It began simply enough. Chancellor Mark G. Yudof approached Dr. Scott C. Kelley,
executive vice chancellor for business affairs, with a value-added philosophy of
sharing resources between institutions of The University of Texas System. Yudof
and the UT System Board of Regents were looking at ways to consolidate business
functions — where appropriate — to add value and better standardize processes and
reports. From that basic concept the Shared Services Initiative was born, and in
less than one year the UT System has already realized millions from actual and
projected savings as well as new revenue.
The Board first approved the initiative in October 2006 as a means of consolidating
redundant information technology and business services in areas with multiple
institutions in close proximity. Kelley, working with consultants from Deloitte &
Touche, recommended the shared services model as a way to encompass these issues in
a best practices approach. The model is about more than just centralizing services;
it allows for shared governance and permits greater flexibility.
The initiative is organized around three basic types of shared services: information
technology (data center consolidation), business systems (software applications) and
business processes.
The first component of the initiative is the creation of three regional data centers:
one at UT Arlington, one in Houston under the direction of UT M. D. Anderson Cancer
Center and one at UT Austin. Each center will be integrated into the operations of a
campus data center, provide high-reliability data center space for all 15 campuses
and the UT System, and minimize increases in operating costs. In addition, the
centers will provide secure data backup, disaster recovery and business continuity
and allow for consolidation of institutional primary data centers as appropriate.
In October 2006 the Board authorized the use of $8 million toward the joint
implementation of a PeopleSoft Student Information System — recently installed at
UT Arlington — on the UT Dallas and UT Tyler campuses. This pilot project is
expected to save 25 percent in implementation costs (compared to separate campus
implementations), lower ongoing maintenance costs, facilitate upgrades and reporting
and provide key information on how the UT System might proceed with future consolidations.
A long-term strategy is being explored to combine the multiple finance systems used
by System campuses into just two financial systems, one for the nine academic
institutions and one for the six health institutions. A plan for the eventual
consolidation of accounting and finance systems should be ready by summer’s end.
Richard St. Onge, assistant vice chancellor for health affairs, has led an effort to
explore an increased use of joint purchasing and supply chain management among the
health institutions. Results from a pilot project showed an annual savings of 14
percent — or $1 million — and projections suggest annual savings of more than $20
million by the end of fiscal year 2008.
Under the direction of Arjuna Sanga, associate vice chancellor for technology transfer,
institutional executives have begun to think innovatively about ways to collaborate.
Institutional partnerships could enhance and accelerate efforts to transform research
into products and services. UT Health Science Center-San Antonio, UT San Antonio, UT
Pan American and UT Brownsville have created an alliance that combines two technology
transfer offices and provides resources that can be shared across four institutions.
This allows smaller institutions to gain access to resources, infrastructure and highly
skilled technology transfer personnel of the larger institutions.
The Shared Services Initiative will continue indefinitely and is a model that will be
used for numerous projects in the future. Although this type of program has been used
extensively and successfully in industry for some time and has recently been finding a
place in government, it is still very new to higher education and the System is at the
forefront with its implementation at a large university system. Through the benefits of
shared services — cost savings through economies of scale, improved processes through
standardization and common data definitions and the application of best practices
throughout the System — the initiative has already proved quite valuable. According to
Kelley, "Through shared service activities we have been able to add over $250 million
of value to the UT System institutions."
