Facing opposition, Shared Services takes shape at UT


Photo Credit: Chelsea Purgahn | Daily Texan Staff

Administrators call the program a cost-saving, centralization initiative. Student protestors and some members of faculty council claim the plan will “dehumanize” certain University services, lead to an undetermined number of layoffs and increase the pressure on the staff who remain. Amidst the controversial claims, one fact is certain: as Kevin Hegarty, vice president and chief financial officer, told The Daily Texan in January, “Shared Services is not a matter of if, it’s a matter of when.”

The Committee on Business Productivity, a group charged with identifying ways for UT to cut costs, first introduced the idea of Shared Services in January 2013. Since then, the Shared Services Steering Committee has worked to determine how to implement the initiative on campus. The committee presented its final report and recommendations to President William Powers Jr. earlier this month.  

Since its introduction, Shared Services has been defined in many ways by different parties across campus, and the steering committee itself has undergone multiple roster changes at the request of student and faculty governance groups. Student protestors also oppose the involvement of Accenture, a consulting firm with a controversial history, in the plan’s development. Meanwhile, across the country, other universities have begun to adopt Shared Services plans — with varying levels of success. 

For administrators, Shared Services means cutting costs by centralizing services. At present, various colleges, departments and units across campus organize and deliver their procurement, finance, human resources and information technology services in different ways. According to Hegarty, 500 positions will be eliminated through the centralization process — ideally through natural attrition and retirement.

“Rather than Shared Services, it’s really sharing resources — sharing people,” Hegarty said. “We have people all over the campus, down to the department level, that do very similar activity. … These people do essentially the same thing. This whole concept is, if you amalgamate that work into fewer, more concentrated units, you achieve potentially a different result.”

According to the steering committee’s report, implementing Shared Services will cost the University approximately $35-$40 million. Each year thereafter, the University’s projected savings will sit somewhere between $30-$40 million annually, Hegarty said.

Some members of the UT community have voiced their concerns about the limited amount of hard data and evidence currently available to support the administration’s claims of increased productivity. The Faculty Council passed a resolution in January requesting more information about Shared Services and also asked the committee to add two non-administrative UT employees to its ranks. After the resolution passed, one faculty member and one staff member were added to the committee. 

A month later, the Graduate Student Assembly also passed a resolution regarding Shared Services, requesting more information about the initiative and for a graduate student to be added to the committee. A graduate student was added to the committee after the resolution was passed.

“The issue isn’t with Shared Services; The issue is with the manner in which it’s being rolled out,” said David Villarreal, communications director and president-elect for GSA and one of the resolution’s authors. “The only thing we really need is our involvement. At the end of the day, we’re not trying to stop Shared Services in its tracks. We’re just saying, as it’s being developed, let us know what’s going on so that we know and so that we can be part of the conversation.”

Villarreal said he is concerned about the projected elimination of 500 positions.

“[Hegarty] has outlined a plan that explained how this would happen, under the assumption that those 500 jobs would be voluntarily eliminated within an extremely short calendar,” Villarreal said. “If he had given a more realistic plan and one that just didn’t paint the rosiest of pictures on the job loss, I would probably have helped him and supported him at the end of the day.” 

According to Hegarty, UT already lays off 150-200 individuals every year. Hegarty said individuals criticizing the plan do not understand that the University’s current business model is not sustainable.

“We’re getting starved on the academic end for dollars to hire teachers and retain people,” Hegarty said.

In February, hundreds of students, university employees and community members marched on campus against the Shared Services Plan. Bianca Hinz-Foley, Plan II junior spokeswoman for United Students Against Sweatshops, said she is primarily concerned with Accenture’s involvement in the Shared Service initiative.

As well as assisting in the project management of the Committee on Business Productivity, Accenture also played a role in collecting data for the steering committee. According to Hegarty, the combined cost of these services amounted to more than $4 million. Two members of the Committee on Business Productivity and one member of the steering committee are former Accenture employees.

“Some of the big movers and shakers behind the Shared Services Plan at UT are either current or former Accenture executives,” Hinz-Foley said. “That’s troubling because we want the University to make changes the community wants and not something an outside corporation wants to implement.” 

In 2006, the legislature outsourced the call centers for the state’s food stamps and Medicaid programs to Accenture in an effort to save money. The state terminated the contract in 2007 after issues with technical operations led to problems with benefit distribution. According to a report from the Austin-Statesman in 2009, the state of Texas paid Accenture approximately $243 million for their services.

UT is not the only university with ties to Accenture. The University of Michigan has an approximately $11.7 million contract with Accenture for cost-cut consulting, including Shared Services. Since 2003, the University of Michigan has paid Accenture a total of about $19.4 million, according to documents provided by Michigan spokesman Rick Fitzgerald. 

“We used Accenture, the consulting firm, to help us identify areas [conducive to shared services], how much we might save, what the scope of the operations that could be pulled into a shared services operation — so that’s been going on for a couple of years,” Fitzgerald said.

In November 2013, approximately 1,000 faculty members signed and submitted a letter to Michigan administrators, criticizing the centralization efforts. Fitzgerald said Michigan’s plan for implementing Shared Services was altered as a direct result of this sort of feedback from faculty.

“What we found as we started rolling this out is that the campus community, primarily the faculty, didn’t really have enough information about how [shared services] would be working,” Fitzgerald said. “We learned that we needed to slow down the process and make sure we gave the schools and colleges more time to figure that out.”

The University of California-Berkeley is currently in the process of finalizing the implementation of shared services on their campus. According to Berkeley spokeswoman Melanie Hurley, Campus Shared Services, which was launched in January 2013, currently provides business and financial services to 60 percent of the campus. 

Hurley said Campus Shared Services was developed through more than 20 “work groups” on Berkeley’s campus. 

“Throughout implementation, the team has relied on campus work groups made up of staff, faculty and students who collaborate with [Campus Shared Services] staff to identify the most effective processes for Berkeley,” Hurley said in an email. 

According to Hurley, savings will not actualize until the 2016 fiscal year, when Berkeley will see $6.9 million in annual savings. Hurley said, by 2020, annual savings are predicted to increase to $13.7 million.  

At UT, Hegarty said the end goal of Shared Services is to ensure that the University can operate efficiently.

“We want to minimize administrative costs to maximize investment in our core missions,” Hegarty said. “We’re not in the business of just doing administration for the sake of doing administration. We’re not in the business of just employing people for the sake of employing people.”