Spending In Order to Save: Campus Seeks Efficiency
Thursday, August 26, 2010
Category: Special
With the onset of the fall semester,
the private consulting firm Bain & Co.
will continue its ten month collaboration
with UC Berkeley to streamline
campus operations beyond its original
time span and despite the initiative's
cost.
Chancellor Robert Birgeneau and
other campus officials have lauded the
firm's efforts throughout the duration
of the project, dubbed Operational
Excellence, stating that an outside
viewpoint has allowed for a necessary
examination of the campus' overall
structure and operations. But some
argue that the consulting firm's presence
on campus is unnecessarily costly
and contrary to the character of the
public institution.
Originally hired for a time frame of
six-months at a cost to campus of $3
million, the firm began their assessment
of departmental structure and
operations in October 2009. When
the firm released its final diagnostic
report in late April, it suggested the
campus could save $75 million should
Birgeneau follow their recommendations.
Two weeks later, Birgeneau affirmed
the majority of the recommendations
in the report, which focused on five
cost-saving areas: student services,
procurement, operational simplification,
information technology and energy
management.
To implement the recommendations,
the administration will assemble
of a total of seven teams, two of
which - information technology and
procurement – have already been created.
As a result, Birgeneau has asked
Bain to continue through January
2011, costing the campus an additional
$1.7 million for the firm to assist in
the process.
"As with all other streams of work
in (Operational Excellence), we are
in the design phase of the work," said
Associate Vice Chancellor for Public
Affairs Claire Holmes in an e-mail.
"Each plan will ultimately be developed
by the department. It is just beginning
now."
This is not the first time that the firm
has assisted universities struggling
with budget problems. In 2009, the
firm was hired by both the University
of North Carolina at Chapel Hill and
Cornell University in their attempts to
achieve potential savings.
However, neither campus has disclosed
just how much money went into
their respective projects. UNC was
privately funded by an anonymous
alumnus, and Cornell has declined to
state how much money is being directed
toward their "Reimagining Cornell"
campaign.
The firm's last interaction with the
UC occurred in 1997, when the firm
was hired to asses cost-saving areas
within the university - ultimately, a
merger between the UC San Francisco
and Stanford University hospitals was
deemed appropriate. However, two
years later, the project collapsed and
was abandoned due to lack of financial
support on both sides.
Because the administration has decided
to invest more with the project,
students like sophomore Jonathan Ma
are concerned that while the firm's
professional opinion was a "plus" for
the campus in terms of their "track
record," the amount of money being
spent was substantial.
"I do think we have a strong chance
of saving $75 million, but I also think
that spending almost $5 million to do
it is a lot," he said. "I don't know what
the odds are of saving $75 million with
a firm or with students. In the end, I
think all of us would like that kind of
money but we are all unsure of the
odds."
Contact Katie Nelson at [email protected]
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