Effectiveness and Efficiency in the Modern Higher Ed Environment
The UM System is in the midst of a significant period of change centered on the operational effectiveness and efficiency of the four campuses within the University of Missouri System (UM System). In this Q&A, five senior leaders representing different administrative bodies across the system shed some light on the massive changes aimed at improving effectiveness and efficiency on all four campuses. They dive deeply into the findings of the UM System’s recent Efficiencies and Effectiveness Report, and lay out some guideposts for the future of the system.
Evo: Why did the UM System decide to adapt to the higher ed financing crisis by looking at internal efficiencies rather than simply increasing tuition and fees?
The University of Missouri has a long history and culture of focusing on access and affordability for its students as demonstrated by its tuition and required fees compared to peers in the region. The University understands the need to be good stewards of taxpayer funds and recognizes that Missourians expect efficiencies in state government, including its public universities. In addition, since FY2009, the Higher Education Student Funding Act passed by the Missouri legislature effectively limits tuition and required fee rate increases for Missouri resident undergraduate students to the change in the consumer price index (CPI) as of December of the prior calendar year.
Evo: One of the strategies the UM System has employed to improve operations is the introduction of a system-wide shared services center for accounts payable. Did you experience any of the same challenges other institutions (like UT-Austin and Michigan) faced when launching the center?
The University of Missouri, like many institutions, has been implementing shared services to realize cost savings and provide more efficient business processes over the last few years. The Accounts Payable Shared Service Center is just one initiative that is a broader part of our strategic plan to develop shared services for Finance, Human Resources, and IT.
The university has experienced challenges related to implementing shared services, similar to other institutions. The largest of these challenges has been change management as shared services directly changes how people do their jobs and impacts how services are accessed. To help manage these challenges the university has taken a scaled approach to shared services in many cases. This has included establishing pilot groups and staged rollouts to help refine shared services delivery and assess the scale prior to full implementation.
Evo: Aligning procurement has also led to massive savings for the UM System; $15m annually. Other than cost savings, what are some of the benefits of moving to a unified procurement strategy?
The structure of the UM System Supply Chain is unique in our industry. We believe we are one of only two known systems responsible for the end-to-end healthcare supply chain (the alignment model), which is a 24/7/365 operation. The other is the University of Miami, which modeled its new program on our design via the Huron Consulting group.
The shared service design assures we are providing high levels of service to the university’s entire major business units because we operate under a variety of Memos of Understanding (MOU) that typically include a defined set of services, an extensive dashboard of service level expectations and key performance indicators. These are reported on a variety of scorecards and operational reports monthly and quarterly. The resulting operational model is distinctive and strategic in its ability to provide support across the entire supply chain based on both workload and scale of pending projects.
One of the greatest benefits is the significant improvement in the resource allocation, more specifically the Operations Team within the Supply Chain. The alignment allowed for all campuses and the health system to receive significantly improved support in the areas of functional applications, purchasing cards, project implementations, staff training and the Finance Support Center. This all resulted in improved focus and productivity and a growth in collaboration, and early on allowed for a 28-percent staff reduction while services provided grew exponentially. The team continues to be recognized annually by the National Purchasing Institutes (NPI) Achievement of Excellence in Procurement Award, as well as other noted distinctions recognizing our unique structure and processes, which are indicators that we have not only a unique but a high-return program.
Evo: In terms of future steps, one of the next moves you mentioned was implementing the recommendations of the ERP Optimization project. What are some of the significant failings with the current system-wide ERP environment when it comes to the efficiency both of the system itself and each institution?
Over the last 15 years, technology has dramatically changed relative to its infrastructure and capabilities. The systems we are currently running were designed and engineered in the early to mid 90’s and although the implementation has been reworked by the vendor to take advantage of capabilities introduced in the market, the result has been an increasingly complex environment to operate and maintain. New deployment approaches have emerged that take direct advantage of recent advancements (such as mobile) that improve our ability to rapidly adopt and deploy new capabilities.
We spend 50 to 65 percent of all our technical resources simply keeping the current systems running and reasonably up to date. Unfortunately over the last 10 years this work has consumed increasing percentages of our resources. In conjunction with a very complex, brittle technical environment, we have limited resources available to provide enhancements to meet growing business requirements at the level we would like.
The current software was built to be modified in order to accommodate variation in business practices. The result, in some cases, is that we have significantly modified the software accommodating different business practices across the campuses, which adds to complexity and expense. This complexity not only makes it more expensiveto maintain but also delays us in adopting new functionality that would improve service to our students.
Evo: How will the ERP Optimization project recommendations help to overcome these issues?
The ERP Optimization project will provide a framework and direction for the next stage of evolution of the university’s ERP Strategy. By adopting new technology platforms being developed, it will alleviate some of the challenges mentioned above (e.g. increase efficiency, more quickly allow for implementing business process enhancements, reduce costs, etc.) as well as eliminating issues that we have not been able to address (e.g. data purging, disaster recovery, continuous operation).
– – – –
- Among the University of Missouri System’s major efficiency and effectiveness improvements are the introduction of a shared services infrastructure, a unified procurement strategy and a revision of the system-wide ERP environment.
- One of the biggest challenges to the success of the shared services initiative is change management, but that’s being overcome by scaling the rollout process.
- The biggest issue with the ERP environment is that the current system was developed for a different era, meaning the system is highly complex and difficult to maintain.
Author Perspective: Administrator