Shared Services in Higher Education: Trends, Case Studies & Best Practices

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

North America | Latin America | Europe | Middle East & Africa | Asia-Pacific2

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?



Who We Are



Best Practices

Agenda




Who We Are · Overview



Who We Have Worked With



Who We Are


Higher Education Focus

Best Practices

Agenda




Achieve the Triple Benefits of Shared Services

Higher Quality

Lower Costs

Improved Control



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



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



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?



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?





Who We Are


Best Practices

Agenda





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



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



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



Who We Are


Best Practices

Agenda





Early Adopters : Shared Services was already underway “pre-recession” at many Universities

Shared Services Examples in Higher Education



Shared Services Examples in Higher Education

Many have followed



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



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



University of MichiganAdministrative Services Transformation (AST) project

Finance & HR Functions – All academic (19) and administrative (13) units

ncci-cu.org

Consultants



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



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



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



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



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



Who We Are



Agenda

Why of Shared Services?

Best Practices



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”



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



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



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



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



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!



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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