Learning from Others: Comparisons and Good Ideas
from Industry and Higher Education
A report from the Benchmarking Workgroup of the
Restructuring Task Force
Penn has made a concerted effort to learn from other organizations as it
restructures its own computing services campus-wide. The Benchmarking
Workgroup was convened to investigate what information service
organizations in higher education and industry are doing to support
information technologies (IT). Our goal was to look at a variety of
organizational structures for providing IT services and determine how
Penn compared in terms of services offered, delivery mechanisms, and
productivity of resources. We identified examples of best practices,
based on recommendations from the restructuring task force and other
outside organizations. We also looked at institutions that had recently
restructured their computing services (or were in the process of
restructuring) to learn from the choices they had made.
The time frame for benchmarking was short. We focused our efforts on
developing an overview of what other organizations are doing and how they
are structured. Most of the information we collected was descriptive,
The workgroup conducted personal interviews with representatives from 15
top tier higher education institutions. We looked at institutions that
are similar to Penn in mission, size, and scope of services. Our project
time frame allowed for only one interview at each site (usually with a
central IT senior director or CIO). To ensure a broader understanding of
the entire computing environment, we augmented the personal interviews
with information from each school's Web site and from other published
On the industry side, we gathered information through literature searches
and reviews of Gartner Group reports; no personal interviews were
conducted with corporations. Because more published comparative data are
available for industry than for higher education, we were nevertheless
able to compile useful ideas and make comparisons.
The team considers the initial "discovery phase" of benchmarking to be
complete. The following summary provides insights into what other
organizations are doing and offers data to assess Penn's productivity
comparatively. The team was also successful in establishing
relationships with key benchmarking partners, opening the lines of
communication for ongoing information exchange. Our peers are as
interested in what Penn is doing as we are in what they are doing.
The team's most important observations are summarized below:
Overall, Penn has a strong record of accomplishment on which to build.
We rank high among our peers in providing network services,
administrative computing, and support for instructional technologies.
Penn can be considered leading edge with Project Cornerstone
architectures, client/server systems, and the data warehouse. At the
same time, we appear to be spending a smaller proportion of our
institutional budget on information technology (IT) than our peers.
In both industry and higher education, computing is seen as an area of
investment, not cost containment. Industry expects to see its investment
in computing almost double over the next five years. Many universities
have recently made, or anticipate making, significant investments in
Organizations in both industry and higher education are facing many of
the same challenges. An increasing demand for network access and
helpdesk services are two examples. The largest and fastest growing
information technology budget item in industry is personnel costs though
head count remains relatively flat. Industry IT directors rate training
and retraining as their most pressing concern. The relationships we
established during the initial phase of benchmarking will allow us to
continue tracking how others are meeting these challenges.
Distribution of computing support appears to be the trend in industry,
though most IT funding remains centralized. Higher education employs
various mixes of centralized and decentralized services.
Penn's new model integrates strategies that a number of forward-thinking
institutions are already using (e.g., cross-functional process teams,
service bureaus, and enterprise services). Our peers were very
interested in Penn's Network Architecture Task Force and its cross-unit
approach to recommending standards, which allow us to take advantage of
new and emerging technologies. Penn's use of user groups, listservs, and
newsgroups is highly regarded among our peers for increasing
communication and understanding across units.
Other universities use carrots, not sticks, to encourage standards. They
offer many of the incentives Penn uses: favorable pricing, technical
support, and links to the emerging architecture. Industry is much more
stringent than higher education in setting standards ("The choice is
vanilla and everybody gets it.").
Almost 75 percent of companies report they outsource some IT functions,
most commonly disaster recovery, network operations, and application
development. If they could do it over, many companies would seek tighter
controls on deliverables and schedules, a dedicated individual to manage
outsourcing, and more flexibility in the contract.
The use of service level agreements is growing: 62 percent of Gartner
industry respondents say they use such agreements. Our higher education
peers who use service level agreements recommend them as a mechanism for
No single support model is favored. A wide range of support models are
in use in highly successful companies. We found a wealth of examples of
"best practice" in select areas, but no single organizational structure
that works for everyone. From conversations with leaders in higher
education IT, we determined that there is no "right" model.
Asked about lessons learned from restructuring experiences, our
interviewees stressed that organizational transitions take time, honest
communications, and a personal investment on the part of those involved.
What constitutes "success"? Even the experts don't always agree. For
example, only five companies appeared on both lists of "top 100
companies" developed by two major information technology publications in
Ongoing benchmarking activities, both internal and external, can help us
understand whether we've been successful, but ultimately it's our end
users who will make that determination.
In order to analyze the enormous amount of data collected during
interviews and literature searches, the workgroup focused on a set of key
questions about Penn's evolving support model. That approach is used
below to summarize our findings and make comparisons with peer
institutions and industry. To support our findings, we have included as
Appendix A a list of institutions interviewed and a bibliography of
articles and literature resources.
In addition, case summaries, interview transcripts, articles, reports,
and supporting documentation are available at:
ISC Benchmarking Library
230A, 3401 Walnut Street
University of Pennsylvania
Philadelphia, PA 19104-6228
- Are Penn's resources being used productively?
Productivity has two aspects, resources used and services received. As
anticipated, the wide variations in definitions on both sides of the
equation make precise comparisons difficult. However, the available
information indicates that Penn's costs are well within the range of
those of universities in general and comparable institutions in
Among universities interviewed, Penn remains competitive in the delivery
of IT services. In some areas (e.g., network architecture task force,
data warehouse, and information and systems architecture), Penn is
considered the institution against which to benchmark. In other areas
(e.g., distance learning), Penn has not made an institutional commitment
and is not comparable to those who have made this a priority.
Many universities have recently made, or anticipate making, significant
investments in IT; virtually all those against whom we benchmarked view
IT as an area for investment rather than cost containment.
In general, it is difficult to make industry comparisons of productivity
because of the differences in the task of the enterprise. Gartner Group
data indicate that education as an industry uses a higher proportion of
revenue for IT than any other industry except computer related
businesses. Total IT investment and IT investment as a percent of
revenue across industries is expected to almost double over the next five
A more detailed presentation of the cost data follows.
Costs as a Percent of Revenue:
Gartner Group estimates of IT spending as a percent of revenue and hidden
IT spending as a percent of central IT budget are shown in Table 1
||Central IT Budget as Percent of Revenue
||Other IT Spending as Percent of Central IT Budget
||Total IT Spending as Percent of Revenue
|Hospitals & Health Care
Penn's estimate of $50 million spent enterprise-wide on IT approximates
Gartner's estimated average of 5 percent of revenue spent by
Interviews with comparable universities indicate that they have not
systematically tracked the cost of IT across their institutions. As is
true at Penn, much of the cost of IT is outside the central IT
organization. The cost of central IT groups (as a percent of revenue)
ranges from 1.6 percent to 6.1 percent. Penn falls well within this
range, with ISC spending (approximately $20 million, including allocated
or billed cost) accounting for 2.01 percent of revenue.
- Gartner Group estimates that IT costs are underestimated by virtually
all industries for many of the same reasons that make it difficult for
Penn and other universities to accurately assess cost. The rate of
spending outside the central IT group differs across industries, but is
believed to average roughly 28 percent of central IT, and 56 percent of
central IT for education. To the extent that Penn's $50 million cost
estimate (enterprise-wide) is more accurate than the estimates of
comparable institutions, Penn's actual costs may be lower than might
otherwise be expected.
- The purview of central IT groups within universities varies widely,
with some including telecommunications, others including computer resale,
and still others including support for the medical center. In addition,
some comparable universities are more centralized than Penn and may
include a higher proportion of total costs in the central estimate.
Given the wide range of estimates provided by these schools for central
IT costs, we believe Penn to be well within that range.
Allocation of Costs by Category of Expense:
Personnel costs are the largest IT budget item and the area of greatest
growth. Central IT head count represents approximately 5 percent of the
total head count in large enterprises. Penn's central IT head count is
less than 1 percent (.83 percent), and about half of the average for
education. The following table (Gartner Group) presents central IT head
count as a percentage of total employee head count:
| Survey Average
| Hospitals & Health Care
IT personnel expense is growing and expected to continue to grow, even
though head count has been rising slowly or not at all; higher cost,
skilled service providers are being substituted for lower cost operations
personnel. Consistent with the shift in the types of individuals needed
within the IT organizations is the increasing importance of training and
retraining of personnel. The biggest issue facing IT organizations in
their efforts to maintain top levels of performance is providing staff
training in new technologies with no growth in training budgets.
Industry estimates are virtually unanimous in forecasting costs
increasing as a percent of revenue. Estimates of the rate of increase
vary widely. Gartner Group analysts note that average IT spending is
expected to grow to 9 percent by the year 2000.
In Table 2 Computerworld data show IT spending as a percent of revenue
and percent of annual growth.
||IT Spending as
Percent of Revenue
|IT Spending as
Percent of Annual
|Health Services & Pharm.
Many universities have recently made, or anticipate making, significant
investments in information technology. The University of Michigan, for
example, expects its investment in IT to increase because it is buying
higher-end products to remain competitive and because sheer volume is
driving up support costs.
- How does Penn compare with other organizations we've studied in the
following dimensions: networking, instructional technologies, standards,
and administrative computing? Do we appear to be going with the trend of
change or against it?
Penn's networking services are in the high end among institutions we
studied. This is based on our campus and dorm wiring strategies,
networking technologies, and access support. In one area Penn seems to
be ahead of other schools: Penn's Network Architecture Task Force looks
ahead over the next 3-5 years and sets standards that can accommodate
Most institutions in higher education and industry have a centralized
network infrastructure. Additionally, the trend in industry is for local
area networks to be maintained and managed centrally companies find it
too expensive and too much trouble to distribute LAN experts.
Standardization makes this possible. Higher education generally appears
to be ahead of industry in the deployment of networks, particularly
enterprise-wide networks and use of the Internet. Many companies, for
example, are not using email yet, and others are only using it at the
workgroup level rather than at the enterprise level. However, industry
is catching up quickly.
Of the universities studied, over half specifically stated that they had
merged telecommunications and network services. This is an important
area of followup for the benchmarking group. We will probe structures
and economies and query the remaining institutions.
Among the institutions interviewed, Penn is on the high end in providing
support for instructional technologies. This is based on our use of
networking and instructional technologies in the classroom and provisions
for faculty and student access to tools, technologies, and support. We
consider several schools "best practice" in certain areas: Northwestern,
for its Technology in Learning and Teaching (TILT) program which pairs
faculty and staff for training on network tools; MIT, for its distributed
outreach focus across units and commitment to center/school
collaboration; and Michigan, for its organized effort to support the
infusion of technology into teaching and learning. Other schools are
ahead of us in distance education infrastructure and support, but Penn
has not identified this area as an institutional priority.
Also worth noting is a new instructional support group at Stanford that
is staffed with computer experts who also have discipline knowledge and
work in departments to support faculty. The group was created on the
recommendation of a committee on technology and learning, and established
with money from the president and provost.
In many institutions the library plays a key role in technology training,
particularly at UC Davis, USC, and Washington.
Industry appears to go further than higher education in setting
standards, but doesn't allow for flexibility to meet the range of diverse
needs we find in universities. Often in industry "the choice is vanilla
and everybody gets it." In higher education, schools that are behind on
the technology curve appear to be in a better position now to establish
standards because they don't have to accommodate large installed bases.
At Penn, installed bases and decentralized authority have made it more
difficult to establish standards. One notable exception is the ResNet
program. It was developed when the dorms were behind the curve in
technology, and allowed Penn to institute strong standards. The ability
to adopt an industry wiring standard in 1992 has made Penn a leader in
Some companies are facing the same standards problem as universities,
that is, divergent hardware platforms and database systems at their
subsidiaries. Mergers and buyouts have caused some of these standards
Most higher education institutions use the "carrot approach" to encourage
adherence to standards. They offer many of the incentives Penn employs:
favorable pricing (or no cost access), technical support, and links to
the emerging architecture. Typically, central IT plays a guiding role,
with the campus participating in setting standards. The key
recommendation here is to pay attention to the culture. A realistic view
of the institution is required.
In industry, corporations with a data warehouse, database standard, and
client/server applications are seen as leading edge. These criteria put
Penn in the leading edge category. This rating is also consistent with
Penn's standing among its peers in the Ivy Plus consortium (a semi-annual
information-sharing gathering of administrative computing directors of
the Ivies plus MIT and others). We continues to hear from Ivy Plus
members that Penn's original principles for Project Cornerstone,
information technology architecture, and client/server deployment serve
as models for others.
Of companies surveyed by Computerworld, 86 percent are using some form of
client/server, but maintain a healthy degree of skepticism. Some
companies are backing off on client/server, maintaining that not all
applications should or can be client/server. On average, 20 percent of
IT budget is spent on client/server projects, with a growth rate of 45
percent. Fifty-seven percent report complexity of multivendor
environments (many failure points) and 55 percent report lack of trained
personnel as the most serious problems with client/server.
- How are other organizations delivering services? How are they
staffed, managed, and funded?
The organization of IT support in industry runs the gamut from highly
centralized to highly decentralized. Some companies are decentralizing;
others are centralizing after a period of decentralization. The trend,
however, appears to be toward decentralization. But despite talk of
decentralizing IT, IT budgets for the most part remain centrally
controlled. Computerworld industry data show the following:
- 79% of IT spending is managed centrally
- 13% of IT spending is managed by divisional or functional IT managers
- only 8% of IT spending is managed by non-IT managers
In higher education, the data suggest that in most instances general
computing support is provided in a mix of centralized and decentralized
services. With a few exceptions, the trend appears to be toward general
"shrink wrap" support at the central level and custom support at the
Different approaches are employed across institutions, but most of them
are based on a mix of central and local IT support. UC Davis has shifted
its focus to primary support at the local level. User groups, listservs,
and newsgroups are highly recommended to support this approach, providing
forums for people to share information. Wisconsin provides primary
support at both the central and local levels, with central assuming
responsibility for high-volume general support and local groups providing
Again, different approaches are employed, involving a mix of central and
local support staff. UC Davis' central IT has shifted its focus to
supporting primary support providers in the units. Central and local
participation in user groups, listservs, and newsgroups helps make this
model successful. To effectively provide secondary technical support at
the central level, central IT must have staff who are at least as
knowledgeable as the local gurus generally, and more knowledgeable in
Across the board, network backbone is provided as a central
infrastructure service and is almost always funded centrally. We found
no examples of public utility commissions in use as a form of governance
for network infrastructure services. A big issue facing many of our
peers is supporting the ongoing cost of the network. UC Davis has a
committee of faculty and IT staff exploring options, which will shortly
present a funding model to the provost. Penn's Network Architecture Task Force makes recommendations for network improvements, but getting to
implementation is often a hurdle due to the lack of a funding mechanism.
In industry, software upgrades are provided as a network service (and as
added incentive to support standards).
The "intranet," as opposed to Internet, has been the subject of recent
articles in the computer press. Intranet is described as a kind of
enterprise internet in which the World Wide Web is used as the "client"
in client/server applications and for enterprise-wide (or
division/department-wide) information dissemination, collection, or
exchange. The Penn Web is headed in this direction, and the Wharton
School has already begun to implement an intranet system for its internal
It's difficult to summarize trends or practices in the area of service
bureaus, or market-based "small businesses." We didn't ask specifically
during the interviews, and higher education and industry refer to this
type of service in a variety of ways. However, the examples we did
uncover are all central. Michigan, for example uses central charge-back
service bureaus; and Northwestern, though providing a baseline level of
network services as a utility, sells "gold pool" modem services as a
service bureau. Hawaii, on the other hand, discovered that the cost of
metering services exceeded the cost of provision. They simply tack an
additional charge onto the telephone bill to cover network services.
This is an area that clearly needs followup. UC Davis mentioned the
"competency center" concept specifically, but it's not clear how they are
managing this type of service delivery. MIT's service bureau model is
clear for training and applications development, but it is unclear how
expertise is disseminated, managed, or charged. Stanford has computer
experts with discipline knowledge in a competency center approach, but
again specifics are unknown. Wisconsin is seeing a trend of local units
going to the central group to hire local staff.
Enterprise Planning and Brokering:
Standards setting is one area of enterprise planning that is often
coordinated at the central level, with participation across units.
Another common enterprise service is site licensing. Penn appears to be
ahead in the management of its program and central IT strategic license
fund, but is behind other institutions in network distribution of
software. In a good example of brokering, MIT's contracts management
group is responsible for brokering, and the integration group is
responsible for maximizing technology investments across the institution.
Process teams are in wide use in industry, with teams being built as
needed. In the past, budgets were built to allow for the temporary
replacement of unit personnel who participated in project teams. With
downsizing, these budget accommodations no longer exist and employees are
expected to participate on teams and do their "real jobs." The problem
appears to be widespread, but it is unclear how it's being resolved.
MIT and Emory provide the two best examples of process teams in action
among the universities we interviewed. MIT's central nomadic discovery
and delivery team is plugged into projects as needed, and Emory's quality
training and certification group is a cluster of cross-divisional teams
working on cross-divisional projects and processes. Also worth noting
are Michigan's cross-functional teams for administrative financial
systems. In this model, process owners across the university decide what
gets built, when, and for whom (student systems, personnel, alumni).
In industry, 73 percent of companies surveyed by Computerworld said they
outsource some IT function, with small companies doing more outsourcing
than large companies. On average, 10 percent of IT spending goes to
outsourcing. Companies with sales revenue below $500 million spend 15
percent on outsourcing, and companies above $1 billion spend 8 percent on
outsourcing. Disaster recovery (48 percent) is the most common
outsourced function; network operations (29 percent) is next, followed by
applications development (25 percent).
Survey respondents in industry were asked, "If you could do it over, what
would you change in your outsourcing contracts?" Answers ranged from
more accountability and tighter controls on deliverables and schedules to
a dedicated individual to manage outsourcing and more flexibility in the
In a noteworthy industry example, the internal central IT organization
submitted competitive bids against external vendors. Often, the internal
IT group won the contract. Their knowledge of the business and the
existing systems made them much more competitive.
Among universities, the service most commonly outsourced is hardware
repair and maintenance for desktop machines and UNIX workstations. Some
institutions, such as Northwestern, are investigating outsourcing to meet
rising demand for remote access to network services. UC Davis is looking
to do the same, but also hopes to outsource support for these services
(to relieve the associated demand for technical support for remote access).
According to an informal outsourcing survey of university CIO's, the
following functions are also being outsourced: programming/application
development, consulting, mainframe operations, and wiring installation
and maintenance. The survey concludes that outsourcing can be quite
successful when used selectively to augment existing staff and for tasks
where specific expertise is needed for a limited period of time. It also
notes that vendors need to be managed more carefully than in-house staff,
and that good contracts and specifications are key.
Service Level Agreements:
The use of service level agreements is growing. For example, 62 percent
of Gartner Group survey respondents use them. Gartner Group points out
an important problem associated with service level agreements: Often not
everything that is needed to keep the customer happy is included in the
service level agreement. IT groups can meet every detail in a service
level agreement ("working to rule") but the customer is highly
dissatisfied because something critical was overlooked in the original
agreement, or priorities changed, or a new critical need developed.
Our higher education peers who use service level agreements recommend
their use as a mechanism for grounding expectations. Agreements should
be as well-defined as possible, and reviewed/updated on a regular basis.
In Michigan's "Partnership with the Deans" program, service level
agreements are revisited at least annually. For each partnership, one
representative from each side (school/central) meets regularly to
determine where changes might be needed.
- What are others doing to support and nurture innovation? How is
communication and integration across units handled?
In industry, some organizations use advanced technology groups to foster
innovation and develop new technologies. Moving personnel around to
different project teams and different business units is another way some
businesses support innovation and improve communications between staff in
central IT and business unit IT
Some schools, such as Princeton, have institutionalized advanced
technology groups to assist in nurturing innovation. Others, such as
Northwestern, have disbanded their advanced technology groups, responding
to concerns that they concentrate on a select few end users, and their
services are directed at special cases which usually aren't scalable.
Michigan's Partnership with the Deans program has been very successful in
advancing communication and integration across units. It has shown deans
how central IT can better align with school groups. The goal of the
program is to improve communications and increase overall technology
access and capability in the university.
- What problems does Penn share with its peers and industry? What have
we learned about how others dealing with these problems?
We found 3 areas of universal concern among higher education institutions:
- meeting demand for help desk services
- meeting demand for remote dial-in access
- meeting demand for seats in public-access labs
To address these problems, some schools are defining as clearly as
possible baseline services to be provided by the help desk (with possible
value-added service bureau options). Columbia, for example, has
instituted a 900 number for help desk calls. Others are investigating
outsourcing for remote access. Auburn University, for example, now
provides dial-up access for $12 per month to the university's host
computers and the Internet, through a contract with MCI (offering 15
hours of 28.8 Kbps access per month, no busy signals, full graphic
displays, and 24-hour technical support). To address the rising demand
for access on campus, Northwestern is currently using computing labs and
Issues on the industry side are somewhat different. According to the
Gartner Group, the following critical issues are faced by IT organizations:
||Training IT staff in new technologies
||Improving perception of IT among business management
||Funding to keep up with demand and maintain quality
||Educating business managers about how IT might help them
||Developing a methodology to prove IT's return to the business
||Educating IT staff on customers' business needs
||Determining how much end users spend on IT
||Improving the morale of IT staff
||Competing with outsourcers
||Changing IT from a cost center to a profit center
- What can we expect before, during, and after the transition period?
The perception of how well a transition is working can differ
significantly among parties involved within the same institution. It's
very important not to underestimate the need for clear, ongoing
communication with both IT staff and end users.
UC Davis emphasizes that formal agreements, structural changes, and new
processes mean nothing unless people are willing to make a personal
investment in the reorganization.
MIT advises that the restructuring effort is not a sprint, it's a
marathon. It takes time to turn organizations around. Over
communicate. Make sure everyone on the inside is saying the same thing
and is listening as well as talking. UC Davis stresses the importance of
strong leadership to make organizational changes. They also stress that
staff need to understand how they link to the organization and its
goals. In its reorganization efforts, Minnesota seeks to build trust and
confidence within and outside of the central IT organization. Wisconsin
notes that the "construction zone" period is inevitable, and that IT
staff and end users should be encouraged to expect this and understand it
as part of the transition process.
In industry studies, resistance to change and personnel retraining are
cited most often as the biggest obstacles to overcome in making a smooth
- What criteria are being used to determine excellence or success?
A Gartner Group survey lists the top ten criteria management uses to
assess the IT organization's performance. The criteria and the percent
of companies using them are:
||Availability/reliability of installed systems
||Ad hoc feedback from customers to management
||Ability to reduce or contain costs
||Speed/quality of applications development
||Contribution of IT to specific business goals and strategies
||Overall IT spending (e.g., $IT/$revenue)
||Contribution of IT to financial performance of the company
||Cost-efficiency of specific IT services
||Formal customer satisfaction surveys
||Formal service level agreements with customers
The universities we interviewed were unable to provide clear criteria.
According to a 15-month study financed by an Education Department grant
(The Chronicle of Higher Education, January 19, 1996), many college
officials "don't have a clue" about how their campuses are affected by
networking, how it is used, what works best, or how to improve it. The
study's chief researcher, Charles McClure, a professor of information
studies at Syracuse University says, "We have found it's sort of taken as
a given now that you absolutely, positively must have a good information
infrastructure simply to attract students and retain faculty." "When you
ask people 'Do you teach better because you have a good campus network?'
they say, 'Oh, yeah, yeah.' But when you say, 'How do you know?' then
the conversation becomes silent."
Mr. McClure and his associates have completed the study's main
byproduct a manual entitled "Assessing the Academic Networked
Environment: Strategies and Options." Academic decision makers "will
increasingly ask others on campus for evidence that particular services
and activities contribute to the overall success of the institution, that
the networks are operated efficiently, and that they support specific
institutional goals," a draft of the manual says. It says the evidence
should focus on such matters as technology costs and usage patterns, and
provide an understanding of users' views. Among the issues it suggests
should be explored is whether people think that campus networks have
changed their experiences in teaching, learning, research, and
- What measures of customer satisfaction are being employed by other
Although organizations are regularly surveying and measuring , there
don't appear to be any institutionalized efforts that clearly translate
into ensuring customer satisfaction. A lot of data are being collected,
but it's unclear how they are being used.
Michigan's service level agreements and Partnership with the Deans
program appear to be steps in the right direction. Michigan recommends
not counting or measuring more than you're prepared to take action on.
At Northwestern, all departments are subject to internal and external
reviews every five years. How the data are used to adjust services is
Industry seems to depend heavily on ad hoc feedback from customers to
judge success. According to a Gartner Group survey, 98 percent of IT
organizations stated that customer ad hoc or informal feedback to
management plays a very significant role.
- What else have we learned that is too interesting to ignore?
At Northwestern, the vice provost for information systems (VPIS) is on
the verge of getting the university to build into its budget replacement
costs for all campus computers, with deans putting money into a pot in
exchange for additional central money (3-year life cycle). The VPIS has
convinced the deans of the need for this.
The UC Davis Information Technology Strategic Planning Committee's
report, released in December 1992, includes several key findings which
led them away from the then-current recharge (charge-back) model. The
recommended model provides a base level of service, funded centrally by a
campus allocation, at no visible cost to the individual user or
department. This change was made to address concerns that the recharge
(charge-back) model limited access to, and innovation with, information
technologies, as people made decisions on the basis of recharge avoidance
instead of the most effective and efficient solutions for both the unit
and the campus. They also found that campus units were spending a
substantial amount of time and money charging each other for services.
Two major information technology publications, Computerworld and CIO,
both produce annual reports of the top 100 companies most effective in
managing information. In comparing the two reports for 1995, only 5
companies appear on both lists:
- Charles-Schwab Corporation
- The Coca-Cola Company
- MacDonald's Corporation
- Merck & Company, Inc.
- Solectron Corporation
Thus, even among well-regarded reviewers, criteria for determining "best
practice" are inconsistent.
Ninety-three percent of all companies surveyed by Computerworld are doing
some form of re-engineering; approaches and results differ widely.
Survey respondents focus re-engineering efforts on:
| finance and accounting
| customer service
| order fulfillment
| product and service development
A wide range of support models are being used in highly successful
companies, with no one model predominating. The one constant is that
most companies are continually searching for ways to improve.
Flexibility is key. Most companies want to be flexible enough and
responsive enough to adapt quickly to changing circumstances. None of
the universities we interviewed could recommend an institution with the
best support model, although they could identify best practices in select
- What followup benchmarking activities would we recommend to the
Implementation Task Force?
Penn State, which undertook a major benchmarking study several years ago,
emphasizes that successful benchmarking takes time and money. True
benchmarking is more than a quick "snapshot" of an organization at a
given time. In order to fully understand benchmarking data, we need to
understand the culture of an institution. Now that contacts have been
established through initial interviews, we recommend ongoing information
exchange with our benchmarking partners. As we identify areas of "best
practice" among the institutions we've studied, we encourage making site
visits to enhance our understanding of their services (e.g., Michigan's
Partnership with the Deans Program).
All of the data on industry came from published sources. We should
follow up with personal interviews at the most interesting sites, using a
similar question set to the one used with educational institutions. We
recommend Merck & Company, Inc. as a starting point for several reasons:
their ranking among the top five organizations in IT support in two major
studies, the parallels between pharmaceutical and higher education
institutions, their close proximity to Penn, and their broad reputation
for excellent overall management.
Members of the benchmarking and models workgroups will participate in a
series of teleconference briefings with Gartner Group industry analysts
to help us better answer the questions about implementing the new support
model. We have devised a set of very focused questions to frame our
discussions and to ensure that the most appropriate analysts are consulted.
If Penn intends to make a strong commitment to benchmarking as an ongoing
activity, we may consider joining a benchmarking clearinghouse or
consortium. Although the best resources are expensive, they would allow
us to stay in touch with best practices across industries. Some options
- Benchmark Exchange, a Web-based resource
- Gartner Group Best Practices Benchmarking Service
- American Productivity & Quality Center International Benchmarking
Appendix: Schools Participating
Massachussetts Institute of Technology
Penn State University (re: Benchmarking study)
Princeton University (Advanced Technology Group)
University of California, Davis
University of Hawaii
University of Michigan
University of Minnesota
University of Southern California
University of Washington
University of Wisconsin
- 1994/95 Information Technology Budgets and Practices Survey, Gartner Group, November 18, 1994.
- Burns, Laurie, Cheryl Mun-Fremon (University of Michigan), "Partnerships with the Deans: Delivery of the Whole Product," CAUSE94.
- Duwe, Jack, Mark Luker, Tad Pinkerton (University of Wisconsin, Madison), "Restructuring a Large IT Organization: Theory, Model, Process, and Initial Results," CAUSE/EFFECT, Summer 1995, pp. 24-30.
- "The Eighth Annual CIO 100, Practice Makes Perfect: Delivering Best Practices Where They're Most Needed," CIO, The Magazine for Information Executives, August 1995.
- "Forecast '96," Computerworld, December 26, 1995.
- Huber, Richard L., "How Continental Bank Outsourced its Crown Jewels," Harvard Business Review, January-February 1993.
- Jackson, Robert L., "Study Finds Colleges are Ignorant of How Their Computers are Used," Chronicle of Higher Education, January 19, 1996, p. A22.
- "The Premier 100: The Most Effective Companies at Managing Information," Computerworld, October 9, 1995.