How to Save $75 Million

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Chancellor Robert Birgeneau will decide whether a major overhaul is in store for the campus as per a long-awaited report released Monday as part of the controversial Operational Excellence initiative.

The project, launched last October, has drawn criticism due to the involvement of consulting firm Bain & Company, which will cost the campus about $3 million in total for their services. For months, students, faculty and administrators worked alongside the firm to analyze the inner-workings of the campus community in an effort to cut costs.

The final report calls for restructuring campus units, which could save between $75 million and $100 million. The report identified five main campus components that could be reorganized or consolidated to achieve such savings-the procurement of supplies, the structure of student services, energy management, the organization of information technology and the structure of supervisory roles.

Birgeneau will decide by early May which recommendations to implement, according to Claire Holmes, associate vice chancellor of public affairs. He will then form groups for each of the categories that will decide how to implement the recommendations and whether any layoffs would ensue.

The report recommends the creation of a program management office to oversee the process of implementation following Birgeneau's decision.

Holmes said more analysis must be done before the extent of restructuring is known, including the possibility of staff cuts.

"We have to look at the different layers of the campus, but that doesn't necessarily translate to layoffs," she said. "A fair amount of our population is retirement-ready. ... Sometimes people decide this is not the direction they want to go and they decide to leave."

-Emma Anderson

1. STUDENT SERVICES

The readjustment of student services could save the campus $15 million to $20 million, according the report, but may require the resizing and consolidation of campus programs such as the ASUC Student Advocate's Office and the Center for Student Conduct and Community Standards.

The report found that the campus spent more than $220 million last year on about 50 student services ranging from housing to student advising.

Results of surveys sent to students and alumni were used to determine whether individual student services needed to be resized, evaluated, maintained at the "lowest possible cost" or provided with the "best-in-class" service to meet student demand. Services that are found to be "overlapping" may be consolidated.

The report also considers the outsourcing of housing, dining and child care to outside providers, similar to a practice used by institutions such as Stanford University and Cornell University.

"The thinking is that universities are really good at teaching and learning and research and may not be experts on housing and dining and child care," Holmes said. "It's an observation that other universities have done the same, not a recommendation."

-Emma Anderson

2. PROCUREMENT

By standardizing how departments purchase supplies, the campus could save another $20 million to $40 million, according to the report.

Over time, departments have gravitated toward individually utilizing more than 18,000 vendors for a wide range of purchases, from office supplies to research materials. The report proposes to implement campus-wide standards to reduce the number of vendors to obtain the lowest possible prices.

To make purchasing easier and more efficient, a program called e-procurement-an online resource that tracks business-to-consumer purchases and sales of supplies-could be used to help in an overall restructuring of the procurement organization.

Strategic sourcing could be an overall positive enhancement to procurement options on campus, but Graduate Assembly President Miguel Daal, a member of the Operational Excellence Steering Committee, said it could mean employees may not be able to purchase items from their favorite vendor.

"Some are buying test tubes with lips on top ... some are buying test tubes with no lips because they don't want them," he said. "People might say that hell freezes over if there is no lip on their test tube."

-Katie Nelson

3. OPERATIONAL SIMPLIFICATION

The report states that the campus can save between $40 million and $55 million by improving efficiency within administrative organizations.

The campus can cut costs by consolidating common administrative services between different units-including University Health Services, museum services and the executive vice provost's office-as well as increasing the ratio of employees reporting to supervisors.

According to the report, 55 percent of supervisors on campus, totalling about 1,000 employees, currently have three or fewer employees directly reporting to them. Additionally, 471 supervisors only have one direct report.

"We have a lot of layers and this isn't to say people aren't working hard ... but that's not in line with standards; it's not a very efficient way to run an organization," Holmes said.

Increasing the employee-to-supervisor ratio could require combining similar services, eliminating supervisor positions or automating services.

The campus will provide career planning workshops and support groups if layoffs are found to be necessary due to consolidation, the report states.

-Javier Panzar

4. INFORMATION TECHNOLOGY

Consolidating and standardizing information technology services could save the campus between $10 million and $16 million, according to the report.

The report recommends standardizing systems used by IT support units, centralizing servers under a central data center, outsourcing IT functions such as printer and copier maintenance to outside providers and developing technology standards such as uniform computer models for administrative staff.

According to Shelton Waggener, associate vice chancellor for information technology and chief information officer, reforming IT services would not only lower costs incurred by the department but also facilitate the campus's ability to adhere to other recommendations presented in the report.

While the report recommends several proposals indicating consolidation of the department's services, Waggener said staff size will not likely be reduced. He said IT officials will focus on increasing the effectiveness and efficiency of existing services.

"There's more than enough demand for the existing staff; we have lots and lots of demand for IT services," Waggener said. "We just want to get more for every dollar we're spending."

-Mihir Zaveri

5. ENERGY

Though the report's recommendations surrounding energy management on campus provide the smallest cost-saving benefit-between $3 million and $5 million-compared to the other areas addressed in the report, the measures could provide for the hiring of additional staff.

According to the report, energy consumption is not systematically measured across campus, and buildings with similar uses-such as teaching and research-vary significantly in their consumption levels.

These inefficiencies may make it difficult to implement any widespread energy-saving programs, the report states.

A lack of specialized staff, not funding, inhibits the campus from being able to pursue energy-saving programs, the report states.

The report also proposes an establishment of an incentive-based system to reward reduced energy consumption and increase accountability.

Energy infrastructure improvement projects such as installing energy meters and reporting systems may also be in store for the campus.

Other recommendations include hiring management staff on a project-by-project basis, increasing real-time consumption feedback and designing a support plan to assist buildings in energy usage reduction.

-Mollie Bloudoff-Indelicato

Tags: OPERATION EXCELLENCE


Contact the news desk of The Daily Californian at [email protected]



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