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Looking Internally to Improve Institutional Efficiency
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Looking Internally to Improve Institutional Efficiency

Allowing each department in an institution to manage every element of their administration can lead to massive inefficiencies.

Throughout the United States, universities — large and small, public and private — are facing ongoing pressure to continue offering their students outstanding education against a constant backdrop of diminishing financial resources. As a result, many are looking at innovative ways to contain costs and reduce spending while maintaining a strong emphasis on teaching and research.

One way institutions such as Yale University are containing costs and refocusing resources is through a strategy known as shared services. Under the shared services approach, which has become common in the corporate world, certain transactional processing functions such as finance, human resources and procurement are shifted from colleges, schools and units into a standalone service center, with a major focus on delivering these services at a lower cost, with a higher level of quality.

A key element in the successful implementation of shared services in any type of organization involves developing and sustaining an effective partnership between the center and its customers. In higher education, however, a number of factors such as extensive decentralization of administrative services, autonomous academic programs, faculty governance and culture, which are prevalent across many institutions, may pose challenges to designing and implementing a shared services model.

A key value consideration in moving some services into a shared services center is the ability to gain greater insight and understanding of the process through the use of metrics at a university-wide as well a college/department-specific level so as to be able to further derive productivity gains and potential cost savings. Not every function or service is a strong candidate for a shared services center.

However, in looking across the landscape of transactional work, three areas in particular stand out:

1. Expense Management

Moving this work into shared services allows universities to achieve greater standardization, consistent training, enhanced compliance and risk mitigation, lower cost per transaction and increased visibility into the health of the process. Keeping such work in each department allows for greater increase of shadow processes, variable costs per transaction, possible inconsistent policy application and reduced metrics visibility across the entire campus.

2. Financial Management

The demand for stronger financial acuity and analysis continues to grow on campuses, and the potential to have a talented team of financial analysts to provide assistance with reporting, analysis, and projections makes moving financial management into shared services a very attractive option. Rather than having each department possess potentially varied financial skills or develop unique sets of financial reports, the move of this work into shared services helps ensure everyone is using the same financial language and looking at the same financial data.

3. Contact Center

The contact center is the front door to your shared services center. It acts as a one-stop shop for staff, vendors and your community to receive consistent and timely answers to inquiries. Further, it provides for the ability to use the data to drive communications, training efforts and service on campus. Having multiple contact centers across campus answer the same or similar inquiries can result in increased technology costs, inconsistent service levels and a significantly harder time gathering information as to who is calling, how often and for what reasons.

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3 Responses to Looking Internally to Improve Institutional Efficiency

  1. Ian Richardson Reply

    2013/11/01 at 7:51 am

    Good arguments for adopting a shared services model. I would add that this model generally allows institutions to better capture data on processes and their impacts, which could help in decision making later on. Kolbash touches on this when describing how a centralized contact center could allow institutions to better gauge the type of callers they get and what information is requested.

  2. Stacy Hexner Reply

    2013/11/01 at 12:20 pm

    As institutions are asked more and more to account for their expenditures, it will become increasingly important for them to have consistent expense management. In this case, a shared services model might be the best way to go, not just to improve efficiency, but transparency as well.

  3. Jeff P Reply

    2013/11/04 at 9:52 am

    I believe part of the hesitation with shared services is that, whenever institutions discuss consolidation, there tend to be staffing impacts. To move to this type of model, administrators need to be open and transparent about what the move will mean in terms of new processes and functions, but also what it may mean for staffing levels.

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