Oct 10 2016

More Tech, Less Money: How CTOs Can Manage IT

Guarantee cost savings by strategically planning and managing IT investments.

Most educational leaders face similar challenges when it comes to paying for technology. But money can be saved — and quality of service improved — when those leaders share with each other what works.

One challenge many districts face is how to afford expanding technology needs with a flat or shrinking budget. Drawing from decades of combined professional experience, and utilizing the Consortium for School Networking’s (CoSN’s) SmartIT resources, members of the New Hampshire CTO Council have volunteered their experience and time to share useful information with educational leaders who are struggling with this financial challenge. The group includes chief technology officers from a variety of rural and urban school districts, and focuses on how to make progress with fewer resources.

According to those experts, one should start by determining the total cost of ownership for current services and any new initiatives, using CoSN’s TCO assessment tool, available for free at cosn.org/tco.

Calculating TCO provides a clear picture of the true cost of a project or service and serves as a foundation for comparison and evaluation.

Be SMART in Calculating ROI

When comparing options, it’s useful to break everything down to an annual cost (by unit, if possible) for delivery of a service. With a clear understanding of annual TCO, it’s much easier to determine if an initiative will save money. When that’s the case, CTOs should demonstrate a business-focused return on investment. Here is the equation: ROI = (savings – cost)/cost.

The benefit (savings minus cost) of the investment is divided by the cost of the investment. A small benefit with high cost has a weak ROI; a big benefit with low cost has a strong ROI. If the ROI calculation is negative, the project will need to demonstrate a strong value of investment. A weak or negative ROI means you should probably use VOI to make your case, or drop the project.

While CTOs could probably determine ROI on their own, VOI involves a bit more. A well-established vision and a carefully crafted strategic plan are prerequisites when considering VOI. The trick is to be SMART (Specific, Measurable, Assignable, Realistic, Time-related) about developing key performance indicators that can help track the IT department’s efficiency and effectiveness.

Determining KPIs for projects can be challenging. It requires planning, consistent effort and ongoing communication throughout the project to be effective. That means clearly defining goals, gauging success and following through with measurement.

Collaboration to Find Capital

Even if there is a strong case for moving forward with a project, it might still be a challenge to find capital for it. When it comes to finding financial resources, a strong partnership between the chief financial officer and CTO is critical.

In successful school districts, the CFO and CTO work closely together as peers, and both are key members of the district superintendent’s administration. When a CTO works closely with the CFO, they form a financial and technical problem-solving machine capable of making significant progress and navigating among rapidly shifting federal, state and local funding priorities. It may take some effort at first to build such a relationship, but it is well worth the time.

How does a CTO make a CFO a BFF (or best financial friend)? Start by discussing the skills needed for calculating TCO, ROI and VOI, then ask for his or her recommendations. Most CFOs enjoy having someone else to talk to about business efficiency and productivity.

Then take the CFO through classrooms that use technology well so he or she can see the impact it has on learning. Go to lunch and listen to his or her views on technology. Make cross-team connections between the IT and finance departments. Each of these types of outreach will help the CFO understand how technology can save money and improve efficiency.

When we work together in these ways to achieve goals that are specific and measureable, it helps students learn and saves the district money. That’s a big win for everyone.

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