Shared services will help UT do more work more efficiently

Kevin Hegarty

For more than two decades, state funding at the University of Texas at Austin has been in decline, shrinking from 47 percent of the University’s budget in 1984-1985 to only 13 percent today. Although tuition has risen, our undergraduate resident tuition remains low, ranking second lowest in 2012-13 out of a 12-institution national comparison group.

Overall, this has led to a flat, if not declining, revenue base to cover the costs of operating the University.

With a strained revenue base, the need to raise salaries in order to attract and retain the best talent has meant that, for the past several years, the University has reduced administrative positions. We have reallocated the dollars saved to those who remain, while, in turn, asking them to work harder.

Breaking this unsustainable cycle by rethinking how we deliver administrative services to our campus is my principal motivation for asking the campus to embrace sharing services in the highly transactional process areas of finance, procurement, human resources and information technology.

Shared services was a primary recommendation made by the Committee on Business Productivity, as outlined in its report, “Smarter Systems for a Greater UT.” I am appreciative of the work done by the group, and we have used the report as a starting point from which we have undertaken our own study and review.

Through our review and in speaking with other institutions that have implemented similar processes, we determined that shared services can benefit our campus. Should we move forward to the design and implementation stages, this would mean that some administrative positions would move from the college, department and unit level to a Shared Services Organization.

By sharing services, which will be assisted by new technology, I believe it is possible to reduce our administrative workforce by 500 positions over a four- to five-year implementation period. With attrition rates of 12 to 13 percent among our administrative staff of 12,000 employees, we believe we can achieve this without layoffs, and that is our goal.

Once fully realized, shared services and the implementation of our new administrative systems are expected to save the University $30-$40 million annually, forever.

I have begun using the term “in-sourced shared services” to let the campus know that work currently being done by UT employees will continue to be done by UT employees. Shared services is not outsourcing.

Although outsourcing can be appropriate in certain cases, it does not make sense for shared services. We want UT employees delivering shared services to UT employees. To me, our community and its love for this University is our “special sauce,” and I believe we will serve our constituents better with a staff that understands who we are.

I encourage our campus community to join those of us who believe changing the way we deliver administrative services will benefit our campus. And I will remind those who are working against us that doing nothing is a recipe for the decline of the University and will lead to others outside the University imposing actions upon us.

I’m happy to meet with any University group of any size — even if that means a small group of coworkers who join each other for lunch. I want to help answer the question of what shared services will mean for you, and I’ve found that meeting in person is the best way to answer that question.

General questions can be sent to [email protected] We have responded and will continue to respond to every email we receive.

I believe we all want the best for our University, and I hope that this will unite us as we engage in thoughtful dialogue concerning these issues.

UT-Austin will host its second town hall on shared services Friday at 10 a.m. in POB 2.302 (AVAYA Auditorium). For those unable to attend, the town hall will be webcast as well.

Hegarty is UT’s Chief Financial Officer.