Investing in students by modernizing higher ed
Learn how the University of Massachusetts is using shared services to drive significant costs and reinvest in students and the university’s mission.
Like most public university systems, the University of Massachusetts (UMass) faces a challenging fiscal environment. A shrinking pool of college-aged students, caused by demographic shifts in the Northeast and stagnant state funding, has made cost containment and efficiency an imperative for university administration.
One of the university’s most prominent initiatives, “We are better together,” is transforming the way UMass delivers its administrative services, which support the university’s academic and research missions.
"We are always pursuing innovative approaches to ensure we fulfill our core mission of providing a high-quality, affordable and accessible education for students from all backgrounds.”
– LISA CALISE, Senior Vice President for Administration & Finance and Treasurer, University of Massachusetts
At its core, “We are better together” is based on the belief that, as a complex organization, the university’s whole is greater than the sum of its parts. While the university system’s campuses are geographically diverse, they all have the potential to share administrative services, such as procurement, human resources, finance and IT. By implementing a shared services approach, the university minimizes duplication, increases efficiency, produces tangible savings, increases transparency and improves services for UMass faculty, staff, students and business partners. In higher education, savings from successful shared services implementations range from 10 to 20 percent. Recent advances in automation have also increased the potential for savings.
For certain functions, such as procurement and IT, there is the potential to dramatically reduce non-labor-related costs. For example, there are opportunities in procurement to consolidate spend, negotiate better contracts and eliminate maverick spending with suppliers.
As it prepared to implement shared services, UMass researched the experiences and results of other higher ed institutions, including other public university systems in Colorado, Missouri and Maine. The analysis included an investigation into the key characteristics of each implementation, including customer service, staffing strategy and organizational structure, which provided insight into the tools, policies and processes that leading organizations have adopted to support their “procure to pay” (P2P) shared services efforts.
Modernizing administrative services will yield savings to reinvest in its students and its mission. Indeed, UMass will reap the benefits of an estimated savings of $16 million in the first 12 to 18 months with annual savings to follow, which is roughly equivalent to a 3-percent increase in tuition or the endowment distribution of a $400 million gift.
But savings are only a part of the story.
“A sentiment of skepticism arises when a system like ours takes on something of this magnitude,” says UMass Assistant Vice President of Innovation and Operational Services David Nero. “There is a perception that customer service may suffer as a result of delivering services in a unified way. The reality is that the personal side doesn't go away. In fact, it can be better, because there will be a dedicated team to focus on a service, not just one person disconnected from their colleagues doing similar work on a different campus.”
Staff specialization will improve service for end users, while better data will allow for advanced analytics and performance optimization. New service levels and increased transparency will also give university stakeholders more visibility into costs and outcomes.
While a shared services model presents a remarkable opportunity to improve service and reduce costs, campus personnel understandably want to participate in the process, in order to ensure their concerns are being addressed and service expectations are being met.
“We established an advisory working with representation from every campus, and it included faculty and members of our Board of Trustees,” explains Calise. “That cross-functional working group model has worked so well that we are using it for other system-wide initiatives.”
“The reality is that the personal side doesn't go away. In fact, it can be better, because there will be a dedicated team to focus on a service, not just one person disconnected from their colleagues doing similar work on a different campus.”
The team embarked on a series of campus town halls to solicit ideas and feedback from faculty and staff. These meetings allowed stakeholders to participate in shaping the plan by voicing concerns and the working group provided invaluable information about particular nuances at the campus level. For example, some campuses may prefer local suppliers for goods and services. While the university may look to consolidate spend to improve pricing, it was important that the local businesses that supply the individual campuses continue to be part of the ecosystem in the future. Their essential feedback was incorporated into the plan, and stakeholders will continue to be involved in ongoing improvement efforts in the future.
As soon as the comprehensive shared services plan was approved by the Board of Trustees, UMass moved forward to implement procurement and related functions first to build momentum and confidence in the model.
After completing a national search, UMass hired the university’s first system-wide Chief Procurement Officer (CPO). The CPO will lead the newly created Unified Procurement Services Team, which is comprised of procurement, operations, accounts payable and travel services, and customer service professionals who will provide efficient, effective services to the system office and the individual campuses.
This first shared services initiative will play an integral role in improving the efficiency and effectiveness of the UMass system through enhanced strategic purchasing and more data-focused and streamlined operations. As the model matures, the university plans to extend the shared services model to drive further performance improvements.