Potential IT cost savings are lost in translation

Private firms have failed to grasp the sector's unique requirements, a former Russell Group official tells John Gill.

February 14, 2008

Opportunities to save universities many millions of pounds are being missed because of a culture clash between higher education and the private sector, according to the former head of IT at a research-intensive university.

Paul Hopkins, ex-chair of the Russell Group of IT Directors, said there was potential for huge savings through sharing IT services if only the sector could work better with private industry.

Spending on IT within higher education in the UK is estimated to be about £1 billion a year, some 5 per cent of total expenditure. In the private sector, savings through shared IT services typically cut the IT bill by 25 per cent. A similar result in higher education could save the sector up to £250 million.

Mr Hopkins left his job as IT director at Newcastle University last month to set up a consultancy helping private-sector IT companies work more effectively with universities. He became a member of the Higher Education Funding Council for England shared services advisory board nearly two years ago.

He said that both universities and IT vendors were starting to wake up to the possibilities. However, he added, the private sector's lack of understanding of universities and their funding was hindering a breakthrough in the shared services agenda.

"If you talk to IT directors in higher education they will tell you that when an IT vendor comes in they often have to spend some considerable time explaining how universities are different (to private companies)," Mr Hopkins said.

"A surprisingly large number (of vendors) have never even heard of the research assessment exercise and how important it is to the finances of research-intensive universities."

The Government is seeking £1.5 billion in efficiency savings from the universities, innovation and skills budget - with about £500 million to come from universities, including £150 million sought from shared services and improved procurement over three years.

"Universities often look very strange from the outside," Mr Hopkins said. "I spent over 20 years of my life in industry, and the culture shock of coming into a university was really quite severe.

"It takes time, but when you realise that the driving forces in a university are very different from those in industry you start to realise what ideas will be understood."

He said effort was required on both sides if higher education was to reap the rewards of private-sector input, but he remains optimistic. "Shared services as a concept is buzzing around, IT directors are waking up and vendors are starting to pay attention, too," he said.


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