Kevin Hegarty

From left, Tom Gilligan, dean of the McCombs School of Business, and Robert Hutchings, dean of the LBJ School of Public Affairs, will step down at the end of the semester, according to a blog post  by UT President William Powers Jr.

Two UT deans will step down at the end of the semester, according to a blog post released Friday by UT President William Powers Jr.

Robert Hutchings, dean of the LBJ School of Public Affairs, and Tom Gilligan, dean of the McCombs School of Business, will be stepping down from their positions, Powers said in the post. The two will join Roderick Hart, dean of the Moody College of Communication, Kevin Hegarty, UT’s vice president and chief financial officer, and Powers in leaving the University at the end of this term.

It is likely the new deans will be named by the next UT president, according to University spokesman Gary Susswein. The next president will be announced in March, according to a UT System timeline.

“Broadly speaking, I think anytime there’s a leadership change in an organization, you see turnover like this,” Susswein said. “Whether it’s Dean Gilligan, or Dean Hutchings, or Vice President Kevin Hegarty who is leaving, you know these are people who have been at UT Austin for a long time and have contributed a lot.”

Gilligan, who could not be reached for comment on his decision to step down, helped shape McCombs into the high-ranking business school it is today, Susswein said. 

“McCombs is one of the best business schools in the country and, especially among public universities, is one of the top, and a lot of that is because of what Dean Gilligan has brought there in terms of developing new programs, in terms of making sure that we have the top faculty and the top students and even in terms of facilities,” Susswein said.

In an email sent to faculty and staff, Powers said Gilligan has helped students prepare for the world outside of academia.

“He has attracted top faculty and students and fostered research that is central to UT’s intellectual climate,” Powers said in the email. “He has also built and expanded multiple programs that support industry while challenging students and preparing them to be leaders.”

Hutchings, who has been dean of the LBJ school since 2010, said that when he took the position as dean, he only planned to stay one semester. 

“We’ve done a lot during my tenure. I feel like I’ve achieved just about all the things we set out to achieve when I first arrived, and it’s been a pretty long agenda of issues and items, so I feel good about that,” Hutchings said.

Hutchings said he will be a visiting professor at Princeton University in the fall and a distinguished fellow at the Woodrow Wilson International Center for Scholars in Washington D.C. in the spring to work on a new book. Following his work at Princeton and in Washington D.C., he said he will return to UT as a faculty member in the LBJ School.

“It’s fairly traditional when a dean steps down, if he’s going to return to the faculty, the old dean leaves town to give a new dean a chance to sort of make his or her own imprint on the place,” Hutchings said.

Photo Credit: Chelsea Purgahn | Daily Texan Staff

Kevin Hegarty, UT’s vice president and chief financial officer, will step down from his position to become executive vice president and CFO at the University
of Michigan.

Mary Knight, associate vice president for finance, will serve as interim CFO until Hegarty’s position is filled.

Hegarty will make the transition from Texas to Michigan during this semester, pending approval from Michigan’s Board of Regents. His last day working on campus will be Feb. 26.

Since 2001, Hegarty has overseen finance, budget, real estate, information technology, open records, payroll and purchasing at UT. 

Mark Schlissel, president of the University of Michigan, spoke about Hegarty in a speech to Michigan’s Board of Regents.

“Mr. Hegarty is strongly committed to the role of public universities and brings a valuable combination of private sector and public higher education experience to the appointment,” Schlissel said. “I am confident he will serve our university well in meeting the challenges ahead.”

President William Powers Jr. said Hegarty has been a valuable resource to the University with regards to improvements in efficiency.

“Few people in our University’s history have served the campus with as much dedication and honor as Kevin,” Powers said. “He will be sorely missed and will always be a great friend. Kevin’s love for the Longhorns is exceeded only by his accomplishments improving the university, making us one of the most productive and efficient campuses in the nation and leading us through very challenging budget years.”

Hegarty has contributed to large-scale projects at UT, such as information technology, finance and procurement services and Shared Services, a plan to centralize the University’s human resources.

“If you look at any of the main initiatives that have happened at the University — things as big as the creation of the Dell Medical School — Kevin and his expertise [have] really been central to that,” UT spokesman Gary Susswein said. “This is a big loss for the university, but we wish Kevin well.”

Susswein said the search for Hegarty’s replacement will not begin until after the next UT president is in office.

Knight, who worked with Hegarty for the duration of his 13 years at UT, said she will continue to expand Shared Services while serving as interim CFO.

“We’ll continue to move forward with the Shared Services Initiative,” Knight said. “It’s currently in a pilot phase, so it has a relatively small impact on the campus as a whole.”

Knight commended Hegarty for his ability to work closely with faculty and administrators on campus.

“He’s got fabulous working relationships with the deans and the vice presidents and really has the attitude of ‘we are here to help with the academic and research mission, and we want to do our jobs well so that the mission of the University can be accomplished,’” Knight said.

After receiving harsh criticism from some students, faculty and staff members during the 2013-2014 school year, Shared Services has made some changes.

Kevin Hegarty, vice president and chief financial officer, said the pilot programs in the Office of the Executive Vice President and Provost and the College of Education look vastly different than the original Shared Services Plan first introduced to the UT community almost a year ago. 

The original Shared Services Plan, presented by the Shared Services Committee in October 2013, called for the elimination of 500 jobs and the centralization of University services such as finance, human resources and information technology services.

“The initial concept that we presented to campus was, ‘Let’s build a center, and, eventually, it’s going to have 500 people to provide all those services, and it’s probably going to be off-campus,’” Hegarty said. “That’s no longer the vision.” 

The Shared Services Committee held open forums on campus after releasing its plan for faculty and students to discuss and ask questions about the implementation of the program.

Hegarty said after engaging in these discussions, the committee decided to study different versions of Shared Services already being implemented by the McCombs School of Business and the College of Liberal Arts. After reviewing the results of these two programs, Hegarty said two pilot programs were created in the provost’s office and the College of Education.

“The implementation team went in and studied the provost’s portfolio,” Hegarty said. “[They] studied the College of Education, and they divided the implementation of Shared Services — what units get brought into the Shared Services center. We call it the Central Business Office, the CBO.”

The CBO, now located in the UT Administration Building on Guadalupe Street, used to be made up of small groups of people located in various offices on campus. Previously, the CBO provided services to small units, including the Office of the Vice President for Legal Affairs and other organizations that could not afford to have large staffs. 

Hegarty said the CBO began offering its services to the College of Education and the provost’s office about six to eight weeks ago, after the smaller offices merged into one.

While the provost’s office has seen positive results, Hegarty said some departments in the College of Education have been disappointed with the services they have received from the CBO.

“We knew purchasing volume rises dramatically in August, and we knew that in the first 12 days of class, there are a lot of [human resources] transactions going on — appointments of faculty and appointments of staff, etc.,” Hegarty said. “While we tried to staff up ahead of that, we didn’t have enough staff. The service levels came down below quite honestly what CBO expected and certainly below what the college had expected.”

Hegarty said, since this occurrence, the College of Education asked his office to no longer expand the school’s services to the responsibilities of the CBO until quality of service levels are back up to speed. According to Hegarty, there have been no layoffs as a result of Shared Services. 

“Where a position has been displaced, we’ve been able to offer an opportunity in the CBO or elsewhere on campus to make sure that person lands on their feet,” Hegarty said. 

Victoria Vlach, a course scheduler for the Asian Studies department, lost her job as a result of Shared Services. Through the creation of Centralized Business Services Office and the Liberal Arts Instructional Technology Services in the College of Liberal Arts, 500 jobs are being eliminated.

Photo Credit: Miriam Rousseau | Daily Texan Staff

Though Kevin Hegarty, UT executive vice president and chief financial officer, said no layoffs will occur in UT’s move toward shared services, centralization within the College of Liberal Arts has led to the elimination of multiple positions.

The centralized offices within the College of Liberal Arts are in no way affiliated with the University-wide move to shared services, but the Shared Services Steering Committee reviewed the college’s centralization before producing its report and recommendations. 

In February, Victoria Vlach, the course scheduler in the department of Asian studies, was told her position was being eliminated “because of restructuring for improved efficiency,” according to documents obtained by The Daily Texan.

Over the course of the last two years, the College of Liberal Arts has worked to centralize its administrative and technological services by creating offices meant to work with multiple departments in the college. Of the 44 departments and centers in the college, 14 now work through the Centralized Business Services office. 

The Shared Services Steering Committee considered the success of the College of Liberal Arts’ centralization when drafting their own plan to cut University spending through the centralization of human resources, information technology, finance and procurement services. Hegarty said approximately 500 jobs must be eliminated in the consolidation through natural attrition and retirement. 

Vlach, who has worked at UT for 18 years, said she had heard about layoffs happening in other centers and departments in the college, but, because of the size and complexity of her department, she did not think her own job would be affected.

“It was like being sucker punched, having the wind knocked out of you, being hit with a ton of bricks — pick a metaphor, and it applied,” Vlach said.

Christine Williams, sociology department chair, said she thinks the College of Liberal Arts has handled centralization incredibly well, but she is not
comfortable with a University-wide effort.

“I’m completely terrified of the possibility of it going to a University level,” Williams said. “Keeping it at the college level is very important, both in terms of the ability to communicate needs to the college and [the college’s] understanding of the kind of operation we’re running here. I think it would be really different if it was kicked up two levels of administration.”

William Pennebaker, chair of the psychology department, said the college laid off four IT staff members when his department consolidated IT services. He said centralization efforts could potentially ease the financial strain in a department.

“We’re under all sorts of pressure to reduce costs,” Pennebaker said. “If there’s a way to do something that will get the job done and it turns out it’s cheaper, you have to at least give it a try.” 

Vlach said the people who make the decisions about layoffs underestimate the human consequences of their actions.

“I think they forget,” Vlach said. “I really think they forget the human piece of it. Numbers are fine, but they cannot hold the value of an individual human action.” 

Vlach said she worries that small steps towards centralization will escalate to larger levels.

“You’re playing Jenga, only you’re only pulling out pieces from the bottom layers,” Vlach said. “How long is that going to last before the whole thing comes crumbling down?”

President William Powers Jr. endorsed the final report and recommendations produced by the Shared Services Steering Committee in a letter dated Monday. 

In the letter, addressed to the UT community, Powers said he expects Kevin Hegarty, vice president and chief financial officer, to carry out the change in a “thoughtful manner.”

“I thank the Shared Services Steering Committee, Vice President Hegarty, the campus leaders who have volunteered to participate in this next critical phase of transformation, and all members of the UT staff for the important work they do every day,” Powers said in the letter. 

As defined by Hegarty, Shared Services is a plan to centralize University services across campus. The plan outlines the elimination of 500 jobs — primarily through attrition and retirement, according to University officials — to centralize finance, information technology, human resources and procurement services.

The committee’s final report, endorsed by Powers, outlines the findings and recommendations produced by the committee through its exploration of Shared Services implementation at UT. 

In the report, the committee provided recommendations on how best to conduct a pilot version of implementation. According to the report, the committee will take a closer look at existing forms of Shared Services on campus, particularly those at the College of Liberal Arts and McCombs School of Business, as well as pursue test runs in colleges, schools and units that volunteer and have structures conducive to centralization.

Now that Powers has endorsed the plan, UT spokesman Kevin Almasy said the Shared Services project team will start meeting with pilot participants to begin developing a transition plan.

President William Powers Jr. endorsed the final report and recommendations produced by the Shared Services Steering Committee in a letter dated March 31. 

In the letter, addressed to the UT community, Powers said he expects Kevin Hegarty, vice president and chief financial officer, to carry out the change in a "thoughtful manner."

"I thank the Shared Services Steering Committee, Vice President Hegarty, the campus leaders who have volunteered to participate in this next critical phase of transformation, and all members of the UT staff for the important work they do every day," Powers said in the letter. 

As defined by Hegarty, Shared Services is a plan to centralize University services across campus. The plan outlines the elimination of 500 jobs — primarily through attrition and retirement, according to University officials — to centralize finance, information technology, human resources and procurement services.

The committee's final report, endorsed by Powers, outlines the findings and recommendations produced by the committee through its exploration of Shared Services implementation at UT. 

In the report, the committee provided recommendations on how best to conduct a pilot version of implementation. According to the report, the committee will take a closer look at existing forms of Shared Services on campus, particularly those at the College of Liberal Arts and McCombs School of Business, as well as pursue test runs in colleges, schools and units that volunteer and have structures conducive to centralization.

Now that Powers has endorsed the plan, UT spokesman Kevin Almasy said the Shared Services project team will start meeting with pilot participants to begin developing a transition plan. 

More information about Shared Services and campus feedback

Original article about the committee's recommendations

A committee of seven student leaders proposed a tuition increase of 2.6 percent for in-state and out-of-state undergraduate students to the president’s office Thursday, according to Student Government President Horacio Villarreal.

The decision was made in less than four weeks, after the UT System sent out revised instructions for the tuition proposal. Originally, the UT System said the committee could not consider an increase of in-state tuition. The committee also originally asked for a 3.6 percent increase for out-of-state undergraduate students.

The potential increase would raise the weighted-average tuition for undergraduates taking 15 credit hours from $4,899 to $5,026. Out-of-state undergraduate tuition would raise from $16,921 to $17,361 if UT System approves the proposal.

According to Thomas Melecki, director of student financial services, the University will allocate more money for need-based financial aid in keeping with increased tuition rates.

According to Kevin Hegarty, executive vice president and chief financial officer, the proposal has been endorsed by President William Powers Jr. and was sent to the UT System for approval Friday.

Hegarty said the proposal would generate $9.1 million in net revenue to campus. Twenty percent of the revenue would go toward financial aid for students.

“There are a number of categories of how the money might be spent,” Hegarty said. “Faculty salaries are a high priority.”

Senate of College Councils President Andrew Clark, who is a member of the committee, said the committee recommended a 2.6 percent tuition increase for out-of-state undergraduates, rather than the full 3.6 percent increase they were authorized to recommend, because of input from the town halls.

“Originally, what was on the table was an out-of-state increase of 3.6 percent, but we changed it to 2.6 percent because of the feedback at every forum we have that out-of-state tuition has been rising,” Clark said. “We wanted to do something to balance it out a bit. Obviously, 2.6 percent is still higher, but it’s a little bit of relief.”

Clark said the committee agreed to propose an increase for in-state and out-of-state tuition in order to keep the University competitive. 

“Tuition is the only source that we have direct control over,” Clark said. “Just to remain competitive, we need to ensure we have consistent sources of recurring funding.”

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.”

The Shared Services Steering Committee sent a report to President William Powers Jr. on Wednesday with recommendations for the implementation of the Shared Services Plan. 

Powers is currently reviewing the report, which outlined the findings and recommendations produced by the committee through its exploration of Shared Services implementation at UT. The original Shared Services Plan called for the centralization of a variety of University procurement, information technology, human resources and finance services at various colleges, schools and units. 

According to Kevin Hegarty, executive vice president and chief financial officer, the logistics of Shared Services have changed based on feedback from campus dialogue sessions. 

“One of the things that we’ve learned as we’ve gone through this dialogue phase on campus, and in looking at a number of experiments that are already happening on our campus, is that maybe the approach ought to be different across different units,” Hegarty said. “I do think that the transformation from where we are today to where we ultimately get, it can’t be done [immediately] — it’s not logical and it’s too risky to take one giant step from a very decentralized model to a very centralized model. Maybe you two or three step it.” 

The report included a list of five common themes the committee heard from campus dialogue sessions. According to information provided in the report, campus feedback consisted primarily of concerns about transparency and community involvement in the plan’s development and the potential impact of implementation on people working at UT. 

In the report, the committee provided recommendations on how best to conduct a pilot version of implementation. According to the report, the committee will take a closer look at existing forms of Shared Services on campus, particularly those at the College of Liberal Arts and McCombs School of Business, as well as pursue test-runs in colleges, schools and units that volunteer and have structures conducive to centralization. 

In the report, the committee said it will determine the success of a pilot based on whether the centralized services maintain or improve service quality, based on feedback it receives from faculty and staff within a particular college, unit or school and through monitoring the volume, accuracy and cycle-time of a centralized service. 

According to the report, it will be difficult for the University to see financial benefits from the pilot programs, but UT will work to establish an accurate estimate of savings based on the other information obtained in a pilot program.

In a post on his blog, “Tower Talk,” Powers said he is currently reviewing the recommendations submitted to him by the committee. 

“Change is never easy, but I believe we must share services across the campus for three reasons,” Powers said in his post. “To improve service, to improve career paths for our staff, and to reduce costs, allowing us to better serve our core missions of teaching and research.”

Graduate Student Assembly passed a resolution requesting more information about the Shared Services Plan at its meeting Wednesday. 

The resolution calls for the addition of one graduate student employee, selected by GSA president Columbia Mishra, to be added to the Shared Services Steering Committee.

“The main thing we’re really asking for is just [to] give graduate students a seat in this process,” said David Villarreal, communications director for GSA and the bill’s co-author.

The Shared Services Plan is a set of recommendations that calls for the centralization of University human resources, information technology procurement and finance services. According to University officials, the plan calls for elimination of 500 jobs, mainly through natural attrition and retirement. Before pursuing a full-scale implementation of the Shared Services Plan, the Shared Services Steering Committee will design and conduct a pilot version of the plan in specific University units. 

The assembly’s resolution also asks Kevin Hegarty, executive vice president and chief financial officer, to provide regular updates on implementation, information about centralized services that already exist on campus, specifics on management-consulting firm Accenture’s involvement and specific information about the process of a pilot version of the plan. The resolution also requests that Hegarty begin sharing information by the next GSA meeting March 5. 

In January, Faculty Council passed a resolution requesting more information about the plan and for two non-administrative individuals to be added to the Steering Committee. Hegarty responded to the resolution a week after it was passed by posting a list of the requested information online. In his response, Hegarty agreed to add two non-administrative individuals to the steering committee.