Since October 2013, one of the most contentious administrative issues on campus has been Shared Services — an initiative that will centralize the University’s finance, human resources, procurement and information technology services in an attempt to save more than $30 million per year.
The centralization will likely eliminate 500 university jobs, primarily through natural attrition and retirement. When Kevin Hegarty, the University’s executive vice president and chief financial officer, first addressed the shift to Shared Services last year, these lost jobs seemed to be the most controversial aspect of the proposal, at least in the eyes of students. Soon after, though, faculty and students alike pointed to other concerns, including the hefty price tag of the implementation — up to $180 million combined for both Shared Services and switching to a new business-management software system — as well as the University’s decision to hire consulting firm Accenture to assist with the project’s implementation.
The University’s decision to hire Accenture has been a heated issue because of the close relationship many of the individuals on UT’s Committee of Business Productivity have with the firm, as well as Accenture’s involvement in past mishaps in the public sector. As the Daily Texan has reported, the committee chair, Stephen Rohleder, served as chief executive of Accenture’s Health and Public Service division. The subcommittee that recommended that UT’s operations be centralized into shared services was chaired by Stephan James, a 38-year Accenture veteran. And three of six people on the Shared Services Steering Committee are Accenture employees, with one being a former Accenture executive.
As for Accenture’s contentious history, in 2006, a Texas Medicaid and Children’s Health Insurance Program run through Accenture encountered so many problems, including long-wait times for callers and unreceived medical benefits for children, that the contract was canceled prematurely.
According to Hegarty, who spoke to the editorial board about Shared Services on Thursday, the University hired Accenture to implement the beginning stages of Shared Services because the consulting firm had an existing contract with a Texas agency, and the University could easily latch onto the same contract without having to initiate a competitive bidding process separate from the one that had already occurred. Yes, as Hegarty repeatedly said Thursday, this action was a completely legal one. But we don’t believe the legality of the decision makes it any less an example of partiality on the part of UT officials.
Friday, more than 300 students protested against the University’s relationship with Accenture, despite the fact that the campus was closed for winter weather. The protest’s goal was to encourage the University to terminate its relationship with Accenture. Anne Lewis, a senior radio-television-film lecturer who spoke at the rally, told the Texan editorial board that her biggest concern about UT’s relationship with Accenture lies in the “DNA alteration of the University we love and value in support of a corporate project. … This is worrisome because we are using a private model for a public institution; there’s a great deal of money going into this and the published figures are incorrect.”
In other words, Lewis believes that “both the model and the specific company are troublesome.” To remedy the situation, both Lewis and Bianca Hinz-Foley, Plan II junior and a spokeswoman for United Students Against Sweatshops (a student group that took part in the protest), want the University to terminate its relationship with Accenture. But that’s both unlikely and unreasonable.
The truth is Shared Services is not and should not be an issue. Given the University’s current budget shortfall, it may very well prove to be a reasonable, timely and cost-saving initiative. With rapidly declining state funding and a freeze on tuition, it’s imperative that the University consider cutting costs in administrative areas, rather than cutting back on the quality of education that it provides students. And in regard to the new ERP system: It’s about time. Our current system is 25-30 years old. For technology, that’s ancient.
So yes, UT needs to spend the money on an updated system. UT needs a Shared Services model. But that doesn’t mean everything in this arrangement is kosher.
As Hegarty said repeatedly, “The devil’s in the details.” The details indicate that hiring Accenture without a separate competitive bidding process was inappropriate; a separate bidding process would have insured that no nepotism was at play in hiring the firm responsible for implementing Shared Services. Although paying for Shared Services or the ERP system won’t cut into our University’s operating budget now, it easily could if something goes wrong. After all, the money has to come from somewhere.
Shared Services and the much-needed ERP upgrade should benefit the University, both in terms of efficiency and profitability. But, by not competitively bidding out the contract for the Shared Services implementation, the University has increased the risk, however small, that the system or the ERP software isn’t the best one for UT. This irresponsibility is the main issue at hand, and it’s one that should not be acceptable.