INTRODUCTION
The Information Technology Strategic Planning Committee Report,
issued in December 1992, described a vision of a "new reality" for
the campus information technology environment. The "Vision Statement:
A New Reality" declared that:
The strategic directions outlined in this report will result in ... the creation, evolution, and implementation of an information technology environment that is relevant, empowering, and based upon an architecture flexible enough to enable rapid adjustment to unpredictable change. Strategic use of information technologies will enable the campus community to leverage scarce resources, better manage information as the expensive and essential resource it represents, and provide tools to make it possible for the campus to function at its maximum potential even in times of restricted resources. Information technologies foster partnerships, collaborations, and the creative reframing of problems that will finally yield a campus enabled to transform its processes and practices.
The successful implementation of the Network 21 Project will move
the campus a long way towards achieving the Strategic Planning
Committee's vision of a "new reality."
BACKGROUND
The Network 21 Budget and Policy Oversight Committee was
appointed by Provost and Executive Vice Chancellor Grey on December
15, 1994
(See
Appendix A). Dr. Grey charged the Committee to:
Project Budget Capped to $23 Million - The Committee met
throughout the winter and spring of 1995 and submitted its first
quarterly report to Provost and Executive Vice Chancellor Grey and
Academic Senate Chair Karl Romstad on April 11, 1995. The report
included the Committee's decisions for scaling back the Project by
$3.8 million to stay within the $23 million cap imposed by Dr. Grey
(See
Appendix B).
FUNDING HISTORY
The Network 21 Completion and Utilization Plan is primarily
concerned with the challenge of funding networking. The funding
history of campus computer operations is critically important to the
understanding of the present day Information Technology budget, and
particularly relevant to the challenge of regularizing funding for
networking on the Davis Campus. The recommendations that follow in
this report have been significantly influenced by the events of the
past and the financial realities of the present.
University of California computer operations were decentralized to
campuses by the UC Office of the President in the late 1960's and
early 1970's. Unfortunately, the Davis Campus received this
responsibility without any additional resources and was expected to
absorb the costs within its existing budgets. The funding of
administrative computing, especially payroll and personnel-related
systems, was a particularly difficult burden to assume, given the
already lean budgets for central administrative services. Three
funding strategies were adopted to cope with this
situation.
First, certain computing services, including networking, were largely
funded through UNISYS central campus computer recharges. Clients who
utilized the UNISYS machine subsidized other services. The UNISYS
funding base has eroded as the dominant computing paradigm has
transitioned from centralized mainframe to distributed
computing.
Second, the Campus Administration decided to allow computer service
costs to exceed the available budget and then to fund the overruns at
year-end from general fund balances. This practice led to Computing
Services generating annual deficits of up to $1 million, which is not
viable given the present financial circumstance. And equally
important, it hardly represents wise practice.
Third, network installations, including most building interior work
needed for those installations, were funded locally.
The formation of the Information Technology Division brought about
substantial reassessment of organization and budgets. The funding of
networking had to be addressed during a time of dwindling resources.
This resulted in the 1992 decision to use voice revenues to help fund
campus networking. Voice reserves were used to cover an approximately
$1 million deficit caused by campus networking. Since then voice
rates have been generating the revenues to fund the annual operating
budget for I.T. networking services, (except for approximately
$150,000 in network recharges, recovered by charging departments
$70/month per router port). The campus has still not found a regular
means of funding the operation and maintenance of the campus network,
resulting in a depletion of campus computing and telecommunication
reserves. Consequently, it has been impossible to set aside adequate
reserves for major voice related expenses (e.g. switch
upgrades).
It is also very important to recognize that historically the campus
did not budget for networking infrastructure in capital projects,
including new building construction and major renovations. As a
result, the campus missed the opportunity to fund and install
internal building networking infrastructure incrementally.
BUDGET REALLOCATIONS
"Every facet of activity in the university is increasingly
dependent upon networked computing." (Grey 11/23/94) Consequently,
funding the operation and maintenance of the network must be a high
campus priority. Funding must be sufficient to replace equipment
which becomes obsolete after several years. This represents a
significant challenge given the historical absence of permanent
funding for the present network. The campus can no longer afford to
be without a sound funding strategy to finance the costs of
technology.
Information technology is a fact of present day life, vital to the
university's future; it represents a substantial and continuing
expense that must be incorporated within all campus unit budgets.
The funding of networking and information technologies will
require budget reallocations at every level.
COMPLETING THE NETWORK
BUILDOUT FUNDING NEEDS - Full campus connectivity will
require substantial incremental additions to the network even after
completion of the Network 21 Project. The buildout additions listed
below are not necessarily listed in priority order.
BUILDOUT FUNDING RECOMMENDATIONS
The Network 21 Budget and Policy Oversight Committee recommends
the following funding mechanisms to complete the network buildout.
The Committee considered numerous revenue sources during its
deliberations. Some of these sources were determined viable, whereas,
others were rejected for various reasons.
Appendix
C describes all of the revenue sources considered and provides
the Committee's assessment of their respective potential as a source
for funding network buildout.
Exhibit
I presents the buildout costs over a three year period and two
possible funding scenarios.
UTILIZING THE NETWORK
Once installed, the network must effectively respond to the
fast accelerating use of technology. The funding strategies that
follow anticipate the substantial growth in utilization of the
network and provide a method for responsible management of this
growth.
NETWORK OPERATIONS AND
MAINTENANCE
Network Operations and Maintenance Funding Needs - The
Network, like any other major utility, requires operation and
maintenance support. Hardware, software, and staff are needed to
monitor the network for problem detection and isolation, traffic
control, and to maintain network performance. Operations and
maintenance will include equipment repairs, electronics upgrades,
regular equipment replacement, etc. The average cost over the next
ten years is estimated to be $2.4 million per year.
When the Network 21 Project was conceived in 1991, there were 3,000
connections on campus. Since then that number has grown to 6,500 and
is projected to increase to 10,000, in offices alone, by the time the
Project is completed. In addition, there will be approximately 2,700
connections in 280 departmental and campus labs and 3,500 residence
hall connections. Up to this time, the campus has not budgeted to
operate a network of this size, nor has it maintained a reserve to
upgrade and replace network electronics. The recommendations that
follow address both sets of costs.
Operations and Maintenance Funding Recommendations - The
Network 21 Budget and Policy Oversight Committee recommends a
multiple source funding strategy designed to accomplish a fair and
equitable distribution of the burden necessary to achieve the
advantages of the network. The recommended revenue sources, described
more fully in
Appendix
C, should allow for operations and maintenance funding in
reasonable proportion to use by student, faculty, and staff user
groups.
1. Student Technology Fee - Students should fund their fair
share of operating and maintaining the network, estimated to be
approximately 29 percent of the total costs. The Student Technology
Fee would raise approximately $700,000 per year for network support.
See page 9 and
Appendix
C for a full discussion of the Student Technology Fee and related
issues.
2. Data Communication Fee - Establish a Data Communication Fee
as a viable and equitable means of distributing network costs to
campus units and to students in on-campus housing. For purposes of
campus units, the fee will be assessed based on the number of faculty
and staff employees. There are approximately 10,000 campus employees.
The assumption is that all employees will be utilizing information
technology in some form within the next few years. Student employees
are not included because of their limited work schedules and because
they seldom have exclusive use of a computer. The Data Communication
Fee will be approximately $8.00 per employee per month. The fee
assessments will be calculated based upon the number of employees
within each school, college, division, and administrative
organization and then will be annually assessed to deans and vice
chancellors. This provides the deans and vice chancellors flexibility
to distribute these assessments in a way that best meets the needs of
their respective organizations. The Data Communication Fee will
generate approximately $960,000 via the assessments to deans and vice
chancellors.
The Housing Office will be assessed a charge equivalent to the Data Communication Fee for each student in on-campus housing. This charge will be included in the Housing room rates for the approximately 3,500 students living on campus. Housing would contribute approximately $340,000 per year to operate and maintain the network.
It is important to note that the Data Communication Fee could increase to approximately $12 per employee/month if the proposed student technology fee is not approved. As noted above, this plan assumes revenue of $700,000 per year from the student technology fee to operate and maintain the network.
This fee should be implemented on July 1, 1996 to provide a source of funding to support current network operations and maintenance and to begin the rebuilding of the voice reserves.
3. Voice/Telecommunication Fees - Increase telephone rates
to fund voice-related improvements and network operations and
maintenance. The voice rates would increase telephone line charges by
9% or $2.44 per month (still $10 per month less than Pacific Bell for
comparable features); Student Housing phone line charges would
increase by 8.6% or $1.34 per month to a rate comparable to the
Pacific Bell residential rate of $16.88 per month; and the campus
toll surcharge would increase by 5% still leaving most campus rates
below outside rates. These rate increases will augment voice revenues
by approximately $400,000 per year.
4. Reallocation of Existing Resources - The costs associated
with the operation and maintenance of the network are real and
substantial. Implementation of the "Data Communication Fee" and the
increasing of voice rates will more likely succeed if departments
have sufficient resources to absorb the costs. The fact that
historical distribution of campus financial resources did not take
into account the costs of access to information technology
exacerbates the impact of these funding recommendations. As a result,
it may prove impossible to pass the full costs of network operations
and maintenance on to the campus community.
Some reallocation of existing campus resources should be
carefully examined at the college/school level and at the central
campus level.
Exhibit
II presents the Network 21 operation and maintenance funding
requirements and the proposed funding model covering a ten year
period. The revenues generated during the first six years are
insufficient, causing a cumulative deficit. However, these deficits
will be offset by surpluses created as voice expenses decline in the
later years.
Exhibit
II illustrates the proportionate distribution of the recommended
revenue sources: Student Technology Fee, Data Communication Fee, and
voice rate increases. This funding model will encourage the use of
the technology, while discouraging departments from implementing
ad-hoc workarounds to avoid costs. However, once the network
fully penetrates the campus, a single source funding model, i.e., a
single monthly communications fee for voice and data, should be
adopted.
DESKTOP CAPABILITIES FOR FACULTY AND
STAFF
Desktop Equipment - New and upgraded desktop computing
hardware and software will be required to allow students, faculty and
staff to experience the productivity gains promised by Network
21.
Desktop Equipment Funding Needs - The Network 21 Project
Technical Team estimates that the Campus currently spends
approximately $7 million per year for desktop hardware and software.
The Technical Team estimates that Campus Departments will need to
spend an additional $2 million per year to upgrade obsolete desktop
technology to achieve the productivity gains promised by Network
21.
Desktop Equipment Funding Recommendation - Desktop equipment
will have to be funded by individual campus units. Campus units must
address the financing issues associated with purchase of
department/unit hardware and software that meets a minimum
configuration requirement. The Oversight Committee considered
recommending a reduction in per (desktop) unit pricing through
Central Administration subsidy. However, the Committee has since
reconsidered because of concerns about the ability of the campus to
fund such a subsidy. The full text of the Desktop Capabilities
Subcommittee Report appears in
Appendix
F.
The Committee recommends that Information Technology take the
following actions to assist campus units:
ACCESS TO TECHNOLOGY FOR STUDENTS
Few institutions of higher education have the resources to
provide the information technology infrastructure required for
students to enjoy the full benefits of networking and access to the
vast information resources increasingly available over the Internet.
Students are major stakeholders in the campus information technology
infrastructure. Consequently, many of the major research universities
are already assessing a student technology fee in the range of
$75-$200 per academic year.
(See
Appendix E).
Student Technology Needs - Students need access to new and
improved student computing facilities, including student labs,
network connection sites and other infrastructure to meet academic
requirements and to be properly prepared for the future. Neither the
Information Technology Division, nor individual campus units, will be
able to fund adequately the costs of operating and maintaining the
network infrastructure required in areas such as the Library,
Memorial Union, student laboratories, classrooms, and student
facilities devoted to extracurricular activities.
More and more universities are recognizing that traditional funding
models are inadequate to support the fast accelerating use and
associated escalating costs of information technology. However,
campuses must furnish access to modern computing facilities with
appropriate support services to prepare students for graduate work
and/or the business world .
Student Technology Funding Recommendations - Students should
fund their fair share of operating and maintaining the network,
estimated to be approximately 29 percent of the total costs (about
$700,000 per year) as previously noted on page 6 under the
Operations and Maintenance Funding
Recommendations.
1. Student Technology Fee - Establish a $50 per student per
Academic Quarter Student Technology Fee, phased in over a five year
period. By the fifth year, this Fee would raise $3,450,000 per year
to fund access to technology for students. Of that amount $2,750,000
per year would be available to enhance student access to and use of
information technology by providing improved classroom facilities and
support services, special equipment purchases, network connection
sites, new student labs, upgraded hardware and software, and expanded
network infrastructure. A committee would be appointed to oversee the
expenditure of these funds and to assess the results.
Despite the attractiveness of this option, the UC Office of the
President has concerns about any new fees, given agreements with the
Governor and State Legislature. Alternatives to a systemwide Student
Technology Fee are:
Alternatives to a Student Technology Fee are:
2. Registration Fees - The Student Services and Fees Advisory
Committee could recommend to Provost and Executive Vice Chancellor
Grey a reallocation of Registration Fees to fund further access to
technology for students. (This is not a likely option given the
recent substantial budgetary reductions and associated
reallocations.)
3. User Charge - Establish a "User Charge" for information
technology services beyond some baseline level of "free"
services.
CONSULTATION PROCESS
The Network 21 Budget and Planning Oversight Committee
recommends that this Interim Report receive widespread vetting within
all segments of the campus community. The Committee members are
prepared to engage in discussion of the Report with the various
campus constituency groups.
However, the funding program to support operation, maintenance,
and future expansion of the network must be determined in time to be
effective during the 1996-97 Fiscal Year. Delaying this decision will
result in a significant funding shortfall.
With this timeframe in mind, the committee attempted to state its
recommendations in a manner that would allow the Chancellor and the
Provost and Executive Vice Chancellor to weight and modify them for
implementation, based on the results of the consultation with the
campus.
FUTURE WORK PLAN
The Network 21 Budget and Policy Oversight Committee will
continue to monitor the progress of the Project, review the Project
budget, and pursue implementation of the decisions emanating from the
recommendations contained in this report. The Committee will also
consider issues associated with:
The Network 21 Project was originally scheduled for completion by
December 1995. However, the University's serious financial
difficulties and questions about the magnitude of the Project led to
a protracted debate about the Project's merits, particularly when
placed in competition with other important academic support needs.
Subsequently, there was substantial difficulty in reaching consensus
on the modified Project scope given the reduced $23 million Project
budget. These factors have delayed Project completion 18 months and
have led to the following difficulties.
CONTINUED OVERSIGHT
Owing to the spiraling growth in demand for connections and the
uncertainty of cost projections, it will be necessary to continue
evaluation of the campus network infrastructure and the method of
financing it. Consequently, a Network Budget and Policy Oversight
Committee should continue in existence beyond the duration of the
Network 21 Project.
Robert D. Grey University of California Office of the Provost Davis, CA 95616