University of Alberta
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Virtual IT Budgeting Model (Version 2.0)

MS-Word Version

Paul Sorenson
Vice-Provost (Information Technology)
February 1, 2005

The release of this document is the beginning of a process to develop a workable model to manage IT budget allocations on a campus-wide basis using a consolidated (virtual) budget. The goals of this approach are to:

  1. Understand better how (and how much) we are spending in support of information technology systems and services.
  2. To identify those systems and services critical to our operations and to ensure that these systems and services are sustainable on an ongoing basis.
  3. To identify opportunities for major improvements to existing systems and services and for the creation of new systems that can provide efficiencies and cost saving and/or improved services to our University community.
  4. To allocate and reallocate budget resources to the units that need them. The goal is to have very little budget residing in the Vice-Provost (Information Technology) Office; however, this office with the assistance of the IT Committee will review annually the components of the consolidated (virtual) IT budget.

As a starting point we will identify all information systems that require significant resources and have a broad impact across the University. Each of these systems has some level of associated support services and therefore whenever the word information system is used in this document, it is assumed to include associated support services. The identified information systems will then be examined in greater detail and assessed as to whether they should be tracked as part of the virtual IT budget based on the criteria given in the following table.

Information Systems Assessment Risk Opportunity Academic Plan Alignment Scope
System X [F/O/R/C] [CR/RG/IS/ER] [H/M/L] [E/U/C]

Risk can be of four types: F = Financial, O = Organizational, R = Reputational and C = Compliance. Only high risk factors will be noted.

Opportunity can be of four types: CR = Cost Reduction, RG = Revenue Generation, IS = Improved Service and ER = Enhanced Reputation.

Academic Plan Alignment can be one of H = High, M = Moderate, L = Low.

Scope can be one of E = Externally connected, U = University wide, C = Cluster of University Units or Departments.

We have also identified in the table below four areas in which funding is typically spent in support of information systems. The appearance of a "Y" in the cell of the table means two things:

  1. this is a budget item that should be effectively managed and reviewed in order to achieve goals 2) and 3) above, and
  2. the budget for these items will be allocated/reallocated as part of the consolidated (virtual) IT budget through the Vice-Provost (IT) office in partnership with the units that have been or will be allocated the associated funding. All proposed allocations/reallocations would be reviewed by the IT Committee before final approval.
Information Systems Funding SW Licensing HW Renewal Maintenance Agreement Support Personnel Budget Allocated to
System X Y Y Y Y  

The previous description of the model needs more work and some of the critical things that must be done are:

  1. Define the review and allocation processes that go with the model.
  2. Define how this consolidated (virtual) budget will be managed in relation to the overall University budget.
  3. Gain the support and approval of this model from EPC.

Below is an instantiation of the model to provide some examples that can be used to help understand and provide a basis for further discussion about the model. NOTE: these tables do not represent any agreed upon instance of the model and the determination factors for these information systems may not be accurate.

Information Systems Assessment Risk Opportunity Academic Plan Alignment Scope
Network Support F/O/R CR/RG/IS H E
Student Info System O/R CR/RG/ER H E
Microsoft Licensing   CR L U
Information Systems Funding SW Licensing HW Renewal Maintenance Agreement Support Personnel Budget Allocated to
Network Support Y Y Y Y CNS
Student Info System Y Y Y Y AIS&RO
Microsoft Licensing Y       CNS