Managing technology costs.

• Author: Cummings, Norm

The recession of the early and mid 1980s hit southeast Wisconsin severely Unemployment reached double digits, and revenues declined, along with the tax base. The need for government services increased just as the state and federal governments reduced or eliminated funding to local government programs in response to their own budget problems.

Many local governments deferred equipment purchases, maintenance programs, and other capital and operational investments to cope with the effects of the economy-much like they are doing during the current recession. Unlike in the 1980s, however, local governments today have significant investments in technology that they rely on and need to maintain to perform vital services. Opportunities exist, between economic downturns, to develop funding systems and invest in operational efficiencies (enabled by technology) that might not start paying themselves off for several years.

INVEST, INNOVATE DURING GOOD TIMES

During the 1990s and into the current decade, Waukesha County, Wisconsin, developed a vehicle equipment replacement fund, parks and highway pavement management programs, and other funding mechanisms to stabilize future budgets. Beginning in the mid-1990s, the county established similar funding programs for technology replacement, maintenance, and innovation, based on a return on investment (ROI) philosophy and process.

In 1996, the county developed the computer replacement fund, an internal service fund designed to allocate the costs for computer equipment and related costs (maintenance contracts and non-application software). The fund, which charged department cost centers in a way similar to an operating lease on equipment, was seeded with property taxes and surplus fund balance. The new fund allowed departments to better account for computer equipment costs in the annual budget process and insured that the county's equipment would be replaced on an ongoing basis with current technology

In later years, additional objectives were added to the computer replacement fund to stabilize departmental operating budgets. The fund incorporated the total cost of ownership method--accounting for all costs of operating and supporting computer equipment and distributing these costs to the departments that drive them--to account for the county's computer-related costs. The new end-user technology fund (EUTF) included information technology (IT) staff costs, network support, common software licenses, help desk support, training (both IT end-user staff and department staff), hardware maintenance, and backup recovery systems. Items not included in EUTF were software, server, and IT staff costs that benefited just one department.

In addition to stabilizing operating budgets, the EUTF was managed to meet the following objectives:

1) Standardize technology and centralize support to manage costs and provide service effectively.

2) Charge back costs to departments in a way that best reflects their use of technology, providing incentives for them to make the most costeffective decisions when making...