The case against UT's Shared Services Plan

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President William Powers Jr. speaks in the Avaya Auditorium in January. He called for increasing UT’s efficiency by cutting costs.

Photo Credit: Pu Ying Huang | Daily Texan Staff

On Jan. 29, 2013, President William Powers Jr. gave a speech called “Smarter Systems for a Greater UT,” which announced a report written by the Committee on Business Productivity, which consists of 13 business leaders, about how to increase revenue. The recommendations ranged from increasing food and parking costs to layoffs and downsizing.

Since then, UT has rolled out one of the report’s proposals: the “UT Shared Services Plan.” Shared Services consolidates essential administrative functions such as IT, HR, Finance and Procurement into one administrative organization, displacing localized personnel devoted to providing these services to departments and other units. Although UT Chief Financial Officer Kevin Hegarty has been telling a happy story about this plan, members of the UT community should be alarmed for the following reasons:

Shared Services is expensive and risky. UT, under the guidance of recommendations from the consulting and outsourcing firm Accenture LLP, plans to spend more than $150 million over 10 years to consolidate and to reduce its workforce by 500 people in IT, HR and Finance over the next five years. The projected net benefit is only $120-$140 million over the 10-year period. The proposal presents no measures of likely success or failure. We urgently need a transparent discussion of the plan’s risks.

Shared Services is not transparent. Accenture was paid $960,000 for the work they did to produce a report that relies on undisclosed research. The committee, chaired by Steve Rohleder, an executive of Accenture, also has representatives on the Shared Services implementation committee. The University must make public the extent of Accenture’s involvement and how much the company stands to gain. 

Accenture is a bad choice. In 2005, the state of Texas awarded the company an $899 million contract to operate the state’s food stamp authorization system (along with oversight of the Children’s Health Insurance Program and Medicaid enrollment call centers), which they tanked, leaving thousands of Texans unable to feed their families. In 2011, Accenture was sued for defrauding the federal government in a boondoggle that cost taxpayers millions. What’s in store for us?

University workers do not like Shared Services. Four years ago, Shared Services was implemented with Accenture at Yale, and contrary to what Hegarty might tell you, professors, staff and students have protested its effects, including the loss of department administrative personnel and the doubling of work for employees who remain. 

We can raise our voices. The Texas State Employees Union, which includes faculty, staff and graduate student employees, opposes this cloakroom plan because it takes away jobs, involves a scandalous corporate privatizer and entails great expense and financial risk.

We call on UT to release all data related to the plan including an itemized list and timelines of specific job classifications which will be eliminated, an itemized list and timelines of the specific jobs which will be consolidated, including salary levels, and an itemized list of projected quarterly expenses/investments and savings/profits over the next 10 years. TSEU is further calling on UT to give employee and student groups (including TSEU) representation on the “Shared Services” planning committees and make committee meetings open to the public as well as release recordings and transcriptions of these meetings.

We invite readers to an information session with UT alumnus and scholar Richard Ovetz, “Shared Services and Other Bad Ideas,” on Thursday at 7 p.m. in Room 3.124 of Sid Richardson Hall (LBJ School). The talk will be introduced by Democratic Texas State representative Elliot Naishtat.

Tallman is a graduate student in linguistics, a member of the UT Graduate Student Workers and the Texas State Employees Union. Cloud is an associate professor of communication and of rhetoric and writing.