Spending In Order to Save: Campus Seeks Efficiency

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."

Tags: