to determine greatest needs

Form joint team to examine opportunities for savings

“Exit” meeting with unit executives and IT leadership to lay out plan for adoption

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IT Partnership ProgramPriority Projects

Clearer articulation of central services

Better definition of what “should” be central vs. distributed

Server housing/hosting services

24/7 Help Desk consolidation

Network Attached Storage

Virtualized servers

Consolidate e‐mail and calendaring services in MS Exchange

Increased use of software site licensing

Virtual computing labs

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Status

Need further vetting of central vs. distributed model

“Savings” can include

•Reductions (e.g., consolidation, budget cuts) •Cost avoidance (e.g., info security)ITS customer service initiative put in place

Have begun IT Partnership Program meetings with campus units

Have generated one‐pager service summaries to showcase the various IT projects

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Sample ofone-page service summaries

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Complexity of UNC organization

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02_26 S

Spans and Layers: Information Technology Services

Number of supervised units

No supervised units

1-3 units

4-7 units

> 7 units

Source: ITS HR data, Jan 2010Note: analysis excludes 5 administrative

personnel;Center point represents Layer 3 (CIO)

FTEs:Mgrs:Span:

419735.7

Research Computing

User Support

& Engagement

Communication

Technologies

Teaching &

Learning

Deputy CIO

Enterprise Applications and ERP

Infrastructure

& Operations

Eliminated Layer 8 altogetherEliminated exec.

position with 2 direct reports

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Improving Efficiency

ITS has eliminated 34 filled positions with minimal impact on customers

…that includes 5 executive level positions

ITS spans and layers:

• Increased average span slightly from 5.4 to 5.7

• Eliminated “layer 8” altogether

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Results to Date

Consolidate (Med School) Help Desk: $120K/yr;   servers in ITS computer room: $150K non‐recurring

Reduce use of “on‐call” pay: $700K/yr

Improved staff efficiency/spans and layers: 

•$3.8M in ITS –includes FY2010‐11 budget cuts

•$1.9M in campus IT –not included FY2010‐11 budget cuts

For a total of: $6.5M/yr (plus $150K non‐recurring)

New IT governance structure put in place

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Mission Challenges

Bain survey of IT personnel: ~1100 IT personnel, $100m in personnel

Applications, end‐user support, and system admin./maint. are largest components

Bain pressed a traditional corp. model:consolidate staffing and top‐down directives

Collides with Carolina culture…

How do we drive adoption of the IT projects which could save units money?

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Program Enablers and Challenges

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• Input and buy‐in from the constituents•Tracked results, and accountability for the results•Open and transparent process and measurements•Public scrutiny through community involvement•Published comparative benchmarks•Technical /tactical support from program office

Program Success Factors

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Over three years:

Research Funding Growth‐ 165%Faculty Growth‐ 60%Budget Growth‐ 68%Staff Growth‐ negative 18% Infrastructure cost Percentage‐ under 11%Recommended as a model for UNC 

Accomplishments inone school- An Example

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Lessons Learned:Cautions/ Roadblocks

• “We are different”• Stay within the comfort zone• Complacent with “low hanging fruit”• “Already have done everything that could be done”• Delegate too far down resulting in inaction• Procrastinate till this will go away• Lack of desire or disincentive to make unpopular decisions

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•Aggressive “marketing ” effort: present a value proposition to make solutions attractive

•Build “Trust” through frequent communications minimizing fears of arbitrary/self serving solutions 

•Frequent reemphasis by the top management•Routinely assess the program and perform course correction as needed

Program Sustainability

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Questions?