- Building a New Model for Sustaining IT Investments
Appendix 6A – Building a New Model for Sustaining IT Investments
Components of a new model for sustaining IT investments include:
- Technology standards that:
- Help UNLV choose technology that works well with existing systems
- Enhance service provision by reducing variability
- Allow UNLV to broker contracts for preferred vendor pricing
- Ensure that evolving information technology security requirements are addressed
- Regular assessments of UNLV's IT investments to:
- Identify technologies that need to be decommissioned
- Determine when fundamental infrastructure needs to be re-architected
- Pursue opportunities for consolidation of technology investments
- Determine when to adopt emerging technologies
- Funding models that:
- Address the shared and unique needs of UNLV’s distributed and central IT environments
- Optimize technology refresh programs throughout the institution
- Anticipate the costs associated with major shifts in the provision of infrastructure services
- Account for maintenance and renewal costs of grant-funded equipment used to provide on-going university services
Adhering to Technology Standards
The campus currently has IT standards for the purchase of desktop and laptop computers and a contract in place for a single vendor for campus cell phone devices and services. Additionally, for economies of scale, compatibility, and consolidation of skills needed for management, central IT uses a primary manufacturer for servers and one for network equipment. More must be done to establish additional standards that would reduce the number of vendors providing supported devices (e.g., printers). New standards will also optimize purchasing power and lead to better service provision. Ensuring adherence to technology standards through appropriate policies and approval procedures will also make it more likely that newly acquired technology will integrate well with the broader enterprise system environment.
To ensure that campus IT investments are keeping pace with anticipated need and reflect changing campus strategic directions, the Technology Review Board (TRB, see Initiative 1) is responsible for developing new and maintaining existing campus technology standards. The group will also set appropriate thresholds for applying the standards, work with the Purchasing Office to set up commodity approval processes, and establish exception procedures. The TRB is also responsible for reviewing and recommending changes to the enterprise IT architecture and will be in a position to adjust campus standards as the IT environment continues to evolve.
To realize the benefits of technology standards, new policies and procedures regarding the purchasing of IT applications, equipment, and services must be established (see Initiative 4). To meet the unique needs that will arise across the campus community, exceptions to the technology standards and to the purchasing policies and procedures will need to be granted. Exceptions will be considered carefully as they diminish the benefits associated with establishing standards and often require additional administrative and management oversight.
Furthermore, continually evolving information technology security requirements will impact technology standards. In order to mitigate new risks the TRB will work with the campus Cyber Security Team (see Initiative 8) to stay abreast of changes in the security landscape that require adjustments to campus technology.
Finally, UNLV must strive to maintain an optimal balance between organizational effectiveness and individual preferences. Individuals need to acknowledge that the university cannot support every available technology.
Assessing the IT Investment
Regular assessments of IT investments will help determine when to decommission a service, when to consolidate services that are being offered by multiple units on campus, and when to introduce emerging technologies.
Once IT services are included in the IT Services Catalog (see Initiative 5), periodic review of the IT investments associated with those services will reveal changes in usage, which in turn will trigger a timely decommissioning. Even before a technology becomes obsolete it may need to be decommissioned. When multiple technologies provide similar services or when newer technology is needed to integrate better with newly implemented applications, decommissioning should be considered.
Advancing the infrastructure
Sustaining the IT environment is broader than replacing aging equipment. The underlying technology infrastructure (e.g., server and application management, storage services, database management, data center services) must also continually be updated to accommodate new approaches to providing infrastructure services. In the next four to six-year period, UNLV will need to leverage:
- Virtualization (i.e., the ability to provide technology services independent of specific hardware).
- Implement virtual desktop environments customized for specific roles within the university (e.g., a cashier’s desktop would be different than one used by an administrative assistant in athletics)
- Deliver virtual applications that provide access from anywhere on any device (e.g., provide students virtual access to software currently only available in campus computer labs)
- Private Cloud Infrastructure Services (i.e., UNLV managed resources available through self-service web-based interfaces)
- Develop a self-service method to access and/or install commonly used applications licensed for use at UNLV
- Deploy new servers and/or databases through a self-service interface (e.g., faculty member able to deploy a web server for a class project with very little advance preparation time)
- Cloud Services (i.e., software applications available through web-based interfaces)
- Replace legacy human resources and financial management systems with cloud-based applications (e.g., Workday- see Initiative 9)
- Introduce new cloud-based web-conferencing tools (e.g., Blue Jeans, WebEx see Initiative 14)
- Maximize cloud-based collaboration applications (e.g., Google App for Education)
- Off-site Data Center Services (i.e., off campus server and storage hosting)
- Provide high availability business continuity and disaster recovery capabilities to protect university data and information services
- Leverage partnerships with infrastructure providers to adapt more quickly to changing technologies
New infrastructure services will also require a more robust set of management tools and methodologies. UNLV will need to invest in:
- Enterprise process management to allow for precise control of scheduled activities
- Database replication tools for backup, automatic recovery, workload distribution, etc.
- Security and auditing tools to protect the integrity of UNLV’s systems and data
- Enterprise application integration tools to streamline communication between interacting systems
One of the many strengths of a distributed IT environment is the ability to adopt new technologies for unit-specific needs very quickly. The technology deployments often fall below purchasing thresholds requiring a bid process and many new technology services are offered as software-as-a-service so no hardware infrastructure is needed. Occasionally, more than one unit will adopt the same technology.
With assistance from UNLV’s Purchasing Office, the IT investment assessment effort will include a periodic review of technology purchases across the campus to discover the technologies being adopted by multiple units across campus (see Initiative 4). The assessment will determine when purchases of the most commonly used technologies can be consolidated to leverage better pricing and, if appropriate, some centralized IT services (e.g., login and password management for software applications). Additionally, the UNLV representatives on the NSHE System-Wide Software Committee could use the information gleaned from the periodic assessments to determine if there are opportunities to leverage campus technology purchases at the system level.
Adopting new technologies
The decision to introduce a new technology to the campus community must take into consideration a wide variety of factors. A solid understanding of the overall technology environment is critical for successful campus-wide adoption of new technology. To ensure timely implementation of new software applications, the ongoing university IT investment assessment effort must include development and maintenance of an up-to-date list of the operating systems on campus computers used for administrative functions. That effort must be done in coordination with the current fixed asset inventory process for IT equipment. The assessment information will be used to determine the impact of the introduction of new software applications and help inform the rollout of the software.
Without the assessment and a plan to accommodate older equipment and operating systems, both distributed and central IT units are often left with the challenge of developing workarounds so older technology can accommodate new software. Maintaining old software on newer equipment and operating systems creates a similar set of challenges and additional workarounds. The workarounds are often difficult to develop and generally require special support services to maintain.
Emerging technologies pose a different set of challenges. Distributed IT units are often in the best position to take risks on the adoption of the latest technologies to meet their unique needs. If the technology is successful it is likely to spread. If the technology does not meet expectations or the company providing it fails, recovery is much quicker than with the enterprise technologies.
Efforts to sustain the IT investment at UNLV in a cost effective matter should account for the need and desire for individual units to pursue new technologies unique to their disciplinary pursuits. When the new technologies adopted in individual units start to cross units, the TRB must review how widespread the adoption might be and determine how those technologies will be supported as they continue to grow.
The IT investment assessment effort needs to encourage innovation and the adoption of new technologies while simultaneously monitoring the IT environment for the unintended consequences (e.g., negative impact on students) or missed opportunities (e.g., possibility for cost savings and provision of support) associated with technologies that migrate across campus units.
Developing Funding Models
As indicated in the introduction to the UNLV IT Master Plan, securing funding is a complex process dependent on a variety of factors (see Appendix D). Consequently, identifying the source of funding needed to sustain UNLV‘s IT investment is not within the scope of this initiative. However, developing models to help make informed decisions about the effective use of IT funds is an important part of optimizing the current IT environment.
Within the central IT organization only a few sources of ongoing funding are available for hardware and software expansion as services grow or for routine replacement of aging technology. A central fund of $350,000 is available for annual replacement of computers in academic departments and student fees are available to help support a portion of IT services dedicated to student use.
As with other UNLV units, rising operating costs consume the vast majority of the central IT organization’s budget, and the limited remaining funds must be carefully allocated between replacing the most at risk systems and supporting demands for new services. UNLV’s central IT organization estimates that 90% of its technology refresh is accomplished with one-time funds. Every effort is made to utilize these one-time funds to meet the university’s most pressing needs. However, constraints on the funds and the unpredictability of annual allocations pose challenges for creating a systematic approach to sustaining the IT investment under central IT’s stewardship. These same challenges are replicated in distributed IT units across the university. A more predictable and comprehensive approach for utilizing annual funds will help UNLV design and sustain an optimal IT environment.
Addressing central and distributed IT needs
UNLV’s highly distributed IT environment poses additional challenges to establishing strategic funding models for sustaining IT investments. For example, each major division on campus is responsible for providing computers for the employees in the unit. While the university provides minimum technical specifications for new computer purchases and selects a small number of approved suppliers, the individual units determine when computers will be replaced.
As computers age, they require additional service, are more prone to security vulnerabilities, and often require special workarounds to connect to new services. Those units without dedicated IT support staff that cannot afford or choose not to replace aging computers pass the rising costs of maintaining those computers on to central IT. Other units opt for shorter refresh cycles and purchase computers with newer operating systems without adequate consideration of older applications still in use on campus, creating challenging IT support issues. To balance the needs of distributed and centralized IT units, the funding model for refreshing computers must account for the full cost to the university including the costs of replacing computers too frequently or not frequently enough.
Similarly, distributed IT units may acquire new technology that accelerates the need for expansion, replacement, or renewal of the university’s IT infrastructure. The units may also acquire new services for the constituents in their unit. On occasion, those services expand to serve the broader campus community. The lifecycle costs of sustaining these investments are rarely part of the initial funding.
In the absence of a comprehensive approach for sustaining IT investments, both central and distributed IT units are developing use-based charges as a method to fund existing and new IT services. The proliferation of new rate structures perpetuates the ad hoc nature of IT service provision, excludes some units from receiving much needed services, and can incentivize activity that puts the university at risk (e.g., housing servers under desks rather than in secure data centers).
As UNLV continues its transition to a Top Tier institution, consideration should be given to the development of rates for technology services that can be directly charged to grants. Doing so would reduce the pressure on state-funded budgets to provide those services. UNLV’s IT governance structures (i.e., the TAC and the TRB) are responsible for developing the guidelines and approval processes used to determine which components of the IT environment are best delivered on a pay-per-use model.
Optimizing technology refresh programs
While the level of sophistication in hardware, software, and other technology assets may vary depending upon responsibilities, all UNLV employees should have access to basic, reliable, and up-to-date technology to be productive. At a minimum, the technology should have an optimal operating system to run the commonly used campus applications, be secure, and function effectively. Old or out-of-date technologies (e.g., computers running operating systems that are no longer supported by the vendor) threaten the integrity and security of the UNLV IT environment, reduce the usefulness of the technology, and are inefficient in terms of the increased staff support required to maintain functionality.
Replacing UNLV IT assets when they have failed or are no longer supported by the manufacturers requires a significant investment in recurring resources. The UNLV IT funding strategy must include the development of technology refresh cycles that reflect changing needs, evolving standards, and new technologies. The refresh cycles must balance both technical and cost considerations and should not be based solely on the age of the technologies. The refresh cycles will vary greatly across types of technologies (e.g., computers, network equipment, software applications, etc.) but should be developed with the following factors in mind:
- Minimum technology specifications to run commonly used campus applications
- Anticipated changes to campus applications that require up-to-date operating systems, browsers, databases, etc.
- Capacity planning (e.g., impact to network of increased use of video) and utilization targets (e.g., exponential increase in use of the learning management system)
- Consolidation opportunities (e.g., server virtualization, additional hardware standards)
- Upgradeability of existing hardware components (e.g., ability to increase memory capacity to extend useful life)
- Changes in technology (e.g., software-as-a-service, off-site hosting options, ubiquitous wireless, business analytics and reporting)
- Life cycle of technology costs (e.g., increased maintenance costs for aging hardware)
- Reliability metrics (e.g., equipment performance better or worse than expected)
- Information technology security requirements (e.g., implications for the network, servers and databases in light of the need for encrypting data in transit and at rest)
Additional information to consider when developing technology refresh cycles is included in the section below entitled, “Key Drivers for Creating Optimal Technology Refresh Cycles.”
The cost savings associated with the implementation of IT asset refresh cycles are not likely to be realized until the cycles have been funded for some time. Other benefits that could be realized sooner include:
- Reduced number of incidents/outages and their duration
- Reduced IT infrastructure complexity through hardware standardization
- Addition of new capabilities/functionality through the use of new hardware
- Fewer security audit findings through the replacement of unsupported hardware
- Improved visibility into future infrastructure investments
Optimal technology refresh cycles must also take into consideration how the work environment is being impacted by employees who choose to use their personal devices to do their work. These choices will determine which technologies need to be purchased by the university and when those devices will need to be refreshed (see Initiative 11).
Finally, decisions about whether and when to refresh are not always straightforward. Changes in where and when work is done and on what devices impact refresh decisions for individual productivity tools. The complexity and interdependence of enterprise technology environments complicate decisions (i.e., maintain, upgrade, or replace) about any single hardware component within the environment (i.e., virtualized servers, shared storage appliances, network devices). The refresh decisions must be considered at the application level and must include an analysis of application interdependencies, infrastructure interdependencies, and overall system-level architectures. Failure to do so can lead to disruptive and costly outages and customer dissatisfaction.
Sustaining grant-funded acquisitions
A particularly difficult challenge at UNLV is the ability to refresh technology infrastructure acquired through external funding sources (e.g., grants, contracts, gifts) or one-time allocations from centralized end-of-year funds from university sources. While some units are able to build the costs of replacing equipment purchased with one-time funds into unit operating budgets, most have no funding sources to cover the replacement and/or ongoing maintenance costs. The replacement and ongoing costs of maintaining equipment purchased with one-time funds need to be considered when the equipment is initially purchased. New funding models must be developed to ensure the programs that the technologies support do not languish due to aging equipment, no longer supported applications, and/or inadequate connectivity.
A new model for sustaining IT investments starts with making thoughtful initial purchasing decisions based on standards. Periodic and thorough ongoing assessments of these investments will determine when technologies need to be decommissioned, redesigned, consolidated, or replaced with newer technologies. Finally, the model must include funding mechanisms that balance the use of central and distributed IT funds, optimize refresh cycles, support a robust underlying infrastructure, and address replacement costs for equipment purchased with grant funds or acquired through donations. Failure to develop a new model leaves the campus at risk and will impact the ability to meet its Top Tier objectives.
Key Drivers for Creating Optimal Technology Refresh Cycles
A 2011 article by Shiwanand Pathak, entitled “Technology Refresh Management,” highlights some of the forces that drive technology refresh. Eight key factors are described.
Many organizations have aging technologies and no proactive approach for regular technology assessment. As long as the existing technology is meeting its intended purpose it is not replaced. Legacy technologies are usually heavily customized to meet user needs. Each change makes it more difficult to migrate to newer technology.
Suppliers upgrade their technology and subsequently stop supporting older versions. The suppliers are motivated to migrate customers to the latest version of their technologies.
Skill set shortage
As technology advances, the focus shifts to the newest breeds of technologies. Over time this causes a shortage in the people who know the legacy technology and acquiring skilled resources becomes an issue.
Regulatory compliance is mandatory for all organizations. Organizations must develop procedures to prevent security leaks and ensure controls are in place to meet compliance requirements. As technology components approach obsolescence and vendors stop supporting them, the components become more susceptible to security incidents
Organizations think technology refresh decisions are high investment items. Technology refresh actually helps reduce operational expenses and enhances organization capability, which in turn helps to lower the overall cost of IT. Over time legacy technology becomes expensive due to the high cost of maintenance.
Technology standards are often developed to reduce the diversity of technology components in a complex organization. Technology refresh can be used to help achieve standardization goals.
Organizations scan the technology environment constantly for the technological innovations that will provide them competitive advantage. Technology refresh can serve as a strategy to migrate to the newer technologies.
Organizations prefer to use products from vendors that are stable and have good market standing. If the viability of a vendor changes, technology refresh provides an opportunity to change vendors.
The article also offers some suggestions to avoid the technology obsolescence trap:
- Put IT strategic planning at the heart of the CIO management agenda
- Develop a technology strategy
- Do a health check of the current IT landscape
- Fund a technology refresh program
- Focus on retiring older systems