UC Davis is developing a plan to streamline its future operations in human resources, information technology and finance. This week employees got a taste of what to expect—change, consolidation, and lots of both.

A report from the ScottMadden consulting firm states that a shared services approach at UC Davis will lower administrative costs and free up funds for academic endeavors, student services and high priority administrative initiatives. It will also make entry level jobs in HR, finance and IT more interesting and empowering. And, it will eliminate many of the frustrations that come with wading through complex policies and procedures that can bog down even simple transactions.

At the same time, campus leaders acknowledge that it is reasonable for employees to have questions and concerns about where they fit in for the long-run. In nine staff forums over nine days, Karen Hull, associate vice chancellor for Human Resources and leader of the shared service center implementation, addressed the question on everybody’s minds: How likely am I to lose my job?

“The model implies staff reduction, yes. How much? I can’t answer that definitively at the moment, but when we do know, we will be very open about it,” Hull said at the Aug. 16 meeting for Administrative and Resource Management employees. She later stated that the ScottMadden model makes reduced staffing possible by better technology, simpler processes and clearer policy. The impact is difficult to predict because a number of decisions about the business model remain to be made.

“There are still many unknowns,” Hull added.

Key questions remain

Hull noted that Chancellor Linda Katehi and her cabinet have endorsed moving ahead on the concept of establishing a shared service center. Finance, human resources and IT functions in five administrative divisions will be included in the initial implementation. The five divisions are ARM, Information and Educational Technology, the Office of the Chancellor and Provost, Student Affairs, and University Relations. The Office of Research will also participate, but in a subsequent phase of integration.

The question now is, in what time frame will be plan be phased in, and exactly how will it be done? In the coming weeks, employees will learn more about this, as the chancellor’s cabinet is expected to finalize the implementation strategy, determine the shared service center recruitment strategy and confirm their level of commitment to technology investments.

Report's recommendations

The ScottMadden report recommends that the campus establish a single shared service center for administrative units with one leader overseeing its HR, IT and finance functions. It recommends creating all shared service center jobs afresh—new job classifications and new position descriptions—then filling them with the most qualified individuals based on a competitive application process. (In organizational development parlance, this is known as the “zero-based” hiring approach.)

An alternative hiring strategy (referred to in the report as “targeted selection”) would be to reassign current employees to equivalent positions in the shared service center, filling only newly defined roles by competitive application. Regardless of the recruitment method, UC Davis employees in the divisions moving to shared services would be given preferential and equitable consideration for shared service center jobs.

As for technology, the report recommends a significant investment in systems to automate routine transactions, enable self-service, improve work-flow, document handling and case management, and make better information available to employees and customer service providers. In the financial area, UC Davis has a bit of a head start because we are in the process of implementing the Kuali Financial System to replace DaFIS.

There is also a systemwide initiative to implement a new payroll system. The ScottMadden recommendation is to expedite the Kuali project and also implement an HR information system and a time and attendance system that directly feeds into PPS. Academic departments will also benefit from these technology upgrades and business process improvements.

Timing is approximate

Timing recommendations in the ScottMadden report are based, in part, on technological readiness. Finance transactions would move in Stage I because the technology implementation has already begun. (The first module of the Kuali Financial System has just launched.) In addition, accounting processes are highly transactional in nature and easiest to convert to the shared service model. HR functions would move in Stage II, followed by IT in Stage III. Holding IT until Stage III would make IT resources available to work on technology needs in Stages I and II.

The ScottMadden plan proposes a three-year time frame with completion of Stages I, II and III in 2013. The timeframe for implementation is approximate.

“We have some hurdles to overcome, like building an HR information system from the ground up,” said John Meyer, vice chancellor for Administrative and Resource Management and co-chair, with the chancellor, of the Organizational Excellence Steering Group. “There is a long trajectory from now to a fully functioning shared service center, and a lot can happen to influence the implementation.”

The case for shared services

The ScottMadden report makes the case that the cost of doing business at UC Davis right now is significantly higher than national benchmarks. They project net annual operating cost savings of $9 to $16 million beginning 2013-14. This level of savings is achieved through technology, streamlined processes and standardized approaches to business functions.

Staff members naturally fear the impact to their jobs. The shift to shared services will be mitigated by attrition, and administrative departments have been holding open positions in anticipation of the migration to shared services. Campus leadership is also committed to minimizing the impact to staff. Specific programs are being developed with this goal in mind.

“Organizational Excellence is about how we control our own destiny with less support from the state,” said Meyer. “It’s about giving people better tools to do their jobs when they’ve been limping along with systems that are dated and don’t talk to each other. We are going to take the best ideas from this report and adapt them to fit our campus.”

Responses to employee feedback and questions about the initiative are on the Organizational Excellence Website: oe.ucdavis.edu