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Appendix A: ICT Investment – Five-Year Budget and Priority Plan

An ICT Budget and Priority Plan, or five-year central ICT expenditure plan, has been produced for the first time in the University. It should be stressed that the amounts shown in the Budget and Priority Plan are illustrative.⁶⁸ The purpose is to establish and agree the principles for creating an ICT Budget and Priority Plan, and to explore how this will be used to help set ICT priorities for central expenditure in the future. It will provide a vital tool for addressing the apparent discrepancy between the funding which is likely to be available, and the funding required.

Table A1 presents a single plan for ICT investment over the next five years. It is important to recognise the following caveats and explanations:

1. The purpose is to collect Oxford’s ICT planned expenditure through central University funding in one table, to prioritise⁶⁹ items driven by the needs of the collegiate University, and to make estimates of the central ICT resources which will be needed over the next five years.
2. The plan covers central funding for ICT activities across the University (measured in 2005/6 £s throughout).
3. The intention is to develop a process by which a single view of central ICT expenditure can be created. It will be a blueprint for future procedures; both the process and the content of the ICT Budget and Priority Plan will be refined and developed by the new ‘ICT Structure for Coordinated Decision Making’ (CDM) structure.
4. The result will be an ICT Budget and Priority Plan for central expenditure, with priorities set by Oxford (as opposed to the ICT service providers), which will enable long-term strategic planning to be made in the provision of central ICT.
5. The current priorities are specified on the basis of feedback received and documented in sections 1 and 2.
6. The ICT project costs specified by units in the table have been developed according to local practice, and this leads to apparent inconsistencies. In due course it will be essential to specify and agree a common approach, but at present it is important to recognise and understand the differences.
7. Similarly the level of detail for future planning varies from unit to unit,⁷⁰ and again a common approach will be required in future.
8. An additional area of uncertainty relates to the source of funding: some central ICT activities are not funded from the infrastructure charge (e.g. some are funded by Oxford University Press); this level of detail is missing in the current analysis.
9. An area of particular uncertainty is the process of moving from pilot – to project – to service, and specifying what constitutes baseline budgets for the service providers through the lifecycle of the application. The Business Services and Projects unit proposes to create a permanent team of specialists to continue development and enhancement of finance and student systems, based on Oracle Financials and the Oracle Student System, and a permanent rolling programme of other (i.e. non-finance, non-student) business systems projects. This would obviate the need to submit annual bids for ongoing phases of work on Oracle Financials and ISIDORE and for individual smaller projects. In OUCS’s case, it is assumed that upgrades and renewal of existing services require new capital investment, but that recurrent costs remain covered within the baseline allocation. New services delivered by OUCS, however, which require additional recurrent costs (staff, maintenance, etc) will either need to be added to the baseline in due course, or the cost met through charging.
10. By analogy with the creation of new projects, it will be important to specify a process for seeking agreement to terminate existing ICT services, and agreeing the consequent reduction in baseline level.
11. The University’s overall approach to planning future capital spending is to cost each individual project in full, including that part which is considered by some units as part of existing recurrent expenditure. It is recommended that this becomes the standard approach (this is not done consistently in the table entries at present).
12. The forthcoming CDM structure will need to address the issue of baseline allocations for all the central service providers in the University. No further analysis is undertaken here but the University will need to debate and agree a definition of what is included, possibly with fEC considerations taken into account. A process for determining the appropriate baseline levels by year will have to be agreed by the collegiate University (which will include additions for new services and subtractions for the removal of old services).
13. The Medical Sciences Division ICT expenditure and plans have been appraised and two entries⁷¹ are included in Table A1. These are exciting projects which are applicable beyond the confines of the Division, and are representative of other projects developed through units within Divisions and Colleges. It will be important for the central University to invest in ICT wherever the best use of resources can be made⁷², and it is proposed that funding is made available to ensure that these important ICT services are accessible to the wider University.

14. A Categorisation is made for each entry in Table A1. This is based on a number of factors, but in particular feedback received from Oxford as described in sections 1 and 2 of this ICT Strategic Plan. To an extent the category represents the potential funding source/method. The Category definitions are:

    • Category 5 – funding already agreed by central University;
    • Category 4 – very strong user requirement and/or underpins other high priority pilots, projects, services;
    • Category 3 – potentially very important, and worth funding as a pilot;
    • Category 2 – very important for parts of Oxford but not an enterprise-wide service; should be funded through cost-recovery;
    • Category 1 – potentially less important than higher categories but worth considering to be funded as special project through development office.

    Some items have components within more than one Category,⁷³ in this case the item is placed in the most relevant Category.

    The formal allocation of projects to Categories will be re-appraised by the new CDM structure in due course.

15. Full Economic Costing (fEC) is likely to play an increasingly important role in funding central ICT services, particularly when teaching as well as research is covered. This will have an important impact on Category 2 items, and will increase the focus on cost recovery for different levels of service within a given ICT application.

Data from Table A1 are displayed in Plot A1 and show the central ICT expenditure by Category. Plot A2 shows the same data with a total anticipated central ICT baseline expenditure added. If the baseline remains at current levels, the University is committed to c. £11m/year plus the Category 5 expenditure. This is shown in Plot A3.

Table A2 takes the projected expenditure from Categories 4-5, tabulates the anticipated baseline amounts, unit by unit, and forms a total central ICT expenditure which would be required year by year.

Table A3 offers a holistic view of ICT across Oxford. Taking the total spend from Table A2, the projected spends from Categories 1-3 (a proportion of these would be cost-recovered and would not be borne by the Centre), an approximate total divisional spend on ICT (based on one Division’s approximate numbers), approximate college expenditure (based on the extrapolation from the spends of a sample of colleges) , and finally some known ICT funding from external agencies, gives an overall spend for ICT in Oxford.

This rather crude approach indicates that the total Oxford ICT spend could be as high as £50m/year if external funding continues at its present level, if cost recovery ICT services are introduced, and if some development funding is procured for ICT.

The ICT Budget and Priority Plan for central expenditure has been created to be compatible with, indeed in support of, the Capital Projects Register, used by the Capital Steering Group.

An initial comparison between the expenditure foreseen in the ICT Budget and Priority Plan in its current state (remembering the uncertainties listed above concerning the amounts) and the proposed ICT expenditure in the Capital Projects Register, indicates that funding anticipated in the latter will only cover the capital⁷⁴ costs of a fraction of the projects foreseen. The budgeting exercise will need to be repeated more carefully before definitive statements can be made.

It will be essential for the collegiate University, through the new CDM structure described in Appendix B, to specify central ICT priorities, and to ensure that mission-critical central services receive adequate funding in order to operate robustly, reliably, and effectively. Existing services which are agreed to be of a lower priority may need to be terminated.

It is expected that all mission-critical central ICT services will be appraised as soon as possible, and risk assessments made. This will make it possible for the CDM to make informed decisions, concerning where resources are most needed.

Eventually the CDM structure may be offered an ICT budget to manage part of the ICT expenditure. This will avoid every (small scale) ICT project needing to get endorsement from PRAC before it can proceed.

Up: Contents Next: Appendix B: Terms of Reference of the Planning and Resource Allocation Committee Sub-Committee Structure

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Maintained by: OUCS Webmaster (webmaster@rt.oucs.ox.ac.uk) Submitted for consideration by PRAC, March 2007. ICT Strategy Programme Consultation Sub-Group.