91制片厂

91制片厂 Your IT Cost Optimization Roadmap for Higher Education

Improve cost-to-value in a sustainable manner.

Analyst Perspective

Optimize your cost sustainably.

In today's economic climate, the higher education sector faces significant challenges and trends. Financial and demographic challenges are expected to be persistent for over a decade. With a peak in high school student enrollment expected around 2025, the financial stability of higher education institutions will be strained in the upcoming years. Additionally, there is a notable decline in public trust in the value of higher education, with many viewing colleges and universities as perpetuating inequality rather than promoting social mobility. Rising costs and student debt have also dramatically increased, disproportionately affecting students from lower-income backgrounds and contributing to broader economic inequalities. Leadership and governance issues add to the complexity, with increased political scrutiny and a challenging environment for college presidents and senior leaders.

Given these pressures, reducing spending across organizations is inevitable. For IT organizations, cost optimization often becomes a onetime event, typically translating into cost-cutting measures.

Often, IT organizations respond with short-sighted measures. However, by leveraging the Info-Tech methodology and tools, you can develop an IT cost optimization roadmap tailored to your specific circumstances and timeline.

A well-thought-out strategy should help you achieve three key objectives:

1. Reduce unwarranted IT spending.
2. Optimize cost-to-value.
3. Sustain cost optimization.

This blueprint will guide you to understand your mandate, identify your cost optimization journey (whether reactive, proactive, or strategic), and assess your IT spend across four levers: Assets, Vendors, Project Portfolio, and Workforce.

Remember, cost optimization is not a onetime project but an ongoing process.

Executive Summary

Info-Tech Insight

Cost optimization is not just about reducing costs. In fact, you should aim to achieve three objectives: (1) reduce your unwarranted IT spending, (2) optimize your cost-to-value, and (3) sustain your cost optimization.

Your challenge

IT leaders are often asked to cut costs.

• During periods of financial stress, such as state funding cuts or declining enrollments, university leadership often shifts their focus from growth to safeguarding essential operations and services. This can lead to institution-wide cost-cutting initiatives aimed at achieving short-term, measurable savings.
• Cost management is a persistent challenge for higher education institutions. Universities and IT departments must adopt a flexible cost structure that maximizes institutional value while maintaining the ability to adapt to shifts in enrollment, funding, and regulatory pressures. At the same time, institutions must be prepared to respond to unexpected events.
• While no one can predict future trends with certainty, factors such as rising operational costs, inflation, and changes in government funding can create immediate and substantial financial challenges for institutions.

In times of economic slowdown or downturn, the key challenge of IT leaders is to optimize costs without jeopardizing their strategic and innovative contribution.

When crisis hits, do IT鈥檚 hard-won gains around being seen as a partner to the institution suddenly disappear and IT becomes just a cost center all over again?

Common obstacles

The 90% of the budget you keep is more important than the 10% of the budget you cut.

• When the institution responds to fluctuating economic conditions, IT must ensure that its budget remains fully aligned with institutional strategy and expected institutional value.
• However, in the face of sudden pressures, a common tendency is to make quick decisions without fully considering their long-term implications.
• Avoid costly mistakes with a proactive and strategic mindset.
  Put in place a well-communicated cost optimization strategy rather than hastily cutting back the biggest line items in your budget.

Know how you will strategically optimize IT costs before you are forced to cut costs aggressively in a reactive fashion.

How can IT optimize costs to achieve an institutional impact, but not cut so deep that the organization can鈥檛 take advantage of opportunities to recover and thrive?

What is cost optimization?

It鈥檚 not just about cutting costs.

While cost optimization may involve cutting costs, it is more about making smart spend and investment decisions.

At its core, cost optimization is a strategic decision-making process that sets out to minimize waste and get the most value for money.

Cost optimization encompasses near-term, mid-term, and long-term objectives, all of which are related and build upon one another. It is an accumulative practice, not a onetime exercise.

A sound cost optimization practice is inherently flexible, sustainable, and consequence-oriented with the positive goal of generating net benefit for the organization over time.

Change your mindset 鈥�

Info-Tech鈥檚 Management & Governance Diagnostic survey reports IT-staff assessment of core capabilities by four categories: Improve (high importance, low effectiveness), Evaluate (low importance, low effectiveness), Maintain (low importance, higher effectiveness) and Leverage (high importance, high effectiveness). Over half of the higher education institutions surveyed saw themselves as ineffective at cost optimization: Improve = 24% and Evaluate = 34%

A starting point for cost optimization improvement is adjusting your frame of mind. Know that it鈥檚 not just about making difficult cuts 鈥� in reality, it鈥檚 a creative pursuit that鈥檚 about thriving in all circumstances, not just surviving.

Slow revenue growth expectations generate urgency

• In times of financial uncertainty 鈥� such as declining enrollment, reduced government funding, or economic downturns 鈥� university leaders often shift their focus from growth to survival. This shift frequently leads to cost-cutting mandates across departments, aimed at achieving immediate, measurable financial benefits.
• Cost optimization in higher education involves continuous financial management, requiring long-term strategic initiatives. Institutions and their IT departments must adopt flexible cost structures and practices aimed at maximizing institutional value while maintaining the agility to adapt to changes in funding, enrollment trends, and the broader economic landscape.
• Under these circumstances, IT departments in higher education are often tasked with meeting aggressive cost-reduction targets on short notice. Without a well-thought-out, strategic approach, such reactive measures can undermine future institutional goals, potentially disrupting critical academic services, operational efficiency, and long-term sustainability. Planning with a forward-looking perspective is essential to avoid unintentional long-term consequences.

Enrollment in Higher Education

Financial challenges are on the horizon for higher education. A lower enrollment is expected due to demographics and domestic challenges to foreign student pathways.

• 18-year-olds are expected to decline 1%-2% year-over-year after 2029 (Boeckenstedt, 2022).
• International recruitment faces political headwinds in Canada, Australia, and the US (Sadler, 2024).

Download the blueprint Understand the IT Implications for the Enrollment Cliff

Case Study

Empowering success through strategic innovation and cost optimization.

INDUSTRY: Education

SOURCE: Abilene Christian University

Insight summary

Sustain an optimal cost-to-value ratio across four levers:

1. Assets
2. Vendors
3. Project Portfolio
4. Workforce

Cost optimization is not just about reducing costs.
In fact, you should aim to achieve three objectives:

1. Reduce your unwarranted IT spending.
2. Optimize your cost-to-value.
3. Sustain your cost optimization.

Reduce unwarranted IT spending.
Stop the bleeding or go for quick wins.
Start by reducing waste and bad spending habits while clearly communicating your intentions to your stakeholders 鈥� get buy-in.

Optimize cost-to-value.
Value means tradeoffs.
Pursue value but know that it will lead you to make tradeoffs between cost, performance, and risk.

Sustain cost optimization.
Think about tomorrow: reduce, reuse, recalibrate, and repeat.
Standardize and automate your cost optimization processes around a proper governance framework. Cost optimization is not a onetime exercise.

Info-Tech鈥檚 methodology for building your IT cost optimization roadmap

Blueprint deliverables

Each step of this blueprint is accompanied by supporting deliverables to help you accomplish your goals:

Measure the value of this blueprint

Maintain an optimal IT cost-to-organization revenue ratio.

This blueprint will guide you to set cost optimization goals across one to three main objectives, depending on your identified journey (reactive, proactive, or strategic):

• Reduce unwarranted IT spending.
• Optimize cost-to-value.
• Sustain cost optimization.

In Phase 1 of this blueprint, we will help you establish your goals to satisfy your organization鈥檚 needs.

In Phase 3, we will help you develop a game plan and a roadmap for achieving those metrics.

Once you implement your 12-month roadmap, start tracking the metrics below over the next fiscal year (FY) to assess the effectiveness of undertaken measures.

Info-Tech offers various levels of support to best suit your needs.

Diagnostics and consistent frameworks are used throughout all four options.

Guided implementation

What does a typical GI on this topic look like?

A Guided Implementation (GI) is a series of calls with an Info-Tech analyst to help implement our best practices in your organization.

A typical GI will include multiple calls over the course of one to two months.

IT cost analysis and optimization workshop overview

Contact your account representative for more information.
workshops@infotech.com 1-888-670-8889

Phase 1

Understand Your Mandate and Objectives

This phase will walk you through the following activities:

• Institutional context and cost optimization journey
• Cost constraints and parameters
• Cost optimization goals

This phase involves the following participants:

• CIO/IT director
• IT finance lead

1.1 Gain consensus on the institutional context and IT cost optimization journey

60 minutes

• Using the questions on the following slides, conduct a brief journey assessment to ensure consensus on the direction you are planning to take.
• Document your findings in the provided template.

See the next three slides for guidelines and the journey assessment questions and template.

Distinguish between three journeys

By considering institutional objectives without forgoing your IT mandate.

Questions to help determine your journey