division iv director’s report peter staecker july 2001

Division IV Director’s

Report

Peter Staecker

July 2001

BoD meeting: Beijing

• Core Function History• Dues Increase• Challenge budget mandate• Future Meetings of BoD/OUs

Core Function History

• Background: request by TAB to see history of core function growth. Dan Senese previews to BoD in Beijing.

• Summary: Function categories and list Financial History Discussion

Sidebar: OARSidebar: OAR• Syntax: Overhead Allocation Recovery, AKA the Findlay

model, = a revised New Financial Model.• Purpose: Distribute income and expenses in fair &

equitable manner• Revenue streams to support Infrastructure expenses:

OU Reserve income, IP revenue, Conference registrations, Dues

Don’t forget cost-cutting

• Further recommendations: Direct Core Function (Infrastructure) costs be paid by users Indirect Core Function (Infrastructure) costs should be

allocated

• Result: Costs will be visible to all OUs at time of budget preparation. Core function cost reduction will be a shared exercise.

Core Functions ($48M* total)

Member servicesControllers/Admin & PayrollHuman resourcesBusiness admin & financial planningIn-house investing & procurement

Information technologySales & marketingCustomer servicesFinancial services

Corp activities, awards & facilitiesExecutiveConstituent communicationsSPC & research

* ~ 20% of IEEE budget

Direct

Mostly Direct

Indirect

Core Function CategoriesCore Function Categories

Direct ($11.8M)• Shared services supporting all IEEE• Direct charge (= pay-by-the-drink)

(Time sheets, headcount, equipment usage, sq ft, # of orders, etc)

Member services Controllers/Admin & Payroll Business admin & financial planning Human resources In-house investing & procurement

Core Function CategoriesCore Function Categories

Mostly Direct ($26.1M)• Shared services supporting most of IEEE• Direct charges as above; Indirect

allocated by committees (OAR, IEEE FinCom, ExCom)

• Mixture? Stay tuned

Information technology Customer services Financial services Sales & marketing

Core Function CategoriesCore Function Categories

Fully indirect ($10.1M)• Shared service supporting all IEEE• Indirect charges allocated by

committees (OAR, IEEE FinCom, ExCom)

Corp activities, awards & facilities Executive Constituent communications SPC & research

Core Function History

• Overall Core Function spending meaningful: $26M (1996) -> $48M (2002B) 10.7% CAGR IT largest ($17M) by factor of 3 Some high growth categories, but…

• Category level trend data not meaningful Need for restated historical financials

• Need to link closely to OAR

Next stepsNext steps

• Cost center definition consistent with requirements of overhead recovery process (Findlay committee)

• Provide restated multi-year history (number of years to be defined)

• Create budget standards that are IEEE Finance Committee approved

• Create new budget format that is easier to understand

BoD meeting: Beijing

• Core Function History• Dues Increase• Challenge budget mandate• Future Meetings of BoD/OUs

Dues IncreaseDues Increase

• Passed: Dues increase from $86 to $101 R1 Assessment of $2 R1-R6 USA Assessment of $4 Agreed in principle: annual dues increase

• Comments: Bad timing (economics; double hit to

members if S/C dues rise also) Necessary to avoid additional $3M

shortfall

BoD meeting: Beijing

• Core Function History• Dues Increase• Challenge budget mandate• Future Meetings of BoD/OUs

Challenge Budget MandateChallenge Budget Mandate

Motion: IEEE FinCom recommends that the BoD require that the IEEE OUs, including the Societies as tiered down by TAD meet the challenge budgets recommended by the IEEE ED.

This recommendation was passed.

BoD meeting: Beijing

• Core Function History• Dues Increase• Challenge budget mandate• Future Meetings of BoD/OUs

Meetings of the BoDMeetings of the BoD

Motion: ExCom recommends that future meetings of the BoD and OUs be held in locations close to Headquarters. Against: Violates a “rule” stating that 1

meeting every other year must be held outside R1-6. Make the selection $ based rather than location based.

For: It will save money. Motion failed (by 1 vote).