Administrative Process Redesign Initiative

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Administrative Process Redesign Initiative

• Shared Services

2
The Budget Challenge

• 25 growth in students over the past decade
• Two year budget shortfall resulting in reduction
  of core support by 25
• Budget cuts impact staffing levels and services
• 20 million last year
• 31 million this year
• Central administration units cut more
• Academic units cuts assigned differentially

3
The Budget Challenge

• Campus faces more shortfalls next year
• State has not resolved its fiscal challenges
• Contributions to the Retirement System will
  restart in April and are critical to fund
• Furlough and debt restructuring is a temporary
  solution
• Fundamental change is needed

4
The Budget Reality
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Current Service Model

• Highly decentralized
• Administrative job structures typically include
  very diverse responsibilities
• Administrative jobs require attention to complex
  policies, laws and regulations
• Compliance requirements can drive organizational
  structure in ways that are not strategic

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Our Current Service Model

• 1,000 employees with PPS access
• 225 FTE involved in staff payroll processing 80
  involved in academic personnel processing
• 85 FTE involved in purchasing
• 340 involved in accounting finance
• Total payroll costs 80 million

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Challenges With Current Service Model

• Lack of standard processes practices
• Jobs include many diverse, complex
  responsibilities. Difficult to complete master
• Reductions in administrative staff put more work
  on fewer people

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Challenges With Current Service Model

• Training this many employees is difficult
• Error rates (e.g. 1 in 10 PPS entries has an
  error. Special payroll actions have even higher
  error rates.)
• Lack of technology infrastructure
• Impedes efficiency effectiveness
• Cannot collect or analyze data
• Encourages shadow systems

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The Opportunity Vision

• Working with campus stakeholders, we will improve
  the operational efficiency and effectiveness of
  administrative processes and structure so that we
  can support our mission of teaching, research and
  service.

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Provost Lavernias Charge

• Identify service center structure
• Identify and describe services to be included in
  the service center and those that will remain
  internal to schools, colleges and divisions
• Identify staffing model
• Provide an estimated cost of implementing the HR
  shared service center and investment payback
  period
• Identify a governance structure
• Identify the elements to include in a service
  level agreement
• Identify a timeline and process for implementation

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Key Drivers for Implementing Shared Services

• The top four drivers for implementing shared
  services
• Process efficiency
• Cost reduction
• Quality improvement
• Internal customer satisfaction
• Other key drivers include
• Creates an alternative to replicating
  capabilities in every operating unit or
  centralizing them
• Combines customer focus with economies of scale
  and efficiencies
• Allows business units to concentrate on
  developing and improving core activities and
  focus on external customers

Source Deloitte 2007 Global Shared Services
Survey
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Service Models
SHARED SERVICES
Customer Focused Services Independent
Entity Flat Structure Leading Practices Cost
Process Effectiveness
DECENTRALIZED
CENTRALIZED
Negatives
Negatives
Redundant Inefficient Non-Standardized
Unresponsive Detached from Business Inflexible
Customer Focused Business Intelligence
Economies of Scale Standardized Processes
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Potential Shared Services Functions

• Human Resources
• Compensation
• Records management
• Benefits administration
• Training development
• Onboarding/Offboarding
• Labor relations
• Policies and procedures
• Finance
• General ledger
• Payroll
• AP/AR
• Planning and budgeting
• Tax
• Cash management
• Travel and expenses
• Credit and collections

• Customer Service
• Call centers
• Communication and media relations
• Materiel Management
• Strategic sourcing
• Procurement
• Warehousing
• Inventory management
• Transportation

• Information Services
• Standards
• Technology planning and development
• Desktop support
• Applications development
• Data center operations
• Application maintenance
• Telecommunications
• Hardware and software

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Shared Services Is Not

• Centralization
• A power grab
• Simply moving deck chairs around

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Shared Services Is About

• Providing high quality, consistent customer
  service
• Working with our current budget reality
• Leveraging economies of scale
• Streamlining business processes
• Providing opportunities for employee success
  through job design career development

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Benefits of Shared Services
Reduce Expenditures

• Eliminates duplicate processes
• Eliminates redundant labor and systems
• Aligns labor skills and costs with specific tasks
• Creates awareness of costs, shaping usage
  behavior
• Cost reduction potential of 20 to 50

Improve Operations
Leverage Information

• Increases service levels
• Eliminates non value-added processes
• Focuses efforts of shared services staff
• Improves customer satisfaction

• Allows collection and analysis of standardized
  data
• Ensures comparability
• Enables better decisions
• Adapts easily to growth
• Provides one-stop shopping

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Unknowns

• Exact structure of Shared Service Centers
• The work that will be completed by
• Department
• Dean/VC
• Central administrative unit
• Service Center
• Reporting structure
• Timing for implementation

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Shared Services Projects typically have four
phases
Typical Shared Services Road Map
Assess
Design
Build
Deploy

• Design Business Processes
• Design Organization
• Design Enabling Technology
• Select Locations
• Develop Hiring Plan and Recruit Shared Services
  Leaders
• Refine Communications Plan
• Create Workforce Transition Plan
• Develop Training Plan and Management Development
  Program
• Design Facilities
• Design Service Management Approach Details

• Develop Service Management Processes
• Build Performance Support and Training Materials
• Recruit Shared Services Personnel
• Create Service Level Agreements
• Develop Key Performance Indicators
• Develop / Deliver Build Communications
• Build the Organization
• Conduct Deployment Planning

• Execute Deployment Plan
• Confirm Service Level Agreements
• Conduct Training and Work Shadowing
• Develop / Deliver Deployment Communications
• Test Shared Service Center Readiness
• Execute Workforce Transition Plan

• Shared Services Vision
• Scope of Shared Services
• Current State Analysis
• Benchmarking/ Opportunity Assessment (done)
• High Level Operating Model
• Process Split Definition
• Change Management Strategy
• Business Case
• Implementation Roadmap

Current Project Focus
Pilot
Group 2
Group 3
Program-, migration- and change management
(ongoing)
Management Checkpoint

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Next Steps

• Forming executive steering committee
• Conducting customer focus groups
• Provide information about Shared Services
• Better understand the needs, interests concerns
  of campus stakeholders
• Inventory current administrative restructuring
  efforts
• Analyze technology requirements for SSC
• Evaluate structure options
• Determine which services will be assigned to
  department, dean/vc, central administrative unit
  shared service center
• Complete return on investment analysis

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Discussion

• How would you like to be engaged?
• What are your needs, interests concerns?
• How do we suggest we engage staff, department
  chairs faculty?
• What can we do to make this project most
  successful?
• When should we come back together?

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Questions?