shared services in higher education: trends, case studies & best practices
TRANSCRIPT
North America | Latin America | Europe | Middle East | Africa | AsiaNorth America | Latin America | Europe | Middle East | Asia-Pacific© Chazey Partners 2015
Shared Services in Higher Education:
Trends, Case Studies & Best Practices
October 29th, 2015
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North America | Latin America | Europe | Middle East | Asia-Pacific
Who We Are
Trends in Shared Services
Higher Education Case Studies
Best Practices
Agenda
Why Shared Services?
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North America | Latin America | Europe | Middle East | Asia-Pacific
Who We Are
Trends in Shared Services
Higher Education Case Studies
Best Practices
Agenda
Why Shared Services?
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North America | Latin America | Europe | Middle East | Asia-Pacific
Who We Are · Overview
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Who We Have Worked With
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Who We Are
Trends in Shared Services
Higher Education Focus
Best Practices
Agenda
Why Shared Services?
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Achieve the Triple Benefits of Shared Services
Higher Quality
Lower Costs
Improved Control
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What Exactly is Shared Services?
• Treats its internal clients as if they were an external client. Treats them with the same level of respect and service that external clients expect
Elevator Speech
• Provides non-core services to the “business”, employing a specialist team, geographically unconstrained, and focusing on the requirements of the internal client. This involves a philosophy and approach totally unlike traditional “corporate-driven” centralization.
Definition
• Has the goal of providing high quality, non-core, but mission critical services (which can include both repetitive common processes and more specialized professional services) to the business at lower cost and more efficiently than the business could otherwise provide for itself.
Goal
• Achieves cost savings and higher quality of service by leveraging organizational re-alignment, economies of scale, technology, lower cost locations, client interaction framework, standardized end-to-end processes, and best practices.
How-To
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Centralization/De-Centralization Cycle
Remote from business
Unresponsive and inflexible
No Business/ Operational control over costs
Viewed as central overhead
Prevalence of shadow operations
Centralized
Challenges Disparate
processes Multiple
standards Duplication
of effort Different
control environments
High cost and costs unclear across the business
Not scalable
Decentralized
Challenges Responsive
to Business and Operational needs
Business/ Operations control decisions
Customized solutions to meet Business/ Operational requirements
Benefits Shared Highly client
focused Commercially
driven Service
Partnership Agreements
Clear unit costs
Flexible delivery
Clear understanding of drivers and activities
Common systems and support
Consistent standards and controls
Tight control environment
Economies of scale
Benefits
Costs too high, poor compliance environment
Unresponsive to needs of business
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State Funding and
Endowment Decreases
Technology Demand
Campus Growth
Compliance/ Administrative Requirements
Cost of Higher
Education
FEELING THE “SQUEEZE”
Marketplace Competition
Why Shared Services in Higher Education?
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Reduced funding and escalating cost-containment pressures are requiring operational excellence in higher education institutions to continue to achieve academic excellence.
Only 42% of college and university chief business officers are confident with their financial model’s stability over the next 10 years. (Inside Higher Ed and Gallup 2015 Survey of College and University Business Officers)
Increasing student fees alone has not been sufficient to close the budget gaps, and is no longer sustainble at many Universities and Colleges.
Why Shared Services in Higher Education?
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Who We Are
Higher Education Case Studies
Best Practices
Agenda
Why Shared Services?
Trends in Shared Services
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General Trends in Shared Services
• Started in mid-1980’s - driven by private sector multinationals
• Successfully implemented Shared Services initiatives achieve “20%-45% cost reductions from the current state” (The Shared Services Roundtable, March 2015)
• 100% of Hackett’s top quartile benchmarked enterprises leverage Shared Services (Hackett 2013)
• More prevalent today in midsized companies and businesses
• Improved services, not just cost
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General Trends in Shared Services
• “Moving up the value chain”
• New adopters are moving directly to multifunctional/Global Business Services model as part of their implementation strategy (Deloitte, 2015 Global Shared Services Survey, February 2015)
• Technology options continue to grow (spend on technology is not the problem)
•Significant focus and growth in the Public Sector globally
• Slower to adopt – so far
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Unique Challenges to Higher
Ed
“Politics”Within Campus/Across System/
State and Federal
Workforce:Campus/Faculty/ Colleges/Depts/ Research/Health
Centers
Territorial and Governance Issues“Traditional Silos”
Funding Sources/Increased
Costs
Transparency creates critics
“Failures” jumped on
“Culture”/Tenure/ Change
Management
Some of the Unique Challenges Facing Shared Services in Higher Education
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Who We Are
Trends in Shared Services
Best Practices
Agenda
Why Shared Services?
Higher Education Case Studies
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Early Adopters : Shared Services was already underway “pre-recession” at many Universities
Shared Services Examples in Higher Education
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Shared Services Examples in Higher Education
Many have followed
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University of North Carolina – Chapel HillGOALS:
Streamline campus operations and provide more funding for academics and University’s core missionsImplement simpler, more responsive systems and processes that enable informed decision-making while complying with policies and lawsReduce bureaucracy and create a more satisfying work environment for faculty and staff
Carolinacounts.unc.edu
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Yale UniversityFormed in January 2010 to take repeatable common work out of departments
Consolidation of pre-existing service units to sustainably improve cost structure, compliance and client service
Shared Services at Yale University
Yale Shared Services Finance
HR Shared ServicesHR Transactions and Contact Center
FRMS Pre & Post Award
All shared services are single centers located on campus
yss.yale.edu
“Establishing and maintaining a relationship with our customers was integral… our customers wanted to be involved in the development, implementation, and ongoing operation of Shared Services and we very much wanted and welcomed their feedback.” – Ronn Kolbash, Asst VP of Yale Shared Services
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University of MichiganAdministrative Services Transformation (AST) project
Finance & HR Functions – All academic (19) and administrative (13) units
ncci-cu.org
Consultants
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State of Iowa UniversitiesGoal: To utilize and leverage the current technology and best practices to provide exceptional, streamlined services in an efficient and accurate manner in order to reduce overall administrative costs by minimizing redundancies and improving quality across campus.
Human Resources - Increase strategic services:• Technology - Automate processes• Comprehensive strategy to align short and long-
term initiatives• Clarify roles• Redesign governance
Finance - • Establish staffing levels• Clarify roles
IT Transformation - • Strengthen collaboration between
distributed and central IT teams• Streamline the delivery of commodity
technologies• Plan for future technology innovations
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University of KansasCompleted the build phase in August 2013 and began implementation with the intent to role out five SSCs before the end of fiscal 2016.
ssc.ku.edu
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University of OklahomaIT Shared Services Goals:
Build 3 New Data CentersTransform University IT SystemsUnlock EfficienciesShare Excess CapacityIncrease Mission Focus
Lessons LearnedUniversity-wide buy-in on cost efficiencies requires selling Monetizing IT savings can be difficultRetained Staff needs to understand the futureMust plan administration of consumption pricing and billingVirtual and Fractional Staffing Models present unique challenges
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University of Florida
Institute of Food and Agricultural Services (IFAS) shared service centers developed to consolidate and streamline the administrative functions such as Human Resources, Finance and Accounting, and Grants Management.
IMPLEMENTATION STRUGGLESMajor challenge with primary customer: facultyFaculty did not understand scope of service or shift in modelConfusion around detailed processes, client interaction frameworkNo clarity on how to measure service levelsStaffing challengesStatus quo was tight-knit with close proximity: Pushback on centralizationLift and shift without standardization, workload optimization, space planning or evaluating skillsets
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Case Study – City of Houston HR Problem: City facing $50-70M Budget DeficitOpportunities: Centralization; reduce liabilities; improve efficiency; eliminate redundancyPlan: Implement Shared ServicesProcess:
Step 1: People – Redefine Roles and ResponsibilitiesAnyone spending over 51% of time moved to Central HR
Step 2: Process StandardizationFocus on quality of service and transparency
Step 3: Technology Adds CapabilityReduce reliance on expensive and unnecessary add-on solutions
ResultsHR Staff to Employee ratio improved from 1:38 to 1:119Improved quality of serviceMore efficient, better placed staffSelf-service functionality Improved understanding of customer issuesEnhanced use of SAP Capital Management Module: $650k of annual savings
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Who We Are
Trends in Shared Services
Higher Education Case Studies
Agenda
Why of Shared Services?
Best Practices
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Tips & Tricks #1
• Having a Business Case is key
• Consider functions, processes, sub-processes, locations, regions, operating units and entities
• It is really important to distinguish between “solutions” vs “quick fixes”
• Multifunctional now often the chosen way to proceed
• Consider how far up the value chain you want to go
• Senior level Executive sponsorship is key - executives must understand and support the roll-out
• Remember always that the project does not end with “go-live”
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Roadmap: Key Activities & Deliverables
Financial Business CaseOrganizational
StructureOperating
ModelGovernance &
Policy Frameworks
Change Management &
Comms PlanImplementation
Plan
Report & PresentationBaseline Opportunity
MatrixProject
Initiation
Baseline Reports & Data
Stakeholder Interviews
As-Is/Client Interaction Workshops
Activity Based Analysis
Technology Landscape
High-Level Benchmarking
As-Is Leading Practices
Diagnostics
To-Be Leading Practices
Diagnostics
Technology Assessment
Location Analysis
To-Be Design Principles
Stakeholder Analysis
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Client• Service orientation in place• Structured way of dealing with customers• Customer satisfaction levels understood• SPAs in place • Reality versus perception• Account management
Process• Processes documented• Standardized, controlled & repeatable activity• Recharging methodology• Benchmarking – internal/external• Metrics: Control Based; (ii) Efficiency &
Effectiveness
Technology• ERP implemented• Document Scanning Solution• Workflow• Automated Payments• Elimination of Side Systems• Self services tools• Automated Score Cards
People• Skilled Leadership in place – do not compromise on
competencies• Team shape & stability – process shaped/spans of
control/staff – perm v temps• Team members – culture, values & behavioral competencies
assessed • Team morale, reward & retention• Working environment conducive to team working
CRITICAL SUCCESS FACTORS
Remember the Client
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Client Interaction Framework
Account Management• SSO to client; via reporting,
interaction, escalation & communication
Client Contact Management• Client to SSO; to manage
and resolve queries and drive learning/improvement
Service Partnership Agreements• SPAs are 2-way agreements
clarifying both SSO services and client inputs
Client Feedback• Client satisfaction
continuously monitored both informally and formally
Continuous Improvement• Mechanisms to identify the
areas for improvement and to develop solutions
Process Control Database• Documents end-to-end
SSO processes; highlights activity of both SSO & client
Performance Measurement• Comprehensive KPIs,
measures and metrics framework, SSO & client
Performance Reporting• Process performance will
be reviewed monthly by SSO and client
Recharging Methodology• Define basis for charging
for SSO services to turn consumers into clients
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Tips & Tricks #2• Do not underestimate the change management required
• Consider a multi-faceted communication and advisory approach
• Generate a culture of service and continuous improvement
• Make sure your team includes both academic and administrative resources and be prepared to travel to meet and work with users
• Assign your best resources and people to the project
• Assign end-to-end process owners
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Tips & Tricks #3
• Separate transformation from ongoing activities
• Offer end-to-end services by provisioning as many non-core services as possible under one organizational umbrella
• Realignment can help remove silos and foster a strong shared service culture and team spirit
• Enable succession planning, job rotation, new opportunities and targeted and consistent training programs
• Do things differently – that’s the whole point!
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Top Three Takeaways
1. Shared Services can be complex, but it is not rocket science
2. Start with a Roadmap and supporting business case
3. You are not alone, others have gone before
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Contact us
www.chazeypartnersinc.com