Published on 2015/03/02

Transforming the System: Overcoming Obstacles to Long-Term Viability

The EvoLLLution | Transforming the System: Overcoming Obstacles to Long-Term Viability
Centralizing administrative services at the system level can realize massive savings and create a more consistent experience for students.

Across the United States, public university systems are being forced to re-evaluate their traditional approaches to doing business. Significant shifts in market forces have made this critical to the long-term viability of public institutions. In the first installment of this two-part series, Rebecca Wyke shared her thoughts on the importance of business model transformations for public higher education and discussed some of the barriers that stand in the way of these changes. In this conclusion, Wyke outlines some of the approaches her System is taking to overcome these challenges and set up for long-term viability.

The EvoLLLution (Evo): In the first part of the series, you discussed some of the obstacles the System has faced in trying to develop a new business model. From your perspective, how can the System adapt to overcome those obstacles?

Rebecca Wyke (RW): We’re a seven-university system and we have ventured into shared services. Two and a half years ago, we decided we could not afford what were essentially eight administrations; one for the system and seven for the campuses. We chartered several administrative reviews—one for IT, one for procurement, one for HR and one for facilities.

IT and procurement were the first two and the review team settled on a functional alignment of those services. Instead of having eight IT departments across the system, there is today a single IT department that leverages all of the resources of the university system on an enterprise-wide level to service all seven campuses and to centralize the ERP system.

Procurement took a similar route, but with them we took them from a largely paper-pushing function to strategic procurement where we are really using their best practices in order to achieve savings.

The IT alignment produced $2 million of savings in its first full year of implementation and, in its third year of implementation, it will achieve an annual savings of about $3 million. It also has some side benefits of more consistent policy and implementation and data collection as well as what we hope will translate into better improvements and better support, particularly for the academic side of our institution. It leveled the playing field a little bit between the haves and have nots, so those institutions or departments, with resources and those without have continued to even out a little bit.

On the procurement side, the first year was an estimated savings of a little less than a million dollars and in the second full year of implementation about $2 million in savings. Those two initiatives alone resulted in about $5 million in savings.

The HR review is projected to create about $1.6 million in ongoing savings after year four. All of these require some restructuring, some investment, particularly in technology and sometimes in people with different skill sets. These approaches all allow you to operate more efficiently than in a siloed approach.

Evo: What can the System do on the academic side to overcome some of the challenges you mentioned, including bringing faculty on-board with changes?

RW: On the academic side, we have what’s called the Academic Program Review and Integration Process. We’ve created sub teams for each faculty; there’s a sub-team on engineering, on nursing. We are really much more in the beginning stages of that. Similar to the administrative reviews, we are doing pilots with these sub teams. They’ve been requested to put forth their recommendations of what they think they could do to work together across the university lines more collaboratively and we expect we’ll have a range of options.

We have other programs that have been very collaborative in the past and we held a summit where over 100 faculty came together on a Saturday on a volunteer basis to work with their colleagues from across the system and strategize together.

We have one example out there now for a degree in cyber security. We’ve got four campuses collaborating to offer that new degree program, which is unique in name and also meets a current need of the state’s business community.

Evo: What were some of the challenges you had to overcome to move this centralization of processes forward?

RW: If you’re a leader or part of a leadership team on campus and you know that you need those backbone operations to successfully achieve your goals, the concern is that, if you lose direct control of those operations, then somehow, you’ll be hampered in meeting the goals that you’ve set for your institution or your program.

Part of it is having and ensuring as you build the shared service, you’ve got people on board who’ve got a strong customer focus and a really thick skin. I’ve implemented many IT systems in my career and you always have a problem during implementation. The issue is how you approach those problems. When someone else has that responsibility on your behalf, it’s easy to just place blame and just recognize that there are going to be problems with implementation. There is pain before there is success and it’s best to acknowledge upfront that it’s going to be a little bit painful for everyone and a little extra work for everyone until you can get to a new way of functioning and doing business.

There is at least a growing recognition by campus leaders and constituencies that it’s better to reduce on the administrative side than on the academic side. You don’t impact the students as severely and everybody can eventually get to a new way of doing business.

Those were the lessons learned. There was necessity; it wasn’t a choice of whether or not to do it, it was a choice of what was going to go. There was a lot of education that went into this. For the pilots, we visited the campuses multiple times and we had a website that we still maintain that gave them all the latest information. We ran survey reports and provided feedback so staff and faculty could see it.

People really need to know that the service is ready to go before you decide to flip the switch and shift the work over. When you’re doing cost savings at the same time, you need to be sure that you’re properly resourced up front and then look for an implementation plan. There are a number of lessons we can learn and they’re not unique to higher ed.

This interview has been edited for length.

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Key Takeaways

  • Centralizing administrative services is a great way to reduce administrative costs without causing any lack of service; if anything it creates a more consistent environment across the System.
  • On the administrative side, implementing shared services approaches in areas like IT, procurement and HR can realize massive savings for the System.
  • For all major changes, it’s critical that leaders involve all stakeholders across the centralizing process with openness and honesty about what they can expect.

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