Tag Archives: operating costs

Activity Based Costing Presentation at NACUBO 2016 Montreal

“Using Activity Based Costing to Identify the Cost to Deliver IT Services” will be presented by the University of Illinois at Chicago and WTC Consulting, Inc. during the NACUBO 2016 Annual Meeting on July 18, 8:30-9:45 a.m. in Concurrent Session IV.

What is the best way to determine the cost of IT, generate forecasts, and benchmark against peers?  These questions drove an activity-based costing project by the University of Illinois at Chicago (UIC) and WTC Consulting, which identified 190 Basic Products and Service Elements (BPSE™) in the university’s central IT department.  The elements formed a transparent picture of IT roles, activities, and costs, creating the basis for a new rate and funding strategy that yielded a bundled common services model.  Hear the project leaders describe cost drivers, methodology, rate philosophies, campus engagement, and implementation challenges.  The panel will also address using results to allocate IT costs, evaluating outsourcing targets, identifying cost-cutting goals, and more.

Learning Objectives:

● Learn different rate and funding philosophies that work in higher education.

● Discover that not all metrics for comparison are created equal.

● Find out which decision-making structure builds buy-in from the start.

For more information on WTC Consulting, Inc. visit us in Booth #918 at NACUBO 2016, or visit our website www.wtc-inc.net and our blog www.wtcconsulting.info

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TASSCC 2015. WTC presents at the TASSCC 2015 Annual Conference in San Antonio, Monday, August 3rd.

Information Technology – Here are the Costs.  Show me the Value.

Phillip Beidelman – President, WTC Consulting

Dean Oyama – Consultant, WTC


To present a methodology and findings for identifying products, services, lines of business, and value delivered by an IT operation.


How much does IT cost?  How can we do IT cheaper?  How will we pay for IT?  Where’s the value?  These questions drove a detailed study of Information Technology costs at the University of Texas Southwestern Medical Center (UTSW) in Dallas.  For this study, IT and financial executives at UTSW partnered with technology cost experts from WTC.  Over a six-month period, WTC specialists examined the institution’s $85M IT operating budget for Fiscal Year 2014.  Every dollar spent on FTE and non-FTE expenses was identified.  From this evaluation over 300 Basic Products and Service Elements (BPSE) performed by the University’s central IT department were identified.  These BPSEs were then organized into IT Lines of Business.  Together this information delivered a transparent picture of IT operations spend, and clearly defined the activities and cost of a large Health Information Technology operation.  The presenters described the study drivers, and the methodology.  They also discussed how this information could be used to allocate IT costs; evaluate outsourcing targets; identify cost-cutting goals; and more.



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Rate and Funding Trends from the desk of Phillip Beidelman

One of the trends we see these days has been an extension of activity-based costing principles directly to the entire IT environment.  In the past, colleges and universities limited the idea of full costing to telecommunications and networking, but in recent years there has been significant interest in extending the identification of fully-loaded cost into IT.  It seems in these hard economic times, everyone is interested in what things really cost and how the cost of services might be reduced.  One way to reduce costs is to conduct an analysis of services provided by central providers on campus and departments.  This analysis will give you the knowledge necessary to consolidate duplicate services, discontinue departmental services that are centrally provided, or combinations of other ways to reduce your IT costs.

Another trend we have been seeing across different institutions is an interest in integrating strategic technology planning, with capital and operating cost projections, and the development of rate and funding plans to come up with a realistic picture of what it will take to fund strategic goals.  These are complex interactions that need clear issues-based decisions.  Creating such models and plans for your institution will allow for greater flexibility for the adoption of newer technology solutions, like mobility.

With all the issues in the economy today, it is important to fully utilize your budget in a way that best benefits your institution.  Creating a practical 5 or 10-year plan will help you focus on what is important and make sure you are able to reach all your strategic goals.

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One of the Ways WTC Helped a Leading Southern University

For a leading southern university, WTC identified the ten key areas of duplicated services that could potentially be supported in a more efficient and cost-effective manner through either central management or central coordination.  This assessment identified a potential 10% – 20 % reduction in operating costs associated with existing IT services.  WTC provided a road map on how to achieve these savings along with recommendations that address establishing both an IT governance framework and an IT operational framework.  WTC also made recommendations addressing specific services such as network management, help desk, email and calendaring, storage of backup media, file services, and disaster recovery.

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