Nov 6, 2012
From staff reports
On Monday, Ohio University Executive Vice President and Provost Pam Benoit and Vice President for Finance and Administration Stephen Golding sent an e-mail to faculty and staff about the RCM projects:
During Fall Semester work on a variety of Responsibility Centered Management (RCM) projects has taken place. We want to update the university community on what has been accomplished, how it has been accomplished, and what can be expected through the end of this calendar year and into January 2013.
We also want to communicate that over the next four months outstanding operational concerns related to BobcatBUY, the Print Responsibly initiative (on which ComDoc was selected to be the university's partner), People Admin, and any related administrative processes will be documented, reviewed, and addressed. Additional information is provided later in the email.
Ohio University's RCM Project
The limitations of the current incremental budgeting system combined with the successful use of RCM at other institutions precipitated the decision, approved by the Ohio University Board of Trustees, to adopt a new approach to resource management.
This new approach should be understood first, foremost, and always as a means to help preserve and improve the academic mission of Ohio University. RCM does not make academic decisions. Through the provision of reliable, accessible data, RCM creates a way to understand the possibilities inherent in academic decisions. Those possibilities are then to be weighed by the leadership and faculty of a particular unit.
RCM invests authority for decision making with the deans of each college and campus. However, tied to that authority are responsibility and accountability. Each dean must work in the best interests of the entire institution within the framework of shared governance.
Over the course of the past academic year, a set of RCM guiding principles relating to responsibility and accountability were developed with input from across the university. These principles have been shared in a number of different venues but it is worth reviewing them. They need to be understood, supported, and implemented at all levels and by all members of the university community.
Primary Initiatives of the RCM Project
- Ensure the sustained strength of Ohio University by aligning resources with university priorities to support academic excellence.
- Support strong academic governance that promotes collaboration across units and builds on the strengths of the university.
- Present a holistic view of the university budget that provides a clear connection between performance and incentives.
- Empower unit-level decision making authority to promote academic excellence and institutional efficiency that is balanced by responsibility and accountability.
- Create a simple and transparent budget process driven by the goals of financial predictability, and stability.
The RCM Project has two primary initiatives: the development of a budget model and alignment of administrative services to support the model. Information about each initiative is provided below.
The Budget Model
The term "budget model" is used to describe the work that is being done to create an approximation of the underlying economics of our academic activity. The primary goals of the model are to provide incentives for growth and to fairly align resources with academic activity in ways that are as intuitive and transparent as possible.
The model consists of several elements including a series of spreadsheets that gather information on revenue and expenditures and allocate them across academic units according to a set of algorithms. Eventually those spreadsheets will be embedded in a narrative budget document that will outline their underlying assumptions and calculations. A detailed accounting of the development of the budget model and the components used in the spreadsheets (initially presented at the open budget forums last winter and spring) can be found at the Budget Planning Council website http://www.ohio.edu/finance/bpa/mtgs.cfm
. Click on the link entitled "RCM Presentation" under the October 19, 2012 heading.
During AY 2011-2012 the deans, working with a Budget Planning and Analysis team led by Chad Mitchell and John Day, developed a set of draft spreadsheets. Chad and John then met individually over the summer and into the fall with deans and their budget unit managers. At each of these meetings, the goal was to review and refine the information in the spreadsheets. Chad and John also have incorporated financial data from the past fiscal year to reflect actual expenditures and have worked with Mike Williford in Institutional Research to capture updated information on issues such as enrollment and revenue derived from State Share of Instruction.
New versions of the spreadsheets will be discussed with the deans shortly. Following that discussion, deans will begin scheduling meetings in each of the colleges to provide faculty and staff the opportunity to go over the spreadsheets and discuss how the information contained therein would be used in college planning. Similar meetings will be held with constituent groups and academic support units. We anticipate that the meetings will begin in November and conclude in January.
The Service Alignment Initiative
One of the important lessons learned from other institutions that have implemented RCM is that robust and efficient administrative systems must be in place to support the work of the colleges, campuses, and other academic units. Controlling administrative costs while providing effective services is the challenge that all academic support units face under RCM.
In order to better understand how to align services with the needs of our academic units in an RCM environment, we engaged the Huron Consulting Group to conduct a review of the operations of Finance, Human Resources, and Information Technology. A similar review of Facilities is currently underway. As part of its review of Finance, HR, and IT, Huron surveyed faculty and staff across the institution. Based on the results of its survey, Huron identified a set of issues to be addressed as part of a successful RCM implementation.
As a means of helping Finance, Human Resources, and Information Technology make progress on the issues identified by Huron, we authorized the development of a Service Alignment Initiative (SAI) and asked Julie Allison, who currently serves as the controller in Finance, to lead the project. During the 18 months that the project is expected to be in operation, an alternative approach to leadership in the controller role, including assistance from Huron, will be in place thereby allowing Julie to work full time on the SAI. Recognizing that recommendations based on the Huron surveys will necessitate changes in a number of administrative processes, we are constituting a group made up of faculty, deans, and representatives from different academic support units to act as an SAI advisory group to assist with implementation issues.
Administrative Operations Concerns
Before engaging in any other work, the SAI is to document and help address outstanding concerns about various administrative operations including those associated with BobcatBUY, the Print Responsibly initiative, and People Admin. We know that our ability to be successful with an RCM implementation necessitates providing efficient and useful service in these areas. The SAI will devote the next four months exclusively to this work.
Identification of Chief Administrative and Finance Officers in the Colleges
As part of the discussion surrounding the SAI project, each dean has been asked to identify an individual in his or her unit to serve as the main point of contact for RCM implementation. The request for an individual to function in the capacity of a chief administrative and finance officer reflects a desire to establish a group that can help prioritize and shape administrative efforts and policies. They also will serve as the point of contact for a college's faculty and staff on administrative issues. Chief administrative and finance officers will meet on a regular basis with the Vice President for Finance and Administration and his senior administrative leadership team. We will count on them to help us develop and implement efficient and cost effective approaches to administrative services.
Thank you for taking the time to read this email. Your interest and assistance are critical as we work to support our students, faculty, and staff in a higher education environment that is constantly changing.
Executive Vice President and Provost
Vice President for Finance and Administration