In the past few years, many universities have begun to explore a concept frequently and successfully implemented in the corporate world, but previously rare in higher education: shared services. The term “shared services” refers to a streamlining process where administrative tasks or technology management services that regularly occurred across several departments in the organization are placed under the authority of one unit. For example, instead of each department handling human resources services for its own employees, an institution- or system-wide human resources (HR) office is created.
In recent years, we at Georgia Regents University along with our affiliated health system, GRHealth, have instituted a shared services system across a range of administrative support functions, including Facilities, HR, IT, Communications & Marketing, Audit, Compliance & Risk Management, and Institutional Effectiveness. However, this effort has evolved into much more than the standardization of key administrative and technical processes. We have moved to a shared services management model — one that allows greater collaboration and communication across the entire enterprise and strives to maximally leverage people, knowledge, and resources to their best use regardless of which cost center they are assigned to.
Why Shared Services?
Budget constraints coupled with efficiency demands have caused many higher education administrators, like myself, to consider new modes of operations. Many have tried to adapt management tools used successfully in the corporate world to our own organizations. Shared services are one such tool documented to increase efficiencies and reduce costs in the business world that is now gaining traction in higher education.
While the potential to reduce costs was a key factor in GRU considering shared services, now that we have implemented the model I would argue that increasing the value of the services offered, by increasing the breadth and quality of the services provided and the leaders recruited, can — and should — be the most significant advantage an organization reaps from implementing a shared services model. For example, the sharing of various IT systems, applications, and resources has resulted in a consolidated email system and will soon increase the ease of sharing files, printers, and other online resources across the entire enterprise; as well as increase security and functionality for collaboration. And sharing of facilities has allowed for a unified classroom scheduling system that more efficiently uses space and has provided room for a growing undergraduate STEM program.
We found another benefit. Universities are generally structured as separate colleges and departments, with silos focused on individual performance and success. Such myopic operations can result in duplicative activities, disparate and often opposing processes, and increased costs and inefficiencies. Few mechanisms or incentives exist within a university for aligning management vision and focus. We have found that instituting a shared services management model can provide such a mechanism, allowing administrators — and their faculty and staff peers — to see and work together to improve the “big picture.”
Finally, we should recognize that administrative services develop incrementally over time, generally without strategic direction or coordination across the greater institution. The simple process of engaging in dialogue and consideration around a shared administrative services system will generate thoughtful dialogue about the value and quality of these services, and should foster a robust top-to-bottom analysis and reassessment of these needs and systems, eventually leading to better, more effective and more efficient overall services.
Avoiding Pitfalls
Implementing shared services in any business can be a challenge, especially when the change may lead to redefining work responsibilities or the loss of a job. And in higher education, where the status quo holds great sway, it can seem nearly impossible. However, if the process is approached carefully, individuals, divisions, and departments — and ultimately the institution as a whole — can greatly benefit. Here are some things to consider that may help ensure shared services aren’t dead-on-arrival at your campus. Communicate, communicate, communicate: Just mentioning “shared services” can cause much angst. Even if plans don’t include job reductions or outsourcing of administrative functions, employees will worry about job security. Thus, a robust communication strategy is needed to address such fears. In addition, “customers” — employees and departments who use the services — will worry that loss of control over a service will result in degradation of the service and a reduction in response to their departmental needs. It is critical to understand who these customers are and to provide them with information about potential changes, and identify procedures to relay concerns and implementation issues.
Assess and reassess: It is difficult to predict accurately the full results of such significant changes. It’s a near certainty that implementation will be smoother in some areas than others and that even the best planning will have some unintended consequences. The best way to work around these issues is to ensure that resources are appropriately allocated according to institutional and strategic priorities; that a system for accurately measuring results is implemented; that effective feedback channels are established so that problems can be readily identified, addressed, and resolved; and that we be willing to be relatively fluid, adjusting and readjusting as necessary. We saw this when we first set about to make Legal Affairs an enterprise-wide operation. We soon realized that some functions, such as compliance, were better suited to be separate units, while the legal needs of a health system and the university required separate unit leaders; thus we adjusted and allowed the university and the health system to have separate legal departments, each reporting to the same enterprise leader.
Recognize people, processes, and policies matter: Integrating and consolidating into a shared services management model requires that the right people be placed in the right positions. Top-level leaders need to be versed in all areas of the enterprise so that they can understand the big picture and be willing to envision a new way of providing routine services. Mid-level managers need to clearly understand and be able to articulate what processes impact their customers, and be willing to develop transparent policies that are customer focused; and front-line employees must be able to work across operational lines, regardless of hiring point of origin or cost center they are assigned to. This requires a significant amount of education and clear vesting by top leadership in the process.
Remember one size does not fit all: There are multiple options for structuring services, and they can vary by department or service. For best fit, the unit leader should have significant input into determining which organizational structure is best. Within GRU, we have chosen to use several:
One leader/separate units: In this type of shared services structure there is a single leader governing services across the organization, but separate staffs for different departments. GRU’s Legal Affairs Office is structured this way, where there is a single overarching leader for both the university and the health system (the President/CEO, who in this case also acts as unit leader), but there are separate staffs handling legal services for each sector.
One leader/one unit: Here, one organization provides services across all departments. GRU’s Offices of Communications & Marketing and of Advancement & Alumni Affairs are such examples, where one unit leader and one staff handle these services for both the university and the health system.
One leader/mixed units: Here there is one unit leader, but staff within the unit may serve the entire organization or may provide services to specific departments. At GRU, both Human Resources and Facilities are structured in this way.
Be willing to gauge success in more than one way: Measurable cost savings are one obvious indicator of success. But improved services, through greater depth, breadth, quality or efficiency, are another and these benefits should be quantified and recognized. The Results Sharing services can result in greater efficiencies and cost savings. But improved services, through greater depth, breadth, quality or efficiency, are another benefit. For example, at GRU the benefits of a shared administrative services system can be seen in the improved government affairs services with greater return on investment for our efforts, and greater return on our philanthropic effort, and the ability to provide broader services at similar or lower cost, despite an unfunded university consolidation and a 30 percent decrease in state support. More importantly, developing a shared services management model has helped create greater alignment across leadership and staff around the educational, research and service missions of the university, allowing us to move from an organization with many independently operated departments with multiple goals into an aligned and integrated enterprise with an overall vision and interrelated goals.
At GRU/GRHealth, moving beyond simply the sharing of administrative services and into a shared services management model has allowed our complex organization to better meet the growing challenges faced by a public postsecondary institution and an academic health system. We have eliminated unnecessary redundancies in our operations, while the separations that remain make sense for operations and work for the good of the overall enterprise. We continue to realize new efficiencies, e.g., facilities are being better utilized, IT is being coordinated, and all personnel are being more effectively managed and more equally compensated. And we are developing into a team with a shared vision to increase student and patient services; a concept I believe was sometimes lost prior to shared services.
—Ricardo Azziz is president of Georgia Regents University
