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Technology Spending Survey '08

Inside the minds-and budgets-of chief information officers and IT directors
University Business, Dec 2007

NEW TECHNOLOGY AND UPGRADES TO EXISTING DEVICES SEEM to be introduced daily. At the same time, technology prices can change in the blink of an eye-just look at how the cost of an iPhone dropped only months after it was introduced. Because the market is so volatile, it can be hard for an IT leader on campus to know where to apply precious budget dollars. Throughout the year University Business informs readers of emerging technology trends, and once a year we take the pulse of IT spending.

This year, our Technology Spending survey was conducted with the help of Datamonitor (, an online data, analytic, and forecasting service that polled chief information officers and IT directors at colleges and universities nationwide. Survey respondents included both public (56.8 percent) and private (43.2 percent) institutions of various sizes. The full results, broken down by category, can be found on our website.

Overall, 51 percent of respondents reported an increase in IT budgets, 32 percent of respondents reported no change between allocations for 2007 compared to 2006, and an unfortunate 16 percent of responding institutions reported a reduction in tech budget dollars.

It is perhaps no surprise that private institutions, which don't have state governments dictating spending, are more likely to have increased IT budgets. Broken down by degrees granted, institutions that grant bachelor's degrees are leading the charge in increases.

But while nearly a third of schools reported no change in tech budgets, that doesn't mean they aren't still supplying their students and faculty with the latest innovations. The reason? Declining technology costs are allowing IHEs to do more with the dollars they have. Witness, for example, the dramatic drop in the cost of a desktop computer in the last few years.

"What we're seeing with budgets increasing is that institutions are preparing for changes in the competitive landscape," says Nicole Engelbert, lead analyst, Education & Vertical Markets Technology for Datamonitor. "They are investing in the longer term to recruit and retain students and interact with alumni and other constituents. Technology allows them to do more with the same or less in terms of spending."

Just what is capturing IT dollars is greatly influenced by the size and type of institution doing the spending. Despite decreasing technology costs, computer hardware and enterprise software still claimed the biggest portions of most budgets.

Interestingly, for doctorate granting institutions, spending on enterprise software ranks higher than spending on desktop computers, while the reverse is true at institutions that grant associate degrees. At the same time, institutions with fewer than 500 students ranked enterprise software 4 out of 7 for impact on budget, while institutions in the 500-2,499 and 20,000-29,999 range both ranked it 5.7.

Engelbert theorizes that smaller institutions could get by without an ERP or SIS, while the larger institutions are finding it necessary to purchase a more expensive version. "PeopleSoft is going to cost a lot more than Three Rivers," Engelbert points out.

But as students bring more technology to campus, institutions can apply their tech dollars to other projects. Just a few years ago, IHEs required that students bring computers to campus. Now, with personal computers and laptops so prevalent, 89 percent of respondents no longer specify it as a requirement. Of the 11 percent of institutions that do, only 12 percent reported providing units for student use.

One area that still isn't capturing many IT dollars is security. It was a key topic of discussion for the CIOs who participated in a recent roundtable interview (see University Business, October, 2007). However, although IHEs store a wealth of highly personal and sensitive data, security ranked 2.9 out of 7 for impact on spending.

Why security spending should rank so low when it is such a prevalent issue is open for speculation. It's possible that security just costs less, or spending on security efforts is taking place in other departments. "You can spend all the money in the world on security," Engelbert says, "but people will still write their password down." The importance of IT security policies and the human element was highlighted for Montana State University in mid-November when published reports said two out of three recent data breaches were from spreadsheets with personal information being posted on public websites.

The IT department is as interested in saving money and improving efficiencies as any other department on campus. Outsourcing, which remains hard to pin down in higher ed, can be a way to accomplish those goals. Forty percent of respondents said they outsourced IT functions ranging from all functions at the low end to enterprise solutions at the high end.

One reason is that many institutions have concluded that they are in the business of educating students, and not building and managing IT infrastructures. Hence, that job is better left to professionals who can do it better and more cost-efficiently. Engelbert says the corporate world has not only been outsourcing for years but prefers it in many situations. As leaders in higher ed share outsourcing success stories, the percentage of institutions doing it could creep up.

To download the complete Datamonitor-University Business IT Spending Survey results, click on the following link.

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