Ovetz critiques UT’s Shared Services plan at union sponsored speech

Speaking before a standing room only crowd at the University of Texas at Austin, Dr. Robert Ovetz described a proposal to transform UT into a more businesslike institution as another in a long line of endeavors to convert public resources into private revenue streams.

These endeavors began 400 years ago at the dawn of capitalism when land owners enclosed public lands known as the commons to take advantage of new market opportunities–selling food to the rapidly growing population of new urban dwellers many of whom were forced off their land by enclosures.

Ovetz was speaking at an event called Shared Services and Other Bad Ideas organized by the Texas State Employees Union CWA Local 6186 and co-sponsored by the UT Graduate Assembly, the Save Our Community Coalition, and UT Young Democrats.

Ovetz attended UT during the late 1980s and 1990s and received his PhD there. His dissertation “Adversarial Research for Resisting the  Entrepreneurialization of the University” describes how a public resource–UT–was being transformed into a private asset.

Shared Services, a proposal from a committee of  business executives appointed by UT President William Powers, if adopted would consolidate UT’s human resources, IT, and financial services through the implementation of a cloud-based enterprise resource planning (ERP) system and eliminate 500 jobs.

Other services would eventually be privatized.

The proposal calls for UT to spend between $160 million to $180 million to design, develop, and implement Shared Services. Most of this money would be paid to private contractors.

Critics of the Shared Services proposal argue that UT would be spending nearly $200 million to eliminate 500 jobs; that the proposal’s estimated cost savings are illusory; and that UT students and workers will pay most of the costs for its implementation.

Shared Services is only one feature of a much broader transformation of UT envisioned by President Powers and his Committee on Business Productivity, composed of 13 “distinguished” business executives who Powers commissioned to “offer advice on aspects of the University’s business operations and processes that could be improved, streamlined, and leveraged to better effect.”

This particular transformation, according to Ovetz, is the latest in series of transformations at UT that “is part of the enclosure of higher education” and the privatization of human knowledge acquired through collective effort.

These transformations got underway in the 1980s when patent regulations and laws were changed to allow businesses to commercialize and profit from research done at public universities.

The commercialization and privatization of public knowledge at UT was not without costs.

UT, according to Ovetz, could have offset these costs by charging a fair royalty for products originating from UT research. It chose to charge only modest royalties.

At the same time, more students were enrolling at UT, which also drove up costs.

The state Legislature could  have helped UT to keep up with higher costs by taxing those who benefitted most from commercialization. It chose not to.

Instead UT and state officials looked to students and employees to pay for the rising costs.

In 1983, UT tuition was $4 per semester hour. By 1999,  it increased to $52 an hour.

Workers at UT were also squeezed.

At one time, university workers received the same raises as other state employees.

But UT and other higher education officials convinced the Legislature to decouple university worker raises from those received by other state employees. Consequently, salaries at UT lagged behind.

To save money during this period, UT radically transformed the way it delivered education. More courses were taught by graduate assistants and adjunct instructors, a low-paid, low-benefit workforce with almost no job security.

Ovetz witnessed this transformation and wrote about it in his dissertation.

He called this era of commercialization and privatization, “the first wave” of the enclosure of public knowledge at UT.

The Shared Services proposal, he said, is the first ripple in the second wave.

Shared Services, according to Ovetz, would be the first step toward transforming UT administrative services into profit oriented businesses.

Each administrative function would be judged on how well it pays for itself, not on how well it serves the university community or the public. Some services will likely be privatized.

Work will be deskilled and made interchangeable.

Those who keep their jobs will work longer and harder for less money.

Before all this takes place, UT, according to the Shared Services proposal, will need to spend money up front to design and implement the plan.

But money is tight at UT, so where does this up front money come from?

Students will pay a hefty share. Parking fees will increase 7.5 percent annually for 15 years, food services will increase by 5 percent, and housing costs will increase by $184.2 million.

Higher costs for students, harder work and lower pay for employers, layoffs, and more public resources siphoned off to private interests sounds similar to the austerity measures being imposed in Europe–and they are.

In Europe austerity was justified by the continent’s economic crisis.

UT’s austerity measures are also justified by an economic crisis–state funding has not kept up with the growing need at UT. The only way to deal with this shortfall is, according to President Powers, to make UT run more like a business.

But Ovetz called UT’s budget crisis a self-imposed crisis.

In addition to deciding not to seek higher royalty payments, UT has chosen not to spend available money.

When he was researching his dissertation in the early 1990s, Ovetz found that UT was earning $1.3 billion in short-term investments from money being held rather than spent in the university’s discretionary and unrestricted funds.

Ovetz argued that the Shared Services proposal is deeply problematic.

  • The cost savings envisioned by the Shared Services proposal can’t be justified even by its own math.
  • It sets up an  administrative hierarchy that skirts existing university governance and will put much decision-making authority in the hands of private contractors.
  • It creates a huge conflict of interests. Several members of the Committee on Business Productivity work for Accenture, a government outsourcing company with a spotty record.

“Shared Services “should be resisted by students, staff, and the local community,” said Ovetz. “It’s a highly questionable plan from a highly questionable source.”

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