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Initiative already reaping dividends
Shared Services aims to streamline processes, increase efficiency  

Feb 27, 2009  

This is one in a series of stories on new university initiatives aimed at ensuring a quality academic experience for students by improving service, increasing efficiency or identifying new resources or savings. The initiatives were profiled at an Oct. 7 Vision OHIO Information Session.

A year ago, it cost the university $13.60 to process a single invoice. As of December, that amount had dropped to $6.44. By June, employees will receive travel reimbursements within days, a process that today can take several weeks.

Those improvements, and others like them, were accomplished through Ohio University's shared services initiatives, a university-wide effort to help employees focus on the university's core academic mission by streamlining administrative functions, decreasing costs and improving service, according to university officials.

Shared services -- an organizational model that works to increase efficiency through alignment and consolidation of support functions and improvement and standardization of processes -- has long been used in private industry. The practice is now beginning to be used in the public sector and most recently, in higher education, said Assistant Vice President of Shared Services Mark Hopton.

For example, business process improvement, customer service, measurement, and data-based decision-making are core components of the Excellence in Higher Education model for improving performance and shared services.  The framework is providing guidance for efforts at Ohio University, Hopton said.

"Let's focus on our core mission: education, research and outreach," he said. "We're not a payroll company. We're shouldn't be concentrating on paying bills. We are an institution of higher education. That's where our focus needs to be."

Cutting the cost of doing business is particularly important now: Ohio University faces a projected deficit in fiscal year 2010 of at least $15.5 million because of factors such as a freeze on tuition, health care, utility and other inflationary cost increases and shortfalls in investment income. State officials have likewise stressed the importance of efficiency, particularly since higher education was largely spared while other state institutions sustained cuts as part of Gov. Ted Strickland's proposed biennial budget.

Working groups made up of deans and vice presidents have presented a list of nearly 20 recommendations for increasing efficiency that officials estimate could conservatively save the university nearly $5 million. Many of these suggestions entail the expansion of shared services functions in areas including Procurement Services, Human Resources, University Communications and Marketing, and the Office of Information Technology. For more information on the initiatives, see related story.

"We've got budget constraints and we have to do what is right for the university," Hopton said. "This is about improving and standardizing processes, and leveraging technology to reduce business expenses so more resources can be directed to support our academic mission."

On Tuesday, the university will host 13 public and private institutions of higher education at a summit to discuss ways they can work together on shared services projects. The summit is just one step toward establishing Ohio University as a leader in shared services initiatives across the state and the long-term goal of eventually generating revenue by sharing services with other universities and schools in the region, Hopton said.

Terry Conry, associate vice president for Finance and Administration, agreed that such steps should be a priority for the university.

"We hold the public trust... We're managing public resources," he said. "Any way that we can find to work across agencies (to save money), it is our responsibility (to pursue)."

Focus on efficiencies

The university conducted a benchmark study last summer that revealed little standardization and decentralized pockets of processing across campus.

For example, employees in individual departments across the university used to handle each unit's payroll functions. Hopton and his team moved those duties to the Business Service Center, which also handles administrative and some human resources functions for Finance and Administration.

Hopton stressed that shared services goes beyond simple centralization. Instead, it strives to fundamentally change business processes to make them more efficient.

"Shared services is about employing best practices," he said. "Instead of having multiple ways to pay an invoice, let's pare it down to something that is more manageable so that everyone is familiar with how to do things. We need to make sure that it is as standardized as possible and completely transparent to our stakeholders."

He also emphasized that most of these projects will be self-funded, and not an additional strain on university resources.

The university has already begun to see savings as a result of these efforts. The re-engineering of business processes and projects implemented saved an estimated $490,000 in labor and efficiency gains in the last year.  Ideally, Hopton said, the institution will develop a campus culture of continuous improvement. There is no reason to believe that the pressures on higher education to control costs and improve quality will abate.

"That's cost containment and becoming more efficient," Hopton said. "We're still not where we need to be, but we are making strides. It's making people aware of what's going on, developing the attitude to get things done and giving them the ability and the tools to complete their work."

In addition to saving money, shared services should also allow administrators on campus to spend less time "pushing paper" and more time doing strategic planning and concentrating on the aspects of their jobs that are directly related to the university's mission and their core competencies.

Savings multiply

In another effort, the university recently implemented automated time collection on the Athens campus. As part of the project, the university installed Workforce software devices that allow hourly employees to swipe their ID badges when clocking into or out of work in lieu of filling out paperwork to record their hours. As of now, nearly 70 percent of hourly employees at the university use the Workforce machines, with full implementation expected by the end of May.

Ultimately, the project will help managers spend less time on paperwork and largely automate the payroll process for hourly workers. The Workforce Project Team expects as much at $300,000 in efficiency gains because of the measure.

The hire-to-retire process is another area that the Department of Shared Services is working to streamline. In an institution the size of Ohio University, the paperwork involved in getting employees hired and paid appropriately can take enormous amounts of time to process. Shared Services will take over processing some of the routine forms that employees fill out upon hire, such as payroll deductions and tax information.

"It's really important that we pull administrative tasks out of these areas?and that we can allow our human resources professionals to focus on strategic initiatives," Hopton said. "Instead of worrying about completing three, four (or) five different types of paper to get an employee hired and paid appropriately, they need to focus on how do we attract, hire and retain the best possible employees."

Conry added that he saw positive results in his department shortly after the Business Service Center took over the day-to-day hiring functions in Finance and Administration.

"I got to focus specifically on finding the best quality applicants and I didn't have to worry about all the procedural steps that go along with the process," he said. "It absolutely has to do with allowing people to focus on their core jobs."

Hopton also has been working with Chief Procurement Officer Frank Corris to institute Concur -- an online system that employees will use to make travel arrangements, submit travel expense reports and update purchasing card transactions -- and to move forward efforts to install an e-procurement system. For more information on these initiatives, see related story.

"It's a daunting task to get this up and running, but it's well worth it," Hopton said of shared services. "It's something that I believe in, something that my people believe in and at the end of the day it's the right thing to do for the university."



Related Links
Shared Services Project:  http://www.facilities.ohiou.edu/sharedservices/ 

Published: Feb 27, 2009 3:00 PM  

Shared Services FAQ 

What is it?

This initiative aims to streamline administrative functions to improve service and allow units to focus on their core missions. Goals include standardizing business practices, improving internal controls and leveraging technology to increase efficiency and reduce costs.

Why is it needed?

Shared Services will eliminate redundancies and reduce processing costs, directing savings to strengthening academic programs. This is particularly important given the difficult economic environment.

What are the advantages?

A shared-services model will reduce the amount of time and resources devoted to completing administrative tasks. It will also help the university save a significant amount of money.

What are the hurdles?

Changing the culture at the university and retraining staff members to operate more efficiently will be the biggest challenges.

What is the timeline?

Full implementation of Concur will occur during spring quarter. The Workforce automated time collection software should be installed campus-wide by the end of May. The university is aiming to have certain administrative functions for all non-academic planning units integrated into Shared Services by July.

Where can I learn more?



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