- What does “shared services” mean?
- What processes are being considered for shared services?
- Why is the University of Texas at Austin looking to implement shared services?
- (new) Why is shared services necessary? Can't we improve efficiencies at the unit level?
- Where can I find the Shared Services Update plan?
- How can I provide feedback?
- Does shared services mean that colleges, schools, and units (CSU) will no longer have control over HR, finance, procurement, and IT functions?
- (new) Will faculty have to take on more clerical work once shared services is implemented?
- Isn’t shared services really code for outsourcing?
- Will I lose my job?
- If an employee elects to join the Shared Services Organization, will their old position be replaced?
- (new) Will my salary remain the same if I move to the Shared Services Organization?
- Is there a particular Shared Services Organization already implemented at another institution or company that is the basis for what will happen at the University of Texas at Austin?
- (new) Where will the Shared Services Organization be located?
- (new) When will the Shared Services Organization be fully implemented? When will the savings be shared with the colleges, schools, and units?
- What about my area's specific culture and requirements? A centralized organization can't possibly meet our needs.
- Will this require process changes?
- (new) Are shared services and the new administrative system dependent upon one another?
What does “shared services” mean?
Shared services means sharing responsibility between organizations to complete a process or service, with different organizations owning different steps in the process. Some steps in the process or service that require local knowledge are owned by specific business units, while highly transactional steps requiring processing expertise are owned by a Shared Services unit that serves the entire organization. The Shared Services Organization is staffed and managed by resources from within the university community.
The Shared Services Organization focuses on providing customer service, improving operations, and reducing cost. Its governance structure provides shared oversight, and the community is encouraged to provide feedback to ensure service quality.
Public sector organizations (government agencies, local municipalities, etc.) have begun to adopt shared Services in recent years in order to make better use of taxpayer resources. Higher education institutions have only recently begun to adopt this approach to manage administrative work. Benchmarking Peers has links to similar efforts at campuses nationwide.
What processes are being considered for shared services?
Four functions are being considered: Human Resources (HR), Finance, Procurement, and Information Technology (IT). Within those areas, specific processes and services are being identified that are the best candidates for shared services.
Why is the University of Texas at Austin looking to implement shared services?
The University of Texas at Austin has engaged and will continue to engage in activities that reduce costs, increase productivity, and improve services. We are looking to gain the following advantages from implementing shared services:
Enable the university to focus its resources on its academic and research mission
Reduce administrative costs while increasing efficiency
Improve financial controls
Increase policy compliance and consistent governance
Improve customer service
Why is shared services necessary? Can't we improve efficiencies at the unit level?
As an institution that receives public support, UT Austin has an obligation to accomplish its educational mission as efficiently as possible. As state education budgets tighten, this obligation takes on a greater level of importance. Shared services is being developed with both of these facts in mind.
Specifically, for more than two decades, state funding at The University of Texas at Austin has been in decline relative to our budget, shrinking from 47 percent of the university’s budget in 1984-85 to only 13 percent today. Although tuition has risen, our undergraduate resident tuition remains relatively low and our goal is to keep it low. (UT ranks second lowest in 2012-13 out of a 12-institution national comparison group. When comparing state funding and tuition per student, UT Austin ranks last.)
Overall this has led to a flat, if not declining, revenue base to cover the costs of operating the university.
With a strained revenue base and a need to raise salaries to attract and retain the best talent, the university has a choice: It can cut positions in order to provide modest raises for those who remain to do the work (this is the path the University has been on) or, it can reorganize some of its workforce in a more logical and efficient way while simultaneously updating its technical systems, using some of the savings to provide better wages.
Over the past decade, the university has also taken steps to improve efficiencies at the unit level and will continue to do so. But due to the current economic climate, we must look at large campus-wide initiatives to recoup the greatest savings.
Where can I find the Shared Services Update Plan?
The UT Austin Shared Services Update Plan is available on the Transforming UT website. It can be downloaded here.
How can I provide feedback?
Does shared services mean that colleges, schools, and units (CSU) will no longer have control over HR, finance, procurement, and IT functions?
No. In a shared services environment, business processes are typically split between CSUs and the Shared Services Organization. The CSU will be responsible for initiating processes, approving transactions, and making key management decisions; while the Shared Services Organization will be responsible for completing the transaction steps.
Service level agreements ensure the Shared Services Organization is providing accurate and timely support to CSUs.
Will faculty have to take on more clerical work once shared services is implemented?
To the contrary, the goal of shared services is to improve service efficiency and quality without affecting the university’s mission of research and teaching. Although some administrative staff will move from the unit level to a Shared Services Organization, faculty should not have to take on added clerical work.
The staff who remain at the unit level will no longer be responsible for a number of transactional actions. They will continue to provide clerical support and will be free to assist with more unit-centric work that they were previously unable to accomplish within today’s decentralized system.
Isn’t shared service really code for outsourcing?
No. The University of Texas at Austin is planning for the implementation of a “Shared” Service Organization that will be staffed by university employees, not a “Managed” Service approach that is outsourced. The university is not looking to outsource the performance of administrative services to external third parties. More information related to Managed Services vs. Shared Services is available in the Resources section of the Transforming UT website.
Will I lose my job?
The experience of our current staff is invaluable, but it is a reality that in the process of consolidating functions and relocating staff that some positions will no longer be necessary. Implementing a Shared Services Organization will take several years to fully implement. It is our belief and hope that much of the reduction in positions can be achieved through natural attrition over the long transition period. While it is true that jobs can be affected, it is also important to look at the human benefit of having an organization dedicated to specific administrative functions. A Shared Services Organization can provide an enhanced career path and career development opportunities that may not exist in today’s university environment.
A common complaint of University of Texas at Austin employees that perform administrative functions is that they are unable to further their skills to pursue advancement opportunities inside and outside of the university. A Shared Services Organization could provide training and professional development that in many cases is not available for university employees today.
If an employee elects to join the Shared Services Organization, will their old position be replaced?
One goal of implementing shared services is to reduce administrative costs while increasing efficiency. Therefore, it will be important to manage changes in staffing as employees transition to a Shared Services Organization. If a staff member leaves their college, school or unit (CSU), the Shared Services Organization and the CSU will decide how best to manage the transition and whether or not the retained position should be filled, removed from the organization, or possibly reclassified to better meet the needs of the CSU’s mission.
There are a number of options available, including hiring temporary staff or leveraging staff in other areas. In the end, adding a new hire may be the right decision for the CSU, but it will be important to do the analysis and make a thoughtful decision.
Will my salary remain the same if I move to the Shared Services Organization?
Staff who accept a comparable position in the Shared Services Organization (SSO) will most likely not see their salaries decrease. In fact, it is our goal that staff in the SSO will have greater opportunity for raises and promotions due to increased career path opportunities.
Is there a particular Shared Services Organization already implemented at another institution or company that is the basis for what will happen at the University of Texas at Austin?
No. There is no “one size fits all” shared services model in public or private industry. The project team is currently planning for the design of a shared services model that will be customized to fit the university’s environment, needs, and requirements. Input from university staff will be part of the planning phase. Benchmarking Peers has links to similar efforts at campuses nationwide.
Where will the Shared Services Organization be located?
The future location of the Shared Services Organization (SSO) is still unknown. If the pilot phase of shared services proves successful and the university decides to implement shared services campus-wide, a decision on where to locate the SSO will have to be made. Currently, two options have been discussed:
1) Locate unused space or lease space near the UT Austin campus
2) Build or lease space in North or Northwest Austin, possibly on the Pickle Research Campus
Depending on staff commuting locations, it may be the case that working closer to home would be more important than working on the UT Austin campus. Staff preferences for the SSO location will be determined through a consultative process with the campus community.
When will the Shared Services Organization be fully implemented? When will the savings be shared with colleges, schools, and units?
Currently, the Shared Services Executive Steering Committee is meeting to define the parameters and participants of the pilot phase. Once that decision is reached, a set of final recommendations will be delivered to President Powers for his review before they are shared with the campus.
There is no timetable for the completion of the pilot or for campus-wide implementation of shared services. Following the pilot, there will be second campus review period in which the data gathered during the pilot phase can be discussed before a decision is made on whether or not to implement shared services campus-wide.
Should shared services be implemented across campus, the President and Provost will decide how best to distribute the savings.
What about my area’s specific culture and requirements? A centralized organization can’t possibly meet our needs.
University and project leadership are keenly aware of and understand the importance of the unique needs across the campus. It is the goal of the project team to design a Shared Services Organization that provides the necessary expertise to accommodate unique needs, while also leaving staff within the units that have local knowledge and capability to manage the functions that remain (within the units).
One example is in purchasing. There are many IT purchases on campus. The Shared Services Organization should have knowledgeable IT purchasers that can support IT purchases for the vast majority of units. However, there may be areas that will retain some local responsibility for more unique IT purchasing.
Will this require process changes?
Yes, it is likely that processes will be modified; however, processes that are uniquely necessary in a given college, school, or unit will continue to be performed locally. More information can be found on the Transforming UT website and the full Business Productivity Report.
Are shared services and the new administrative system dependent upon one another?
Shared services and the recently announced enterprise resource planning (ERP) solution are not dependent upon one another. It is important to understand that our current administrative system has reached the end of its life and needs to be replaced. This decision was made independent of any shared services recommendations.
That said, a new ERP system, which will provide modern technical assistance, will enable staff to work with greater efficiency, meaning that to maximize the benefits of shared services, implementation of a new ERP system is encouraged.