Shared Services at UT: Disconnect between assurances and reality

The administration at the University of Texas at Austin on November 15 held a public relations event on campus to hear concerns about the proposed Shared Services plan that if adopted would consolidate administrative services and eliminate 500 jobs at the university.

The questions that people asked expressed a deep sense of anxiety about the changes that the administration is proposing.

UT’s Chief Financial Officer Kevin Hegarty did his best to allay fears about Shared Services, one piece of a larger transformation project aimed at making UT operate more like a business.

Details of the transformation project were made public in January when a committee of 13 private business executives appointed by UT President William Powers issued a report entitled Smarter Systems for a Greater UT.

Among other things, Smarter Systems called for UT to privatize and consolidate a wide range of services provided by UT staff.

Just prior to the November 15 event, Hegarty took another step to tamp down fears about the overall transformation project and Shared Services by announcing that for the time being UT would not be privatizing student food services or raising student fees, which had been recommended by the Smarter Systems authors.

The Texas State Employees Union CWA Local 6186 called the announcement a “huge victory.”

The union and its partners from the Save Our Community Coalition have been organizing and mobilizing students and staff to protect UT, one of the state’s most valuable public assets, from private encroachment.

In a message to members, the union said that the victory was the result of ten months of organizing and mobilizing at UT.

The union also warned that the threat of privatization and downsizing isn’t over and cited the Shared Services plan, which would consolidate IT, human resources, and financial services through the implementation of a cloud-based enterprise resource planning (ERP) system.

During the recent Shared Services public relations event, Hegarty responded to pre-screened written questions.

Among other things, people wanted to know if Shared Services would cause their jobs to be deskilled and their pay cut, if UT would give them sufficient warning in the event of layoffs, if their jobs would be privatized, if there would be more than 500 jobs eliminated; and if Shared Services would break down well established relationships between faculty, students and the administrative staff who serve them.

People also wanted to know what metrics would be used to evaluate Shared Services pilot projects on campus.

Hegarty replied that jobs would not be deskilled; that new career paths would be opened that could improve pay; that probably nobody would lose their jobs because the cuts would be accomplished through attrition; that no current jobs would be outsourced; that Shared Services would strengthen relationships between all members of the UT community; and that proper metrics would be developed when Shared Services was piloted.

Hegarty, dressed casually in jeans and a burnt orange sport shirt, set a reassuring tone.

But there was a disconnect between Hegarty’s reassurances and the realities of Shared Services.

Hegarty said that Shared Services has been implemented at other universities and that people were pleased with the results.

But the Yale Daily News in 2012 reported that faculty members unhappy with Yale’s Shared Service project said that it “does not meet the needs of individual departments.”

The paper quoted Shauna King, Yale’s vice president for finance and business operations, as saying that faculty had protested “most strongly” the fact that Shared Services caused “the reductions in and restructuring of departmental staff over the past few years.”

Yale began implementing Shared Services in 2010.

The Michigan Daily News more recently reported that 16 department heads in a letter to UM’s Provost said that UM’s version of Shared Services lacked transparency and accountability.

They were especially concerned that “faculty and staff will  have to reapply for their positions.”

The Daily News went on to report that the department heads questioned “the validity of the (Shared Services) campaign, citing similar efforts at
other institutions — including Yale University and University of California, Berkeley — that didn’t yield desired results.”

Hegarty said that Shared Services is the best and least painful alternative for cutting costs at UT.

But Dr. Alberto Martinez, a UT history professor, asked during the 15-minute live audience question period, if the projected Shared Services savings were realistic.

In a recent op-ed piece in the Daily Texan, Martinez said that to achieve the projected savings, 433 jobs will have to be eliminated by December 2014 and even more in subsequent years.

Martinez also wrote that the oft cited Shared Services implementation cost of $160 million to $180 million is too low. “The online plan ‘for campus discussion’ includes a cash flow graph that specifies that Shared Services and the ERP will cost even more: $213.5 million,” said Martinez.

Hegarty said that everything is being done to make the decision on whether to adopt Shared Services as transparent as possible.

But during the brief live question period that limited questions to one per person, Burt Hertigstad, who works in UT’s Department of Radio-Television-Film, said that staff with whom he has spoken weren’t satisfied with the information that they have received about Shared Services and called the meager attempts to publicize the transformation project little more than “smoke and mirrors.”

“Thanks for giving me the chance to ask one question,” said Hertigstad. “But I really have about 50.”

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One thought on “Shared Services at UT: Disconnect between assurances and reality

  1. “The union also warned that the threat of privatization and downsizing isn’t over and cited the Shared Services plan, which would consolidate IT, human resources, and financial services through the implementation of a cloud-based enterprise resource planning (ERP) system.”

    This statement isn’t accurate and helps the administration. There is no inherent relationship between the cloud based ERP and Shared Services. The reason they are being lumped together into one package is to prevent criticism. The Union should be in favor of updated software, but ask for a transparent campus wide discussion about its costs, and seriously consider a cheaper in house solution.

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