Two's company

An interesting story in Inside Higher Ed raises the question of universities sharing administrative resources. Two two-year Colleges - Terra State Community College and Northwest State Community College – have agreed to establish a joint organisation which will provide:

a central administrative structure but, at least for the foreseeable future, no direct governance oversight of the community colleges themselves. The Northwest State and Terra State governing boards each will appoint two trustees to lead the new "regional council of government," as the new structure is formally known under Ohio law.

According to the press release from the two Colleges

The move does not merge the colleges themselves, rather it creates a centralized district and consolidates certain administrative positions for both colleges. The District office is expected to be housed at the University of Toledo Scott Park campus, in alignment with the recently-signed consortium agreement with the University of Toledo. Both Northwest State and Terra State are approximately 40 miles from the new central office.

And some very specific details about implementation:

The new central office is expected to be up and running by July 1, 2015. The first positions to move to the district office are the vice president of academic affairs and the chief financial officer. Terra State’s vice president of academic affairs is set to retire at the end of June, and Northwest State’s current vice president of academic affairs will move to the District office and assume the role for both schools. Similarly, Terra State’s CFO will move to the district office and will work collaboratively with Northwest State’s chief fiscal and administrative officer. Other positions will be phased in over several years through attrition, including a chief executive officer (separate position from the college presidents); chief operation officer; chief workforce development officer; and marketing and public relations, human resources, and information technology functions. No faculty positions are affected by the change.

Some faculty at the Colleges, according to Inside Higher Ed, suspect that this is a precursor to merger with the University of Toledo, and from a distance this does look like a possible outcome.

Campuses in Archbold and Fremont; a shared office in Toledo

More generally, and in the UK context, university governing bodies and vice-chancellors do on occasion wonder whether a sharing of back-office resources between universities would promote efficiency. On the surface, it sounds like a good idea, but in practice it has proven very difficult to do.

There are many reasons for this, but most boil down to the question of institutional autonomy. There’s little problem in sharing services which can be tailored to meet the needs of the partner institutions: for example, the Careers Group at the University of London is a brilliant example of universities sharing costs to get more than they could individually, but with local delivery looking and feeling different for each partner. But in many cases efficiency in delivery of services comes from common policies and procedures, which are often felt to be a component of institutional autonomy.

In addition, there’s the question of whether a partner could reasonably withdraw from a sharing once started. So, for instance, a shared Director of Finance could not effectively deliver for a partner institution which wished to have second thoughts about the arrangement: the space and time needed for the doubtful institution to think it through could not be given since the Director of Finance would have a clear duty to tell the other partner straightaway of this material change in circumstances. Once you start sharing strategic management you’re effectively merged.

Finally, there’s the issue of effectiveness. Many of the services which could be shared – that is, are transactional and routine to the extent that they don’t impact on the academic character of a university – rarely have the scale only within universities to make sharing worthwhile. Consider payroll: definitely shareable without harming autonomy, but it is done on a bigger scale beyond HE – why look to another university for payroll when the benefits of scale will come from much larger private operations?

The collaboration reported by Inside Higher Ed seems to deal with some of these issues (that is, it builds on an existing collaboration, and within a framework of law and regulation which perhaps means that autonomy is not such a pressing concern), and by working in harmony with planning retirements some of the managerial issues are dealt with. But I’d be very surprised if the governing bodies of the colleges hadn’t got at least an eye on merger down the line.

"Knowing trust" - or three ways to make a collaboration work better

A recent piece of work with a client got me thinking about the mechanics of collaboration between universities. Universities nowadays have lots of reasons to work together - whether it’s a research project that spreads across several universities; a joint doctoral training centre; joint courses; or shared services - universities have financial, regulatory and market encouragement to play together nicely.

It doesn't always work, of course, and often when it doesn't, it's to do with people, who are at the heart of any collaboration. I think that there are three really important factors to bear in mind.

The first is clarity about purpose.  Do your best to make sure that people don't think that there's a hidden agenda - this helps with focus. If the collaboration is about a joint doctoral training centre, then say so. And it’s good for senior leaders in the work to be clear early about points of tension and difference. If then plan is to share student numbers 50:50, then say so early. Clarity leaves no room for speculation and mischief making. But where there's uncertainty, it’s easy for people to see and find conspiracy (and merger threats!) We're hard-wired to spot danger, and if there's a chance to revert to type, we'll all do it easily.

The second is to take the time to get to know each other. Universities are long-term organisations: the arrangements often need to last for years, if not decades, and this happens well only when people relate to each other as trusted colleagues. This doesn't have to mean shared team building weekends with paintball and obstacle courses (phew!), but it does mean making ample time in any workshops and meetings for informal discussions - make lunch breaks long not short; have plenty of chances for tea and coffee; and make sure that people from the different partner institutions are actually talking to each other.

The third is easy to forget. Face-to-face is better than phone-to-phone. Better than Skype-to-Skype. Certainly better than email-to-email. That can be tricky when the partners are a distance away, but it is worth working at. Some of the very successful partnerships that UK universities have with overseas institutions are underpinned by regular get-togethers, where a lot of people from one of the partners travel over to meet with the others. You don't do this unless there's real value, and that value, I think, is the authenticity that comes from being present in the same space as your co-conspirators, in whatever activity you're undertaking.

All in all, I think that it’s a ‘knowing trust’ which is required. 'Knowing' because it's important to focus on what your institution needs, and why it’s doing it. But it isn't a short term transaction, it’s a long term relationship. And so trust is an equally important partner.

Happy Birthday, Janet

(Or, five things you need to think about to make a shared service idea work)

Janet – the Joint Academic Network – is thirty this month. There’s a website giving some of the history of Janet, and fascinating it is. (I particularly like the second upgrade to a whopping 256kb/s. At the time this would have been spectacularly fast – but my! how things have changed.)

It’s a good example of a shared service. Undoubtedly Janet provided staff with connectivity on a uniform and high quality basis which they wouldn’t otherwise have had, and thereby enabled collaboration between universities. This makes it very important: the UK’s universities are very impressive internationally, and it’s only by making the most of our strengths that they can continue to be so.

Janet’s just one of the shared services in higher education which makes a positive difference. Other examples of sector-wide shared services include UCAS and the Leadership Foundation for Higher Education. And smaller groups of universities collaborate: internal audit services such as UNIAC or the Kingston City Group; and there’s a fascinating development in Wales: the Wales Higher Education Library Forum (WHELF), which includes all HEI’s in Wales, the National Library of Wales, and NHS libraries in Wales, is jointly procuring a library management system. These are all good things which grow the capacity of individual universities, and which enable more value to be had for less money – what’s not to like?

And for this reason shared services have been very popular with governments and funding councils. But it’s felt to me that the promise has never been fully realised. The 2012 Finance Act included provision for cost-sharing groups to have VAT exemption, which removed one barrier. But there are others, more practical, about managing the transition to a shared service. Here are five things which you should think about, if considering whether a shared service approach might work for you.

How core is the service to your operation? If you share the service you inevitably lose some control, whether it’s over the details of things are managed and prioritisation when things get tough, or whether it’s in the specification and working out what matters in designing the shared service in the first place. If the service that you’re thinking of sharing is critical to your offer – because it’s a fundamental building block, or because the specific quality, price or location matter to those who you serve, think hard about whether sharing is right for you. It’s an expensive mistake to rectify later.

How stable is the environment for the service? Sharing is a long-term activity, and if there’s foreseeable disruption round the corner, you need to factor this into your considerations. Many shared services have at their heart a common database or IT system for managing processes. How would the model look if the technology underpinning it changed completely? In the same way that cloud computing changed fundamentally the business model of many organisations in the field, so other technological (or legislative) changes will make a difference too. This need not be a show stopper, but time spent thinking about the core of the shared business model and how stable this is will be time well spent.

What is the business model? There are many activities in universities which get cheaper and better by being larger – think about the many processes which involve bulk handling of data, and once you’ve got the workflow it doesn’t cost much for a computer to repeat a calculation or a process. But if this is true for universities it is true for other sectors as well. Take payroll, for example: if several universities shared their payroll operation then the unit cost of managing a salary payment would certainly be cheaper. But banks and other commercial providers are managing payroll systems which pay millions of people every month: that’ll be cheaper still. Unless a shared service provides a benefit which is unique to the sector, then it’s quite likely that the financial savings will be outweighed by those available by looking at a different sort of provision. And that’s a big impact upon the business case.

Are you doing it for efficiency or for service quality? Shared services can deliver either, but if you’re thinking of sharing an existing service then you need to be very clear about this. You’ll have staff, buildings, customers and systems involved in what you currently do, and thinking about the change that a shared service will mean for them, thinking about how you’ll manage this, and whether the efficiency savings will really materialise is an important exercise. You’ll get more buy-in from staff and customers if you’re talking about making things better; you’ll have a stronger business case if you’re talking about efficiencies and cost saving. And it’s really hard to do both at the same time.

Do the sharers have the commitment to learn to trust each other? The human dimension is really important, and easy for management teams to overlook. Put simply, the people who will make this work come from all of the different sharing organisations, and unless they trust each other enough to work openly, honestly, and without a hidden agenda, then even mighty efforts can be frustrated. Time spent at the outset of a shared service project in bringing teams together, letting them get to know each other, and learning to work well, is critical to the project’s success. Remember the forming, storming, norming and performing model for team-building? You need to go through all four stages, and do so consciously. Make sure that it’s someone’s job to see that this happens, and listen to their concerns.

Don’t let these issues put you off – the benefits of good shared services are real and long lasting. But if it was easy, there’d be more of them.