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Special Series: Technology and the CEO >> Part 2: Expense or Investment
5/31/2005
In this second part of our series, a candid discussion about a president’s need to differentiate between out-of-control technology spending, and wise, long-term technology investing.
By Laurence W. Mazzeno
Nearly a decade ago, when I was serving as chief academic officer of a small Catholic college in Ohio, I was accosted by the chief financial officer who was carrying around the hefty budget request I’d submitted for IT hardware and software. “Okay,” she said, “I can see where we’d benefit if we spend this $200,000 next year, but when will all this spending for computers end?” Hoping not to be too flippant, I responded quickly but firmly, “Never; technology costs are like the poor in the Bible— they’ll always be with you.” So far, my observation has proven to be accurate. Every year, college presidents in institutions large and small are confronted by IT professionals, faculty, and campus leaders with annual budget requests for new equipment, software, interconnectivity systems—and the people to support all these things. Whether you’re president of a major state university system or a small liberal arts college, you can’t escape the question: What will you spend this year on technology? Yet, how you view that spending can make a great difference to your students, faculty, and staff. Will you grit your teeth and authorize expenditures, or will you look for ways you can maximize your investment in IT resources?
No matter what you call it—“investing” or “spending”—money just g'es out the door, right? Wrong. One of the key reasons presidents need to think of “investing” in technology rather than “spending” on technology is that we are conditioned in our society to think differently about expenditures and investments. It may be cliché to say that we spend in the present but invest for the future—but that cliché has merit. When we talk about investments, we naturally think about the value that our investments will bring in the long term. We tend to plan our investments so that, through them, we can achieve goals that we’ve set for ourselves.
Information technology is not simply a “thing” we purchase. Rather, it is a means to achieving strategic ends, and therefore deserves the president’s attention. The need for presidents to develop the “investment” mindset is critical. For the second year in a row, respondents to the annual Educause Current Issues Survey reported in 2004 that “Funding IT remains the number one IT-related issue in terms of its strategic importance to the institution” (www.educause.edu/apps/er/erm04/erm0430.asp). It’s no wonder; as David Ward and Brian Hawkins observe in The Presidency (American Council on Education, Spring 2003), “Information technology is a critical enabler of institutional strategy.
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