UWM I NTEGRATED S ERVICES presentation to Academic Leadership June 16, 2015 UNIVERSITY OF WISCONSIN–MILWAUKEE
P RESENTATION O BJECTIVES I. U NDERSTANDING THE C URRENT C ONTEXT • UWM • Planning Resources and Trends in Higher Education II. E XPLORING “W HAT I F ” III. P RESENTING I NITIAL I DEAS IV. B UILDING S UPPORT FOR P ROJECT A PPROACH AND S TAKEHOLDER E NGAGEMENT 2
T HE C ONTEXT UWM – Service Models • Current Structure – There are x# of clusters of human resources, business services, and IT activity on campus, both distributed and central – Duplicate/competitive services exist between the schools/divisions and central administrative units – Service providers and customers often don’t understand what services are provided by whom; and who has final decision making authority – There is lack of standardization and documentation of processes, resulting in numerous, varied, individual, inconsistent approaches to determining the right course of action – Managers and generalists use technology “shadow systems” to support departmental needs, which results in significant time spent on duplicate data entry and reconciliation between systems – Process and service level improvement efforts are often focused solely within one school/college/division or department 3
T HE C ONTEXT UWM - Financials UWM FY14 Actuals FY 2014 REVENUES Tuition 233,900,000 Federal Aid 36,800,000 Sales and Services of Auxiliary Activities 67,900,000 Segregated and Other Student Related Fees 28,300,000 Gifts, Private Grants, and Trust Funds 17,200,000 Miscellaneous Revenue 29,000,000 Total Operating Revenues 413,100,000 State Appropriation 134,600,000 Total Revenues & Contributions 547,700,000 EXPENSES FY 2014 How will UWM close the gap Salaries 269,400,000 in the long-term? Fringe Benefits 97,600,000 Revenue growth has not kept Supplies 120,500,000 pace with growth in Capital and Debt Service 49,400,000 expenditures. Aid to Individuals 18,700,000 Total Expenses 555,600,000 Net Operating Gain (Loss) (7,900,000) Add (Less): Adjustments for Deferred Revenue, Accounts Payable, Accounts Receivable (1,600,000) Total Operating Net Gain (Loss) (9,500,000) Revenue Growth Rate 2% Expense Growth Rate 4% 4
T HE C ONTEXT UWM – Financials UWM Rising Expenses in Support Activities (Student Services, Institutional Support, Academic Support)* 130,000,000 Support Activity Spend at 125,000,000 UWM Increased from 32% of the Budget in FY2011 to 120,000,000 35% of the Budget in FY2015 115,000,000 Supporting Actual 110,000,000 105,000,000 Supporting IHC Control 100,000,000 95,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 *Thanks to Professor Kyle Swanson and the Office 5 of Budget and Planning for this analysis
T HE C ONTEXT Planning Resources and Trends in Higher Education • Education Advisory Board – Making the Case for Shared Services • Renewed Drivers for Consolidated Administrative Support • Lessons for Overcoming Obstacles to Business Process Reform • End State Support Models • Academic Impressions – Preparing Your Institution for Shared Services Implementation • UCSF Case Study • NACUBO – Are Shared Services Right for Your Organization • The KU Journey – Shared Services: Best Practices in Higher Education • EDUCAUSE – The Many Faces of Shared Services at the University of California • Accenture – Achieving high performance through shared services - Lessons from the masters 6
T HE C ONTEXT Planning Resources and Trends in Higher Education EAB -Making the Case for Shared Services Renewed Drivers for Consolidated Administrative Support In immediate response to the …with even greater challenges on downturn, universities have been the horizon as short-term solutions forced to make difficult decisions… provide only a temporary reprieve 4.0% Cost Growth 1 Hiring Freezes Salary Stimulus Funds Freezes Travel 5.2% Revenue Restrictions Endownme Growth 1 nt Higher Drawdown Deb Employee t Education 4.0% Cost Growth 1 Layoffs Capital Project Revenues Delays Howwill UWM close the gap in the long-term? and Costs Short-term relief affords • Reducing faculty size universities the opportunity • Restructuring academic support functions to spend the next few years devising a systemic plan for • Narrowing scope of research investments better addressing fiscal • Cutting back on student services pressures • Shrinking the facilities footprint • Hardwiring greater spend discipline • Reducing overall business service costs 2009 2010 “Given the current financial downturn, however, academic leaders now realize administrative restructuring to be an unavoidable necessity.” EAB 7
T HE C ONTEXT Planning Resources and Trends in Higher Education Making the Case for Shared Services Renewed Drivers for Consolidated Administrative Support Shared services indicates a single provider of back-office services to customers within a single university… Shared Service Center (Illustrative) “Although the term holds varied connotations within “Big Four” functions higher education…our focus 1 2 typically included is on models for providing HR IT Finance Procurement Centralized business service delivery delivery point within an individual institution, whereby a single Other functions provider absorbs Facilities Marketing Research Travel 3 sometimes included transactional activity previously performed by generalist staff across How is Shared Services Distinct from campus. Decentralized Delivery Shared Services Centralization? Centralized Delivery Through simplification, Emphasis on continuous business consolidation and process improvement, through Independent automation, these task- automation, process expertise, and specialized models leverage Redundant Unresponsive data analysis Responsive Data- Scale economies of scale to Driven Economie increase service quality of Focus on customer service levels, Complex s Customer Inflexible back-office functions while Standardized through service level agreements Process - Focused Processes reducing labor costs through Expertise (SLAs), customer liaisons, and Inefficient Detached attrition.” - EAB governance boards Automation …and promises to break the traditional compromise between responsiveness and scale 8
T HE C ONTEXT Planning Resources and Trends in Higher Education Making the Case for Shared Services Renewed Drivers for Consolidated Administrative Support Studies indicate university administrative counts rising over the past two decades … FTE Students Per FTE Back Office Employee • Between 1987 and 2007, the increase Public, 4-year in number of back-office positions “While university outpaced enrollment budget reduction plans will inevitably address teaching • Reflects increasingly complex Public, 2-year and research, administrative burdens, but also where the majority potential inefficiencies of costs reside, Private not-for-profit, 4- year universities must • An unsustainable pattern, especially as first look for universities need to scale to support opportunities to cut growing research and technological everything possible needs. from the back- Private not-for-profit, 2-year office before impacting mission- critical endeavors 0 10 20 30 40 50 60 70 in the classroom or lab.” - EAB 1987 1997 2007 9
T HE C ONTEXT Planning Resources and Trends in Higher Education Making the Case for Shared Services Renewed Drivers for Consolidated Administrative Support Consultant Estimates of Efficiency and Savings Gains at a $1.6 B University (EAB) Consolidation How will UWM close the gap in the long-term? $95 M Compounding the challenge is the looming (up to ) $25M Budget Cut $50 M Automation “Representing a proven source of administrative savings not only in private $24 M $12 M industry, but also in the government sector, shared services routinely achieve 10–30% cost Human Academic Information Finance reduction through automation-led headcount Resources Administration and Technology Sponsored reduction and decreases in error-related Projects rework.” - EAB Efficiency 10–15% 10–20% 10–20% 25–35% Gains Savings $9.5 M– $14.3 M $5 M– $10 M $2.4 M– $4.8 M $3.5 M– $4.2 M Potential 10
T HE C ONTEXT Planning Resources and Trends in Higher Education Status of Shared Services Implementation Initiatives Source: http://www.cfe.ku.edu/ssc/ 11
E XPLORING “W HAT I F ” • Given the seriousness of the context provided… • Knowing we exist to serve the employees and students directly involved in the institution’s mission… – How do we enhance effectiveness of the support functions we provide? – How do we introduce even greater efficiency than what is currently achieved? – How do we create greater engagement and satisfaction among those completing the functions? – How do we begin to shift more of our investment to UWM’s Academic Mission? – How do we increase the security of all campus data to reduce our risk of a financially and reputationally costly breach? 12
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