[CSG Winter 2006] Transition to a saner set of IT funding models – What will work going forward?

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Bill Clebsch from Stanford is giving this presentation.

He starts with a slide saying “Funding: The Final Governance”.

He notes that funding evolved from two different models:

That of Communications, which evolved from a culturally accepted phone billing model and monopoly necessity, which gave universities a major windfall, which got used to fund other programs (e.g. networking and data services, which weren’t then necessities). That created within the university a false sense of what IT really costs.

Computing, otoh, had no culturally accepted billing models. The services were perceived as optional. There is a constant influx of new services which require a constant influx of new funding, and those services become necessities – but the funding was based on an optional model.

Admin Systems and Services – automation of tasks cost more than anticipated – e.g. the dispersion of PCs on the desktop was a very difficult transition. It’s a problem because we never pick up the savings on the other side.

The current state is a perception that IT is too expensive without seeing hte corresponding value, and there’s very little “Budget Dust” left to throw at systems. There’s a tenuous link to academic program, and people perceive central IT as administrative computing (including course management systems), and all faculty mistrust everything administrative.

The objective for funding models should be to spread costs equitably across the multiple funding sorces, to link funding with perceived value, to scale IT with university growth and success, and to allow the introduction of new services.

some possible bases of funding could be based on people, facilities, machines, or usage – all of these have to be tempered by how much it costs to bill for it. It was amazing how much the support costs at Stanford went down when they went to flat-rate long distance service. B-School 101: All allocation is arbitrary, but you need one that is consistent and defensible. Several people are recommending the book “Freakonomics : A Rogue Economist Explores the Hidden Side of Everything” (Steven D. Levitt, Stephen J. Dubner)Freakonomics.

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