Nov. 21, 2007
By Joe Brennan
Ohio University has launched a project to review its back-office procedures and seek ways to streamline them with an eye toward improving service to faculty, staff and students while lowering administrative costs.
Vice President for Finance and Administration Bill Decatur has formed a team to guide the development of what is known as a "shared services" approach. This project is somewhat similar to efforts discussed in 2004 to reduce or eliminate redundancy in support operations.
Currently, most university departments and divisions are responsible for conducting their own business processes, such as handling invoices, reconciling purchasing card statements, and tracking vacation and sick leave. Under a shared services model, some or all of these tasks would be performed for the units by teams of expert staff members who serve multiple departments.
"This is important to Ohio University because it will help us control costs and improve internal services," said Terry Conry, associate vice president for finance and administration. "We expect at least a 20 percent reduction in business services costs."
The project team, which includes staff from several units on the Athens campus, has been working since September to gather information from other organizations that have successfully implemented the shared services model. Cornell and the University of New Hampshire are among universities that have gone this route.
During winter quarter, the team plans to gather data on the volume of transactions and the costs involved in performing them. The group also will survey faculty and staff about their current satisfaction with internal services.
That information will be used to identify opportunities for implementing a shared services approach. Some of the possibilities include accounting, human resources, purchasing, marketing and information technology.
Anita Mondo, departmental administrator in the Department of Psychology, is a member of the project team. She said that given the funding issues facing higher education, this is a positive step the university can take to gain control of its own destiny.
"We're taking a proactive and more strategic approach, which is intended to be customer-driven and to provide measurable results," she said. "This could be a really good thing for the university. I hope people will participate and help us to develop and gather a solid set of useful data to drive this process. If we are going to do this, we have to do it right."
Decatur said the shared services model works because it eliminates duplication of efforts and consolidates routine processing in service centers that can perform the work more efficiently.
"What I like about the shared services approach is that, if we do it right, we can not only reduce overhead costs -- we can also increase quality," he said. "One of the most powerful aspects of this initiative is that so many units are working together to reduce costs and improve quality. This is strategic, as opposed to simply asking every area to cut another X percent."
Decatur stressed that the goal is not "an old-school centralization of functions."
"While shared services is a proven approach in the private sector, it is an entirely new way of thinking in higher education," he said. "One significant focus of shared services is that the units become the customers of the shared services centers and there is careful attention paid to customer satisfaction."
He noted that some staff members are asking whether the new approach could lead to job cuts.
"I understand those concerns, but the answer is that we don't know right now. We do know that people's jobs will change," he said. "For example, in the academic departments, this might free up staff to concentrate more time on academic support, as opposed to something like mapping P-card transactions."
The new model is actually already working on campus. Earlier this year, the divisions of Finance and Administration and Intercollegiate Athletics formed a shared services unit. Led by Julie Allison, director of business services, the team provides the two divisions with basic accounting, budgeting and human resources services.
Athletics Director Kirby Hocutt said the new arrangement led to cost-savings by allowing him to eliminate an administrative position after it became vacant this summer. "Julie has provided tremendous leadership, and the level of service has been exceptional," he said. "Athletics is very pleased with this new approach."
Right now, the project team is concentrating on learning about shared services. In the spring, it will gather information and develop specific recommendations for how such an approach can be implemented at Ohio University.