asr and establishment of bscs at unh, 1995 to 1998 …and beyond vision without boundaries eacubo...

ASR and Establishment of BSCs at UNH, ASR and Establishment of BSCs at UNH, 1995 to 1998 …and beyond1995 to 1998 …and beyond

Vision Without Boundaries EACUBO Annual Meeting October 18, 1999

leigh-anne.melanson@unh.edu ken.cody@unh.edu

Dilbert at the EACUBO Annual Dilbert at the EACUBO Annual MeetingMeeting

What we’ll cover todayWhat we’ll cover today

1. Background

2. What is ASR? What are BSCs? Major Outcomes

3. How did we start?

4. Barriers and roadblocks

5. Critical success factors

6. Q and A

The University of New HampshireThe University of New Hampshire

• Public land grant, 2 campuses, part of System• FY99 current funds = $288 million • Sponsored programs = $63 million• 15,000 students

UNH Admin Systems Environment UNH Admin Systems Environment in 1995in 1995

• 1986 – installed CUFS: online budgets, req. to check, etc.

• 900 CUFS users - over 400 entry/update users weekly

• Decentralized processing/Centralized authority

• Most users were secretaries entering few docs

• Low-volume users - not enough experience to be efficient

• No dept back-up during vacation or sick time

• Some Business Managers in place, but no staff or authority

UNH Administrative Support in UNH Administrative Support in 1995 1995

• Most secretaries had business processing AND secretarial duties

• Many admin staff not properly trained, equipped, supervised or centrally supported

• Many essential services were not being provided well at dept & college level

• Many admin staff overworked,

while others not fully utilized

The UNH Budget Challenge in 1995The UNH Budget Challenge in 1995

• Projected $7 million budget deficit by FY97• Layoffs?• Programmatic cuts?• ATB cuts and continuing rescissions?

…or, Try Something New???

The ASR PlanThe ASR Plan

After 10 weeks of study, we concluded that we could save $1.5m/year by an Administrative Services Redesign plan:

1) decoupling all business activity from secretaries and consolidating it in regionalized shared Business

Service Centers, and

2) redesigning business processes to further simplify, standardize and automate

but…We needed time, money & full participation

Initial Campus Reaction to theInitial Campus Reaction to theASR PlanASR Plan

Primary Goals of ASRPrimary Goals of ASR

•Save $1.5 million per year ($1 million in

E&G funds & $.5 million from other funds)

•Maintain or improve essential services

•Avoid staff layoffs

Secondary Goals of ASRSecondary Goals of ASR

Improve campus morale Improve information for decision-making Improve financial management Be well positioned to handle future needs

StrategiesStrategies

1. Consolidate all dept business functions into BSCs

2. Require all business transactions from all units to be

processed by a BSC

3. Reduce positions (not people) through management of

voluntary attrition

4. Empower BSC with delegated authority from central

offices, and expand central support

5. Simplify, standardize & automate business processes

What are BSCs? - What Customers What are BSCs? - What Customers ExpectExpect

CoreCore functionsfunctions

63%

42%

36%

49%

69%

79%

90%

54%

72%

75%

65%

Payroll

Personnel

Reporting

Petty Cash

Purchasing/AP

Travel

Budget Control

Liaison Central Offcs

Customer Training

Operating Standards

Billing/AR

The 18 BSC’s at UNH TodayThe 18 BSC’s at UNH Today

Academic Areas (incl. associated grants & contracts):

1. College of Liberal Arts

2. College of Life Sciences & Agriculture

3. College of Engineering & Physical Sciences

4. Whittemore School of Business & Economics

5. School of Health & Human Services

6. UNH at Manchester

7. Other (Provost, Library, Grad School, DCE, Registrar, Fin Aid, TRIO, etc.)

Research-related Areas:

8. Cooperative Extension

9. EOS/Space & Ocean Sciences

10. EOS/Earth Sciences/RCC

11. Marine Laboratory & other research depts

Areas reporting to President:

12. Athletics

13. Public TV station

14. Advancement (incl. Foundation, Alumni & Univ Relations)

Other Areas:

15. Facilities

16. Computer Services

17. Business Affairs (Housing, Dining, Conferences, Arena, Bookstore)

18. Central Admin (Pres., VPFA, Student Affairs, HR, Purchasing, CO, etc)

BSCs are better because:BSCs are better because:

Qualified, experienced, and trained staff are devoted to business services

Allows for central delegation of authority

Removes process steps & improves cycle times

Provides coverage during absences or busy times

Shortens learning curve for new processes

Provides cross-training, teamwork, and career growth

BSC Director as CFOBSC Director as CFO

BSC Director is the Chief Financial Officer of the area

CFO reports directly to the area Chief Executive Officer(s), with authority delegated from the Vice President for Finance & Admin

VPFA’s office involved in all new hires of BSC Directors & professional staff

BSC Director responsibilitiesBSC Director responsibilities

Manages day-to-day business operations

Maintains internal controls & good business practices

Assures compliance with policies & regulations

Maintains properly qualified & trained staff

Provides financial reporting, analysis & advise to CEO

Implements process & technology changes

Partners with central offices

Represents area on Finance & Administration Council

The Finance and Administration The Finance and Administration CouncilCouncil

Provides advice and counsel on business issues to VPFA

Reaffirms VPFA’s delegated authority to BSC Directors

Supports on-going problem-solving & process improvement

Assists in design & implementation of new processes

Provides campus-wide communication on business issues

Major OutcomesMajor Outcomes

1. Savings - $1.3 million annually, mostly personnel

2. Improved business services to divisions & depts

3. No layoffs - 39 positions eliminated (5 in central offices)

We also…

4. Improved campus morale

5. Improved information for decision-making

6. Improved financial management

7. Positioned UNH to handle future needs

(RCM, Banner, new regs, growth, etc.)

5.4 5.4 5.55.3

5.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

OVERALL SERVICE OVERALLCAPABILITIES

OVERALL STAFFQUALITY

CONSISTENCY OFINFORMATION

RESPONSIVENESSBAD

GOOD

Improved servicesImproved services

BSC Customers Services Rating Summary

Improved services (continued)Improved services (continued)

0.7%

49.3%50.0%

Improved Remained The Same Decreased

BSC Customer Services Improved Rating

Major OutcomesMajor Outcomes

1. Savings - $1.3 million annually, mostly personnel

2. Improved business services to divisions & depts

3. No layoffs - 39 positions eliminated (5 in central offices)

We also…

4. Improved campus morale

5. Improved information for decision-making

6. Improved financial management

7. Positioned UNH to handle future needs

(RCM, Banner, new regs, growth, etc.)

Improved campus moraleImproved campus morale

89 internal promotions

New job specs developed (& raises!) for BSC assistants &

other admin staff

Clearly defined career paths, supported with training

Improved career opportunities for internal candidates

Secretaries & business staff now working at what they like

Collaboration - a new working relationship across units

Communication - FAC, BSC Forum, ASR Forum, AOP...

Major OutcomesMajor Outcomes

1. Savings - $1.3 million annually, mostly personnel

2. Improved business services to divisions & depts

3. No layoffs - 39 positions eliminated (5 in central offices)

We also…

4. Improved campus morale

5. Improved information for decision-making

6. Improved financial management

7. Positioned UNH to handle future needs

(RCM, Banner, new regs, growth, etc.)

Improved information forImproved information fordecision-makingdecision-making

Management reporting via financial datamart & web decision support tools

Eliminated most shadow systems

Financial advise now comes from more qualified BSC Directors

Major new training programs developed

VPFA Office included in hiring process for BSC staff

Desktop standards, central LAN mgmt, Information Technology Liaisons (ITLs)

Major OutcomesMajor Outcomes

1. Savings - $1.3 million annually, mostly personnel

2. Improved business services to divisions & depts

3. No layoffs - 39 positions eliminated (5 in central offices)

We also…

4. Improved campus morale

5. Improved information for decision-making

6. Improved financial management

7. Positioned UNH to handle future needs

(RCM, Banner, new regs, growth, etc.)

Improved financial managementImproved financial management

Implemented extremely successful PCard program

Further delegated buy/pay authority

Improved travel policies & processes

Automated personnel and payroll documents

Distributed payroll & A/P processing to BSCs

Streamlined chart of accounts and budgeting WWW: online policies, training calendar, BSC info

http://www.finadmin.unh.edu/asr/

Major OutcomesMajor Outcomes

1. Savings - $1.3 million annually, mostly personnel

2. Improved business services to divisions & depts

3. No layoffs - 39 positions eliminated (5 in central offices)

We also…

4. Improved campus morale

5. Improved information for decision-making

6. Improved financial management

7. Positioned UNH to handle future needs

(RCM, Banner, new regs, growth, etc.)

How did we start?How did we start?The 6 phases of the typical change processThe 6 phases of the typical change process

1. Enthusiasm

2. Disillusionment

3. Panic

4. Search for the guilty

5. Punishment of the innocent

6. Praise and honors for the non-participants

The 7 tasks of the ASR projectThe 7 tasks of the ASR project

1. Develop conceptual plan (7/95)

2. Build credible business case (8/95 to 10/95)

3. Gain top level support (11/95 to 3/96)

4. Enact selective hiring freeze (4/96 to 6/98)

5. Refine plan (4/96 to 10/96)

6. Gain broad support (4/96 to 6/98)

7. Implement (11/96 to 7/98)

1. Develop conceptual plan1. Develop conceptual plan

•We believed that to provide the best service at the least cost, business staff must be organized in teams of 3 to 12 and secretarial staff should be in teams of at least 2

•To capture budget savings from process improvements, sweeping consolidations of business personnel are necessary.

In other words…

Consolidation was the primary strategy for budget savings.

2.2. Build credible business case: Build credible business case: Model the future stateModel the future state

Gather data….lots of data

Survey 5 pilot areas using modified NACUBO’s Work

Effort Survey (BPR for Higher Ed, c. 1994)

Determine direct labor cost of each function by employee

Develop volume measures for each functional category

Compute benchmark cost/unit of volume

2.2. Build credible business case: Build credible business case: How to get there from hereHow to get there from here

UNH Voluntary Attrition:Admin Support

All Staff Positions Only

FY93 138 28

FY94 141 27

FY95 157 24

3. Gain top level support3. Gain top level support

Approval received to proceed to the next phase from:

• Provost

• Interim VPFA

• 2nd Interim President

• Trustees

• New (current) President

4. Begin selective hiring freeze4. Begin selective hiring freeze

Administered centrally

Oversaw all administrative staff movements

Assisted supervisors recruiting staff

Assisted staff looking for opportunities & retraining

Assured we met our savings goals in a fair & consistent way

5.5. Refine plan: Definition of 3 Refine plan: Definition of 3 categories of categories of admin support servicesadmin support services

1. DEPT BUSINESS SERVICES (CORE BSC SERVICES) – budget, buy/pay, travel, accounting, personnel/payroll, grant & contract accounting, billing & a/r, financial reporting & analysis, reconciliations & other financial controls, CUFS & HRIS entry & update, etc.

2. DEPT SECRETARIAL/CLERICAL SERVICES – typing & word-processing, answer phones, greet visitors, filing, copying, schedule meetings, order office supplies, organize, delivery, other data entry & clerical, etc.

3. OTHER ADMIN/PROGRAMMATIC SERVICES – central office business functions, “line of business” functions (e.g., gift processing at Development Office or student billing at Telecom), general supervision & mgmt, computer support, direct student & academic services, counseling, Student IS entry & update, meetings, newsletters, plan special events, etc.

5.5. Refine plan: Administer fully the Refine plan: Administer fully the work effort surveywork effort survey

399 people surveyed – 373.6 FTEs % of

Survey Results: FTEs FY96 CostsTotal

Dept business services 94.4 $3,472,921 *28%

Dept secretarial/clerical services 195.5 $5,868,10647%

Other admin/programmatic services 83.7 $3,206,58225%

373.6 $12,547,609100%

*Includes:Total FY96 cost of CUFS entry/update $896,785Total FY96 cost of financial reporting & analysis $520,495Total FY96 cost of buy/pay activities $404,000

5. Refine plan: Example - Dept 5. Refine plan: Example - Dept Business BenchmarkBusiness Benchmark

Business FY96 Unit FY96 Cost

Academic Areas FTEs Bus Cost Volume per Unit

College 1 9.2 $ 332,264 11,908 $ 27.90

College 2 8.1 $ 274,840 8,132 $ 33.80

College 3 8.0 $ 267,635 8,091 $ 33.08

College 4 1.6 $ 67,283 2,403 $ 28.00

College 5 3.7 $ 124,515 3,598 $ 34.61

Acad Affairs - other 6.5 $ 229,662 5,862 $ 39.18

subtotal 37.1 $ 1,296,199 39,994 $ 32.41

All other areas 57.3 $ 2,176,722 53,577 $ 40.63

Total 94.4 $ 3,472,921 93,571 $ 37.12

Using benchmark cost/unit of $27.90 x 93,571 units = goal of $2,610,631, a targeted savings of $862,290.

College 1 $ 332,233 9.0 9.2

College 2 $ 226,883 6.1 8.1

College 3 $ 225,739 6.1 8.0

College 4 $ 67,044 1.8 1.6

College 5 $ 100,384 2.7 3.7

Acad Affairs - other $ 163,550 4.4 6.5

subtotal $1,115,833 30.1 37.1

All other areas $1,494,798 40.3 57.3

Total $2,610,631 70.5 94.4

5. Refine plan: Estimated FTE’s per 5. Refine plan: Estimated FTE’s per BSCBSCBusiness Target BSCTarget FTEs @ FY96 Cost Avg Business

Academic Areas @27.90/unit Cost per FTE FTEs

6. Gain broad support6. Gain broad support

• Lots and lots of communication, all faculty & staff groups, especially Deans’ Council

• Identified 8 pilot areas – including all the colleges

• Created Local Teams - included service providers & customers, and supporters & opponents

6. Gain broad support : Local Teams6. Gain broad support : Local Teams

What does a Local Team do?

With the support and assistance of the University ASR Core Team….

Keep others in the Area informed about ASR Address concerns of people within the Area Learn from each other Develop ideas on ways to improve services and reduce costs Develop Area-specific implementation plans

Idea was to educate each other on what each other needs and does to support those needs, and to instill the ASR principle that implementation of organizational change is best accomplished locally with central assistance as needed.

7.7. ImplementImplement

Barriers & roadblocksBarriers & roadblocks

1. Human issues

2. Human issues

3. Human issues

4. Human issues

5. Human issues

Human Issues -- Setting up BSCs Human Issues -- Setting up BSCs impacts EVERYONEimpacts EVERYONE

• Secretaries• Accounting clerks• Business managers• Faculty & P.I.s• Dept chairs• VPs, Deans & directors• Central office staff

Human issues - staff & supervisor Human issues - staff & supervisor concernsconcerns

Internal freeze - took away local autonomy

for hiring process

Staff felt their jobs were in jeopardy

Loyalty to dept impacted redeployment

discussion

Desktop standards meant that Macs &

favorite spreadsheet were history

Human issues - dept chair & faculty Human issues - dept chair & faculty concernsconcerns

Lack of trust of central (and College) administration

Is this a ploy to consolidate academic depts?

Is this a ploy for VPFA or the Controller to take over?

Intense loyalty to and reliance on dept secretary

Chairs fought hard for existing resources; didn’t want to give these up

Dependency on others outside dept to accomplish needs

How to convince people that investment was needed in order to realize savings?

Scalability - anticipated growth

Human issues - VP, dean & director Human issues - VP, dean & director concernsconcerns

What if I go first and then Division B doesn’t do it?

Why do I have to contribute more than Division B does?

Complexity factor, especially in Research areas

One CFO per CEO

CFO must be within shouting distance

Insufficient space to meet BSC requirements

“Virtual BSC” vs “Physical BSC”

Quote of the hourQuote of the hour

“WE ARE UNIQUE”

Critical Success FactorsCritical Success Factors

1. Sell the product

2. Create a sense of urgency

3. Maintain stamina

4. Earn people’s trust

5. Create central framework & support structure

6. Encourage local control

7. Go for the whole

8. Invest in visible ways

1. Sell the product1. Sell the product

• Create a vision, make it easy to remember

• Always provide a choice

• What’s in it for each group?

• Sweeten the pill (e.g., job titles and salary increases)

• Have 10x as much data as anyone else

• Sell the whole package –must take the good with the bad

2. Create a sense of urgency2. Create a sense of urgency

Need leverage, for example…

• Budget problems• New system implementation• Promise of increased local autonomy &

authority

3. Maintain stamina3. Maintain stamina

• Expect time to get over resistance to change – its natural

• Be stubborn, and repeat the message over and over

• Must have more than one leader (need a critical mass of

believers; tag-team)

• Academic & Admin solidarity– commitment &

collaboration

• Must have occasional visible support from the top

• Helps to have consultant from time to time

4. Earn people’s trust4. Earn people’s trust

• Show your face

• Give people a voice… Listen …and Follow-through

• Deliver on your promises – training, technology, central

support, new policies

• Communicate often & openly – repeat the vision & the

“why” of the message

• Use carrots (not sticks) whenever possible

• Set appropriate example in your own area

5. Create central framework & 5. Create central framework & support structuresupport structure

• Common conceptual design, not detailed blueprints

• President mandated establishment of physical BSCs

• Central management of natural attrition

• Transitional BSC, retraining, internal promotions

• Central IT, HR, Facilities, Controller support

• Common system & policies, but local autonomy &

authority

6. Encourage local control6. Encourage local control

• Establish Local Teams

• Establish Financial & Administration Council

• BSC CFOs report to Unit CEOs

• Unit CEOs responsible for implementation of organizational change

• Allow flexibility where you can - compromise on the nonessentials

7. Go for the whole7. Go for the whole

• Don’t settle for 1 or 2 pilots or you will never gain the momentum to finish

• Do the most difficult areas first, to disprove the nay-sayers

• It’s the whole that allows central office delegation and staff reduction

• It’s the whole that provides benefits of standardization and simplification

8. Invest in visible ways8. Invest in visible ways

Financial Resources Committed (in thousands): Physical Renovations $ 455

Equipment (primarily desktop computers) 344

Furnishings (primarily ergonomic workstations) 127

Training 255

Temporary business & systems analysis help 104

Consulting (KublerWirka, Inc. 781-431-8850; mjk@tiac.net) 65

Transitional BSC operations 18

Total $1,368

Significantly less than original project budget of $3.2 million