Combining resources to achieve lower costs and enhance service is the aim of the new U-M Shared Services Center, slated to open in April 2014.
The goal is easily stated, but its realization has required nearly four years of planning and should bring savings of $5 million to $6 million in the first few years with increased savings expected over time.
The effort is part of the university’s overall strategy focused on cost containment to keep U-M affordable to students, and to protect resources for the university’s core missions of teaching and research.
“The savings will be achieved by combining the more than four million finance and human resource transactions conducted each year in units across the Ann Arbor campus into a single facility staffed by some of the university’s most knowledgeable employees at conducting this work, and at troubleshooting the situations that can complicate these processes,” said Alfred Franzblau, vice provost for academic and budgetary affairs.
“Long-term savings will come as the result of a reduction over time in the total number of people necessary to conduct the work, gains from efficiencies and new technology at the Shared Services Center and the efforts of units to re-engineer some of their processes.”
University administrators expect co-locating staff to bring several other related advantages, including concentrated expertise, streamlined processes and easier collaboration among the staff as the new team begins conducting high-volume HR and finance work on behalf of the university’s 44,000 employees.
The migration of work and employees from campus units to the Shared Services Center will occur gradually, starting in April 2014.
Associate Vice President for Human Resources Laurita Thomas explained that about 325 staff members would be directly affected as responsibility for that work moves to the Service Center.
“As that occurs, new jobs will be created in the Shared Services Center, which will ultimately house about 275 finance and human resource professionals,” Thomas said. “We expect retirements and attrition to narrow the gap between Service Center jobs available and the number of candidates in the pool for those jobs.”
Staff jobs in the SSC will not be posted until all candidates have been considered. Supervisory and management positions will be posted, and internal candidates may also apply for those roles in addition to staff jobs.
Even though this transition will bring long-term benefits, Thomas said administrators recognize the learning curve ahead.
“Our collective experience with large change processes on campus tells us that we’ll encounter unexpected challenges and we’ll have to work together for solutions,” Thomas said.
“But this process has been planned in conjunction with leadership from across the campus, including representatives from each campus unit, and their collaboration has been critical to identifying processes and staff that are candidates for the Shared Services Center, creating new job descriptions, thinking about work flow, job training and much more essential thinking as we planned for the change.”
Thomas said it’s an exciting opportunity to build a new community of Service Center professionals with attention to collaborative workspace, workplace culture, and career development opportunities that can support a new way of delivering services to campus.
“Putting the university in the best possible financial position to deliver on our core missions is our top priority and motivation for changes like this,” said Rowan Miranda, associate vice president for finance.
“We’ve studied our own pattern of processing these kinds of transactions at U-M as well as existing shared service operations at other universities and state governments, and we have a rare opportunity to enhance service over time as we reduce overall cost.”
Miranda explained that the university’s approach to cost containment is comprehensive. Other efforts include streamlining information technology, strategic sourcing for procurement and more efficient use of space to reduce the need to construct additional buildings.
“These are critical efforts to support U-M’s success. The more we reduce expenses against the general fund, the more resources we have to apply to the educational mission and tuition control,” Miranda said.
State appropriations for U-M have declined by more than 50 percent on a per-student basis, adjusting for inflation, over the past decade. Yet, comprehensive cost control and reallocation strategies have recently allowed U-M to set the lowest tuition increase in nearly 30 years, increase centrally awarded financial aid and hire 100 junior faculty members.
The new Shared Services Center will be located on Victors Way near I-94 and South State Street. Staffing will occur in three waves as specific HR and finance process are moved, beginning in April 2014 when the center opens for business. The next two waves are planned for July and October when ultimately as many as 275 finance and HR professionals will provide services to campus.