Shared Results: Strengthening the Enterprise

Appendix C State Technology Expenditures

DIR reviewed Uniform Statewide Accounting System (USAS) data from the CPA, as well as data collected from state agencies and institutions of higher education, to estimate the state’s annual technology expenditures. These expenditures include the purchase of goods and services and the total compensation of all staff who perform functions that are primarily technology-related. DIR estimates that the state’s technology expenditures totaled approximately $1.9 billion in fiscal 2006 and $1.7 billion in fiscal 2005.

The following table summarizes the estimated expenditures statewide for technology goods and services and staff compensation for fiscal years 2001–06.

Although DIR has been able to incrementally improve its process for estimating the state’s technology expenditures over the past several years, these figures remain approximations. The method of calculation for estimating expenditures for goods and services and staff compensation is described in the following pages. Further improvements to this method will be possible over time as a result of a current effort by DIR and other oversight agencies to streamline and align state technology reporting (see Critical Issue 4).

TECHNOLOGY GOODS AND SERVICES

Purchases of goods and services are recorded in USAS. The following table shows dollar amounts for fiscal years 2001–06 for technology goods and services.

TECHNOLOGY STAFF COMPENSATION

Texas lacks a consistent, ongoing method to accurately track technology staff and compensation levels. While the CPA’s Uniform Statewide Payroll and Personnel System (USPS) tracks agency payrolls by state job classification, many technology jobs are not tracked using specific classifications. Therefore, DIR determined that the best estimate could be obtained by using data from two recent data sources:

• Data Center Services Initiative for Non-Higher Education Agencies – As part of the data center services initiative (see Appendix A), DIR collected detailed financial base case information from the 27 participating agencies, including specific, validated figures for technology staffing. These 27 agencies represent 80.6% of the state’s non-higher-education technology compensation, based on cost data collected through the Statewide Information Technology Asset Reporting (SITAR) system in 2004. Comparing the newly collected information to past results from SITAR, DIR created a model to approximate the staffing levels for smaller agencies consistent with previous reports.
• EDUCAUSE Core Data Service for Higher Education Agencies – Most Texas institutions of higher education participated in a recent national technology survey conducted by EDUCAUSE, Inc. The Information Technology Council for Higher Education requested that these institutions sign data releases allowing DIR to obtain staff compensation data from EDUCAUSE, which eliminated the need for an additional survey. The institutions that reported in EDUCAUSE represent 55.6% of all Texas institutions of higher education, based on total staff size. On this basis, DIR extrapolated the EDUCAUSE technology staff compensation data to estimate total staff compensation for all institutions.

The following table shows DIR’s estimate of statewide technology staff compensation levels for fiscal years 2001–06. Data for fiscal 2001–04 is based on estimates from historical data provided through the Texas Statewide Planning Information Resources System (TxSPIRS). Data for fiscal 2005–06 is based on the improved data sources described above.

The figure below shows trends in technology spending in the general categories of staff compensation, contract services, computer hardware, telecommunications, and software.

This figure shows an overall downward trend in state technology spending as a percentage of total state spending. This number has decreased in the last six years, from about 3.7% to 2.7%. In 2003, the National Association of State Chief Information Officers (NASCIO) found that the average technology spending was 4% across the fifty states. As more recent data becomes available from NASCIO, DIR will compare Texas trends with other states.

IMPROVING THE METHODOLOGY

DIR has collaborated with the CPA, LBB, and other oversight agencies to improve data reporting structures to yield more accurate and consistent expenditure estimates.

• Standard Technology Cost Towers – Through its Information Technology Detail (ITD) schedule, the LBB now asks agencies to allocate their total technology budget requests across nine standard “cost towers.” DIR will analyze recently submitted statewide ITD data and publish the results in March 2007.
• Uniform Statewide Accounting System – Clarifications made in 2004 by the CPA have improved the consistency of agency reporting of certain types of technology expenditures. For example, DIR analysis of USAS transaction data reported under “Other Professional Services” (object code 7253) indicates that the agencies have largely stopped using this category for technology-related professional services. Through the Technology Information Alignment Committee (see Critical Issue 4), DIR is considering the benefits versus costs of adding object codes to USAS that would further improve the accuracy of expenditure tracking for technology projects.
• Technology Staff Compensation – As noted earlier, data from the data center services initiative and EDUCAUSE were used to estimate technology staff and compensation levels. In addition, DIR and other oversight continue to explore opportunities for improvement in this area.
• Planned Procurement Schedule – Through the semiannual Planned Procurement Schedule (PPS), DIR has begun collecting information from agencies on their planned technology procurements. The Planned Procurement Schedule will provide useful data for future analysis because it includes very precise categories of technology goods and services.
• Data Center Services Initiative – Over time, the state’s data center operations are conducted through one of the state data center facilities, tracking and reporting of the state’s technology assets and expenditures will become simpler and more accurate.